The Portfolio Committee on Trade and Industry received briefings on a virtual platform from the Minister of Trade, Industry and Competition and a Senior Legal Advisor from Parliament to obtain a better understanding of the reservations expressed by the President about the Copyright Amendment Bill and the Performers’ Protection Amendment Bill.
Members were informed of the lengthy process involved in drafting the Bills which had spanned ten years, and had included the appointment of a Copyright Review Commission. In terms of the rules of Parliament, Members were informed that they could not revisit policy issues in the Bills nor any clauses not identified by the President as possibly unconstitutional. The President had identified six issues to be considered: the parliamentary processes followed, i.e. incorrect tagging; the retrospective and arbitrary deprivations of property; the impermissible delegation of legislative power to the Minister; public participation in the Fair Use clause, the Copyright Exceptions, and the implications for International Treaties.
The Minister explained that the Bills sought to regulate the exercise of certain intellectual property rights. Copyright created a monopoly for a given period, and the intention of the law was to strike a balance between the various interests of the originators of certain types of works, the owners of the copyright and users of the works. He emphasised that the President had used the words “may be unconstitutional” and so the Office of the President had taken a cautionary approach in its assessment of the Bills.
The Minister explained that Parliament was being asked to review the processes followed by the previous Committee that had drafted the legislation and to determine whether the public had been given sufficient opportunity to consider the specific language used in the new Fair Use regime that the draft legislation introduced. Parliament had to give consideration to whether the Bills had followed the correct parliamentary process in respect of the National Council of Provinces. The Minister suggested that the Committee could take the cautious approach and submit the legislation to the Council to process as well. The retrospective and arbitrary deprivations of property contained in the Bills needed attention. Because there were no limits on the retrospective deprivation of property nor any indication of the group of people to which the clause applied, the courts could well find that aspect of the Bill unconstitutional. Once that concern had been addressed, there would probably be no need for the possibly impermissible delegation of legislative power to the Minister. The Minister advised the Committee to address concerns about public input in the copyright exceptions permitted in the Fair Use section, possibly by facilitating further public consultation processes. He doubted whether the Bills were in conflict with international treaties but recommended a thorough examination of the relevant clauses, both in the Bills and the treaties.
The Parliamentary Legal Advisor noted that the President had six reservations: two of the reservations were procedural in nature and four were substantive in nature. The process was a little different for each of the two categories. In respect of procedure, if the Committee decided that it agreed with the President’s recommendations, it would report to the House and if the House adopted that recommendation, the Committee would then proceed to correct the procedural defects. With the substantive matters, if the Committee decided that it agreed with the President’s recommendations, the Committee would proceed to amend the Bill. The Legal Advisor provided detailed information on how the Portfolio Committee on Trade and Industry in the Fifth Parliament had made decisions in respect of the six points raised by the President. She provided advice on how the Committee should address each of the concerns, noting that for her Office, the most significant issue in the Bills was that of the retrospective and arbitrary deprivations of intellectual property. She reminded the Committee that while it would receive a comprehensive background report, it could not discuss issues other than those relating to constitutionality as highlighted by the President.
Members had no questions relating to the Bills or the input but did ask for further presentations on the Bills and the background to the Bills. Members committed to addressing the matters raised by the President as speedily as possible. One Member commented that had the majority of the Members in the previous Committee not been in such a rush, refusing to listen to Opposition Members and the public, the remittance of the Bills could have been avoided. One Member reminded the Committee that it should ensure that, once amended, the Bills would still balance the rights of the creators against the interests of the publishers and the public.
The Chairperson greeted the Committee Members, Minister Patel and everyone who was connected on the online platform.
The Secretary confirmed that the meeting was quorate.
The Chairperson noted that the agenda included a briefing by the secretariat on process, and briefings by the Department of Trade, Industry and Competition and the Parliamentary Legal Advisor on the remitted Bills.
Briefing by the Secretary on the process to be followed regarding the remitted Bills
The Secretary Committee said that his intention was to provide the procedural guidelines and parameters that the Committee would need to consider when proceeding with the reservations expressed by the President about the remitted Bills.
On 24 June 2020, the Speaker had referred a letter from the President dated 16 June 2020 to the Portfolio Committee on Trade and Industry for consideration and reporting in terms of the parliamentary Joint Rule 203(1) which stated that: On receipt of a remitted Bill the Speaker must refer the Bill and the President’s reservations to an Assembly committee. In his letter, the President expressed his reservations about the constitutionality of the remitted Bills (i.e. the Copyright Amendment Bill and the Performers’ Protection Amendment Bill).
The Secretary referred to the parliamentary Joint Rule 203(2) that stated:
The committee — (a) must consider, and confine itself to, the President’s reservations; (b) must confer with the corresponding Council committee if -. (i) the reservations relate to a procedural matter that involves the Council; or (ii) the Bill concerned is a constitution amendment Bill that was passed also by the Council, or a section 76 or a mixed section 75/76 Bill; and (c) must report to the Assembly on the President’s reservations.
He repeated that the Committee had to restrict deliberations to the clauses indicated by the President.
After the presentations by the Minister or the Department of Trade, Industry and Competition (dtic) and the Legal Advisor, the Committee would have to decide whether to accept the President’s recommendations. The Committee was also guided by Joint Rule 203(3).
The Secretary assured the Committee of the support of the secretariat in the process that the Committee would be following.
The Chairperson determined that the Committee would look at the process after the day’s presentations.
Briefing by the Minister on the Copyright Amendment Bill and the Performers’ Protection Amendment Bill
Minister Ebrahim Patel stated that the Copyright Amendment Bill and the Performers’ Protection Amendment Bill provided for a number of significant measures relating to intellectual property rights. The Copyright Amendment Bill covered key products, or works, that were used in society and the economy, such as books, music, movies, photographs, architectural designs and their digital equivalents. The Bill clarified the commercial rights of parties and addressed the challenges that could arise as a result of the potential imbalance in powers between parties involved in contractual relationships, i.e. the creators of original works, or artists, and the owners of the copyright of those works, and the potential negative outcomes that could arise from the situation.
The Bills had been developed by the dti over a lengthy period of some 10 years, including the setting up of a Copyright Review Commission to research, review and recommend on matters relating to the regulation of aspects of intellectual Property, particularly in the music industry. In the period before the Bills were submitted to Parliament, the Department undertook consultation with stakeholders and invited public comment on early versions of the Bill and it had attracted some 122 submissions. A conference was held in August 2015 to discuss the Copyright Amendment Bill and it was attended by more than 300 stakeholders. Following the approval by Cabinet, the Bill was submitted to Parliament in 2017 and was considered by the Portfolio Committee. It was amended during the parliamentary process based on public input, consultations, legal advice and discussions in the Portfolio Committee. It was then adopted by the National Assembly during the term of the Fifth Parliament on 5 December 2018 and by the NCOP on 29 March 2018.
In terms of procedure, the Bill was then sent to the President for assent. The President, following advice and considering the Bills, concluded that there might be constitutional challenges with the Bills. He referred them back to Parliament.
The dtic had prepared a detailed background document which had been circulated to the Committee the previous week. The document provided the Committee with a policy rationale that had influenced the original Bills to assist the Committee when considering the referred Bills. The Minister was not going to go through the background document, slide by slide but he would lift some critical issues. The background document, in the form of a PowerPoint, was available to Members. He would not present each slide. The focus of his remarks would be on the constitutionality of the Bills based on the words of the President as the Committee had to “consider, and confine itself to, the President’s reservations.” The Committee could not consider whether, in general, the policy choices and trade-offs made in the Bill were appropriate and optimal.
The Minister reminded the Committee Members that they could only address the constitutionality issues raised by the President and could not make changes to the Bill other than where they addressed the constitutionality issues. Therefore, he would not speak to his views on the policies. That position would inform his comments.
He noted that the current Committee had been duly constituted in the Sixth Parliament and that those who had not been Members in the Fifth Parliament would doubtless require some appropriate background on the policy concerns that had led to the drafting of the Bills. He indicated he would discuss the policy concerns in the Committee and then address the concerns raised by the President. He would explain what the intention of the dtic and the Committee had been and the concerns of the President.
Key Objectives of the Bills
The Bills sought to regulate the exercise of certain intellectual property rights. Copyright created a monopoly for a given period and the intention of the law was to strike a balance between the various interests of the originators of certain types of works, the owners of the copyright and the users of the work. It was a tripartite set of intentions.
When the Bills were introduced in Parliament in 2017, the intention was to update the legislation that had been passed in the late 1970’s, to make copyright consistent with the digital era and to make copyright reflect developments at a multi-national level through the development of international standards, and to introduce improved limits and exceptions into copyright law. The proposed amendments at the time aimed to protect the economic interests of authors against infringement and to promote the progress of science, innovation and creative activities. It was proposed that the legislation would reward and incentivise authors of knowledge and arts.
The Minister noted that was the language used at the time to describe the purpose of the legislation. The purpose of the Bill had been described as enhancing access to the use of copyright works, promoting access to information for the advancement of education and research and the payment of royalties to alleviate what was recognised as the plight of the creative industry. One of the objectives of the Bill was to develop a legal framework on copyright and related rights that would promote accessibility to producers, users and consumers in a balanced manner and included the flexibilities and advancements of the digital era. He noted that the virtual meeting that he was engaged in was an example of how digitalisation had changed the world.
The Copyright Amendment Bill provided for rights by the public in a “Fair Use” regime which applied to exceptions in the application of copyright on the use of works by libraries, archives, museums and galleries or for educational and academic activities or in computer programmes that provide for designated categories of users with special needs, such as people with disabilities. The Fair Use doctrine embedded in the Bill included exceptions and limitations that sought to establish a balance between exploitation of exclusive rights by authors and copyright owners and access to the public to enhance knowledge, innovation and development in society. It allowed users to make use of copyright works without permission or payment when the benefit to society outweighed the cost to the copyright owners. Striking a fair balance was critical in copyright law and in the case of the Copyright Amendment Bill and the Performers’ Protection Amendment Bill, reading through the 10 years of debates and discussion and then the two years of Committee work on the Bills, it was clear that the Committee had sought to take developmental objectives strongly into account.
The Minister stated that it was worth noting that there were significant commercial interests in each corner of the debate and the process of putting together a Bill was subject to heavy lobbying and would remain the case as it was the nature of open society that people would put out and set out their corner and their case.
Concerns raised by President
On 16 June 2020, the President noted that, in considering the various submissions and the process, a number of clauses might be vulnerable to constitutional challenge. The President noted in his letter to Parliament: “In considering the numerous and varied submissions made and the process followed in Parliament to pass the Bills, I have a number of reservations as to the constitutionality of the Bills. These reservations lead me to conclude that, in its present form, the Bill may not pass constitutional muster and may therefore be vulnerable to constitutional challenge. I set out below those constitutional matters that require reconsideration so that these important statutes achieve their intended purpose without the risk of being set aside by the courts. I raise the constitutional issues below, mindful of the noble objectives of the amendments and with the intention that those objectives may yet be achieved in a manner that accommodates the visually impaired, educators, students and others who are meant to benefit from their provisions, without opening the statutes to future constitutional challenges, which would further impact on the very access the Bill seeks to facilitate.”
The President raised the following six reservations:
- Incorrect Tagging
- Retrospective and Arbitrary Deprivations of Property
- Impermissible Delegation of Legislative Power to the Minister
- Public participation in the Fair Use clause
- The Copyright Exceptions
- International Treaty Implications
The Minister indicated that he would explain in detail the reasons for the President’s concerns. He also explained that because there was cross-referencing across the two Bills, both would need to be considered.
The Minister explained that the Constitution prescribed different routes to be followed by draft legislation, based on section 76(3) of the Constitution and Schedule 4 which identified areas of concurrent national and provincial legislative competence. That was the heart of the first concern.
When draft legislation was prepared and submitted to Parliament, the legislation could be tagged as either a section 75 Bill or a section 76 Bill. The difference was essentially that a section 76 Bill gave greater weight to the role of the NCOP and there were different procedures in the event that the NCOP did not pass the Bill. It was the view of the Department, the Office of the State Law Advisor and the Parliamentary Legal Advisors that the Bills had been tagged correctly based on the content of the two Bills. The President took a different view and set out his concerns in the letter, suggesting that the Bills might affect culture and trade. The response to the concerns were set out in the background document on the Bills sent to Members by the dtic.
A reading of the Bills indicated that they dealt with the regulation of Intellectual Property rights, which was an exclusive national competence. The legal test for tagging was established by the Constitutional Court in the matter of Tongoane and Others v National Minister for Agriculture and Land Affairs & Others where it was indicated that the Bill must affect one of the listed items in schedule 4 in a substantial manner, before it would be rendered a section 76 Bill.
In considering the concerns of the President, the Minister suggested that there were three matters that the Committee might wish to consider:
- Did the Bills cover cultural matters and trade? A Senior Counsel opinion in that regard obtained by one of the stakeholders, Recreate, had been circulated to Committee Members.
- If the Bills, notwithstanding the legal opinions, did cover cultural matters and trade, the question then arose, of whether they did so in what the courts believed to be “in substantial measure”? Did they comply with the Tongoane judgement test? If they did, they would require section 76 tagging. He had been advised that the Bills did not meet the test of “substantiality” as the focus pertained to Intellectual Property.
- Even if the Committee took the legal opinions and the “substantiality” test into account, were there any risks to maintaining the section 75 tagging? The Minister believed that there was a risk that a court could find that the Bills covered either cultural matters or trade and that the Bills ought to have been tagged as section 76 Bills.
The Minister stated that in view of the significant commercial interest in matters regulated in the Bills, the Committee might be well advised to re-consider the tagging. It would delay the finalising of the legislation but it would be more prudent in insulating the Bills from such grounds of attack. The argument could be made that the Bill was correctly tagged but the Committee would need to reflect on the risks involved in maintaining a section 75 tagging. His advice was that it might be more prudent to tag it as a section 76 Bill in view of the circumstances. That did not raise policy issues for the Department. It was a constitutional/procedural issue for Parliament to address.
Retrospective and Arbitrary Deprivations of Property
The Minister stated that the issue in respect of the retrospective and arbitrary deprivations of property was relatively clear. He talked about the challenging commercial relationship between a creator and a copyright owner and users of a work. Creators often sold their rights to ownership and future earnings and use of the work to a person or to a firm. In some cases, the creators did not have a sense of the value of their work and had sold it at prices well below the true market value. Clause 6A of the Copyright Amendment Bill sought to entitle the author of a literary or artistic work to continue sharing in the profit of that work in the form of the payment of royalties. That meant that a creator could sell full rights to a work but still be entitled to a share of future profits. Clauses 7A and 8A introduced new section which conferred comparable rights on the authors of visual artistic work and on performers of literary artistic works.
At the time, the Committee had taken note of past exploitation of creators who, unknowingly, had assigned their rights in unfair contractual agreements and the Committee had resolved that redress was necessary. It, accordingly, amended the Bill for the new provision to apply retrospectively to works for which copyright had been assigned any time in the past, for as long as the works were still being exploited for profit. That was the key. The original Bill was looking forward to say what could apply in future but the Committee had decided to take into account those who had been exploited in the past.
At the time, the Department, the Office of the Chief State Law Advisor and Parliament’s Legal Advisors were concerned about the constitutionality of a retrospective clause. There were concerns that the Bill did not identify the categories of people who were exploited and the rights of people who had bought the copyright subsequent to the original contractual owner. The legal advice was that, instead of making the clause retrospective in the form that the Committee had intended, there should be proper research and a more nuanced Amendment Bill should be brought to the Committee. The Committee, however, decided that the urgency of providing redress meant that it had to adopt the amendment as part of the Bill that was being considered at the time. It made provision in the Bill that those clauses would only become operative after the National Assembly had approved the regulations attached to the Bill and after an impact assessment on the affected clauses. Parliament had approved the Bill which included those clauses.
The Minister explained that the President’s position was that the retrospectivity clause might be unconstitutional as it created an arbitrary deprivation of property under section 25 of the Constitution.
The Minister recommended that the Committee reconsider the retrospectivity provisions and that it removes the powers assigned in the Bills to the Minister. He assured the Committee that he and the Department remained at the service of the Committee throughout the processing of the Bills. The Department had obtained legal advice at the time that the Bill was considered but he had also obtained further legal advice in 2019 which confirmed that there were certain constitutional risks pertaining to certain provisions in the Bills.
He had also been advised of a number of anomalies that flowed from the retrospectivity provisions of the Bill. Legal Counsel pointed out that the provisions applied to all past assignment of copyright, even those where the creators had received fair value for the copyright or were even overpaid. The new rule operated not only against the person who had acquired the copyright from the author but also to any purchasers further down the line. The rule required them to shed part of their profit to the creator even if they had acquired the copyright at a fair or excessive price from an intermediary. The courts might find that the new rule was arbitrary as it applied to all copyright holders even where an injustice was not done in the past and it bestowed a windfall on authors who had received fair value for their copyright and even those who were overpaid. It penalised copyright owners who had paid fair value or even overpaid for copyright and those who had acquired copyright from an intermediary. It would, therefore, be regarded as an indiscriminate operation of the new rule. When a rule was indiscriminate and not targeted to address a specific concern, it could be regarded as indiscriminate.
The Minister proposed that the Committee reconsider the provisions on retrospectivity and that could be done without losing the key thrust of the legislation. Given that the Committee’s concerns about past exploitation remained valid, the Committee would have to look at alternative mechanisms of redress. The problem that the Committee had identified was valid and did not go away and the current Committee would have to find other means of addressing the problem.
Impermissible Delegation of Legislative Power to the Minister
The Bill empowered the Minister to develop draft regulations and to conduct an impact study on those regulations to ensure that the sharing of royalties relating to any of the works provided for in clauses 6A, 7A and 8A were dispensed responsibly and not arbitrarily. It also required the Minister to table the draft
Regulations in the National Assembly for approval prior to finalising the regulations and gazetting them.
The Minister considered it a rather hard arrangement put in place by Parliament. The powers of the Minister to exercise that mandate had been intended to ensure regulatory certainty and to minimise the risks to constitutionality as identified. The process only applied to the retrospective clauses in the Bills and the inclusion of the powers of the Minister had been considered appropriate by the Committee to address the constitutionality concerns. What that meant was that the Committee had recognised the challenge to constitutionality and had therefore not given the Minister carte blanche. The Minister had to lay the regulations before Parliament and present an impact study. Only after Parliament had approved the regulations, could the Minister give effect to them.
At the time, the Department, the Office of the Chief State Law Advisor and Parliament’s Legal Advisors were of the view that the additional mechanism in the Bill and the provision that regulations would remain inoperable until approved by Parliament, was viewed as constitutionally defendable.
The Minister addressed the concerns of the President. The Bill was believed to confer substantial discretionary powers on the Minister and that “may well” constitute an impermissible delegation of legislative authority and as such would be constitutionally invalid if the Bill were assented to in its current form. There was no opportunity for public participation in the regulatory process and also that the matter was confined to the National Assembly with no role for the NCOP.
Taking all of those points into account, the Minister held the view that the provision had clearly been prepared by the Committee to give effect to the decision on retrospectivity and he recognised that Parliament’s Legal Advisors and the Office of the Chief State Law Advisor had held, at the time, that the provisions were constitutionally sound. However, regulations could amplify the provisions of a piece of regulation, but it could not contradict them. Regulations had to give effect to the provisions of that relevant section but were unable to save a provision that was unconstitutional. If the Committee was persuaded by his advice to delete or amend the retrospectivity provision, then that specific provision on ministerial power would be redundant and Minister Patel proposed that the provision be deleted.
Public Participation in the Fair Use clause
Intellectual regimes across the world permitted the use of copyrighted material all the time, but they used the material based on very different approaches that could have different outcomes and impacts on markets. Some countries used what was called “Fair Dealing” which provided for the law to set out a finite list of exceptions to copyright infringement. Great Britain, for example, followed the Fair Dealing approach. Other countries used Fair Use which set limits on the exclusive rights of the copyright holder and provided for access to copyright materials in the public interest. Fair Use is a doctrine under copyright law that permits certain use of material without the copyright holder’s permission. As an example, the Minister stated that he could not prevent a media house from reporting on what he said in Parliament, even if he said he had copyright over his words. His words could also be used for scholarship and research. The very basis of research was reviewing other people’s words and finding new insights.
The Minister explained that one of the two approaches, Fair Dealing or Fair Use, was embedded in the way in which all legal systems across the world worked. Fair Use allowed users to make use of copyright material without payment when the benefit to society outweighed the cost to the copyright holder. The most prominent proponent of Fair Use was the United States, which in its law provides for a more open set of examples for what constitutes Fair Use. The law uses words like “such as”. For example: “… would include activities, such as …” In Fair Dealing, the law would say that it permitted “the following:”
That was the heart of the challenge that the Committee had looked at. The draft Bill that had been introduced in the Committee at the start of the process had contained a formulation that used Fair Use but provided a closed list of exceptions. During the public participation process, a number of stakeholders had noted the contradiction between the Fair Use doctrine and the closed list of examples. Out of that, the Committee had resolved to support the redrafting of that section to give effect to the “hybrid model” leaning towards Fair Use. The detail was in the background document.
The original clause had read as follows: “In addition to uses specifically authorised, fair use in respect of a work or the performance of that work, for the following purposes, does not infringe copyright in that work:”
The amended clause read: “In addition to uses specifically authorized, fair use in respect of a work or the performance of that work, for purposes such as the following, does not infringe copyright in that work:”
That was the nub of it: the increased flexibility.
The heart of the President’s concerns related not to the content per se, or to consultation in general, but to the adequacy of public consultation on the changes made by the Committee during the process of reviewing the Bill. It had been argued the changes were far-reaching and ought to have been accompanied by further opportunities to the public to comment.
The Committee in the Fifth Parliament had been of the view that the Copyright Amendment Bill had been developed through a consultative parliamentary process, stretching over two years, where a diverse set of stakeholders and constituencies were active participants. Members of the public themselves had suggested the changes to be made and therefore it was not necessary for Parliament to go back to the public. However, some affected parties contended that the changes were material and could prejudice them.
The Minister reflected that there was no codified way to determine the adequacy of consultation but two key Constitutional Court judgements might assist the Committee to determine whether the process of public consultation on the changes was adequate. In the SA Veterinary Association case, the court established that the Committee should have provided for further public comment, where it had made a material amendment to a Bill. In the Doctors for Life case, the court stated that in evaluating the adequacy of consultation, it would consider, inter alia, the nature and importance of the legislation and the intensity of its impact on the public. Materiality would be identified in, among others, how significant that piece of legislation was.
The principle concern related to the changes in Fair Use, not the matter in general. The Minister suggested that the Portfolio Committee might wish to make a call on the sufficiency of the process, based on the cumulative impact of the erosion of copyright by the list of new exceptions, some of which had been described as wide and open-ended. The Committee might wish to make a call on the sufficiency of the process based on an assessment of the materiality of the change, the relationship taken as a whole to the original provisions that were subject to public comment; and finally the benefit of insulating the Bill against future constitutional attack, by providing for public consultation on the relevant referred provisions.
The Copyright Exceptions
The Copyright Amendment Bill set out a number of exceptions to copyright. The President’s concern was that copyright exceptions provided for in the Copyright Amendment Bill might constitute arbitrary deprivation of property and might violate the constitutional right to freedom of trade, occupation and profession. He drew attention to the three-step test which put forward three cumulative conditions for national copyright exceptions and limitations and prescribed that such exceptions and limitations must be confined to certain special cases; not conflict with the normal exploitation of the copyright work; and not unreasonably prejudice the legitimate interests of the rights holder /author.
At the time, the Department had held that exceptions were critical to any modern, workable system of intellectual property protection and so exceptions was a part of what needed to be looked at and one needed to strike a legitimate balance between the competing interests that he had referred to earlier. The Committee had appointed Professor Tobias Schonwetter from the University of Cape Town who had advised that the exceptions were permissible and consistent with the three-step test and were needed to adapt to digital technology. In his view, there was no obvious conflict with international law.
Looking at the matter as a whole, the Minister stated that it was a trite point that all lawyers agreed that in constitutional scrutiny, deprivation of property was allowed in law, but the deprivation should not be arbitrary and should be contained in a Law of General Application as per section 25(1) of the Constitution. He had been advised that the deprivation of property was contained in a Law of General Application and was not arbitrary. The Committee had been of the opinion that the exceptions were reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom. On the application of the three-step test, other jurisdictions, such as the USA, were not considered to be in breach of the relevant international treaties which set out the three-step test. The Committee might want to take all of those factors into account.
International Treaty Implications
There were a number of international treaties that addressed intellectual property rights, such as the World Intellectual Property Organisation (WIPO) Copyright Treaty, the WIPO Performances and Phonograms Treaty, the Beijing Treaty on Audiovisual Performances and the Marrakesh VIP Treaty and the Berne Convention. SA was a member of two treaties and three others were in the process of being acceded to and would be acceded to as Parliament completed its domestic legislation because one had to be sure that one’s international commitments and one’s domestic legislation were aligned.
The President’s concern was whether the Bills complied with the Treaties. He had referred the Bills back to Parliament to consider the content against SA’s International Law obligations embodied in the Treaties concerned. At the time that the Bills were being presented to Parliament, the Department had provided a presentation that sought to show the alignment, particularly between the Bills and the ratified treaties. The dtic and the Portfolio Committee, as well as the Parliamentary Legal Office, did indeed consider the contents against the treaties and had found them to be in alignment.
However, the point had been raised that, even if the Bills were in conflict with the content of the treaties that would not constitute a basis for referring the Bills to Parliament. He respectfully suggested that, for two reasons, the Committee would be well-advised to consider the concerns expressed by the President, particularly in relation to the ratified treaties. Firstly, the court was obliged to consider the Republic’s international obligations in any matter, including, for example, a constitutional challenge to the provisions of a law. Should the issue of deprivation of property, through the new laws, be considered by the courts, the courts would no doubt look at international jurisprudence and the contents of ratified treaties to consider whether it was arbitrary. To that extent, in respect of matters where constitutional concerns arose, it would be worthwhile for Parliament to consider the alignment of the Bills with treaties. The second point was that even if the Portfolio Committee were to take the view that it was not constitutionally sound, it would not be entitled in law to review and decide on the validity of a referral and would require a court order to that effect.
The Minister stated that in view of the contention by the Department that the Bills were aligned with the applicable treaties, a view held by the Office of the Chief State Law Advisor and Parliament’s Legal Advisors, the Committee might wish to be taken through the contents of the treaties compared to those areas of the Bills where the President had expressed constitutional concerns in order to give proper consideration to those concerns.
The Minister made an assurance that, at the request of the Committee, he would facilitate such engagement with the Department as it was by its nature a very detailed exercise.
The Minister concluded by noting that the President had received numerous notices that had led him to conclude that, in their present form, the Bills might not pass constitutional muster and might be vulnerable to constitutional challenge and his referral was to ensure that those two important statutes achieved their intended purpose in a constitutionally sound manner that accommodated visually impaired, educators, students and others who were meant to benefit from their provisions. Because the Performers’ Protection Bill incorporated provisions of the Copyright Amendment Bill through cross-referencing, both Bills would need to be subject to the detailed and careful scrutiny that the Committee would be engaging in. The value of the checks and balances in the Constitution had been highlighted in the referral to enable the Committee to look afresh at the matter to ensure that governance arrangements were built on a solid foundation of constitutionality.
The Minister and the Department remained at the service of the Committee. He added that his remarks were based on a review of the record, the documentation and the draft legislation.
The Chairperson thanked the Minister and invited the Legal Advisor to present.
Presentation on the Remitted Bills by the Parliamentary Legal Advisor
Adv Charmaine van der Merwe, Senior Legal Advisor at the Parliamentary Office of Constitutional and Legal Services (OCLS), stated that the presentation that she had prepared was very similar to that presented by the Minister so she would try to not repeat, but she would highlight a number of concerns that she had.
In respect of the section 79 process, as advised at the outset, it was not the same as the normal legislative process and the Committee could only refer to matters related to constitutionality as indicated by the Minister. That meant that the policy issues were not open for discussion. The Committee could only consider whether a matter was constitutional.
There were six reservations from the President: two of the reservations were procedural in nature and four were substantive in nature. The process was a little different for each of the two categories. In respect of procedure, if the Committee decided that it agreed with the President’s recommendations, it would report to the House and if the House adopted that recommendation, the Committee would then proceed to correct the procedural defects. With the substantive matters, if the Committee decided that it agreed with the President’s recommendations, the Committee would proceed to amend the Bill.
The concerns related to the classification of the Bills, in other words, the process the Bills had followed in the two Houses; retrospective application of certain clauses; lack of public participation, specifically related to Fair Use as an exception; impermissible delegation of legislative power to the Minister; copyright exceptions and whether they implied arbitrary deprivation of property or might violate the freedom of trade; international treaty implications.
Tagging of the Bills
Adv van der Merwe reminded the Committee that it was dealing with two Bills. Concerning classification, the Committee had to bear in mind that a lot had happened since 1994 when it came to the classification of Bills. Initially, Bills were classified by determining whether a matter could be introduced by a province. If the legislation was something that provinces could introduce, it was declared section 76 but if it was not something that the province could introduce, then it was classified as section 75. But then the courts had said that the matter could not be addressed in that way. The Committee needed to look at each of the provisions of the Bill and understand whether any of those provisions fell within such an area. The court had not changed the meaning of the section but had required that each and every provision of the legislation be considered.
The Office of the State Law Advisor and the OCLS in Parliament had considered the Bills and each and every amendment as it was done because a Committee was not permitted to make amendments that would change the classification of the Bills. Both offices had been involved in the consideration of classification and were of the view that neither of the Bills and none of the clauses fell within the perimeters of cultural or trade matters. It might seem that it did because copyright was so closely involved that one would only refer to the issue of Intellectual Property when one was trading, but that did not make the Bill itself fall within the functional area of trade. The Bill dealt with the intellectual property that one had to consider when one was trading, although there was a knock-on effect.
The courts, when dealing with the matter of the Democratic Alliance versus the President of SA in the matter pertaining to the Transport and Related Matters Amendment Bill, had said that Bills were not classified for their knock-on effect. One had to look at what the Bill was actually regulating. Also, the fact that the Bill was referred to the National House of Traditional Leaders did not, in itself, mean that the Bill was dealing with cultural matters or with indigence law as the wording of the Bill was much broader.
Adv van der Merwe added that the view of her office was that both Bills were correctly classified. However, she cautioned the Committee on the issue. Her office had seen, on many occasion, where the policy direction of an Act was not to the liking of any member of the public, they were then able to take the Act to the Constitutional Court where tagging was used as a reason for going to court. The Committee could not forget that there was a reason for classifications because that provision was in the Constitution. But, the courts had indicated that, because the procedure in section 76 was much more onerous and had a lot more processes built into it, the courts would not hold a Bill invalid because it was classified as a section 76 and not a section 75. For that reason, the Committee could consider requesting that the Bills rather be classified as section 76 Bills.
If the Committee decided on that option, the Bills would not necessarily come back to that Committee because the sections 75 and 76 processes were exactly the same in the National Assembly. However, changing the tagging from section 75 to 76 would affect the process in the NCOP.
Retrospective Application of the Bills
Adv van der Merwe referred to the retrospective application of the Bills, noting that the Minister had gone into detail about the clauses and what they did as well as the concerns. She agreed that there had been a compromise by the previous Committee. That Committee had been advised that there were constitutional concerns, but was of the view that it would rather have the clause in the legislation and if it were to be found unconstitutional, it could be struck off. The reason for containing the retrospection application in only one specific sub-section had been that it would not affect other sections or sub-sections of the Bill. The recommendation of her Office on clauses 5, 7 and 9 that inserted section 6A(7), 7A(7) and 8A(5) was that they be deleted. There would also have to be a consequential amendment deleting section 32(2) that dealt with the delayed implementation of those provisions of the Copyright Amendment Bill. If the Committee agreed with the recommendation, she would amend the Bill and the Amended Bill would be submitted to the House with the report of the Committee. If the Committee did not agree with the recommendation and wished to retain the sections, it would report to the House that it did not agree with the reservations of the President.
Impermissible Delegation of Legislative Power to the Minister
Adv van der Merwe moved on to reservation no. 4 which dealt with the delegation of the same clauses. If the Committee agreed that the retrospective clauses were to be deleted, that would become a moot point. However, if the Committee decided that the clauses should remain, her office believed that the delegations in themselves were constitutional. She agreed with the Minister that while the delegation might be constitutional, it could not fix something in a Bill that was already unconstitutional. The concern was in respect of the retrospective application and not the delegation as plenty of court cases had implied that it was, in fact, permissible for Parliament to delegate legislative function. Parliament might not delegate its plenary power so where the Constitution stated that Parliament had to do something by way of an Act, Parliament could not delegate that function to a Minister, but case law examples showed that things like procedures, rates that might change regularly and other operational issues were delegable and had been delegated a number of times.
In respect of the President’s specific criticisms that there was no public participation in the development of regulations, case law showed that there was clearly a duty on the Executive when it developed regulations to include public participation. Once the regulations were presented in Parliament, section 59 of the Constitution kicked in and Parliament would have to facilitate public participation. There was no need to be concerned about that matter. There was no constitutional requirement that regulations came back to Parliament but there had been a recent development where, as part of Parliament’s oversight function, the National Assembly or both the National Assembly and the National Council of Provinces, could require that regulations be tabled in Parliament before they could be gazetted.
Public participation in the Fair Use clause
Adv van der Merwe explained that reservation No 3 related to the view that substantial changes were made following public participation. The background was that section 12A (Fair Use) had been moved to a new section. When something was moved to a new section, the legal advice was to call for comments and that had been done. However, the Committee had decided to redraft the Bill and take Fair Use out of section 12 and put it in its own section as it applied to all works and not only literary works. There had been no change to the content. The Committee had, at some stage, reached the point when it no longer went back to the public, i.e. when there was no material change. The legal advice was that there had been sufficient public involvement. The courts said that both Houses had significant discretion regarding public involvement. If the Committee wished to err on the side of caution, it could call for more public comment but then it would only be permitted to consider public comment on Fair Use.
Arbitrary Deprivation of Property
Adv van der Merwe stated that reservation No 5 dealt with Arbitrary Deprivation of Property. She explained that copyright had always been subject to exceptions because copyright without exceptions limited the rights to education, dignity, equality, trade, and freedom of expression. The purpose of the exceptions in the remitted Bills aligned copyright with the digital era and promoted multilateral development, which included advancing constitutional values and human rights. The exceptions were subject to a general four-factor test in clause 12A(b) and some were further subject to specific limits. The exceptions were thus not open-ended.
The Bill had also complied with the three-step test. The three-step test was a clause that established three cumulative conditions to the limitations and exceptions of a copyright holder’s rights, basically establishing the legal parameters for reproducing a work. Australian Law had said that Fair Use did comply with the three-step test. The USA already had a Fair Use copyright approach when it had joined the Convention and the interpretation was that Fair Use passed the three-step test.
It was her view that the exceptions were not arbitrary or open-ended as they balanced the rights affected and were aimed at achieving a legitimate government purpose. It was the Legal Advisors’ view that the remitted Bills would pass constitutional muster. If the Committee agreed, it could report to the House that it did not agree with the President’s reservation related to the copyright exceptions. If the Committee disagreed, it could amend the affected exceptions. The Bill had followed a global example of allowing four Fair Use exceptions to copyright: purpose and character, nature of work, amount, market effect. The Committee had requested experts to consider those factors.
Adv van der Merwe referred to the expert panel reports.
International Treaty Implications
Reservation No 6 was not a constitutional ground for rejecting the Bill. There was a concern that the Bills might contravene some international treaties. The President’s reservations related specifically to the WIPO Copyright Treaty, the WIPO Performance and Phonograms Treaty, and the Marrakesh VIP Treaty. None of those treaties were currently enforceable in South African law as they had not yet been ratified, nor domesticated, as required by section 231. As such, the reservation of the President spoke to a future possible action that may or may not happen. The legislature could not legislate subject to possible law. The legislature may take into account treaties that it is informed that South Africa wants to be a member of and legislate accordingly, but its laws could not be in breach of international treaties to which South Africa was not yet a member.
Adv van der Merwe added that in respect of section 79(1), an international agreement that was incorporated into the South African law by both ratification (section 231(2)) and domestication (section 231 (4)), did not in itself constitute a constitutional obligation. Rather, when any reservation that related to the Bill of Rights was considered, international agreements had to be taken into account in that discussion on the Bill of Rights. Accordingly, the fact that legislation might be in breach of a treaty could not in itself be a ground for referral in terms of section 79(1).
Adv van der Merwe advised the Committee that the view of her Office was that the referral reason was not a constitutional ground as required by section79(1). If the Committee agreed, it could report to the House that the President’s reservation related to international treaties was not a legal section 79(1) ground and might not be considered. If the Committee disagreed, it could decide to reconsider the remitted Bills in respect of compliance with the treaties and make any amendments it deemed necessary.
The Chairperson noted that the discussion on the response of the Department of Trade, Industry and Competition to Covid-19 issues had been moved to 19 August 2020 and that on 25 August and 26 August 2020, the Committee would be looking at programmatic issues relating to the Bills under discussion. He invited clarity-seeking questions from Members.
Ms J Hermans (ANC) commented on the comprehensive briefing which the Minister and the Legal Advisor had presented to the Committee. Speaking on behalf of the ANC, she welcomed the move by the President to submit the Bills to Parliament for review. She noted that the President had not raised any concern regarding the merits of the Bills as the ANC was against the exploitation of its people. The democratic principle founded in the trias politica model meant that the separation of powers ensured that whatever legislation was drafted by Parliament had to be constitutional and the Presidency and the Judiciary were there to check that. The concerns identified by the President were intended to ensure that the Bills adhered to the Constitution.
She added that the ANC Members would waste no time in ensuring that the matters were attended to as a matter of urgency because over and over again artists had been exploited and had died as paupers. They were still dying poor.
Ms Y Yako (EFF) agreed that the Bills had to be expedited. The President had the right to question the constitutionality of the Bills but they had been widely discussed in the Fifth Parliament. The Committee now needed to expedite the response. The President had opened the gate for public participation again, despite the many engagements by the previous Committee. She noted that the lawyer (Senior Legal Advisor) had advised Members not to go into details of the other clauses but Members of the Committee were not artists and so did not know about the matters raised in the Bills and so they could not just agree or disagree. Members needed to learn more about the Bills, but the Committee should not be slow in responding to the needs of artists. Artists had suffered during the Covid-19 pandemic without any “repercussions” (support) as the Department of Arts and Culture had not made any provisions for artists.
Mr F Mulder (FF+) welcomed the Minister and was glad to see that he was healthy and seemed well again. He also welcomed Members to Covid-19 level 2. He suggested that the Committee needed to attend to the copyright issue in a responsible manner, protecting the artists, the copyright owners and the users. He agreed that the Committee should give the matter time and conduct more investigation.
Mr D Macpherson (DA) recalled that when the very issues raised by the President had been raised by Opposition Members in the Committee, they had been told that they were grandstanding and scoring political points, and that they had been captured by outside interests. The Members had not been interested in addressing concerns raised about the Constitution.
After the Bill had been approved by Parliament, with all the flaws, he had petitioned the President on 12 June 2020 and the President had agreed with his interpretation that the Bills were fatally flawed. The President had responded by sending the letter on 16 June 2020, stating that he was concerned that the Bills were risky in terms of their adherence to the Constitution.
Mr Macpherson had noted the Minister’s wise words and that he had warned the Committee to proceed with caution. The previous Committee had been desperate to complete the processes and have the Bill passed by Parliament before the elections so that some political parties could say they cared about their people. He had personally warned the Committee about the way in which Fair Use was being used and that the Bills could endanger international treaties relating to copyright. He had disagreed with Adv van der Merwe that there had been adequate public consultation, but none of his concerns had been considered and now the Bill had stalled and gone nowhere. His biggest concern had been about the lack of public participation.
Mr Macpherson now saw that the Committee would continue on the same path by shooting down any and all concerns about the Bills, indulging in dog whistling and making personal comments about any Member who queried issues in the Bill. He suggested that the Committee take the Minister’s advice and be cautious in its consideration of the Bills.
He said that a false dichotomy existed with previous speakers saying that if the Bills were not enacted, people in the creative industry would lose their livelihoods. The Bills should also enable investments in film making, animation, etc. and should create jobs for creative people. The Bills should enable overseas investment, but they did not do that when they contradicted international treaties and included arbitrary deprivation of property rights.
Mr Macpherson hoped that the Members would be more collegial and that the majority party would stop with the name-calling and that they would listen to voices within, and outside of, the Committee.
Mr S Mbuyane (ANC) said that the Committee could not go back to re-examining the Bills and the principles that had led to the Bills. The first point was that the Committee must address the issue as speedily as possible. The current Act had been passed in 1978 and was completely out of date and not in line with the policies of the governing party. He was adamant that the retrospective clauses were essential and that the provisions of the Bill had to clarify that so that retrospectivity could be applied at least up until 1917. Adv van der Merwe had put it clearly when she said that there had been extensive consultations and opportunities for public input. The Department had made recommendations to the Committee on copyright and should advise it on how to address the concerns. It was a matter of high stakes.
Mr Mbuyane proposed that the Committee receive a full briefing by the Department as some Members of the Committee had not been Members when the Bills were processed. The work of the Review Commission was important and should not be forgotten when considering the constitutionality of the Bills.
He agreed that the Committee should then look at the President’s recommendations and should also check that the Bills would still balance the rights of the creators against the interests of the publishers and the public. The Bill dated back to 1978 and the Committee needed to capacitate those who were the creators of works for which they had never been adequately rewarded. That had to remain in the Bill, so Members should just focus on the issues raised by the President.
Ms N Motaung (ANC) said that all the manifestos of the ANC since 1994 had been developed to ensure that all people in SA benefitted from the economic mainstream in the country. The two Bills would give rights to the artists. She asked, rhetorically, what motivated the Members in addressing the President’s concerns. Her response was that musicians such as Mahlathini and the Mahotella Queens had created magnificent music that had entertained people and brought them great pleasure. People such as Simon "Mahlathini" Nkabinde
and others would not forgive them if they neglected to pass the Bills protecting the rights of the creators. There were influential companies in the sector but the interest of the ANC was the lives of its people. The ANC was on the side of the people.
Ms P Mantashe (ANC) agreed with Mr Mbuyane that it was no time for grandstanding by certain Opposition Members. The truth was that the ANC was the one that deployed its resources to assist the people.
The ANC was guided by the principle of criticism and self-criticism and would always do its best for its people.
She stated that President Ramaphosa was the leader of the ANC and as a cadre he had taken the right decision to return the Bill to Parliament so that the identified issues could be addressed. She was in agreement with the President and would affect the changes because the President had requested it – she would not join those who were grandstanding.
Ms Hermans stated that the DA had raised criticism with the Bills but it had been there at the meetings too. It had to bear responsibility for not working constructively. Not all of the problems raised by the Opposition at the time had been considered problematic by the President. The DA was like a clock that was broken. Even a broken clock was right twice a day, but it remained broken.
The Chairperson indicated that he wanted to determine the way forward.
Mr Macpherson added that he saw that his colleagues were going to go down the same route and he asked the Members to consider their train of thought. They could continue with the name-calling and colourful language but it would not change the fact that they had been wrong and everyone else was right. They should play the cards that had been dealt.
He said that the DA’s clock still worked but the ANC’s clock had been stolen, broken and shattered into a million pieces. It would not end very well.
Ms Mantashe said that the ANC agreed with the views of the Presidency.
The Chairperson stated that the Committee needed to respond to the President’s comments. He asked the Minister and the Legal Advisor to advise on the way forward.
Minister’s closing remarks
Minister Patel noted the comments by Ms Hermans on checks and balances in the system and he agreed with that. When the Constitution had been designed, it was determined that the President, when reviewing the legislation, could not look at policy but only at the Constitutional issues. The task of the Committee was not a consideration of policy; it was a review of processes in respect of whether they were constitutional. The Committee could consider the President’s reservations and whether they were correct. In tagging, there was only one option to consider but in the other matters, there were a number of remedies.
He said that Ms Yako raised an important matter and that the Bills sought to address the plight of the artists as SA had artists whose work was immensely rich but who were personally very poor. The entire intention of labour law was to address the protection of workers. But the law had to be bound by constitutionality. It was important because all Members took an oath to adhere to the Constitution. If a law was not constitutional, the artist would not benefit and there could be many years of litigation during which the artist would remain poor.
The Minister agreed with Mr Mulder that the process had to be about constitutional soundness and that there was even-handedness. The even-handedness related to the constitutionality but not to the policy. He looked forward to that approach by the Committee.
He said that Mr Macpherson had raised issues around public participation. Mr Mbuyane had pointed to the Review Commission and he would make copies of that report available to the newer Members of the Committee. Mr Mbuyane and Ms Yako had made the point about the urgency. He was sure that the Committee would prioritise the work on the Bills. Mr Mbuyane suggested a full briefing by the Department. The Minister stated that the DG and DDG responsible were present and would make themselves available.
The Copyright Act of 1978 was out of date as the landscape had changed very dramatically in the light of digitisation. Digitisation had not just created a new way of viewing or reading works but had created an openness that the copyright legislation had to accommodate. SA was a leader in copyright legislation. What had changed since 1987 was that the country was a democracy and redress was critical. He reminded Members that alternative mechanisms to address the challenges of redress and to support those creators who were victims of past exploitation, might need to be considered.
Development objectives were built into the Bill and the President supported development. It was therefore important to note that the three-step test was extremely sensitive to context and granted a large amount of freedom to promote local and concerns. It was incredibly important to take note of the unique circumstances in SA. The Bills’ exception for educational purposes could be found in many countries in South America.
The Minister had not been present in the Committee at the time of drafting the Bill but he had been able to draw on the records, the progress of the Bills, documentation and the final versions of the Bills. The Committee should look at the constitutionality of the Bills and should look at the issues discussed by the previous Committee. He agreed with Ms Motaung and Ms Mantashe and he appreciated the comments of the Legal Adviser as they were helpful and identified the issues the issues to be addressed, while providing advice and options for the Committee.
Parliament was being asked to review the processes followed and whether the public had sufficient opportunity to consider the specific language used in the new fair-use regime that the draft legislation introduced but amendments should be made without losing the key thrust of the draft legislation. As far as the treaties issues were concerned, the Committee should very carefully determine how to deal with the treaties and even if it decided to consider altering clauses, it should be aware that there might well be litigants and that when matters went to the Courts, they would in determining arbitrary deprivation of property, draw on international jurisprudence. The Department was prepared to present the key clauses of the relevant international treaties and compare details in those treaties to the Bills for the Committee if so requested.
The Minister concluded by reiterating the support of the Department and that it would update the background document and create a pack of the documents that the previous Committee had had access to. He cautioned that the pack would be for background information only as the Committee would not be revising the policies incorporated in the Bills, but only the adherence of the Bills to the Constitution. The President had, in a number of cases, stated “it may have” so it was a cautious approach to the possibility of contravention of the Constitution. Updating laws was always a difficult process and one had to identify those issues that had to be addressed and avoid considering other issues.
The Minister stated that the reality and legacy of the artists who had helped to create the rich heritage of SA, but who had not benefited, should be addressed. The Committee needed the wisdom to balance the competing demands from the various role players.
The Chairperson thanked the Minister for his valuable input and requested the Legal Advisor to make her closing remarks.
Closing remarks by the Legal Advisor
Adv van der Merwe stated that she had summarised the points during her presentation and reiterated that the Legal Advisors in Parliament had concerns only about the retrospective clauses. However, the Committee needed to understand how the Bills related to the treaties. As a lawyer trained to understand the words in the Bill, she herself had struggled to understand the language in the Bills. For that reason, she was willing to work through the Bills with the Members.
She reminded the Committee that while it would receive a comprehensive background report, it could not discuss issues other than those relating to constitutionality as highlighted by the President.
The Chairperson requested the Secretary to create a programme to address each of the six issues in the President’s response.
The Secretary said that he would prepare a programme that would take into account the Minister’s offer for the Department to present on the background to the Bill and the points of concurrence or difference between the Bills and international treaties. At the next meeting, he would provide a programme to take the process forward.
The Chairperson informed Members that the programme would be presented at the following meeting.
He indicated that the intention of the current meeting had been to capture the background and to get an understanding of the issues raised by the President.
He concluded the meeting, stating that other issues would be addressed the following day. The follow-up meetings on the Copyright Bill would be on 25 and 26 August 2020. The meeting on the following day would address the impact of the Covid-19 pandemic and the response of dtic to the effects of the pandemic.
The Chairperson thanked the Members for their participation.
The meeting was adjourned.
- Parliamentary Legal Advisor: Section 79(1) referral of Performers’ Protection- and Copyright Amendment Bills
- President’s Letter: Referral of Copyright Amendment bill and Performers’ Protection Amendment Bill to NA
- DTIC: Copyright 2020 Background Document
- Media Statement: Trade and Indusrty committee briefed on President's Reservations with Respect to Copyright Amendment Bill and Performers Protection Amendment Bill
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