Copyright & Performers Protection Amendment Bills: Department of Sport, Arts and Culture briefing

Sports, Arts and Culture

04 September 2020
Chairperson: Ms B Dlulane (ANC)
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Meeting Summary

In this virtual meeting, the Department of Sports, Arts and Culture briefed the Committee on the Copyright Amendment Bill and the Performers Protection Amendment Bill.

The meeting started on a controversial note, with DA Members asserting that the proper rules to convene the meeting had not been followed, that the Department had been late in submitting documents, and that Chess SA was supposed to have presented. When their objections were not sustained, they left the meeting as an act of protest.

The Department said the objective of the Bills were to update existing legislation in order to provide more protection for performers. The lack of statutory reforms in copyright legislation had exposed the arts and culture sector to abuse and exploitation. Unfair contracts had resulted in the perpetual signing away of the economic rights of many artists. The Bills proposed a “Fair Use” model, as opposed to the “Fair Deal” model currently in place.

Members raised concerns over the multiple collecting agencies that existed, and questioned to what extent the Bills protected artistic creators. The Committee wanted to know what action was being taken on issues raised by the President. The Department was also asked why South Africa had not ratified the international treaties that provided for the recognition of rights in the digital era, to which it was a signatory.

Meeting report

The Chairperson welcomed everyone, and asked Committee Members to adopt the agenda.

Mr T Mhlongo (DA) raised an issue over the agenda, and asked why Chess SA had been removed from the agenda and was no longer presenting to the Committee. The Department had also sent documents late. He said this was a rushed meeting and no oversight was given to procedural issues.

The Chairperson reminded Members of what had been discussed in Tuesday’s meeting, and said no one had rejected the notion of the Department briefing the Committee before a joint meeting. This meeting had been convened to provide Members with information so they could better engage in the joint meeting.

Mr Mhlongo said these were important Bills, and the matters needed to be properly discussed.

Mr J Mamabolo (ANC) moved the adoption, and was seconded by Mr M Seabi (ANC). The agenda was adopted.

The DA rejected the agenda.

Mr Vusumusi Mkhize, Director-General: Department of Sports, Art and Culture (DSAC), explained that the documents were late because a request for them was sent by the Committee only on Tuesday. This had given the Department only two days to compile the documents. The late submission was not intentional -- the only intention was for the documents to properly inform the Members.

The Chairperson thanked the DG for the explanation and said she understood. She was still calm and cool, but she noticed that whenever she was speaking, there was a commotion. She asked that Members allow other Members to share their views, and that they should be honest in their discussions. The Committee had taken a decision on Tuesday that Chess SA would not attend today’s meeting. This had been decided by the whole Committee, and Members had left the meeting knowing that Chess SA would not be presenting today. She asked Mr Mkhize to proceed and brief the Department.

Mr Mhlongo said the rules were clear and stipulated that Members must receive documents 48 hours before a meeting, and they had not received the documents within this period. If the whole Committee had agreed on Tuesday that Chess SA would not be present at today’s meeting, could the secretariat provide Members with the meeting minutes in order to see when this had been said.

Mr Seabi said Committee Members could not debate minutes which they had not received. The meeting must continue with the agenda adopted, since the Chairperson had already made a ruling.

The Chairperson reminded Mr Mhlongo that he had objected to the agenda.

Mr Mhlongo said he knew he had objected, and as a statement the DA would be leaving the meeting.

The Chairperson stopped Members from shouting “bye, bye” to Mr Mhlongo. She asked the Department to continue with the presentation.

Mr B Madlingozi (EFF) asked whether the meeting had a quorum to proceed since the DA had left the meeting.

The Chairperson responded that there was a quorum.

Copyright Amendment Bill and Performers Amendment Bill

Mr Mkhize said that due to load-shedding, he might have to ask one of his colleagues from the Department to take over the presentation if his devices switched off. The Copyright Amendment Bill and Performers Amendment Bill overlapped, and that was why they were combined in this presentation.

The legislation that governed copyright in South Africa was the Copyright Act of 1978, and the Performers Protection Act of 1967. The former mainly governed exclusive rights pertaining to authors, while the latter governed the exclusive rights of performers. There was a need to amend these Acts as part of transforming the law in order to attain South Africa’s developmental goals. The Department of Trade, Industry and Competition (DTIC) was the lead department in the development and amendment of the legislation, with the DSAC and other sister departments providing only inputs. The role of the DCAS was focused on enhancing job creation by preserving, protecting, and developing arts, culture and heritage to sustain South Africa’s democracy.

Concerns raised by arts and culture sector

The lack of statutory reforms in copyright had exposed the arts and culture sector to abuse and exploitation. Unfair contracts had resulted in the perpetual signing away of economic rights of many artists. There was also a culture of non-payment of royalties in the form of repeat fees by broadcasters. The non-ratification of international treaties that provided for the recognition of rights in the digital era had put practitioners on the back foot.

Statutory and policy context

The WIPO Performances and Phonograms Treaty (WPPT) administered by the World Intellectual Property Organisation (WIPO), deals with the rights of two kinds of beneficiaries, particularly in the digital environment. On the one hand, there were the performers -- actors, singers, musicians, etc – while on the other, there were the producers of phonograms -- the persons or legal entities that took the initiative and had the responsibility for the fixation of sounds. The WIPO Copyright Treaty (WCT) deals with protection for authors of literary and artistic works, such as writings and computer programmes; original databases; musical works; audio-visual works; works of fine art and photographs. The Rome and Berne Conventions both deal with the protection of literary and artistic works and the protection of performers. South Africa was a party to these conventions and treaties, but had not ratified them.

Mr Mkhize described the journey and context that had been happening with progress on these two Bills, and explained their objectives and provisions.

Objectives of the Bills

  • To introduce a resale royalty right. A resale royalty right meant that an artist (virtual arts) could be entitled to a royalty when their original work was resold commercially.
  • To introduce a hybrid system for limited access and uses, only in certain circumstances, without obtaining permission and without paying a fee or a royalty.
  • To provide mandatory requirements for the recording and reporting by users -- the users of the content such as broadcasters, and other commercial entities.
  • To strengthen the Copyright Tribunal so that it could deal with all disputes on copyright and related rights.

Provisions of the Bills

  • Recording and reporting for royalty determination – to ensure effective and efficient royalty collection.
  • Accreditation and regulation of collecting societies – to ensure an effective and efficient royalty distribution system.
  • Equitable Royalties sharing between the owner of the copyright, content creators, indigenous community - subject to the agreement to the contrary; performer
  • Commissioned works, with more protection for authors to combat unfair overexploitation of work.
  • Assignment – provide protection for creators to close the gaps that come with freedom of trade.
  • Strengthen the protection though Copyright Management Information (CMI), to enable identification of ownership and royalty distributions.
  • Introduction of technical protection measures (TPM) to combat infringement of copyright.

Mr Mkhize referred to procedural and substantive matters related to the President’s referrals and reservations.

Procedural matters

  • Incorrect tagging of the Bills. According to the President, the Bills should be classified under section 76 of the Constitution, not under section 75. The reason was that the contents of the Bills substantially affect matters listed in Schedule 4 of the Constitution, such as cultural matters.
  • Insufficient Public Consultation: The President pointed out that substantial changes had been made to Section 12 of the Copyright Amendment Bill without sufficient consultation with the public.

Substantive matters

  • Arbitrary deprivation of rights. These were the clauses that talk to instances where artists had in the past entered into unfair contractual arrangements. The Bill made provision for restitution. The President had raised a concern that “blanket application” of the retrospective clauses would result in arbitrary deprivation of property rights of the right holders (current owners), especially in instances were such artists were fairly compensated. These clauses were bound to be challenged for constitutional invalidity.
  • Impermissible delegation of authority to the Minister: The Bill made provision for the Minister to conduct an impact study and develop regulations to affect the implementation of the abovementioned clauses. The President stated that this could inter alia deprive content owners of their property, thus constituting impermissible authority to the Minister.
  • Arbitrary deprivation of property, right to trade and right to profession. The President stated that Section 12 of the Bill that allowed open ended access -- fair use instead of fair dealing -- to copyright materials could amount to deprivation of constitutional rights to property, trade and profession.
  • Bills were not in compliance with international treaties, in particular the three-step test. The President raised a reservation that Section 12 might be in contrast with the three-step test in the WIPO and WTO agreements. The three step test allowed the use of materials in certain special cases that did not conflict with the normal exploitation of the work, and that did not unreasonably prejudice the legitimate interests of the author/right-holder.

Proposed way forward

As per the rules of engagement, Parliament was restricted to discuss only the referral by the President. The reservations raised by the President were currently being discussed by the Portfolio Committee on Trade and Industry. Decisions had been taken on two items that were related to the procedural matters --incorrect tagging and sufficient public consultations. Political parties had requested that they be afforded the opportunity to further consult with other working committees on the substantive matters.

Policy option: Fair use or Fair dealing

The introduction of the “Fair Use” model in the proposed Bill had resulted into some form of disagreement among South Africans. The issue had been debated by many – policy makers and, of course, practitioners and arts and culture investors. "Fair dealing" and “Fair use" were related concepts pertaining to users' rights under copyright law. The framework was designed to allow the lawful use or reproduction of work without having to seek permission from the copyright owner(s) or creator(s), or infringing on their legal rights. In line with international treaties, copyright was not absolute, but limited. Limitations and exceptions were therefore used to regulate the limits of the exclusive rights, while granting users limited “exceptions” to access the copyright materials.

Fair Dealing

The current South Africa law refers to dealing. It is comprised of a few cases under which protected works can be used. It allows for only the purposes listed. The onus is on right holders to sue infringers for alleged violations of the law. The defendant should provide any defence. Fair dealing was similar to the United Kingdom (UK) and European Union (EU) copyright law system.

Fair Use

The proposed Bill refers to fair use, rather than fair dealing. The inclusion of the words “such as” in the first clause of the Bill had created a list of permissible purposes that was open, as opposed to the current system, that was limited or rather closed. The onus was on right holders to sue infringers for alleged violations of the law. Likewise, the defendant should demonstrate any justification. Fair use was similar to the copyright law system in the United States (US), Singapore, Israel and South Korea.

Advantages of Fair Use for South Africa

  • Fair Use reduces economic and social costs. Too much protection results in monopoly and perpetuates a lack of access to information. Monopoly has proved to be a serious social and economic cost. Fair Use would address weak demand, low purchasing power, and logistical obstacles created by the existing inequality:
  • Fair Use is the key issue towards affordable translation rights, primarily for education purposes. Access to information/education triggers human capital formation, helps to create a more competitive environment, and enhances enterprise development.
  • Fair Use is good for technology transfer: In their formative stages, many industrialised countries had appropriated knowledge and technology from somewhere, and this includes the US and many Asian countries. South Korea and the US economies were flourishing because of the policies they adopted

Discussion

The Chairperson thanked the Director-General. She said the presentation had been very informative, and was exactly what the Committee needed as a new Committee. It would study these documents in depth to understand the concerns of the President.

She apologised for the way in which the meeting had started out. She said Tuesday’s meeting had been closed, based on the discussions that the Committee should first be briefed before the joint meeting. She believed this presentation would prepare Members for the joint meeting. There might have been Members who thought that this presentation was not going to be informative. She wanted to know what role the NCOP was playing in retagging, as this was a responsibility of the NCOP. She said the Committee supported the recommendations made in the presentation.

Mr Madlingozi said he had learned much about the Bills from this presentation, and he thanked the Department for that. He had had reservations about the Bill, and the presentation had opened his eyes to the corruption within the sector, with multiple collecting parties. He agreed there should be only one collecting party. The old legislation had been crafted during apartheid, and had not taken into consideration people of colour. He asked how much digital protection this Bill provided, and why South Africa had not ratified the treaties. What sections of the Bill were not up for discussion, and why?

Mr Seabi said since the DSAC was collaborating with the DTIC, he assumed this was the same presentation briefing the Portfolio Committee on Trade, Industry and Competition had received. He said the presentation had been positively received, and would be further discussed with the Portfolio Committee of Trade, Industry and Competition. He added that there was a concern that the Bill did not include people with disabilities.

Mr Mkhize said multiple collecting agencies needed to be regulated. The reason for the corruption within the sector was because of the lack of regulations. The Bill also introduced checks and balances and provided access to artists, creators etc. The idea was to have one collecting agency per copyright, and this might help address most of the challenges the sector was facing, although implementing this might impact negatively on freedom of association for creators.

The current legislation had been passed at the height of the apartheid era, and the Committee could imagine the deep-seated discrimination that must have informed the Bill. This was the reason why some royalties were still in the hands of the old regime. There had been a very serious push back from people who had already stolen African intellectual property, and that might affect the rationalisation of treaties. The normal process would be for a country reforming legislation to be in line with the treaties to which it was a signatory. The reason why certain aspects could not be discussed was because there was a matter before the Constitutional Court, and Parliament was restricted until the matter was resolved.

Mr Madlingozi agreed the one collecting agency might work. He said one of the biggest culprits in the industry was the Independent Music Performance Rights Association (IMPRA), which had never reported to the Companies and Intellectual Property Commission (CIPC), yet had been receiving money from the South African Broadcasting Corporation (SABC) without following proper channels.

Mr Seabi asked how the legal issues raised by the President would be resolved.

Mr Mkhize responded that on legal matters, the Department of Trade and Industry was currently looking at the matter, and discussions were still at a preliminary stage. The only issue that had been dealt with was the procedural matter raised by the President. The legal opinions were still the same as last year. Advice from the state law advisor would further inform the processes embarked on in future.

He said the issue of IMPRA was being addressed through various processes within the Department. The Bill was also trying to introduce technical rules that would deal with electronic commerce. This needed to be aligned with copyright and technology legislation.

The Chairperson said the Committee achieved what had been set out for the meeting. Although it was not favourable that some Members had walked out, the meeting had still yielded positive results. The Committee had a lot of work to do, and needed to catch up with the work already done by the Portfolio Committee on Trade, Industry and Competition.

The meeting was adjourned.

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