The Standing Committee on Finance, Economic Opportunities and Tourism convened virtually to deliberate on the public submissions received and responses thereto by the Department of Trade, Industry and Competition (DTIC) on the Copyright Amendment Bill [B13D – 2017] and the Performers’ Protection Amendment Bill [B24D – 2016].
Many questions in the submissions were raised about the importance of copyright law permitting the use of Artificial Intelligence (AI) in the creative industry. The Committee therefore found it concerning that the Department decided to exclude the matter from the Copyright Amendment Bill and deemed it a missed opportunity for introducing legislative guidelines for the use of AI. The Department was exercising caution to include AI in the Bill because to date, no research had been conducted and sufficient engagements had not been held. The matter is postponed for future discussions.
The Committee resolved to follow up on the commitment by the Department to share the SEIAS and Farlam reports with the industry.
The negotiated mandate for each Bill would be considered once discussions are concluded.
The Chairperson stated that the meeting offered an opportunity for feedback on the public submissions received. She called on the Department to proceed with the presentation.
Dr Evelyn Masotja, DDG Consumer and Corporate Regulation Division, DTIC, said the Department would be giving feedback on the public submissions received from the WCPP. She would present a matrix of the consolidated issues but asked if an overview of the observations would suffice.
The Chairperson agreed that the overview would be helpful. However, she noticed that the matrix had lots of comments and suggested that breaks should be taken periodically to allow Members to ask questions.
Dr Masotja indicated that she would be highlighting the key issues that emerged from the submissions because the document is quite lengthy and some of the areas are repetitive due to the similarity of issues raised by various stakeholders. Responses to issues would be similar due to the policy positions of the Department.
The Chairperson asked if Members would be satisfied with the overview instead of the detailed matrix. She suggested that Members could analyse the matrix in their own time.
Mr A van der Westhuizen (DA) said it would have been easier if the responses were done on a clause-by-clause basis. But having heard the manner in which the Department had prepared the presentation, he agreed to proceed with the overview.
The Chairperson noted that the negotiated mandate with the comments from the Department would also be helpful. She agreed that the overview would help to get an overarching idea of the comments.
Dr Masotja thanked the WCPP for inviting the Department to participate in this process. She thanked members of the public for raising their concerns and for responding to the Bill. It had been a very long and complex process. The Department recognised that the Bill is very complex. She thanked all the experts and well-renowned individuals who contributed to the discussion and debates. The Department appreciated the contribution of each stakeholder.
The key issues that emerged from the submissions are summarised as follows:
Adoption of the Fair Use doctrine
The issue emerged numerous times in different submissions. Some submissions expressed strong support for the provisions of Fair Use as it would greatly improve access to information for all, particularly in the digital environment. It would enable and advance development, innovation, AI, robotics, gaming, inventions, and prosthetic enhancements through 3D printing, augmented reality, inventions, and futuristic technologies in relation to the Third and Fourth Industrial Revolutions. However, some of the submissions were not in favour of the Fair Use provisions.
The Department noted the submissions and advised that having flexible exceptions is practised globally where the Fair Use doctrine is applied.
Powers of the Minister to issue regulations for contracts
Objections were registered to the arbitrary powers granted to the Minister. Requests for the relevant provisions to be withdrawn were received.
The Department stated that the powers of the Minister are meant to create an enabling environment. The Minister would not interfere in private contracts but would create a framework to guide compulsory standard contractual obligations for contracting parties.
Reversal of reversionary clauses
It is argued that re-clearing the rights for works of authors after 25 years would limit the commercial availability of works and would likely reduce upfront remuneration and significantly diminish incentives for producers to invest in content considering the high level of risk of losing the ability to commercialise works after 25 years.
The Department stated that the reversionary right is informed by the recommendations in the Copyright Review Commission report and could be expanded in the Regulations.
Socioeconomic Impact Assessment System (SEIAS)
The SEIAS was one of the major areas highlighted in the submissions. The contention is that the Bills do not consider the 2007 Cabinet decision on the need for a consistent assessment of the socio-economic impact of policy initiatives, legislation, and regulations through a proper assessment study.
The Department stated that Cabinet adopted a resolution to establish the SEIAS Unit in the Presidency to facilitate and provide guidance to departments on the application of SEIAS to design policies, legislation and regulations.
Contemplation of a single remuneration model
Stakeholders raised concerns that the Department was using one model of remuneration across industries without recognising the uniqueness of each industry. The model based on the 2010 Corporate Review Commission on the music industry, is being used to inform the Bill which was affecting other sectors, and not only the music industry.
The Department noted the concerns about the remuneration model and recommended that the amendment be effected to include equitable remuneration or royalties and to consider industry specific remuneration models.
The Chairperson enquired about responses to the oral submissions which were not included in the matrix.
Dr Masotja replied that the oral submissions might have been missed. She undertook to provide responses separately.
The Chairperson remarked that Members should use the deliberations to comment or ask questions. She wanted to know which aspects in the 2014 Impact Assessment are covered in the Bill and when the assessment was completed and distributed to the industry.
Dr Masotja replied that the Impact Assessment was launched on different sections, e.g. schools and the publishing industry with reference to treaties that needed to be complied with. The issue of Fair Use was mentioned in broad terms. The study was found to be useful because it gave a sense of issues linked to the Bill. The document was not distributed in the public domain hence the concerns raised by some of the stakeholders. The work done by the Department, e.g. in the musical and artistic sectors in some respect, had not been widely recognised. The work was fairly broad and was done in reference to the treaties. The SEIAS was finalised in 2017 to support the Bill before it was tabled in Parliament. She was however unsure of the date and undertook to double check the date for accuracy.
Mr van der Westhuizen commended the Department for the detailed responses to the submissions. But based on past experience, he is of the view that legislation is not streamlined when the input of provinces is sought because the NCOP finds it difficult to effect changes. Another round of negotiations, talks and working groups would have added value. He asked to what extent the Minister would be granted powers in terms of the nature and context of contracts and royalty percentages. It would have been preferable to have a draft for consideration by artists and producers of copyright items and not to prescribe to artists but to assist by providing a template or guidelines. He heard numerous comments on this matter in public hearings.
Ms N Nkondlo (ANC) asked if the intention of the Bill was to protect or support local artists and creators or if it had something to do with the uproar from people in the creative industry. Concerns of Fair Use and flexibility that could benefit artists had been raised in some of the presentations and in public hearings. As lawmakers, it was important to make laws that provide fair benefits to all involved. The intention of the Bill appears to be noble but she questioned whether the finer detail was rising to the occasion of meeting the intention. She asked to what extent the coverage of intellectual property (IP) of scientific and technological inventions had been strengthened in the Bill with regard to Fair Use. Big tech giants have the ability to cushion themselves but smaller entities might not have recourse in terms of Fair Use for literary works insofar as availing the work to schools. She asked how the Department had been responding to the outcry.
The Chairperson asked why the SEIAS document had not been shared. Making it publicly available would provide more clarity. The Department argued that they had a lot of engagements. But complaints were raised in public hearings about the blanket approach followed and how Fair Use might impact on different sectors. She asked if the Farlam report, with the focus on the music industry, could be shared with the Committee.
Dr Masotja replied that concerns about contract guidelines and Ministerial powers are noted. She agreed that more engagement was needed because the issues were repeatedly raised in the submissions. The rationale of the Bill is related to issues of unfair use and exploitative contracts in the creative industry. The Copyright Review Commission reviewed the matter in terms of the music industry. Concerns of contract abuse from performers in other sectors followed, hence the legislation is being prioritised. The Minister would not be directly involved in contractual arrangements. The idea is to create an enabling environment for new entrants by setting standards and providing a contract template to strengthen agreements. The seriousness of the concerns dictated the approach to the Bill. Stakeholders highlighted a diverse range of issues, e.g. royalties, industry specifics, models of operation and remuneration. She held the view that sufficient deliberations had taken place. The process started in 2009 and included the work done in Parliament since 2017. Different stakeholders might have a different view but most discussions had been extensive. She acknowledged that education on Fair Use had not started but the matter would be prioritised when the Bill becomes law. Other issues in the Bill included issues raised by the President, i.e. constitutional matters and concerns about wider exceptions. She agreed that the Minister should not be prescribing royalty rates and that the issue might need to be reviewed. The possible infringement and current provisions regarding Fair Use could play a role in balancing Fair Use. Such measures would go a long way from a technical viewpoint. She advised that it had not always been a requirement to put reports in the public domain but she undertook to share the SEIAS report for the benefit of stakeholders who raised concerns. She noted the concerns about the blanket approach and advised that the Department is attempting to address it in the Bill. She reiterated the view of the Department that there had been sufficient engagement.
The Chairperson was grateful for the commitment to share the documents and the Farlam report. She wanted to understand the legislative process in terms of the usual procedures for undertaking a study considering that the research was done in 2014 and the legislative process started in 2017. She asked if international benchmarks had been conducted and comparisons made in terms of the extent to which Fair Use is applied. She was concerned about technological amendments because the Department deemed it fit to exclude the use of artificial intelligence (AI) and to postpone the matter for later discussions. Considering the fast uptake of AI, the repercussions would be unimaginable if not taken into account. She regarded the exclusion of AI from the Bill as a missed opportunity and asked what the basis was for the decision.
Dr Masotja replied that research is important to ensure that policymaking is evidence-based. The SEIAS started in 2015 but the Copyright Review Commission was established in 2010 while other studies date back to 2009. The timeline of the Regulatory Impact Assessment started in 2014 with the Draft Bill introduced to Parliament in 2017. The Draft Bill was informed by a coordinated process in the Department along with the work done in Parliament by experts and academics. The Draft Bill had been deliberated in the various clusters after which it was referred to Parliament. The process did not initially involve participation from provinces. The Impact Assessment was meant to aid the process. She explained that AI is being excluded at this stage because many stakeholders are of the view that not sufficient engagements had been held. The Department is being cautious to not include AI in the Bill because no research had yet been done. The importance of the matter is acknowledged, in addition to the other challenges in terms of cybercrime risks. The hybrid model on Fair Use that the Department decided to use is based on benchmarking with other countries where Fair Use is applied, e.g. Singapore, the United States of America (USA) and Israel. The creative industry in the USA is thriving because the application is effective in terms of innovative research and development.
The Chairperson noted the comments by some members of the public in the Chat Function and appealed for courtesy towards others on the platform. She sought clarity from the Department on the way forward in terms of timelines for the Committee to consider the negotiated mandate. She asked how the timeline would impact other provinces.
Dr Masotja replied that the public submissions had been considered and referred to the NCOP in April 2023. The common issues that were identified is brought to this Committee for consideration. She indicated that departments are not normally called but instead, provinces would take their mandates to the NCOP. The process is new because the WCPP is the only province that had requested an engagement on the Bills. The process would normally end with the Select Committee. It was therefore difficult to comment on the involvement of other provinces because the Department does not normally get involved to this extent. The Bills had not been presented to any other provincial parliament. The Department is usually present in public hearings and available to clarify the process.
The Chairperson congratulated the Committee for being the first to engage in the process to this extent. She thanked Dr Masotja for being helpful with the process.
Actions and resolutions
The Chairperson announced that the debate on the negotiated mandate of the Copyright Amendment Bill is scheduled for 11 May 2023. The negotiated mandate for each Bill would be considered once discussions are concluded.
The Committee resolved to follow up on the commitment by the Department to share the SEIAS and Farlam reports with the industry.
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.