Copyright Amendment Bill: consideration

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Trade and Industry

01 November 2018
Chairperson: Mr D Mahlobo (ANC) (Acting)
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Meeting Summary

The Portfolio Committee Department of Trade and Industry met to finalise additions, amendments and deletions to the Copyright Amendment Bill following the discussion on the fourth round of public consultation and the final review of the Bill by the parliamentary Legal Advisor and the team from the Department of Trade and Industry, including colleagues from the Companies and Intellectual Properties Commission. The intention was for the Committee to approve all clauses in preparation for the next meeting on the Copyright Amendment Bill, which would be the clause-by-clause reading.

The majority of the changes were accepted without controversy. ‘Neighbouring rights’ was changed to ‘the rights of performers’, paragraphs were added to give the courts discretion when imposing sentences, despite the legislated minimum sentences, and the word ‘reciprocal’ was removed to avoid the use of treaty language that had caused confusion. Certain clauses were made more readable by including key concepts from the definition. Following the discussion on exceptions and limitations the previous day, the technical team had checked every exception to ensure that there was a limitation and in two cases general limitations had to be added. Various technical and consequential amendments were approved by the Committee.

Section 22B(4), the section containing the reference to the Broad-Based Black Economic Empowerment Act, 2013 (Act 46 of 2013), proved to be the biggest stumbling block. The matter of whether to use the B-BBEE Act to ensure that collecting societies were transformed had been an ongoing debate and the Chairperson had called for input from the B-BBEE Commission. The Commission had explained that B-BBEE applied to all entities that did business with government or business with an entity that did business with government. A collecting society was not an enterprise and did not do business. The Commission proposed that the Bill did not refer to the Act so that it was not bound by an Act that did not relate to those entities. However, the section could make reference to transformation being necessary. The regulations could then stipulate exactly what had to be done regarding transformation.

The technical team proposed that the Bill stated that accreditation would only be given to a collecting society that fulfilled the requirements related to transformation and that the reference to the B-BBEE Act be removed from paragraph (c), which, in any case, referred to adherence to any other applicable Act.

Some of the Members appreciated the clarification as it reflected exactly their view of B-BBEE. Collecting societies did not do business with government so B-BBEE did not apply to them. One could not attach B-BBEE to licensing conditions as that had been decided in the courts. B-BBEE could not be used punitively as the courts would not view that approach favourably, and, because the collecting societies were member-based, it would be difficult to exclude anyone on the basis of their membership. The phrase relating to transformation should be deleted because it was covered by the need for accreditation and any other applicable legislation. If the Committee started insisting on words like transformation, it was being nebulous.

The majority of Members disagreed with removing the reference to B-BBEE. The Bill had to have a requirement for the collecting societies to accept transformation. How did one clarify exactly what transformation meant? The B-BBEE Act explained it. Some Members stated that they could not support the clause without the reference to the B-BBEE Act.

The Chairperson found that consensus could not be reached on the matter. He suggested that Members looked at the criteria on the B-BBEE scorecard so that it could be determined, at the next meeting, whether to include some of those criteria or concepts that facilitated transformation in the clause. The matter was flagged. It was the only outstanding issue concerning the Bill.

Meeting report

Meeting report

Opening remarks

The Acting Chairperson welcomed the Members and visitors, including Dr Evelyn Masotja, the DDG from the Department of Trade and Industry (DTI) and her team, as well as the Senior Legal Advisor, Adv Charmaine van der Merwe.

The day before, the Committee had a very fruitful engagement. The Committee had been focused and Members had considered the public comments and the responses of the Legal Advisor and the DTI. The issues - the previous day - had been limited to those issues that had been advertised.  The presentation today day would focus on those particular issues. Some of the issues would generate further amendments or consequential amendments.

The Acting Chairperson added that, after each amendment had been presented, Members would get the opportunity to confirm that the team had captured the Committee decisions of the previous day. He needed Members to approve the paragraph or section before the team moved onto the next one. He was not going back to clauses once the presentation was complete. Thereafter, the Committee Secretary would address Members on a small amendment to the Committee programme.

The Acting Chairperson reminded the Members of the process to be followed. The Bill was coming back to the Committee the following week and Members would go through it clause-by-clause. The Bill would be supported by a document relating to the constitutionality of the Bill. The expert document had been explained to Members the previous day and that matter had been finalised.

The adoption of the agenda was proposed by Mr D Macpherson (DA) and seconded by Mr A Williams (ANC).

The Acting Chairperson asked the Legal Advisor to make her presentation.


Presentation of Revised Clauses by Senior Legal Advisor

Adv van der Merwe, Senior Legal Advisor from the parliamentary Constitutional and Legal Services Office, explained that she would work directly from the Bill (Copyright Amendment Bill Draft 4.1.2018.11.01/Draft 4.1 Public submissions). Red ink denoted changes stemming from the discussions of the previous day; green ink denoted consequential changes. She asked whether she should go into the consequential amendments.

Mr Williams suggested that Adv van der Merwe could just point out the consequential amendments so that Members did not come across them for the first time during the clause-by-clause reading.

The Acting Chairperson agreed but the focus had to be on the business of the day.

Adv van der Merwe presented the amendments:

 

Clause 1 Section 1(c)(c)

Replacement of the term ‘neighbouring rights’ with ‘rights of performers’: “(c) to whom performers have granted mandates to license, manage or otherwise represent copyright or the rights of performers…”

The Committee approved.

 

Clauses 4, 6, 8, 10

No changes

Approved.

 

Clause 9 Section 8A

The intention was not to restrict a collecting society to collecting documents only for purposes of claiming royalties:

8A(6)(b): “submit a complete, true and accurate report to the performer, copyright owner … to allow the collecting society to fulfil its mandate.”

 

An additional paragraph had been added to ensure that the discretionary rights of the courts were retained:

8A(7)(d): “ If the court was satisfied that substantial and compelling circumstances exist which justify the imposition of a lesser sentence than the minimum sentence prescribed in paragraph (b), it shall enter those circumstances on the record of the proceedings and must thereupon impose such lesser sentence.”

 

The Acting Chairperson asked for comments.
 

Mr Macpherson stated that the mandate was spelt out in the definition, but he found it frustrating to read legislation when one had to go backwards and forwards reading the definition, etc. Was it not possible from a user-friendly, readability point of view, to say, notwithstanding that the explanation was in the definition, “ … to allow the collecting society to fulfil its mandate, including the calculations of royalties due to that person.” At least one would not have to keep going backwards and forwards. It was just a proposal.

The Acting Chairperson asked Adv van der Merwe whether the proposal could be accommodated.
 

Adv van der Merwe stated that it was not difficult to accommodate Mr Macpherson’s proposal as long as one understood that the definition was broader than just that one thing. It could say: “…to allow the collecting society to fulfil its mandate, which includes collecting licensing fees and royalties in pursuance of such a licence.”

There was a possibility.

The Chairperson agreed that it should be done.

Clause 10 Section 9(b)

The DTI had discussed the paragraph the previous day. It referred to making a sound recording available and had been placed in section 9A but then the experts had indicated that there was a conflict between exclusive rights and remunerative rights. The paragraph had been removed from section 9A but, in error, not inserted in section 9.

Section 9(b)(f): by the addition after paragraph (e)  of the following paragraph:

“(f) making the sound recording available to the public by wire or wireless means, so that any member of the public may access the sound recording from a place and at a time chosen by that person.”

 

This was agreed to.

 

Clause 11 section 9A  Page 17

Amendment in line with amendment in section 8A:

Section 9A(1)(aA)(ii): submit a complete, true and accurate report to the performer, copyright owner … to allow the collecting society to fulfil its mandate.”

Adv van der Merwe indicated that she would expand on the words “to fulfil the mandate” and add key point of mandate as earlier requested.

 

This was agreed to.

 

Section 9A(4)(d) An additional paragraph had been added to ensure that the discretionary rights of the courts were retained:

“ If the court was satisfied that substantial and compelling circumstances exist which justify the imposition of a lesser sentence than the minimum sentence prescribed in paragraph (b), it shall enter those circumstances on the record of the proceedings and must thereupon impose such lesser sentence.”

 

This was agreed to.

 

Clause 13 Section 12A

The expert panel had proposed that the word ‘performance’ should be taken out because it was the Copyright Amendment Bill and not the Performer’s Protection Amendment Bill. Initially the team had agreed but a poem, for example, was a copyrighted work and could be performed so the team had agreed to retain the word.

Section 12A(a) “… fair use in respect of a work or performance of that work, for purposes such as the following …”

 

This was agreed to.

 

Clause 13 Section 12B

Adv van der Merwe explained that the previous day, there had been a discussion about the limitations and fair use and so she and DTI had gone over the Bill after the meeting to check that every exception had a limitation on that exception. They had found two or three exceptions with no limitations. In paragraph (f), was an exception relating to the translation of work, and in paragraph (i) was an exception relating to the making of personal copies of a work. The team proposed that the wording used with other exceptions be included in those cases so that it was clear that it was not an open-ended exception.

 

Section 12B(1)(f)(ii): “…Provided that such use shall not exceed the extent justified by the purpose;”

Section 12B(1)(i): “… Provided that such use shall not exceed the extent justified by the purpose.”

 

The Acting Chairperson reminded Members that the Committee had a discussion on exceptions and limitations the previous day as the Berne three-step test checked for such exceptions and limitations. He asked Members if they were satisfied with the proposed changes that ensured correct processes had been followed.

The Committee agreed.

 

Clause 20 Section 19D

Adv van der Merwe explained that the legislation should refer to a person and not an organisation. It was an amendment suggested by the experts but they had not referenced all the uses of the word ‘organization’ so the team had gone through the Bill to check for any additional references to ‘organizations’. Consequently, the team was proposing the removal of the word in Section 19D(2)(a) and both times the word had been used in Section 19D(3).

 

Mr Macpherson wanted to speak specifically about persons with disabilities and how they accessed copyrighted work. He asked if that discussion was possible at that time or whether the meeting would come back to substantive points after dealing with the proposed changes.

 

The Acting Chairperson replied that the business of the day was cleaning up what had been discussed the previous day. The Committee would go through the Bill clause by clause the following week and could then look at substantive issues.

 

Clause 25 Section 22B

Adv van der Merwe explained that having decided on the name and a definition for collecting societies, it was necessary to remove any references to collecting societies that differed from that decision. In some cases ‘representative’ had actually meant ‘respective’ and those changes were also made.

Section 22B (1) – removal of the word ‘representative’.

 

Section 22B(4) was the section about the reference to the Broad Based Black Economic Empowerment Act, 2013 (Act 46 of 2013).  The B-BBEE Commission had explained that B-BBEE applied to all entities that did business with government or business with an entity that did business with government. The Commission proposed that the Bill did not refer to the Act but made reference to transformation so that the Bill was not bound by the Act that did not relate to those entities but, nevertheless, required transformation. The regulations could stipulate exactly what had to be done regarding transformation.

 

Adv van der Merwe proposed that the Bill stated that accreditation would only be given to a collecting society that fulfilled the requirements related to transformation and to remove the reference to the B-BBEE Act from paragraph (c) which already referred to adherence to any other applicable Act.

 

Section 22B(4)(a): “complies with the requirements for accreditation and such requirements as may be prescribed, including requirements relating to transformation;”

Section 22B(4)(c): remove the words “…the relevant provisions of the Companies Act, the Broad Based Black Economic Empowerment Act, 2013 (Act No 46 of 2013), and…”

 

The Acting Chairperson stated that the team had undertaken the consultation as requested and had definitely established that collecting societies were not enterprises.

Mr Macpherson appreciated the clarification. It was exactly what he had said the previous day. With respect to 4(a) he did not think that a reference to transformation was a good idea as it was very open-ended and, besides which, the B-BBEE Act was the only legislated mechanism of transformation. To prescribe something that was not legislated would become problematic and would open the Act to challenge. Because the collecting societies were member-based, it would be difficult to exclude anyone on the basis of their membership. He cautioned that there was no need to use ‘transformation’ as it would become problematic.

Mr G Cachalia (DA) agreed with his colleague and amplified what he had just said. He believed that the requirement for transformation was amply covered in 22B(4)(c) which ensured that collecting societies were covered by applicable legislation. It was clear and defined. He suggested that the phrase relating to transformation be deleted because it was covered by the need for accreditation and any other applicable legislation. If the Committee started insisting on words like transformation, it was being nebulous.
 

Mr Williams disagreed with the DA. The Bill had to have a requirement for the collecting societies to have transformation. He was sceptical about removing the reference to the B-BBEE Act. If all entities were covered, why take it out? He wanted clarity as to whether the collecting societies were covered by the legislation. What did ‘requirements relating to transformation’ mean? The society could have a black driver and believe that they had fulfilled the requirements of transformation. It was too broad. He wanted to see that the societies had to comply with B-BBEE legislation.

Ms Mantashe aligned herself with Mr Williams. Transformation was on the ANC’s agenda. If it was removed, the ANC would oppose it.

Mr S Mbuyane (ANC) seconded Mr Williams and agreed that the Committee should not take out the reference to B-BBEE legislation. How did one clarify exactly what transformation meant? The B-BBEE Act explained it. He read aloud the reference to transformation in the Act. A collecting society had to be aligned with B-BBEE. The word ‘transformation’ should be removed. 

Mr Macpherson noted that the Committee was halfway there as they all agreed that ‘transformation’ should be removed from 4(a). The problem was that the B-BBEE Commission itself had said that the reference to the Act should not be included. They were the very people who adjudicated the Act. Why ask them and then ignore them? It did not make sense. Collecting societies did not do business with government so B-BBEE did not apply to them. Secondly, one could not attach licensing conditions to B-BBEE and that had been decided in the courts. B-BBEE could not be used punitively as the courts would not view it favourably. He encouraged his colleagues to take the advice of the Commission and that they have neither Section 22B(4)(a) or (b) in the Bill.

The Acting Chairperson said that Members had not moved and still held differing views. The Committee did not have much time. The B-BBEE Act was not the only instrument for transformation. The Commission said that collecting societies were not enterprises but he had also asked, if the legislation was not applicable, did the inclusion of it make the Bill unconstitutional? If the Committee was looking at the B-BBEE scorecard, there were many items but the scorecard did include certain imperatives about transformation. Representivity and equity was important but not all of the other things on the scorecard were irrelevant. In preparation for the discussion the following week, Members would have to decide on the critical elements of transformation that should be included in the Bill. The Chairperson stated that the issue was flagged

Section 22B(4)(a) and (c) flagged.

Section 22B(7)(b) and 22B(8)(a) were consequential amendments removing the word ‘representative’ from each of the paragraphs.

This was agreed to.

 

Clause 25 Section 22C

Section 22C(2)(b): ‘… submit a complete, true and accurate report to the performer, copyright owner … to allow the collecting society to fulfil its mandate;”

Adv van der Merwe indicated that she would expand on the words “to fulfil the mandate” and add key point of mandate and earlier requested.

 

This was agreed to.

 

Section 22C(3)(c): “only make payment of royalties to a collecting society outside the Republic, if there is an agreement regarding royalties…”

Adv van der Merwe explained that the word ‘reciprocal’ was ‘treaty language’ but that it just meant ‘between two parties’. ‘Reciprocal’ caused confusion with treaty clauses and there was no need to use the word so she recommended that ‘reciprocal’ be removed and the paragraph refer only to ‘agreements’ regarding royalties. That would still allow collecting societies to make international agreements, which was the important point in the paragraph.

 

This was agreed to.

 

Section 22C(4)(c) was an addition that provided an explanation of turnover and how it was calculated. It was a repeat of the explanation added to other paragraphs dealing with turnover.

Agreed.

 

An additional paragraph had been added to ensure that the discretionary rights of the courts were retained.

Section 22C(4)(d): “ If the court was satisfied that substantial and compelling circumstances exist which justify the imposition of a lesser sentence than the minimum sentence prescribed in paragraph (b), it shall enter those circumstances on the record of the proceedings and must thereupon impose such lesser sentence.”

 

This was agreed to.

 

Clause 27 Section 27

An additional paragraph had been added to ensure that the discretionary rights of the courts were retained:

Section 27(c)(9)(b): “ If the court was satisfied that substantial and compelling circumstances exist which justify the imposition of a lesser sentence than the minimum sentence prescribed in paragraph (b), it shall enter those circumstances on the record of the proceedings and must thereupon impose such lesser sentence.”

 

This was agreed to.

 

The Chairperson noted that the issue about B-BBEE and transformation had not been resolved. He would suggest that the insertion of other elements of transformation would resolve the problems, including something relating to transformation in governance.

 

Adv van der Merwe responded to Adv Albert’s point that a natural person could go to jail but a director of a large company could hide behind the corporate veil. The Bill did not require prison sentences for directors. Sections 213 to 216 in the Companies Act dealt with the responsibilities of directors. One clause specifically related to defrauding, and the failure to record use of works was an intention to defraud. The directors would be subject to the Companies Act and sanctioned in terms of that Act.

 

The Chairperson thanked the Committee for the level of discipline and focus. He reminded Members that when they came back for the clause-by-clause reading, they had to be equally focussed.

 

Committee business


The Chairperson informed Members that the Trade and Industry Budgetary Review and Recommendations Report (BRRR) had been ATC’d and was on the agenda of the House that day. Members were requested to move to the House of Assembly immediately after the meeting.
 

The Secretariat presented the Committee Programme. 30 October 2018 was the closing date for public submissions on the Performer’s Protection Amendment Bill. On 6 November 2018, there would be a caucus and so it would not be possible to have a meeting in the morning. On 7 November, the Committee would be deliberating the Copyright Amendment Bill from 9:00 to 13:00 and the Performer’s Protection Amendment Bill from 14:00. The Committee would also be meeting on 8, 9 and 13 November to deal with the Performer’s Protection Bill. The end of that week would be allocated to consideration of the National Gambling Amendment Bill.

Mr Macpherson stated that he had asked the previous day about consultation regarding the programme and had been told that whips had been consulted. However, on enquiry, he had discovered that there had been no consultation with chief whips and the exemption from the House was only for the Tuesday. He was not happy to be out of the House for almost two weeks. On the following day, Wednesday 7 November, questions would be put to the Minister of Trade and Industry in the House. He had asked that a provisional programme be sent to Members so that Members of the Committee could determine whether the programme was suitable or not.

The Acting Chairperson agreed that the Committee had to be in the House in the afternoon of 7 November as questions were being put to the Minister. The Secretariat had to cancel the meeting for the afternoon of 7 November 2018. The morning meeting would continue. He asked the Committee to agree to the changes in the programme.

The Acting Chairperson asked that the Secretariat send the programme to Members. He also asked that the Copyright Bill be prioritised on the programme. The Chairperson requested the Secretariat to distribute the legal opinion on constitutionality prior to the meeting for the clause-by-clause deliberations.

Closing Remarks

On behalf of the Committee and himself, the Acting Chairperson thanked the Department and the Legal Advisor, and extended his appreciation to the B-BBEE Commission. 

Mr Mbuyane remained concerned about collecting societies but the Chairperson indicated that the meeting was adjourned and he was not going back to that discussion.

 

The meeting was adjourned.

 

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