Copyright and Performers’ Protection Amendment Bills: briefing & deliberations on President’s substantive reservations

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Trade and Industry

26 August 2020
Chairperson: Mr D Nkosi (ANC)
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Meeting Summary

The Portfolio Committee on Trade and Industry met on a virtual platform to receive legal advice from the Parliamentary Office on Constitutional and Legal Services in respect of the substantive reservations expressed by the President on the Copyright Amendment Bill and the Performers’ Protection Amendment Bill. The Committee was given guidance in respect of the action that the Committee could take.

The Legal Advisor informed the Committee that the reservations could be divided into two units: the retrospective application of the Bill and the impermissible delegation of legislative power to the Minister because the first reservation impacted the second. The reservation about exceptions to copyright was linked to the reservation about international treaties because the exceptions could affect the treaties.

The consideration given in the Bill to retrospective and arbitrary deprivations of property sought to address injustices of the past where authors were unfairly exploited in that they received a very small amount for their work and the copyright of the work whereas the person who had bought the copyright to a particular work could still be making a profit on that work years after the purchase of the copyright. The advice provided by the Legal Advisor was the same as had been given to the Portfolio Committee in the Fifth Parliament, namely that the clauses be amended so that they only provided for prospective operation. The Committee could agree and delete the relevant clauses. Alternatively, if the Committee felt that it was something that had to be in the Bill, the Committee could report to the House of Assembly that it did not agree with the President’s reservation.

The impermissible delegation of legislative power to the Minister was a mechanism devised by the previous Committee in order to get around the constitutionality concern in that the Minister would have to follow certain processes before implementation of the retrospective clause, such as an impact assessment study and the development of processes for the retrospective applications to be made applicable. The problem was that the delegations formed part of a larger clause that might be found unconstitutional and a regulation could not correct an unconstitutional provision. That provision would become moot if the retrospective provision were deleted.

One of the President’s reservations 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. The three-step test was a concern that related specifically to Fair Use. However, the Constitution allowed for deprivation, but not arbitrary deprivation. The Committee was advised that all of the exceptions would pass constitutional muster, although, on the whole, they modernised and extended exceptions in the current Act. The Committee was advised that because it had agreed to open up Fair Use for public comment, the exceptions would also be opened up to public comment as they related to Fair Use. The Committee had to deal with the remaining clauses relating to exceptions. The Committee could inform the House that it did not agree with the President’s recommendations in respect of those specific exceptions clauses not affected by the Fair Use decision. Alternatively, it could consider the constitutionality of those clauses and amend them.

In respect of the international treaty implications, the Legal Advisor pointed out that none of the treaties mentioned were currently enforceable in South African law as they had not yet been ratified, nor domesticated. As such, the reservation of the President spoke to a future possible action that might or might not happen. The legislature could not legislate subject to possible law. The referral reason, in that case, was not a constitutional ground as required by section 79(1). The Committee could report to the House of Assembly that the President’s reservation related to international treaties was not a legal section 79(1) ground and could not be considered by itself, or it could decide to reconsider those aspects of the remitted Bills that the Committee found to be in conflict with the treaties and make the necessary amendments.

All political parties agreed that, having heard the recommendations and possible responses to the President’s reservations, they wished to apply their minds to the matters and engage in debate with party colleagues regarding the possible actions. The Committee would meet the following week to debate the matter and take decisions on the way forward and processes to be followed.

Meeting report

Opening Remarks

The Chairperson greeted the Committee Members and everyone who was connected on the online platform.

The Secretary confirmed that the meeting was quorate.

The Chairperson noted that the agenda was devoted largely to a presentation and deliberations on the President’s substantive reservations to the Copyright Amendment Bill and the Performers’ Protection Amendment Bill.

Presentation on substantive reservations to the remitted Bills by Senior Legal Advisor

Adv Charmaine van der Merwe, Senior Legal Advisor, Office of Constitutional and Legal Services (OCLS), Parliament, explained that she would address the substantive issues arising from the President’s section 79 correspondence. She explained that she would divide her presentation into two units: the first would address the retrospective application of the Bill and the impermissible delegation of legislative power to the Minister because the first reservation impacted the second. Thereafter she would address the exceptions and the treaties.

Retrospective and arbitrary deprivations of property

Adv van der Merwe began her presentation by addressing the retrospective application of the Bills.

The president’s reservations specifically related to clauses 5, 7 and 9 inserting sections 6A(7), 7A(7) and 8A(5) into the Copyright Amendment Bill (CAB). Those provisions applied retrospectivity, resulting in copyright owners being entitled to a lesser share of the fruits of their property than was previously the case. The impact of those provisions reached far beyond the current authors it sought to protect by including those that had lived in poverty as a result of not having been fairly protected in the past. The retrospective provisions deprived copyright owners of property without sufficient reason and would result in substantial and arbitrary deprivation of property. In addition, the uncertainty created by the Bill’s unlimited retrospective operation, how assignment by multiple authors would work or what would happen if the owner of the copyright were a non-profit organisation aggravated the situation.

The Legal Advisor explained that the new sections on retrospectivity sought to address injustices of the past where authors were unfairly exploited in that they had received a very small amount for their work and the accompanying copyright. The person who had bought the copyright in a particular work could still be making a profit years after the purchase of the copyright.

The new sections provided that, in future, the copyright owner had to continue to pay a share of the profits to the author. The Committee in the Fifth Parliament had been advised that those sections would only apply to works where copyright was assigned after the commencement of the Amendment Act. However, that Committee had felt that, to address the above concern, those new sections had to be made retrospective and the Committee had inserted sub-sections 6A(7), 7A(7) and 8A(5).

Adv van der Merwe then experienced difficulty in showing the slides on the screen.

The Chairperson requested the Secretary to assist.

The Secretary asked the Content Advisor to show Adv van der Merwe’s presentation. He also reminded Members that they had a copy of the presentation that he had sent the previous day.

The Chairperson remarked that all Members were getting more familiar with the technology as they were able to log on in five minutes instead of taking an hour as they had in the beginning. He was sure that the secretariat would find a way of resolving the matter of showing the document.

Adv van der Merwe moved on to the actions that could be taken in respect of the retrospective application of the Bills. The advice that her Office could provide was the same as had been given to the Fifth Parliament, namely that the clauses be amended so that they only provided for prospective operation, i.e. all dealings that took place after enactment of the Bill. If the Committee agreed with that advice, the CAB would be amended by deleting clauses 5 and 7 and also deleting subsection (5) in clause 9, renumbering the subsections and deleting clause 38(2), which provided for the staggered implementation. If the Committee disagreed with the legal view, or it felt the same as the Committee of the Fifth Parliament, namely that it was something that had to be in the Bill, regardless of the possibility of it being declared unconstitutional by the Constitutional Court as it was important to address that injustice. In that case, the Committee could report to the House that it did not agree with the President’s reservation.

Impermissible Delegation of Legislative Power to the Minister

Adv van der Merwe stated that the following reservation tied in with the previous reservation because the delegations were part of the compromise that the previous Committee had devised in order to get around the constitutionality concern. That was where the Minister would have to follow certain processes before implementation, such as an impact assessment study, reporting back to the National Assembly and developing processes for the retrospective applications to be made applicable. The clause itself was constitutional and there was no problem with the delegations given to the Minister. The problem was that the delegations formed part of a larger clause that might be found unconstitutional. The previous week, the Minister had made a profound statement and she credited him for it: A regulation could not correct an unconstitutional provision.

Adv van der Merwe explained that if the Committee agreed with her Office regarding retrospectivity, then that delegation would fall away as it was tied to the retrospectivity concern. The action would be that the delegations would be deleted. The second possible action was that the delegations should stay and the Committee would have to inform the House.

Adv van der Merwe informed the Chairperson that she could take a break at that point as the next matter was to do with copyright exceptions.

The Chairperson suggested that Adv van der Merwe should work through all the issues and that the Committee would take deliberations after she had completed her presentation.

Ms J Hermans (ANC) noted that, at the start of her presentation, Adv van der Merwe had explained her motivation for breaking the presentation into two units because there were two separate issues. On behalf of the ANC in the Portfolio Committee, she asked for time to undertake further deliberations with her colleagues and that the Committee should meet at a later time to debate the matter.

Mr D Macpherson (DA) asked that the options presented by the Advocate be shown on the screen. He asked for clarity with regards to what Ms Hermans was requesting. In principle, he had no objections. Was Ms Hermans wanting the ANC colleagues to work through that particular section first? If that was the case, it might be difficult for Adv van der Merwe to continue presenting as there were consequential ramifications.

The Chairperson said that it was a process issue. He had wanted to see all actions and then Members could have time, if needed, to process the issues.

Ms Hermans said that she did not see how it affected the other substantive reservations but she requested additional time to discuss the possible actions in the study group.

The Chairperson asked if she wanted a break then or if she wanted to defer the discussion on the point until after the advocate had completed her presentation.

Ms Hermans agreed with the latter proposal of deferring the discussion.

The Chairperson confirmed that her response answered Mr Macpherson’s question. He asked whether any of the Members sought clarity from Adv van der Merwe on the points that she had made. He asked for the executive summary of the recommendations to be presented.

Mr Macpherson suggested that the Committee should continue with the presentation and when they came to deliberations the advocate could show the relevant slides again. They would not have to go through the presentation; just the options.

Adv van der Merwe said that she could proceed with the presentation without a decision on the points that she had made earlier.

The Copyright Exceptions

Adv van der Merwe moved on to the copyright exceptions. 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. The President had also drawn attention to the three-step test which specifically related to Fair Use.

Adv van der Merwe explained that the Constitution allowed for deprivation, but not arbitrary deprivation. One had to examine the two rights affected – the one right that was being protected and the one being infringed. What was the rationale in the Bill and the process followed? She referred to the actual wording in the CAB. Copyright had always been subject to exceptions, even in the current Act. The purpose in the Bills was to modernise copyrights. For example, it was modern practice to copy a CD that one owned onto one’s laptop, but in the current Act, that was an illegal act.

Adv van der Merwe stated that the Bill did not effectively change the right to choose one’s trade, occupation or profession. The Bill was intended to balance out the rights to make a profit and the only concern would lie with a person who felt that he could no longer make sufficient profit to remain in the business. With regard to the three-step test, the question had been addressed in Australia in 2013 and it had been agreed that Fair Use was acceptable under the three-step test.

The President’s concerns related to clause 12A: “12A. (a) 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:” The clause introduced the concept of Fair Use but all of the exceptions were currently in the Act, except for two: scholarship, teaching and education; preservation of and access to the collections of libraries, archives and museums. Those two additions spoke to rights in respect of access to education, dignity, etc. The question was whether any of the exceptions in 12A(a) would constitute an arbitrary deprivation or impact on someone’s right to choose a trade, occupation or profession. Clause 12A(b) contained the factors to be taken into account in determining whether an act done in relation to a work constituted fair use.

Adv van der Merwe did not see any constitutional conflict in clauses 12B (1) because the infringements were currently in the Act and applicability had simply been extended to all copyright works and modernised. (f) added the translation of works being studied, which was also an accepted practice.

She reminded the Committee that because it had agreed to open up Fair Use for public comment, the question was actually moot. Clause 12B was new and had to be opened up to public comment - she promised to send the Secretary a list of those clauses that the Committee had agreed would be opened up. Clauses 12D and 19C would also be published for comment under the decision relating to Fair Use.

Mr W Thring (ACDP) informed the Chairperson that the Content Advisor was displaying different slides to the slides being used by Adv van der Merwe. The numbers of the slides were the same but the content on each slide did not match.

The Chairperson asked that the presentation be corrected so that Members could refer to the correct slide number.

The Content Advisor agreed that she had displayed an older presentation that was not correct. She would put up the correct presentation.

Adv van der Merwe stated that, in here view, all of the exceptions would pass constitutional muster. They were not arbitrary and they were not open-ended; they balanced the rights affected. They were aimed at achieving a legitimate government purpose; there was a rational connection; they did not limit the rights to choose one’s trade, occupation or profession and if it were successfully argued, the exceptions would pass section 36 for the same reason as that they were not arbitrary, and they complied with the three-step test.

She stated that the possible actions were that, firstly, if Committee agreed with the legal advice, it could inform the House that it did not agree with the President’s recommendations in respect of those specific clauses not affected by the Fair Use decision. Secondly, if the Committee disagreed with the legal advice, it could consider the constitutionality of those clauses and amend them.

International Treaty Implications

Adv van der Merwe explained that she had grouped that reservation together with the previous reservation on the “Exceptions” because the reservation affected the exceptions.

Adv van der Merwe explained that the President’s reservations related specifically to the WIPO Copyright Treaty, the WIPO Performance and Phonograms Treaty, and the Marrakesh 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 of the Constitution. As such, the reservation of the President spoke to a future possible action that might or might not happen. The legislature could not legislate subject to possible law. The Committee should, however, consider how the exceptions in the Bills would give effect to the treaties.

She explained to Members that section 79(1) referrals were not the same thing as a finding. Section 79(1) was a communication process between the Presidency and the National Assembly. Parliament had to respond to the President. The section 79(1) process was very limited: the President could only refer to constitutional matters; he could not consider policy. She was adamant, therefore, that the reservation about Treaties was not a constitutional ground and could not be considered by the Committee.

However, when the Committee considered the other concerns raised by the President, it would inevitably lead to a consideration of the treaty implications. It would flow automatically but could not be considered separately from those issues that the Committee would be deliberating. She assured the Committee that the Department had considered treaty implications when drafting the Bills.

The legal advice was that the referral reason in that case was not a constitutional ground as required by section 79(1). There were two possible actions. Firstly, if the Committee agreed with the Legal Advisor, it could report to the House that the President’s reservation related to international treaties which was not a legal section 79(1) ground and could not be considered. The Committee could assure the House that wherever the treaties affected any of the constitutional concerns raised by the President, the treaties would be considered. Secondly, if the Committee disagreed with her Office’s legal view, it could decide to reconsider those aspects of the remitted Bills that the Committee found to be in conflict with the treaties and make the necessary amendments.

She added that should the Committee disagree with the legal advice, and decided to consider that section, the Committee would need a briefing on the exceptions and the International treaties.

Discussion

The Chairperson invited comment on the process to be followed.

Ms Hermans stated that, as with the other two reservations and having heard the recommendations and possible responses to the copyright exceptions and treaties, the ANC Members wished to apply their minds further in the ANC study group and come back later with recommendations and to debate the matter.

Mr M Cuthbert (DA) stated that the DA agreed to the proposal. He was happy to adopt responses at a later stage.

Mr F Mulder (FF+) agreed with the proposal. The FF+ would consider the matter very carefully and thoroughly before addressing the meeting.

The Chairperson asked Adv van der Merwe and the secretariat if they had any ideas about the process going forward as it appeared that first two issues discussed the previous day required the Committee to engage in a process. He had informed the Chairperson of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour in the National Council of Provinces that the Committees might need to engage on the President’s reservations about the tagging of the Bill as section 75 instead of section 76.

The Chairperson explained that he needed some idea of the time required and the proposed programme in order to finalise the process. He invited comment from the Secretary.

Mr W Thring (ACDP) stated that the ACDP agreed with the proposal to give all Members time to pay more attention to the matter and excused himself as he had another meeting to attend.

The Secretary explained that he had pre-empted the request by Members for further discussion and had scheduled a meeting of an hour during the scheduled meeting on the following Tuesday when the Minister would be briefing the Committee on Black Industrialists. That hour could be extended. He had also scheduled time on the following Wednesday and he might even be able to re-schedule the other item on the agenda that day, the National Lottery Commission (NLC), to allow for sufficient time. If the Committee did not reach a formal decision by the following Wednesday, that would impact negatively on the Committee’s programme for the following term.

The Chairperson determined that, by the following Wednesday, the Committee had to have a programme for processing the reservations.

Mr Cuthbert informed the Chairperson that while the DA agreed in principle to the need for additional time to study the document, the party did not want to see the current matter push out the NLC meeting. That option could not be on the table. The DA had called for the meeting for a long time, and the Committee was already limited in time by virtue of the NLC being allocated only half the meeting. He would not agree to anything that pushed out the meeting with the NLC. An alternative arrangement would have to be made.

The Chairperson replied that he was not looking at making changes to the programme at that stage. The Management Committee would look at the issues before the Committee and the time available and he was sure that there would be consensus. The Committee had agreed that parties would adjourn to discuss the matter, the recommendations and the possible actions. The following meeting was on Tuesday and he would see what was agreed upon at that point. The Committee would need to make time for all the important issues before the Committee. He did not want to hide anything.

He informed Members that on Tuesday,1 September 2020, one hour would be set aside for discussion relating to the Bills. Thereafter, the Minister would address the Committee on Black Industrialists. The latest presentation by Adv van der Merwe would be distributed to Members by the secretariat.

The Secretary agreed to distribute any other material submitted to him by Adv van der Merwe. He would also circulate written responses from dtic to questions not answered on the response to Covid-19 during the meeting of 19 August 2020.

Mr Cuthbert raised the matter of the price gouging by SAA that had been discussed on 19 August 2020. Had the Competition Commission come back to the Committee in written format or was the Commission intending to appear before the Committee? The Chief Economist at dtic had committed to come back to the Committee with the Competition Committee to provide feedback on the investigation. He would understand if the investigation had not yet been concluded, but the DA wanted feedback in that respect.                                                                                                                                                                                                                                  

Closing remarks

The Chairperson remarked that the specific matter was an administrative one and he requested the Secretary to follow up. He reminded Mr Cuthbert that he had indicated that it was important to have a discussion on issues presented to Committee Members so that individuals did not bring their own issues, that were unknown to other Members, to the Committee. He would follow up with the Secretary and ensure that the written responses from the Department of Trade, Industry and Competition were distributed so that the matter could be followed up in the next meeting, if there was a need.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  He stated that the meeting was concluded and the Committee would meet again on Tuesday, 1 September 2020.

The Chairperson thanked the Members for their participation.

The meeting was adjourned.

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