National Credit Amendment Bill: negotiating mandates; Copyright Amendment & Performers’ Protection Amendment Bills: briefing

Meeting report

National Credit Amendment Bill: Negotiating Mandates
The Chairperson said that he was aware that the Western Cape had not voted in favour of the National Credit Amendment Bill. The Free State had as yet not provided a negotiating mandate on the Bill.

Adv Charmaine van der Merwe, Parliamentary Legal Adviser, presented the Negotiating Mandates.

Eastern Cape Provincial Legislature
The Legislature had voted in favour of the Bill with two proposed amendments. Adv van der Merwe said that the amendments related to parameters. The first was a proposal that the earnings parameter per month of the applicant be increased from R7 500 to R10 000. The second dealt with the amount of the debt which should be increased from R50 000 to R80 000. She explained that the rationale for the R7 500 per month parameter had been agreed upon after the Portfolio Committee on Trade and Industry had consulted with debt counsellors. The R50 000 limit on the amount of the debt was linked to an Administrative Order obtainable at court.

Gauteng Provincial Legislature
The Legislature had voted in favour of the Bill with no amendments.

Mr W Faber (DA, Northern Cape) complained that he had received only two of the Negotiating Mandates ie Gauteng and KwaZulu-Natal Provinces.

The Chairperson stated that the Committee was not making any decisions on mandates at present. Final mandates were yet to come.

Mr O Terblanche (DA, Western Cape) understood that no decisions would be taken but if members had the documents then engagement could be better.

The Committee Secretary understood the concerns of members but confirmed that mandates were sent to members. As soon as he had received them he had sent them to members.

The Chairperson said that there seemed to be a technical problem of some sort.

Mr M Rayi (ANC, Eastern Cape) stated that the mandates had been sent to members in two batches. The first was on 11 February 2019 and the second on 12 February 2019. He had checked to see whether they had been sent to members of the DA and the EFF and they were.

Ms B Mathevula (EFF, Limpopo) confirmed that she had received the mandates and asked the Committee to move on.

KwaZulu-Natal Provincial Legislature
The Legislature supported the Bill. Adv van der Merwe noted that the Legislature had stated that it had proposed amendments but when she had looked at them it was rather a summary of public hearing inputs.

Limpopo Provincial Legislature
The Legislature negotiated in favour of the Bill with a proposed amendment. The amendment dealt with the process for extinguishing debt. Adv van der Merwe explained that if a debtor was unable to settle his/her debt within five years then the debt was suspended for twelve months. After the twelve months an evaluation was done. If the debtor was still unable to settle the debt, the debt could be suspended for a further twelve months. If the debtor could still not settle the debt, then the Tribunal could extinguish the debt. The Province felt that the second twelve month suspension was unnecessary and that the debt ought to be extinguished after the first twelve month suspension. She said that it was a policy decision that needed to be made. She explained that the reason the provision was made for two twelve month suspensions was because it was difficult for persons to rehabilitate themselves within twelve months.

Mpumalanga Provincial Legislature
The Legislature voted in favour of the Bill without proposed amendments.

Northern Cape Provincial Legislature
The Legislature voted in favour of the Bill with supposed proposed amendments. Adv van der Merwe on perusing the proposed amendments found that it was more a discussion of the public participation process. There were no real proposed amendments. 

North West Provincial Legislature
The Legislature voted in favour of the Bill. The mandate stated that there were no amendments but the report of the committee in the Legislature did reflect amendments. Adv van der Merwe said that the amendments spoke to the credit life insurance period being extended from six months to twelve months. She responded that the Bill already made provision for longer periods.

Western Cape Provincial Legislature
The Legislature did not support the Bill and attached its reasons to the mandate. Adv van der Merwe said that two legal opinions based on the previous version of the Bill were also attached to it. The two legal opinions had been submitted to the Portfolio Committee on Trade and Industry when it had dealt with the Bill.

Adv van der Merwe stated that she had recently received the Negotiating Mandate from the Free State.

Free State Provincial Legislature
The Legislature had voted in favour of the Bill with no amendments.

Adv van der Merwe said that there was a duty on Parliament to facilitate the public participation process. The Department of Trade and Industry (DTI) had stated that it was kept busy in the Eastern Cape Province.

The Chairperson said that the mention of the Eastern Cape Province was important. He addressed Mr Rayi and asked whether public hearings had taken place.

Mr Rayi confirmed that public hearings had taken place in the Eastern Cape.

The Chairperson stated that the Committee was compelled by the Constitution to consult.

Discussion
Mr Rayi asked Adv van der Merwe to provide the Committee in table format the proposed amendments by Provinces and the responses to them. It would assist the Committee during deliberations.

Adv van der Merwe agreed to do the table format document as requested. She drafted the document whilst members continued with discussions on the Mandates and other matters on the agenda.

Mr L Magwebu (DA, Eastern Cape) referred to the Limpopo proposal that debt should be extinguished after the first twelve month suspension and asked how DTI felt about it. He was concerned about the high unemployment rate in SA. He asked what was wrong with writing off the debt after the first twelve month suspension if the individual had tried his/her best to find a job within that twelve month period.

Dr Evelyn Masotja, DTI Deputy Director General: Consumer and Corporate Regulation Division (CCRD), responded that there were initial concerns by the credit industry that the Bill was about extinguishing of debt. There were measures to address the concern. The DTI needed to strike a balance between relief for the consumer and the concerns of the credit industry. If the Bill allowed the extinguishing of debt after twelve months then the concern would once again be an issue. Extinguishing debt was a last resort. Some still felt that extinguishing debt was unfair to the credit industry. The DTI was well aware that unemployment in SA was a challenge.

The Chairperson referred to the North West proposal for the extension of credit life insurance from six to twelve months and asked what if the debtor serviced his debt within nine months. Would the insurance still run for twelve months?

Dr Masotja replied that the Bill did allow for different timeframes. This could be catered for in the regulations.

Mr Faber said that the Northern Cape had questioned why the income limit was not set lower than R7 500. Since it was not lower, he felt many people were being excluded.

Dr Masotja replied that extensive deliberations had taken place on the R7 500 and the R50 000 amounts. A process was followed. Consultations and research had been done. The thresholds were well considered. The amounts could be reviewed in the future. Anybody earning less than R7 500 would be catered for.

Mr Faber reacted that the R7 500 threshold had been decided by the Portfolio Committee on Trade and Industry. Why had the Portfolio Committee not called in subject matter experts? He pointed out that there were experts who did not agree with the R7 500 threshold. He asked whether National Treasury had not received the correct information from subject matter experts.

Dr Masotja replied that extensive consultations were done on the figures. The figures were not arbitrarily chosen. She reiterated that the Bill did allow the figures to be reviewed.

Dr Ria Nonyana-Mokabane, DTI Chief Director: Legislative Drafting, added that consultations on the figures were also done with debt counsellors. Debt counsellors did not even wish to consider clients who earned less than R7 500 per month.  

The Chairperson stated that he together with the Chairperson of the Portfolio Committee on Trade and Industry had met with debt counsellors. The Bill had been advertised for call for comment and people were welcome to make inputs on it. The figures that were decided on were scientifically tested. People who dealt with credit matters had come up with the figures.

Mr Terblanche asked what would trigger the review of the figures. He also asked whether the Committee would be discussing concerns/issues that provinces had in the present meeting.

Dr Masotja replied that the DTI would have to study the uptake of the intervention. Constraining conditions would also be looked at. Different factors would be looked at to bring about a review. SA’s economy was continually changing. The R7 500 and R50 000 figures were the starting point. The review would speak to outcomes.

The Chairperson stated that due to time constraints discussing the concerns/issues that provinces had would have to be done at another time. On 20 February 2019 the Committee would be dealing with the final mandates from provinces on the Bill.

Responses by Parliamentary Law Advisers/DTI to Negotiating Mandates
Adv van der Merwe explained that the responses given were that of the Parliamentary Legal Advisers Office and of the DTI. She had compiled the document in table format as requested.

Eastern Cape Province - She explained that the figures of R7500 and R50 000 had been agreed upon by extensive consultation. The Province had proposed that the parameters be increased. Debt counsellors had suggested the R7 500 figure. Clause 29(b) of the Bill required the Minister to review the amounts. Inflation and economic conditions would be looked at.

Limpopo Province - It had proposed that the debt be extinguished after the first twelve month suspension. She explained that the extinguishing of debt in itself had been a contentious issue. The fact was that it affected people’s rights. A balance was needed between the rights of the credit provider and of the debtor.

North West Province - It proposed that credit life insurance be extended from six to twelve months. She explained that credit life insurance was dependent on the credit agreement that was entered into. It was covered by Clause 19 in the Bill.

She concluded that the Western Cape Province had not supported the Bill and also did not have proposed amendments. The remaining Provinces had no proposed amendments.

The Chairperson stated that the Gauteng Province had discussed the debt extinguishing provision at length. In the end the Province agreed that the Bill covered it sufficiently. Could debt extinguishing, however, be dictated to the provinces?

Mr Rayi too felt that debt extinguishing was adequately covered by the Bill. Perhaps it should be left as it was in the Bill. He was pleased about the Minister being able to review the parameter amounts.

The Committee agreed that the response document be distributed to the provinces.

Mr Terblanche pointed out that the Western Cape had given its reasons why it had not supported the Bill.

Adv van der Merwe replied that the Western Cape had not proposed any amendments. She would have commented on them if amendments had been proposed.

Mr Terblanche reacted that he understood that there were no proposed amendments but that the Western Cape Province had commented on the Bill.

Mr Rayi stated that the Committee had requested Adv van der Merwe tabulate the proposed amendments along with the Parliamentary Legal Advisers Office and DTI responses. The responses were in relation to proposed amendments not on comment about the reports of provinces. The facts were that the Western Cape Province had not proposed amendments. He added that Mr Terblanche was free to make a declaration about the Western Cape Province not supporting the Bill when the Bill went to the plenary. The Committee had to make a decision on whether it supported the proposed amendments of the provinces or agreed with the responses of the Parliamentary Legal Advisers Office and the DTI.

Mr Terblanche said that he was covered for now.

Mr Rayi suggested about the Limpopo and the North West proposed amendments that the provisions in the Bill be left as they were.

The Committee agreed.

Copyright Amendment Bill: briefing by the DTI
Dr Masotja provided the Committee with insight into the background on the process around the Bill. The Bill was introduced to Parliament and referred to the Portfolio Committee on Trade and Industry on 16 May 2017. The Portfolio Committee had adopted the Bill on 15 November 2018. She highlighted some of the challenges currently faced by the creative industry. These included a lack of formalisation of the creative industry which made it prone to abuse. Piracy and counterfeiting was rife and enforcement agencies were not coordinated. There was non-payment of royalties in the form of repeat fees and also the commercial exploitation of actors. Moral and economic rights of actors were also not recognised. The digital environment was not covered by the Copyright Act of 1978. One of the main objectives of the Bill was to develop a legal framework on copyright and related rights that would promote accessibility to producers and users in a balanced manner which included flexibilities and advancements in the digital space that should empower all strata of citizens in SA. There were international treaties that had set the basis for the Bill. These included the WIPO Performances and Phonograms Treaty, the Beijing Treaty for Audio Visual Performances and the Marrakesh Treaty of which SA was not yet a member. The briefing continued with a breakdown of the clauses of the Bill with a brief explanation of each.

Discussion
Mr Faber felt that the Bill ought to be a Section 76 Bill as it affected the provinces. He believed the Bill to have been wrongly tagged.

The Chairperson said that it was not a matter for the Committee to decide, political party leaders could bring up the issue.

Mr Terblanche shared the concern of Mr Faber and wished it to be put on record.

Mr Rayi replied that the Principal Act which was the Copyright Act, 1978 was also a Section 75 Bill. The amendment bill amending the Act could therefore not be a Section 76 Bill. An existing act was being amended. The tagging could not be changed.

Mr Faber heard what Mr Rayi was saying but stated that in the previous Parliament he had asked for a bill to be retagged from a section 75 to a section 76. He had been successful. The Bill did impact upon provinces. The bill that he had retagged dealt with languages at courts. He would get the bill’s exact designation for the Committee.

Mr B Nthebe (ANC, North West) said that, for argument’s sake, the Committee could assume that Mr Faber had a point. He suggested that the Committee agree that retagging did not lie with the Committee but lay elsewhere.

The Chairperson stated there had been a long process on the Bill. The National Assembly had thoroughly engaged on the Bill. He noted that Part 4 of the National Council of Provinces (NCOP) Rules guided the Committee’s process on the Bill. The Committee would provide a report on the Bill to the House where it would be dealt with. As a Section 75 Bill, the House could only accept or reject the Bill. The Chairperson asked the Committee Secretary to speak to the process of the Bill.

The Committee Secretary noted that for a Section 75 Bill there was an initial briefing; thereafter there would be a notice for public comments. The Committee would deliberate on the public comments made and thereafter finalise the Bill.

Ms Mathevula asked that the DTI in its presentation state the venue where public hearings were held.

Mr Terblanche stated that the Bill was a complex piece of legislation. He felt that the Committee needed to be briefed by a subject matter expert. Were the inputs thus far by subject matter experts good enough or sufficient? The Committee needed to be on top of the matter, given what was envisaged. He felt the penalty to be too harsh for a juristic person which was turnover which amounted to the income for the year when the offence was committed (slide 20).He felt that total turnover for a year could never be a fair fine. The provision needed to be revisited.

Dr Masotja replied that extensive debate had taken place on the harshness of penalties. The idea behind it being strict was because of exploitation that was rife. Much deliberation had taken place on it. She admitted that stakeholders were still concerned about it.

Mr Magwebu felt the Bill to be an important piece of legislation. The Fourth Industrial Revolution was here. With literature, how were book authors covered when people could download soft copies from the internet? With music, there was a trend for old songs to be remixed. Did the writers of the original songs get royalties from the remixed music? When films were played all over the world and songs were used in them, did the music artists receive royalties? Where a gogo crafted something and a tourist purchases it for next to nothing but sells it abroad for a huge profit, did the Bill cover this gogo? How would the gogo even know that the Bill protected her? The DTI was asked whether it was ready to deal with these types of matters.

Dr Masotja stated that literature was covered by section 12(D). Remixes were covered by section 6(A) and it dealt with royalty sharing. Royalties had to go to the author of the original song. There were different mechanisms in the Bill. Usage had to be fair. There were safeguards in the provisions. On music/songs used in movies there had to be authorisations. Payment was due to the music/song artists. Persons had economic rights. Where things were reproduced, persons had to get paid. Where things were distributed, persons had to get paid. These were both economic rights.

Ms Meshendri Padayachy, DTI Deputy Director: Deputy Director: Intellectual Property Law, agreed that the Fourth Industrial Revolution was upon SA. The digital economy would rise. The Bill tried to address challenges. With literature, the digital rights of authors were not covered in legislation hence the Bill tried to cover it. Authors at present were not being paid royalties. There were also unfair contracts in place. When one used the music of someone else, you need the permission of that person. New copyright provisions were introduced in the Bill and royalties would be shared. Everyone in the value chain had to benefit. Streaming was also catered for in the Bill. She pointed out that films were more complicated. Music was often sold with the film rights. However ownership had to be acknowledged. She gave the example of the SA television programme called Generations where the original cast was fired. Due to the fact that they contributed to the success of the programme, these actors where entitled to be paid for the roles that they played. On the fine arts and the rights of the gogos and others to royalties, DTI did have awareness programmes. She noted that there were exceptions and limitations on fair use. A remix could be seen as illegal. Permission had to be obtained even if it was a small part of the remix. She felt the treaties to be important as they were best practice in copyright.

Mr Nthebe pointed out that the sector that the Bill covered was one of the most exploited. To get things right there needed to be things which could be touched and felt. He asked if the essence of the Bill would be spelt out in the regulations. On the provisions of the Bill which applied retrospectively, how far would the Bill apply retrospectively?

Adv van der Merwe explained that there were three clauses in the Bill that provided for retrospective application. The clauses were very contentious and were carefully drafted. The clauses created rights that were not in existence. For example a musician sold the rights to his song to a music label for R500 000. The song becomes a hit and the music label makes millions of rands. The purpose of the clauses was to fill gaps that were there. She did note that the retrospective clauses only applied to books and music that were sold after the Bill came into operation. She said that the Minister of Trade and Industry had to prescribe the process. There was first a great deal of work that needed to be done by the DTI.

Mr Rayi asked the Chairperson to draft a programme for the Committee on the bills being considered by the Committee. He agreed that the bills being considered were complex. He suggested that on Committee days when there were no plenaries that the Committee could meet in the afternoons. The Bill was a section 75 Bill. If the Committee was only to get written submissions, he asked about inviting stakeholders to make presentations. On retrospective provisions, he asked whether the families of deceased artists would benefit.

Adv van der Merwe replied that public participation was at the discretion of the Committee. The Committee could decide on the extent of the public participation. On a section 75 Bill the Committee would facilitate public participation. She recommended that the Committee first gauge what responses it received. If there was little response then there was no need for public hearings.

The Chairperson said that the presentation spoke about treaties that SA was not a member of. He asked if there was a disadvantage to this — or perhaps there were advantages as well. Addressing Mr Rayi he said that the programming committee had changed the programme. The Committee was no longer going on oversight. The Committee could thus use the time freed up by the cancellation of oversight visits. The House Chairperson had cautioned committees not to be pressurised in doing their work.

Dr Masotja stated that legal opinions on the treaties could be obtained. Even if SA was not part of treaties the rights in them could be brought into South African legislation. She felt that SA should become part of the treaties.

Dr Nonyana-Mokabane explained that the treaties informed the drafting of the Bill even though SA was not a member of the treaties. DTI was working on the process of SA ratifying the treaties. The process was progressive. The idea was to accede to the treaties and to ratify them.

Adv Rory Voller, Companies and Intellectual Property Commission (CIPC) Commissioner, stated that Cabinet had approved the Intellectual Property Policy in 2018. The ratification of the treaties was being looked at. There was an Inter-Ministerial Committee on Intellectual Property that was looking at the ratification of the treaties. There was alignment between the Bill and the treaties. SA was playing catch up on the ratification of the treaties. The CIPC would be the implementing agent on the Bill. There was a collecting management aspect that had to be considered. Collecting societies would be in place. The CIPC would play a regulatory role. He felt that the Bill was well thought of.

The Chairperson was concerned whether performers in SA were protected. Were the families of deceased performance legends benefitting?  

Performers’ Protection Amendment Bill: briefing by the DTI
Dr Masotja explained that Performers’ Protection was a related right of copyright that catered specifically for the protection of the rights of performers. The Committee was given insight into the background on the process around the Bill. The Bill was introduced to parliament and introduced to the Portfolio Committee on Trade and Industry on 2 December 2016. The Portfolio Committee on Trade and Industry had adopted the Bill on 15 November 2018. Challenges currently facing the industry were also highlighted. These included non-payment of repeat fees, non-payment for commercial exploitation, unfair contracts resulting in the perpetual signing away of economic rights as well as the non-recognition of moral and economic rights of performers. To address the challenges facing the creative industry from non-payment of royalties, lack of formalisation of the creative industry which exposed it to abuse, piracy and infringement on the rights of performers the objective of the Bill was to provide amongst others for the protection of performers’ moral and economic rights, for royalties or equitable remuneration to be payable when performance was sold or rented out and for written agreements to be entered into where rights of performers were involved. The Committee was also informed that there were international treaties that had set the basis for the Bill. These included the WIPO Performances and Phonograms Treaty, the Beijing Treaty for Audio Visual Performances and the Rome Convention. The briefing continued with a comprehensive breakdown of the clauses of the Bill accompanied with a brief explanation of each.

Discussion
Mr Magwebu asked how the Bill would be implemented practically. If the intention was to protect performers with the Bill why were the rights of performers subject to the contracts that they signed? In some instances performers who were desperate, signed contracts that were bad for them. If performers signed contracts which waived their rights, he asked what the point of the Bill was. He felt the need to outlaw certain types of contracts if performers were to be protected such as contracts that waived royalties should be outlawed. Production houses had legal experts at their disposal which performers did not necessarily have. The desperate performers were the ones that lost out big time due to desperation and perhaps ignorance.

Dr Masotja replied why contracts could not just be waived. There was a need for better education and awareness in the industry. Performers needed to be better equipped when entering into contracts. In written contracts there was the issue of contractual rights. The required terms that a contract should have could be set out in legislation. Important terms included those that covered royalties and remuneration. Contracts were something that the DTI was fully aware of. She pointed out that there were contracts which may not be unenforceable. Performers had to know their rights. She was not too sure that one could outlaw certain things. It would be a quite drastic step. She did venture to say that the Bill was a step in the right direction. The DTI had even experienced opposition when it wished to set out what terms needed to be included in a good contract. There should be a certain minimum of contractual terms.  

Mr Terblanche repeated his earlier suggestion that the Committee needed to be briefed by experts in the field. Performers were in need of good lawyers when they entered into contracts with big companies. He too felt that the Bill should stipulate that certain illegal waivers should be considered null and void.

Dr Masotja said that for both the Copyright Amendment Bill and the Performers Protection Amendment Bill inputs from experts were taken into consideration. The challenge with having experts was that they had different opinions. Experts also did not necessarily have all the answers.

Mr Rayi asked how widespread the non-payment of repeat fees in the industry was. How did the Bill intend to deal with this? DTI was asked how the Bill dealt with unfair contracts. Clause 3 as stated in the Bill itself and not in the manner it was captured in the presentation could perhaps deal with the concern raised by Mr Magwebu. The presentation did not explain Clause 3 as well as it was expressed in the Bill itself.

Dr Masotja replied that the non-payment of repeat fees was very prevalent in the industry. Some performers did not get paid. There were even famous performers who received no remuneration even though their work was continually used. Perhaps they were paid a once off but that was all. The Bill tried to address these matters. Clause 2 amending section 3 covered rights that were given to a performer. There were firstly moral rights, these included being able to object to a representation if it was distorted. It depended on how the performer wished to be represented. Secondly, there were economic rights.

The Chairperson encouraged members to read the Principal Act, that is, the Performers Protection Act, 1967 together with the Bill and the presentation document. He pointed out that experts in the entertainment industry were not necessarily people with degrees but were the performers and those working in the industry itself. A group of performers called the Living Legends had recently met with the Department of Arts and Culture in Sophiatown. These were the types of people that should be taken on board. There were far too many performers who died as paupers due to unscrupulous persons taking advantage of them.

Mr Terblanche agreed with the sentiments of the Chairperson. He also felt that constitutional and international treaty experts should be taken on board. The Committee needed to have a proper understanding of the subject matter in order to make informed decisions.

The Chairperson asked Dr Masotja to answer all outstanding questions in writing. The Committee had simply run out of time. He asked the Committee Secretary to speak to the process for the Bill.

The Committee Secretary said that the process for the Bill was the same as that of the Copyright Protection Amendment Bill. The Bills would be dealt with concurrently.
 
The meeting was adjourned.