Copyright Amendment Bill: consideration of submissions on additional clauses

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Trade and Industry

31 October 2018
Chairperson: Mr D Mahlobo (ANC) (Acting)
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Meeting Summary

The Portfolio Committee Department of Trade and Industry was briefed on the Copyright Bill. The Senior Parliamentary Legal Advisor and the Department of Trade and Industry focused on the responses by the public to the specific clauses that had been added or revised following the reports of the copyright experts. The Department also presented an expert opinion on the alignment of the Bill with international treaty requirements.

The Parliamentary Legal Advisor reported that several submissions had commented that the full piece of legislation had not been advertised but she informed the Committee that it had been the fourth opportunity that the public had had to respond to the Bill. As was the normal practice, the full Bill had been advertised when it had been received in Parliament and thereafter amendments had been advertised. The Legal Advisor informed the Committee that the requirement for consultation on legislation had been fully complied with. She was confident that the Committee had complied with its constitutional duty and could not have done more.

Many of the submissions had addressed policy issues outside of the scope of the advertised clauses that had already been finalised by the Committee. Those comments were not considered. There were no substantial comments on the definition of a collecting society. The international treaties provided for rights of distribution and rental but those rights had been missing from the Bill. The rights had been added and the majority of submissions supported the clause.

Clause 9 Section 8A relating to the recording of acts in relation to audiovisual works plus the relevant offence had been added. The clause was a duplication of section 9A which addressed sound recordings. Many submissions suggested that the punishment was very harsh, especially because sentences were minimum sentences. The Legal Advisor informed the Committee that the harsh minimum sentence could be defended by including the fact that the judiciary and magistracy could, under substantial and compelling circumstances, reduce the minimum sentence. The Committee had considered the offence very seriously and her proposal would not reduce the sentence in law. 

Submissions showed confusion around the suggestion that a person with, inter alia, business rescue skills would be required if there was a need to appoint an administrator to a collecting society. It was emphasised that it was the skills that the clause was referring to and not a business rescue practitioner. The Committee was assured that the administrator would not be the Companies and Intellectual Properties Commission, which was to be the regulator of collecting societies.

The Department of Trade and Industry agreed with public inputs that the South African term of collecting society be used. That was a policy decision that the Department had supported. The collecting societies were required to be accredited and a collective management structure would be incorporated in the requirements for accreditation. The Department advised that the penalties be retained as artists were still not receiving what was due to them and the culture had to change. The policy rationale was that there had been a disregard of rights for many years.
 

Public comments had raised the issues of reciprocal agreements with different countries. There was a concern that the section did not meet the national treatment obligations. The Department agreed to look into the wording but would not withdraw the issue as reciprocal royalties had to be paid when a South African’s work was used in another country.

The Department informed the Committee that the Companies and Intellectual Properties Commission had no mandate to ensure compliance with BBBEE and the Companies Act did not clearly spell out the mandate of the Commission on BBBEE. As collecting societies were member-based organisations and were not enterprises that provided a service with a turnover and met certain criteria as spelt out by the BEE Act, BBBEE did not apply to collecting societies. The Department recommended that the reference to BBBEE be removed from the Bill.

A copyright expert had been requested to ensure that the Bill complied with international treaties by testing it against the Berne Three-Step Test. The test has three conditions for exceptions and limitations relating to special cases, conflict with the normal exploitation of the copyright work, and prejudice of the legitimate interests of the rights holder/author. The expert stated, in writing, that he could not see any obvious conflicts with the three-step test.
 

Members asked a few questions but also took party positions in relation to the Bill. Members asked whether the impact on the African Growth and Opportunity Act (AGOA) had been carefully considered. Had discussions taken place on what the Bill meant for AGOA? What had happened about the impact assessment process? Was the Department sure that the BEE Act excluded the collecting societies?

One of the Members expressed concern about the fact that the public had only been given only ten days to comment. He stated that the public, on both sides of the argument, felt that it was being left behind as the Bill steamed ahead. Consultation was a cornerstone of democracy which demanded that people feel satisfied with the consultation. Most Members agreed with the Legal Advisor that there had been adequate consultation with the public and that requests for further consultation should not be entertained as it was a delaying tactic.

Some Members supported the suggestion to withdraw the reference to the BEE Act while others strongly opposed the recommendation and called for the retention of the reference as transformation was critical.

Some of the Members raised their concern that small businesses might be impacted by the Bill in a double whammy with small business owners being liable to criminal prosecution as an individual, and administrative fines against the business. Directors of companies would hide behind the juristic personal of the company.
 

Members also agreed with the public that the penalties for offences were unnecessarily harsh and punitive. However, the majority of Members believed that the minimum sentences should remain in the Bill. The intention was to redress the victimisation of the people over time. It was not a punitive penalty. The Committee had to deal with those businesses that victimised actors and performers and shied away from complying with the law.

Meeting report

Opening remarks

The Acting Chairperson welcomed everyone and thanked them for being on time. He asked that everyone focus on the issues during the meeting as the Bill had to go to the House in November. He did not want to cut people off but the Committee could not take one step forward and two steps back.

In the previous meeting the Senior Legal Advisor had presented technical changes that had arisen from various reviews. That process had also ensured alignment within the Bill and with international treaties. A number of clauses had been revised, advertised for public consultation and input had subsequently been received. The current meeting was only about those issues that had been flagged and advertised. The Acting Chairperson asked Members to focus on those issues only.

The Acting Chairperson reminded the Committee that the fair use and fair deal issue was crucial and that the exceptions and limitations were aligned with international treaties. Dr Schonwetter, the expert advisor from the University of Cape Town, had responded to the question of whether the Bill complied to the Berne three-step test, and if it did not comply, whether it was necessary to comply. Dr Schonwetter was also asked to comment on whether there was any deprivation in the Bill and, if so, did it comply with the Constitution. The Acting Chairperson requested that the Committee staff provide Members with copies of the opinion. Ms Meshendri Padayachy, Deputy Director: Intellectual Property Law, Consumer and Corporate Division, Department of Trade and Industry (DTI), would brief the Committee on the opinion provided to the Committee.

The Acting Chairperson added that certain issues had been flagged previously. One issue was that the collecting societies had to be broad-based black empowerment compliant and what it would mean if a society was not BEE compliant. Secondly, there had been a recommendation to insert the word ‘written’ before agreement in Clause 22. That insertion would create a loophole by excluding verbal agreements. The Committee had discussed case law in that regard.

When Members had engaged with the issues, they should consider the inputs and take a firm position on the matters. After the meeting, the team would finalise the wording of those clauses in accordance with the decisions of the Committee. The final wording would be presented to the Committee the following day and Members would have to decide whether to accept the wording. The next step would be the clause-by-clause reading and there would be voting on issues that could not be resolved by consensus. The Bill would have to go to Creda for printing and the Committee staff would have to check the proofs. The State Law Advisor would have to certify the Bill. The Committee would then prepare its report on the Bill so that it could be submitted to the House with the Bill.

The agenda was then proposed by Ms P Mantashe (ANC) and seconded by Mr G Cachalia (DA).

Ms E Ntlangwini (EFF) was absent as she was preparing for her traditional wedding. The Acting Chairperson conveyed the best wishes of the Committee to Ms Ntlangwini on the occasion of her traditional wedding.

The Acting Chairperson welcomed Dr Evelyn Masotja, DDG for the Consumer and Corporate Regulation Division at the Department of Trade and Industry (DTI), and her team.

Copyright Amendment Bill – Public Comments

Adv van der Merwe presented the responses to the fourth opportunity that the public had had to respond to the Bill. Many of the submissions addressed policy issues that had been finalised by the Committee. Those comments had not been considered. She would be presenting comments on the actual clauses that had been advertised.

Clause 1: Definition of collecting society

Adv Charmaine van der Merwe, Senior Parliamentary Legal Advisor, reminded the Committee that the Bill made it an offence for anyone to act as a collecting society unless it was accredited as a collecting society. That had made it necessary to present a clear definition of a collecting society. The definition had been advertised.

Public input had suggested that the reference to collecting society should be a substantive provision and not a definition but Adv van der Merwe explained that the structure of a Bill was to define frequently used words and ‘collecting agencies’ was a frequently used expression. A second submission suggested that collecting societies should be restricted or there might be other groups of people forming a collecting society. DTI would have to advise. Some submissions had suggested that the phrase ‘collecting society’ should be changed to collective management organisation’. That was a policy decision and it had been made.

The use of the term “neighbouring rights” in the definition had raised concerns because not everyone was familiar with the term. The advocate believed that the term could easily be replaced or reworded using a description of ‘neighbouring rights’. The same submission had queried whether the Bill allowed for the current differentiated accreditation, such as currently existed in the music industry. Adv van der Merwe stated that the Department would have to determine whether the Bill was wide enough or whether it needed an amendment.

There was a concern that other stakeholders had been excluded. The Society for the Blind was concerned that the Bill did not consider its organisation. Adv van der Merwe explained that the society that the submission referred to was a society for protection of rights, not one for collection of funds.

The Acting Chairperson asked if the Committee wanted to deliberate each point before continuing to the next point. 

Ms Mantashe agreed that it was a good idea to discuss after each clause.
 

Mr S Mbuyane (ANC) recommended that the Acting Chairperson follow the agenda which stated that presentations would be made, followed by discussion.

Mr D Macpherson (DA) agreed that the presentation should be given in its entirety as it was important that Members understood those things in context. It would help if the presentations were concluded before Members discussed the issues.

The Acting Chairperson agreed that the Committee would allow the presentations to be concluded and requested that Members take notes. He asked that DTI make a note of precisely where the advocate recommended that it should give input and then the DTI presentation could be confined to those points.
 

Adv van der Merwe continued the presentation.

Clauses 4, 6, 8 and 10: Adding the rights of distribution and rental

Adv van der Merwe stated that the international treaties provided for rights of distribution and rental but those rights had been missing from the Bill. The rights had been added and the majority of the public comments agreed with the inclusion of those rights. Some of the submissions showed some confusion because they responded as if it were an exception. Adv van der Merwe pointed out that the addition was to add rights to copyright holders and therefore not an exception.
 

Clause 9 Section 8A: Recording of acts (audiovisual works) plus offence

Adv van der Merwe explained that the clause was a duplication of section 9A but in this case it addressed audio-visual works. It had been recommended by the experts. The comments were generally the same as had been provided in response to the same clause dealing with musicians, section 9A. Mostly they were policy decisions and the Committee had made decisions on the matters. However, she suggested that it would be good for the Committee to apply its mind to the input.
 

Submissions had suggested that the punishment was very harsh. Many submissions were against both the recording and the offence. There was a concern that it turned an exclusive right into a remuneration right. DTI could advise. Some suggestions were that the clause belonged in the Performer’s Protection Bill. The advocate stated that the two Bills were linked and it could appear in the Performers’ Protection Bill but it also had a place in the Copyright Act.

 

There was a concern was that there was only criminalisation and not an administrative fine. That had been a policy decision. Adv van der Merwe advised that the Bill should go ahead as it stood and if it did not work, an administrative fine could be added. The Tribunal would then be in a position to advise the Committee. Adv van der Merwe advised that the judiciary or magistracy could give less than the minimum sentence if there were substantive issues and she recommended stating that in the Bill so that the full discretion of the judiciary was not removed.

Clause 25 Section 22C Empowering Collecting Societies

Several comments stated that the purpose of the log sheet records was broader than calculating royalties and the description might limit the information that collecting societies might need to fulfil its mandate. Adv van der Merwe suggested amending the clause to make it more encompassing than just using the log sheets for collection and payment of royalties. The recommended wording was: “…for the purpose of allowing the collecting society to fulfil its mandate.” Adv van Merwe agreed the suggested wording and recommended that the Committee accept that change.

Submissions asked that the collecting society be required to give copyright owners or users information about royalties or costs to a user. Adv van der Merwe stated that because the copyright holders were members, the society would have to provide them with the relevant information. Collecting societies would also be obliged to provide users with costing information. All of that would happen in practice and could even be in the founding documents. There was no need for legislation.
 

Adv van der Merwe stated that submissions that raised concerns about the terminology used in the Bill could not be attended to as all terms used were the correct and appropriate terms as verified by the industry experts. There was no need for further definitions as the terms were being used in the way that they were ordinarily used.

Clause 25 Section 22C: Offence not to provide information

The advocate stated that the submissions were concerned about how harsh the offence was and that it seemed to be arbitrary. It was the minimum sentence that was the concern. Submissions suggested that the Bill should include an assumption that if a company did not record use of a work that it was a decision not to pay. Adv van der Merwe stated that such a clause would not be in keeping with the principle of innocent until proved guilty.

There were proposals that the penalties in the Bill be referred for a legal opinion but Adv van der Merwe explained that any legal opinion would simply state that both minimum and maximum sentences were allowed by the Constitution. A legal opinion could not give advice on the length of the sentence as that was a policy decision. She reminded the Committee that the harsh minimum sentence could be defended by including the fact that the judiciary and magistracy could, under substantial and compelling circumstances, reduce the minimum sentence. Adv van der Merwe understood that the Committee had considered the offence very seriously and therefore did not think there would be a change.

There was a suggestion that section 9A(4) was a duplication of section 22C(4) but the one was the right to receive the report and the other was the obligation to keep and submit the reports. The offence would be the same but it depended on whether it was from a collecting society or some other body.

The Bill did not contain an explanation of turnover in that clause and Adv van der Merwe recommended that an explanation of what turnover was, and how it was to be calculated, be included in the clause.

The public was concerned that so much information was in regulations but the advocate explained that there were reasons for putting details in the regulations. Regulations were for practical application and anything that might have to be changed so the required changes did not clog up primary legislation. It was the Minister’s duty to call for public comment

Clause 25 Section 22F: Skills of an administrator

The Bill provided for the Tribunal to step in if a collecting society was not performing effectively. Submissions asked about business rescue but the clause, in actual fact, referred to the skills of a person practised in business rescue, not the act of business rescue. If there was a need for a business rescue, the Tribunal could also step in to deal with that. There was a concern about the Companies and Intellectual Properties Commission (CIPC) being both the regulator and appointing an administrator. Adv van der Merwe pointed out that the Tribunal would appoint an administrator.

Clause 28: Clarifying section 28

The submissions suggested that the amendments allowed for parallel importation. The policy concept had been discussed by the Committee and a decision had been made. Clause 28 dealt with copies of copyright material made outside of the country. Currently the Act stated that the material could only be imported if the same copyright rules applied in the foreign country as in South Africa. The proposed amendment broadened the clause and allowed the importation of copies made legally in a foreign country. The technical panel had raised the possibility of a foreign country that did not have copyright laws which would mean that the copies would be legal in that country because there would be no copyright protection at all.

Adv van der Merwe stated that there were two options. Firstly, the Committee could retain the current clause in the Act that required compliance with South African copyright law. Secondly, as proposed by Adv Baloyi, copies could be imported if they had been made with the authorisation of the copyright owner. It was a policy decision and the Committee had felt uncomfortable with Baloyi’s proposal but had awaited public input. However, the public input into the clause was not constructive as comments had not taken a stance of either approval or rejection. There had only been some generalised commentary.

Concerns about method of consultation

A lot of submissions commented that the full piece of legislation had not been advertised. Adv van der Merwe stated that if the whole Bill was published each time, Parliament would never get a Bill passed. The advocate discussed the process of calling for public comment as from October 2017. She stated that all changes had been advertised. There were some changes made without consultation, but those were consequential changes as a result of changes made in response to public input. Adv van der Merwe was confident that the Committee had complied with its constitutional duty and could not have done more.
 

The Acting Chairperson noted that that the presentation had been very clear. He asked Dr Masotja to respond in those places where the advocate had suggested that DTI provide input. He asked Dr Masotja to introduce her team.

Report back on the Copyright Amendment Act Submissions – DTI

Dr Masotja introduced her team: Dr Rea Nonyane- Mokabane, Chief Director, Legislative Drafting, Ms Pregoria Mabaso-Muvhango, Director, Legislative Drafting, Ms Meshendri Padayachee, Deputy Director IP Law and Policy, Mr Nkosinathi Mkhonza, Administrative Assistant, IP Law and Policy and Mr Kadi Petje, Senior Manager, Creative Industries, CIPC.

Dr Masotja stated that she would respond to those items indicated by the advocate plus a few items flagged.

Clause 1: Definition of collecting society

DTI had taken a policy decision to use the South African term of collecting society. The societies were required to be accredited and a collective management structure would be incorporated in the requirements for accreditation. The suggestion that the Bill should allow for joint collecting societies was unnecessary as it was in the regulations. Collecting societies were member-based so there was no need for exclusions. Dr Masotja agreed that alternative words be used for neighbouring rights.

 

Slide 9 Section 9A

Dr Masotja stated that DTI had inserted “making available rights” in place of “remunerative rights” but had forgotten to remove “remunerative rights” from the Bill. The experts had already told DTI to remove the “remunerative rights” and “making available rights” had been put back in the Bill so that issue had been addressed.

Dr Masotja stated that DTI supported Adv van der Merwe in that the issue of reporting could appear in the Performers’ Protection Bill but it did fit in the Copyright Act and should be retained in Copyright Bill.

Regarding the submissions calling for administrative fines, Dr Masotja stated that the matter had been discussed by the Committee and DTI proposed that the penalties be retained. The policy rationale was that there had been a disregard of rights for many years. The issue had to be addressed and artists protected and receive their royalties. She also agreed that there were public consultations in respect of regulations, adding that government always adhered to consultation requirements because the development of regulations was very difficult and stakeholders assisted in getting regulations right. The concerns were, however, noted.

Dr Masotja responded to the submissions proposing that the collecting societies provided education instead of fines being imposed. The collecting societies could provide education but that did not mean that the penalties should not be kept in place.

Dr Masotja noted, in response to the call in submissions for civil actions and civil remedies, that they were available. Access to the courts was always an option.

 

Clause 25 Section 22F: Skills of an administrator

Dr Masotja referred to the business rescue issue. DTI had looked at the skills of the administrator and it had been noted that the business rescue person would have the requisite skills. It was not about the business rescue process.

 

Clause 28: Clarifying section 28

Submissions had suggested that parallel importation was dealt with in section 12B(6) and addressed again later in the Bill in section 28. The first reference could be deleted. Dr Masotja said that DTI had reviewed the two sections but because parallel importation was an ‘exception’, DTI believed that both references should be retained.

 

Clause 25 Section 22C Reciprocal processes

Dr Masotja raised the issues of reciprocal agreements with different countries. There was a concern that the section did not meet the national treatment obligations. The submission stated that the wording did not meet the requirements of national treatment. DTI would look into the wording but would not withdraw the issue as reciprocal royalties had to be paid.

 

The technical error noted by one of the submissions would be addressed. The numbering of section 22C(2)(e ) would be changed to section 22C(2)(d ).

 

Dr Masotja appreciated the input by the public.

 

The Acting Chairperson noted that the two presentations had to be read together. There was an alignment between the two. He asked Ms Padayachy to brief the Committee on the Three-Step Test.

 

Compliance with the Berne Three-Step Test

Ms Padayachy asked the meeting to recognise the passing of artist HHP, Hip Hop Pantsula, the previous week. He was a stakeholder of DTI and the Committee. She extended condolences to the family.

Ms Padayachy presented a written opinion from Prof Tobias Schonwetter, Director: IP Law and Policy Unit, University of Cape Town, who is a copyright expert and advisor to the Committee.

Mr Macpherson suggested that it was not a legal opinion.

The Acting Chairperson said that Dr Schonwetter was legally qualified and the team had asked for a legal opinion. At the end of the presentation, the Committee would determine the type of opinion.

Mr Cachalia stated that legal opinion had locus standi, was given by senior counsel and could be relied on in a court of law. The document before Committee Members was an opinion from an academic expert in his field.

Mr Williams read from the first page in which Dr Schonwetter stated that he had provided his opinion to a set of questions sent by the Committee.

The Acting Chairperson agreed that it was not a legal opinion per se.

Ms Padayachy briefed the Committee on the opinion supplied by Prof Schonwetter as it was a highly technical document. The first question that he had been asked was: Do the proposed exceptions and limitations comply with the Berne three-step test? If not, is it necessary to comply?

Ms Padayachy referred to extracts from the document:

National copyright laws seek to adequately protect creators and owners of copyrighted works and balance the rights of copyright owners with the interests of other stakeholders to access and use copyrighted works. As a member of the World Trade Organisation, South Africa is bound by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and, as a contracting party, to the Berne Convention. The three-step test sets limits to copyright exceptions and limitations to create an international standard.

The test has three conditions to exceptions and limitations: 1) be confined to special cases; 2) not conflict with the normal exploitation of the copyright work; and 3) not unreasonably prejudice the legitimate interests of the rights holder/author.

Having considered the legislation in the light of the above, assisted by several academic works on the matter, Dr Schonwetter concluded as follows:

Newer in-depth research on the topic strongly suggests that open-ended, flexible fair use provisions like the one contained in the Copyright Amendment Bill are indeed permissible under and consistent with the three-step test – and in fact needed for copyright law to adapt to digital technology. As for the other exceptions contained in sections 12B – 19D of the Bill, I cannot see any obvious conflicts with the three-step test either: Several of these provisions stem from the current Copyright Act and it is assumed that their compliance with the three-step test is not all of a sudden challenged now. As far as newly introduced exceptions and limitations are concerned, some of these are based on similar provisions in foreign laws. This may not substantiate compliance with the three-step test per se but may at least suggest compliance if these provisions have not been challenged in the other country. Overall, the newly introduced exceptions are flexible but appear, on balance, to be specific enough to meet the requirement of the first step. Crucially, most of these exceptions and limitations contain time honoured limits such as “fair practice”, ‘extent justified by purpose” which limit their scope effectively. And as far as the test’s third step is concerned, it should also be remembered that this step does not state that an exception must never prejudice any interest of an author; instead it only provides that limitations or exceptions must not ‘unreasonably’ prejudice the ‘legitimate’ interests of the rights holder, thereby giving lawmakers more leeway in this area than acknowledged by some commentators.

  • Opinion, Dr Tobias Schonwetter, University of Cape Town, 19 October 2018.

 

Ms Padayachy stated that, in conclusion, there were no obvious contradictions or conflict with the three-step test. Dr Schonwetter had suggested that Committee could add the words ‘of the test’ if challenged on the matter.

Dr Schonwetter had also been asked if any of the proposed exceptions or limitations constitute deprivation of property. If so, would section 36 of the Constitution be covered?

To those questions, Dr Schonwetter had stated that it was really a question for constitutional lawyers but that while there might be deprivation of property, it would not be arbitrary deprivation of property and should, therefore, be constitutional.

Dr Schonwetter also commented on compliance with the African Growth and Opportunity Act (AGOA), the United States legislation that determined conditions of African countries trading with the United States under the special agreement.

The Committee determined that the reference to AGOA was not a matter that needed consideration when deliberating the Copyright Amendment Bill.

BBBEE accreditation

The issue had been flagged by the Committee. Dr Masotja informed the Committee that the CIPC had no mandate to ensure compliance with BBBEE and the Companies Act did not clearly spell out the mandate of the Commission on BBBEE. As collecting societies were member-based organisations and were not enterprises that provided a service with a turnover and met certain criteria as spelt out by the BBBEE Act. Because BBBEE did not apply to the collecting societies, DTI recommended that the reference to BBBEE be removed from the Bill.

 

Discussion

The Acting Chairperson wanted a structured approach to the discussion. The Committee would go through each item and exhaust the item before moving onto the next one. The first matter under discussion was the collecting societies. The recommendation was that the name should stay. The term ‘neighbouring rights’ would be replaced with appropriate wording.

Mr Macpherson had a process point. He hoped that the Committee Members were not going to be tied to one issue at a time as there were a lot of things that spoke to one another. He asked that the Members be allowed to talk to other issues at the same time if there were a link.

The Acting Chairperson stated that he wanted to complete each item but obviously some issues would be cross-cutting.

Mr A Williams (ANC) stated that it was important to use words that had meaning in South Africa and so he recommended that the Bill use the term collecting society and no other terms.

Mr Macpherson noted that there had been a lot of discussion in the media. He was concerned about the fact that the public was only given only ten days to comment. He was sure that that was the shortest time allowed for public consultation ever. The opposite of including people was making them feel excluded from the process. The public felt that it was being left behind, on both sides of the argument, as the Bill steamed ahead. He felt that he had to make the point.

Mr Macpherson said that some of the issues should be carefully considered, such as the impact on AGOA. Had discussions taken place on what the Bill meant for AGOA? What had happened about the impact assessment process, or was it like the impact assessment for the National Credit Amendment Bill that was delayed and delayed until, in the end, it had been dropped and the Bill had gone ahead without an impact assessment

Mr Macpherson welcomed the suggestion of withdrawing the reference to the BEE Act, which he had raised in the previous meeting. That was certainly welcomed.

The Acting Chairperson agreed that there had to be a consideration of the Committee’s adherence to the legal process of consultation and engagement. Adv van der Merwe had included it at the end of her presentation. The Committee was on the rights of distribution and rental.

Ms Mantashe stated that the ANC was satisfied that the correct processes had been followed and was comfortable with the way in which the Bill had been handled as everything necessary had been done. She did not understand what the DA was saying.

Mr Mbuyane corrected the Acting Chairperson stating that the Committee had to discuss collecting societies first, before distribution and rentals. He noted that South Africa had 59 plus publishers, as per the Department of Basic Education. Was it possible to allocate one publisher to a collecting society? If that was possible, which publisher, and how could it be done?
 

Mr Mbuyane apologised as his questions were all over the show.

The Acting Chairperson noted that he was ungovernable but asked him to continue, even if his questions jumped all over.

Mr Mbuyane addressed the matter of broader-based consultation and the skills of an administrator. He was not sure whether they were talking about CIPC as an administrator or as a regulator. He needed clarification.

Concerning section 28, Mr Mbuyane asked the presenters what their views were on the reciprocal arrangements. He was not sure whether that section was going to be deleted. Reciprocal arrangements should be in the Bill as people should give South Africans what was due to them. The issue of minimum sentences in relations the recording of acts, i.e. the discussion on audiovisual works. The Bill needed a range of sentences. One could not just look at people and sentence them. The Committee should look at minimum and maximum.

Mr Cachalia referred to Adv van der Merwe’s presentation where she referred to various public inputs that had cautioned that the fine in Clause 9 could bankrupt a business. The Committee had to be cognisant of the fact that no industry would mean no work for those in the field. The industry consisted of small, medium and large businesses and one size would not fit all.

Mr Cachalia referred to the comments that the offences were administrative in nature. The Committee should take into account that non-compliance was, indeed, an administrative issue of compliance, restitution and administrative justice and so consideration should be given to an administrative penalty. The Bill should not include a punitive exercise. If there was a penalty, it should be in the form of restitution and not display an attitude of “these companies make so much money, and therefore we have to hit them hard!”

Mr Cachalia believed that it was all very well for the Committee to say that there had been adequate consultation, but if the weight of opinion out there was that there had not been adequate consultation and that people felt that they had not been heard, then that was a different story. Consultation was a cornerstone of democracy and demanded that people feel satisfied with the consultation. The Committee could not ride roughshod over that and had to be extraordinarily careful about that. He agreed that consultation had been particularly piecemeal. No one had seen the full picture. He would have split the Bill up thematically.

Mr Cachalia welcomed Prof Schonwetter’s opinion. He appreciated the thoroughness and the consideration of the extensive work done in Australia. Certainly, the weight of the opinion seemed to be that there was no conflict with international treaties. However, he thought there should be an opinion on the constitutionality of the Bill and the impact on AGOA.

Adv A Alberts (FF+) said that the public needed more time for consultation and the Committee needed more time to consider the issues because there had been a barrage of information that day. Committee Members needed to go away and study the inputs and the responses and then come back and deliberate.

Adv Alberts was of the view that the reference to Audiovisual works and the protection of actors in those works should be placed in Performer’s Protection Amendment Bill. There should a reference in the Copyright Amendment Bill as they were neighbouring rights but the detail should be in the Performer’s Protection Bill. He advised that the Copyright Amendment Bill should be kept clean. Issues relating to the Performer’s Protection Bill should not be mixed in with specific copyright issues.

Adv Alberts was concerned about offences. He noted that it was a valid concern that small businesses might be impacted by the Bill in a double whammy. For example, the owner of a bar would be exposed to penalties both, criminally as an individual, and administratively against his business. He suggested that perhaps the Committee could look at revenue for small business and turnover for large companies and provide details specifying a small versus a big business in the regulations. Large media companies could afford the fines. An individual would be exposed to personal liability. He did not think it fair - and it might not be constitutionally fair - that directors and other managers in big companies could hide behind the corporate veil and had no personal liability but the small business owner was personally liable. It was large corporations that stole the most from artists, worldwide, and had to be held accountable. The corporate veil had to be lifted.

With reference to Prof Schonwetter’s opinion, Adv Alberts asked the Committee to be aware that when fair use was introduced into law in SA, there would be a flurry, or even an avalanche, of litigation as companies felt that people were using copyrighted work in a way that the company did not consider fair. The large companies could go to court as they had the money, but individuals could not afford legal support to go to court and would not be able to make a case, even in the Tribunal, without expensive counsel. That meant that fair use would not be tested as big businesses would protect their copyright. Individual screenplay writers, etc. would not be able to go to court to defend fair use. He suggested that the legislation had to be amended as issues arose rather than letting large companies go for litigation. For example, if libraries had a good case for using copyrighted work, it should be added to the Bill.

Mr Macpherson reminded the DDG that the Committee had asked for a report from the technical expert team giving consideration to whether there were further concerns and whether anything had been left out.

Ms Mantashe said that she had understood that amendments were intended to redress the victimisation of the people over time. It was not a punitive penalty. The Committee had decided to deal with those that shied away from complying with the law. Now they should shy away from victimising actors and performers. She did not see any harsh sentences in the Bill and so there was no need to reconsider. She reiterated that the Committee had done wide consultation. There had been no communique that had come to the Committee suggesting that there had been insufficient consultation. If there had been dissatisfaction, the public should have addressed the Committee. The piecemeal advertisements were as a result of the response to the public input that the Committee had bowed to. The Committee had not had any information regarding a lack of consultation.

The Acting Chairperson asked that the report by the technical experts be circulated to those Members that did not have a copy. Concerning the issue of adequate consultation, he noted that Adv van der Merwe was satisfied with the amount of consultation that the Committee had engaged in. It was not out of the norm to send out only the particular issues that had been addressed by the Committee. A report on consultation would assist the Committee to show that it had consulted adequately and asked that such a report be drafted.
 

When the Legal Advisor had presented at the previous meeting, she had said that one of the expert team was looking at constitutionality. In addition, it was essential to get a legal certificate from the parliamentary Constitutional and Legal Services Office. That matter was not being dropped but would be dealt with outside of the Committee and Members would get a report.

The Acting Chairperson requested the DDG to respond to issues raised by Members, especially on the issue of BBBEE, although she had already made her recommendation on the matter. The second issue was the sentences. The offences were clear but she could discuss minimum and maximum sentences and so on.

 

Responses by DTI

Dr Masotja stated that DTI had received concerns from AGOA earlier in the year when AGOA representatives were doing a general review of all countries. DTI had met with copyright experts from the US and the issues that they had insisted on had been incorporated in the Bill. It was important to note that their concerns were in alignment with concerns raised in public submissions.

Dr Masotja told the Committee that the BEE legislation was very specific and collecting societies simply did not fit into the accreditation of BEE because they were not enterprises. Because collecting societies did not fit the requirements, the reference to BEE accreditation should be removed from the Bill.

Members of any group could form a collecting society so there was no need to amend the Bill to allow for a particular group to form a collecting society. DALRO was a collecting society for publishers so that it would not be a new thing to have a collecting society for publishers. Individuals were also free to come together and create a society if there was a need. Besides which, Dr Masotja added, the Bill was wide enough to cover specific collecting societies.

Regarding the skills of an administrator, Dr Masotja assured Mr Mbuyane that members of the public had interpreted the clause incorrectly and that CIPC would not be the administrator should there be a need to replace the management of a collecting society with an administrator. The Tribunal would decide on an administrator. It was not possible for CIPC to be the administrator as that would conflict with its duties as the regulator.

The recommendation by the experts had been to delete the reference to reciprocal arrangements but DTI was of the opinion that the clause talked to a very important right. SA copyright holders were all over the world and the country was part of the larger world. The Bill made it permissible for collecting societies to make agreements when and where they needed to.

The issue of the draconian penalties had been extensively debated by the technical team and in the Committee but artists were dying as paupers and the Bill had to protect their interests. Dr Masotja stated that the Bill would create an environment where there was consideration for artists. She understood the point about promoting small businesses but those business owners had to take into account that other people were also trying to make a living. Nevertheless, it was a decision that only the Committee could take.

Dr Masotja addressed the question of adding to the limitations of fair use as suggested by Adv Alberts. Members had to remember that SA had adopted a hybrid model and the issues had been extensively debated. The DTI knew about the negative impressions about fair use. The debate was closed. The Committee could decide about adding lists, etc, but it would be a burden and the position was constantly changing. The more the discussion continued, the more musicians were dying in poverty. SA was seen as a country that over-consulted. It was commendable that the country consulted but there came a time to take action. Sometimes there was too great a focus on engaging with the public and time was lost in remedying issues while the country was losing the chance to exploit economic opportunities.
 

Dr Masotja believed that the reference in the Copyright Bill to the rights associated with audiovisual works was not extensive. There were extensive clauses on the issue in the Performer’s Protection Bill so she believed that the balance was correct.

Dr Masotja asked Ms Padayachy to speak on section 28.

Ms Padayachy supported the DDG’s comments on reciprocity. Reciprocity meant that just as other countries expected SA to collect and hand over royalties earned by international artists so SA expected those countries to collect and hand over royalties to SA artists. In one country did not pay royalties, reciprocity agreements were necessary. For that reason reciprocity should be retained in the Bill. The country already had national treaty agreements that meant that foreign nationals had to be treated in the same way as SA nationals.


Section 12B(6) allowed for parallel importation. That was the importation of copyrighted works that had been legally produced abroad and respected copyright. Clause 28, however, allowed right holders to prevent the restriction of the importation of goods. DTI had tried to balance that by looking at whether an action related to copyright was legal in the country from which it was being imported. DTI had ensured that there was alignment. Section 28 did not allow for the same parallel importation allowed for in section 12B(6). Section 12B(6) was an exception and removing the clause would remove the exception. Clause 28 was a restriction that gave the rights holder some rights. That created the balance. The scope was different for each of the clauses. She had considered the expert opinion of Adv Baloyi. The Committee could retain the section in the original Act or allow the consent. If Adv Baloyi’s suggestion contained in section 28 was retained, then section 28 would almost mirror what was in 12B(6) and that was where the confusion came in.

 

Response by the Legal Advisor

Adv van der Merwe stood by her statement that there had been adequate consultation. The first consultation of two weeks was given when a new Bill was introduced and then the Bill went to public discussion, i.e. a Committee meeting. The public could attend and there were reports in the media, etc. Subsequent consultations were short consultations on things that had been introduced to the Bill. Ten days was not shorter: it meant ten working days. It had been the position of the Committee that if a person required extra time to submit, for valid reasons, that extension of time had always been granted. In Adv van der Merwe’s view, there was no concern about the length of time granted for submissions.

Concerning the sentencing, DTI had indicated the rationale for the penalties. Adv van der Merwe’s advice would be that, should the Committee decide to retain the word ‘minimum’ in relation to the sentence, that the Bill specifically included the fact that, where there were exceptional circumstances, the judiciary or magistracy could consider a lesser sentence. That was the approach in sentences in respect of murder and rape. That allowed the court to view each case on its own merits. She recommended following that example if the Committee decided on a minimum sentence. However, the Committee could decide to make it a maximum, and not a minimum sentence. Both approaches would be constitutional.

Regarding the constitutionality of the Bill, Adv van der Merwe explained that the State Law Advisor, Adv Gideon Hoon, and Adv Strydom from the DTI legal team were in the process of completing that legal opinion. They had found one or two things challenging and they wanted to give the Committee a supported answer.

Adv van der Merwe stated that the report from the expert team would be circulated to Members. It was in the format of the Bill. The team had related all issues in the experts’ reports to the clauses in the Bill. All comments were inserted in the comment section against the relevant clause, section or paragraph. It might be very difficult to print the document but she had forwarded it to the Committee Secretary.

Adv van der Merwe referred to the slide 9 which showed when the first advertisement of the Bill had taken place. The Members would see on their electronic copies the notes that she had written relating to that page. Those notes showed that there was a clear line from the first B Bill draft until version 4. 

Looking at the BEE compliance, making it a requirement in law when it was not applicable in view of the fact that the collecting societies were not enterprises, meant that it was superfluous in law. She recommended that it be taken out of the Bill.

The Acting Chairperson stated that he had allowed the Committee Members to make broad ranging statements in the first round but Members were going to have to focus on the specific issues raised in the presentations. On the following day, the Committee would be taking decisions on the proposals. He requested that Members not go back on issues raised and responded to by the team.

The Acting Chairperson stated that, regarding the issues around constitutionality and legality, Adv Strydom and Adv Hoon would provide comment by 7 November 2018.The document on the compliance with conventions was in front of Members. As far as consultation was concerned, the Committee would draft a document showing details of the consultation process so that everyone would be aware of the route taken to consult fully. He asked if any Member wanted to talk on the definition of a collecting society.

Mr Macpherson opened the email from the Secretary with the experts’ report. He explained that that was not the report that he had asked about. The previous week, the Committee had asked for a report from the technical experts on whether they were satisfied with the Bill after the changes, whether anything had been left out, or needed to be added. The Committee needed to know if there were any outstanding issues.

Mr Williams did not support removing the BBBEE requirements for collecting societies from the Bill. The concern was about the non-transformative state of collecting societies. If BBBEE was not included, the sixth Parliament would have to change the definition of collecting societies. Currently, the collecting societies were owned and controlled by white people who were getting their money from black people. He had not heard of the loophole in the legislation before. In future, the BEE legislation should be amended to include collecting societies.

Mr Cachalia was astounded at the position put forward. He noted that the Committee wanted to ensure that collecting societies worked well and paid the artists. The Committee was looking at preventing transgressions against artists. If the collecting societies had to be BEE compliant, it would be double dipping which was rent seeking of the first order. There was no reason for it. Mr Williams could go back to the Marxist logic of the value of labour in production – there was none there.

Mr Macpherson explained that one could not include BEE in the Bill. One would have to tackle BEE legislation first. One could not include the BEE legislation in the hope that the sixth Parliament would change it. One would simply be creating yet another legal challenge and adding that to the many legal challenges that already existed in relation to the Bill. It was simply unenforceable because it was not found anywhere in BEE legislation. BEE legislation was the point of departure, not the Copyright Amendment Bill.

Ms Mantashe supported Mr Williams. White companies had not complied in the past, so why would they do it at that stage? She wanted BBBEE legislation to be kept in the Bill.

Adv Alberts said that one had to accept that a collecting society was accountable on an administrative basis. It was designed for it to make sure that administration was conducted in a fair and transparent way. The Bill allowed for that. If the collecting society was not transparent enough, one should add extra clauses. Regardless of who ran such a society, it had to pay the royalties to the artists. That was the most important thing to artists. It was not a going concern. It did not have shares. Artists simply wanted it to be properly run. People had to be employed on merit so that artists could be protected.

The Acting Chairperson stated that there could not be a parliamentarian who was against transformation. But it had to be done within legislation. He asked for a legal opinion. Did the collecting society fall under BEE legislation or were there exceptions to the legislation? The Committee would not be able to exhaust the matter at that meeting as there were different views on the matter. Was DTI sure that the BEE Act that talked about ownership, etc., excluded the collecting societies by law?

Mr Macpherson said that it was concerning that people sitting in the Committee did not understand legislation. One could read BEE legislation upside down, inside out or back to front, but it would not change the fact that the legislation did not apply to collecting societies. Members could protest about transformation but why did they not go and change the legislation? It was surprising that Members who championed transformation did not know and understand the BEE legislation. That spoke volumes.

The Acting Chairperson stated that was a step too far as no one knew what Members did or did not know about the legislation.

Mr Williams was not concerned about what Mr Macpherson thought that he did or did not know. He stated that if it was not, in fact, in the law, then it should be retained in the Bill and the BEE law had to be changed. The Committee had unearthed a huge problem. The Committee had been talking about it for months and months and he did not know why the DTI had not told the Committee about the problems with the BEE legislation. It was disturbing that the Department had not picked up the issue beforehand.

The Acting Chairperson closed the matter. He knew that the Committee wanted to support transformation. He suggested that DTI approach the BEE Commission to enquire whether BEE applied to collecting societies. Confirmation was needed. Those who were dealing with the legal opinion on constitutionality should be requested to provide an opinion on that as well. The Legal Advisor should say whether the reference could be left in.

The Acting Chairperson continued with the specific issues in the Bill. In Clause 1, the technical team should provide a substitute for ‘neighbouring right’. Clauses 4, 6, 8 and 10 did not require changes as the public submissions had resulted from a misunderstanding. He asked whether Members wanted to make any changes and quantify the time in jail in Clause 9 section 8A. Members had discussed the offences at length and had decided to include the word ‘minimum’. Did Members want to make changes or move the sentence to regulations? If it was to be kept in the Act, the Committee had to decide on the quantification. Did they want to add a minimum or maximum?

Ms Mantashe found comfort in the Advocate‘s statement that the courts could look at exceptional cases but she did not want the Committee to deviate from what was in the Bill.

Adv Alberts said that it was appropriate and right that courts could have discretion and deviate from the legislated sentence. He asked about the question of personal accountability of small businesses versus large businesses. Could the corporate veil be lifted?  He was concerned that an individual could go to jail but a director who stole millions could hide behind a corporate entity’s separate persona. That was just wrong.

The Acting Chairperson asked the DTI team to broaden the clause to include directors. He further stated that the team would be making a very slight amendment in several clauses and would present those the following day. He moved on to Clause 25 section 22 which dealt with offences and had been discussed. Clause 25 section 22F dealt with the administrator and an explanation had already been given on that paragraph. The CIPC would only play the role of regulator and not administrator.

The Acting Chairperson moved on to Clause 28 which clarified section 28.

Mr Mbuyane asked to return to the CIPC’s role as regulator and suggested that, as regulator, CIPC should play a role in appointing an administrator. Also, in terms of monitoring of administrator, the CIPC should have a hand in the monitoring.

The Acting Chairperson accepted the comment about the oversight role of CIPC. That was the last of the main issues.

The Acting Chairperson turned to the DTI concerns. He referred to section 22C regarding the question of reciprocity. DTI would propose the correct wording the following day. The other issue in the section was editorial. The advocate had raised the matter of consultation and that had been discussed and the Committee staff would put together a chronology of the consultation so that if the matter of adequacy was raised, there would be evidence of the process. It was correct for it to be recorded that the Committee had applied its mind to reaching out to the public. There were two perspectives on the matter of consultation: one said that there had not been enough consultation; the other said that there had been sufficient and the Committee was taking too long to finalise the matter.

Mr Mbuyane said that regarding the question on consultation, the Acting Chairperson should read slide 9 and 10 of the advocate’s slides. The slides contained general comments of appreciation from the public.

The Acting Chairperson stated that, as Chairperson, he had to be impartial. His ruling was that a roadmap was necessary and Members could make their own judgements.

Mr Cachalia agreed that the roadmap would be useful so that the Committee was not exposed like the Minister of Home Affairs had been. Two random comments meant nothing in particular.

The Acting Chairperson thanked the members of the public for giving comprehensive inputs and thanked Adv van der Merwe and the DTI team, and Dr Tobias Schonwetter for his comments.

The Acting Chairperson mandated the drafting team to go and finalise the wording according to the comments of Members. Some issues not resolved included BEE and there had to be consultation with the BEE Commission in that regard. He also needed to know, if it was not applicable, whether leaving the reference in place would make the Bill unconstitutional. Once the Committee had agreed on the wording of the roadmap, the Committee would go through clause-by-clause and there would be a process of voting where consensus was not reached. The Committee would be given all the outstanding information. Once the Committee had finalised the Bill, it would have to go to Creda for printing and the Committee staff would have to check the proofs. The State Law Advisor would have to certify the Bill, and the Committee would have to prepare its report on the Bill so that it could be submitted to the House with the Bill.

Ms Theko agreed with the Acting Chairperson and asked him to provide Members with the list of processes so that she could hold him accountable, and to remind herself of the process.

The Acting Chairperson promised to provide a copy of his overview to all Members.

Adv van der Merwe took the opportunity to deal with some miscommunication. The expert technical panel had never come together as a panel. Four members had provided inputs separately. Some inputs had been the same and others had differed. The technical team had linked the comments to the Bill and each point made by the experts had been added in the comments section. All comments had been addressed, including the technical terminology. The experts had expertise in different areas of copyright. There could not be a panel report because the experts had never met as a panel. There were no outstanding issues in respect of the comments by the experts.

Committee Programme

The Committee Secretary stated that the three Bills were priority Bills and the Committee would have to sit during plenary, subject to the requirement that they ceased work to go and vote when required to do so, after which, the Committee could continue its work. The days he was referring to were: 1, 6, 7, 8, 14 November 2018. There might be a change to 6 November 2018 as the President might present in the National Assembly in the morning.

Mr Williams noted that the Secretary had said that Members could attend the House to vote, but on 7 November 2018, the Committee had questions to the Minister and many of the Committee Members would be in the House on 7 November 2018. Members could not just put a question and leave.

Mr Macpherson asked for the details of the programme to be communicated to, or consulted with, chief whips of other parties. Had that been done?

Ms Mantashe noted that there meetings on Fridays but there were no flights home on Friday afternoon and she was a family person. She asked if the Committee could meet on Thursdays.

The Secretary assumed that there had been consultation with the chief whips. He agreed to adjust the programme accordingly for 7 November. He informed the Committee that no formal decision on the final date of term had been communicated to Committees.

The Acting Chairperson suggested that the programme be accepted in principle subject. He added that there would be certain Fridays when the Members had to meet to conclude the work. His Church met from Friday until Monday so he understood the difficulties of working on Fridays, but there was work to be done.

Closing remarks

The Acting Chairperson thanked the hardworking team. He was aware that the officials had other responsibilities as well. His only complaint was the lack of attendance by the Arts and Culture officials. He asked why the Department of Arts and Culture (DAC) officials were not in attendance.

Dr Masotja stated that they had been involved in addressing the experts’ comments as well as the public comments but had had other commitments that prevented them from attending the Committee meeting.

The Acting Chairperson asked for the attendance of DAC officials in future as there had to be cooperative governance and one department could not come in at the end and say that it was not happy.

The Acting Chairperson reminded Members of the meeting the following afternoon. If the Committee was equally focussed as it had been that day, the meeting would not extend into the evening as the only item was consideration of the items that had been referred back to the team.

 

The meeting was adjourned.

 

 

 

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