Copyright Amendment Bill; Performers' Protection Amendment Bill: briefing

Meeting report

ECONOMIC AFFAIRS SELECT COMMITTEE
12 March 2002
COPYRIGHT AMENDMENT BILL; PERFORMERS' PROTECTION AMENDMENT BILL: BRIEFING

Chairperson: Mr Moosa (ANC)

Document Distributed:
March 12, 2002 Research Summary on Copyright Amendment Bill and Performers' Protection Amendment Bill (See Appendix)

Relevant Documents:
Copyright Act, No. 98 of 1978
Copyright Amendent Bill [B73B-2001]
Performers' Protection Act, No. 11 of 1967
Performers' Protection Amendment Bill [B74B-2001]

SUMMARY
Copyright and Performers' Protection Amendment Bills are complementary legislation. Protection of copyrights and performers' rights was a key element in the global intellectual property framework, and that adoption of these amendments would demonstrate South Africa's commitment to taking these issues seriously, which was a valuable image to project to potential investors. Department of Trade and Industry, and its legal advisor reviewed the substance of the amendment Bills. It was noted that a minor textual inconsistency may require the Copyright Amendment Bill to be sent back to the Portfolio Committee for further technical amendments before the Select Committee can pass it.

MINUTES
Mr Netshistenze of the Department, stated that the purpose of the Bills was to protect performers' rights in intellectual property, with distribution of the rights revenue stream to be monitored by government, as necessary. Parties were left to negotiate terms of compensation, with the Copyright Tribunal created by the legislation providing a regularized mechanism to adjudicate disputes. Supplemental draft regulations to be promulgated by the Minister would soon be distributed for stakeholder comment, and would address some of the technicalities of government licensing and regulation of "collecting societies", who in representing them would be responsible for receipt and distribution of rights revenue to performers and copyright owners.

The Department legal advisor, Adv. Strydom, reviewed the substance of the Bills, noting that the Department believed that further amendment to the Copyright Amendment Bill is necessary as a result of changes by the Portfolio Committee to Section 9A(1)(b) of the principal Act (the Copyright Act, No. 98 of 1978). The inclusion in that provision of "performers" in the negotiation process between users and copyright owners necessitates their being given dispute resolution rights before the Copyright Tribunal per Section 9A(1)(c), and it may be necessary to send the Bill back to the Portfolio Committee to make this "consequential change".

The Chair questioned why performers should be included in the negotiation between users and owners, with the advisor indicating that the Portfolio Committee had decided on that structure to augment the separate negotiation between copyright owners and performers (when they were not the same person) as to sharing of revenue contemplated by amended Section 9A(2)(b).

Adv. Lever (DP) suggested that, reading the provisions together, they were sensible, but questioned whether the legislation protects "successors in interest", with the advisor indicating that this issue is dealt with in the principal Act.

The Chair concurred with Adv. Lever's assessment, and suggested that the Department facilitate the necessary Portfolio Committee technical amendment discussed above so that his Committee could then expeditiously process this Bill.

Turning to the Performers' Protection Amendment Bill ("the PPAB"), the advisor noted that a consensus emerged at public hearings that the protection it would afford performers within South Africa concerning recording of performances must be reciprocated internationally, hence the Portfolio Committee's late amendment of Section 4 of the principal Act (the Performers' Protection Act, No. 11 of 1967). This Bill tracks the Copyright Amendment Bill in providing performers with the right to participate in royalty negotiations, but Adv. Lever (DP) observed that the right under the latter is more extensive. The advisor agreed, stating that this was a policy decision by the Portfolio Committee.

A question was raised as to why "successors in title" were specifically mentioned in the PPAB (amending Section 5(4)(a) of the principal Act) and not in the Copyright Amendment Bill, which the advisor could not fully explain. Adv. Lever (DP) also remarked that the PPAB language concerning "successors in title" was unclear and should refer to both the recorders (those responsible for "fixation") and performers, but Mr. Theron (DP) disagreed, suggesting that the Bill was designed to protect performers.

At the Chair's suggestion the Department official and advisor agreed that this language would be clarified in due course, and to confirm that "successors in title" were dealt with by the principal Copyright Act. He requested that they report back on the status of the aforementioned further amendment to the Copyright Amendment Bill at the March 13 meeting of his Committee, noting that he hoped that these Bills could be voted on at that time. Before March 13 meeting members would review the research summary concerning this legislation which had been distributed.

The meeting was adjourned.

Appendix
12 March 2002
Copyright Amendment Bill [B72-2001 ] and
Performers' Protection Amendment Bill [B74-2001 ]

Introduction

Stakeholders have since 1995 been debating whether royalties accrued from the recording rights of performing artists (needle time) should be paid to the performer. The media has reported on several cases where artists have not received a fair or equitable share of revenues. There have also been incidents of popular Black artists who even died penniless. Previously the focus centred on performers and recording companies interests and stressed the issue of needle time at the expense of other rights. The legislation was narrow and did not take into account the broader environment. The reflections did not operationalise how this right would be exercised - giving emphasis on collective management of this right.

The current framework did not sufficiently address the issues of the percentages to be distributed amongst the performers and recording companies. The power relations amongst the performers and recording companies have skewed towards the latter. The government was previously not involved in the regulation of this relationship. The Independent Communication Authority of South Africa and other role-players face the challenges of addressing the issue of local content in order to empower local performers. The focus of the proposed changes needs to also address the training arid development of artists.

The purpose of the amendments in the Copyright and Performers Protection Bill is to begin to address the many issues of the collection and distribution of royalties and to try to redress the many monetary and power imbalances that exist in the industry.

Areas Addressed by the Amendment Bills

The amendments, proposed to section 9 of the Copyright Act of 1978 and section 5 and 8 of the Performers Protection Act of 1967, as well as the Portfolio Committee's amendments to them, include the following:

· That needle time royalties must be regulated, whether or not the right is exercised collectively or individually.
· Royalties should be payable to the individual or the collecting society.
· A portion may be deducted for administration by a collecting society.
· The constitution of collecting societies must indicate precisely how collecting of fees and their distribution are to be done.
· A Board should be appointed to determine tariffs.
· Collecting societies must be given licenses to operate, with set terms and conditions, and if these conditions and terms are breached, the license may be withdrawn.
· Collecting societies of different jurisdictions should enter into reciprocal agreements that govern repertoires.
· Collecting societies should submit their constitutions, statements of accounts to the South African Patents and Trade Marks Office (SAPTO) for monitoring.
· Broadcasters, performers and recording companies should form separate organisations to better represent their interests.
· The tariffs should be increased on an annual basis.
· The protection of South African performers abroad and foreign artists in South Africa will enjoy protection to the extent that the other country is also a member of the World Trade Organisation or the if it has any reciprocal agreement on this issue with South Africa.

The objectives of the above clauses are to deter exploitative practices and establish level playing fields.

Summary of Submissions made to the Portfolio Committee on Trade and Industry on the Amendment Bills

South African Music Rights Organisation

They are in broad support of the Bills. However they wish to propose that provision be made for needle time to include a non-derogation clause with regard to the existing rights of composers and authors. They also requested consideration be given to how South African rights owners will be enforced in neighbouring and other countries which are not signatories to relevant international agreements.

Business Software Alliance

The Alliance supports the Copyright Amendment Bill. In addition they would encourage Parliament to criminalise copyright infringement, pre-establish penalties in this regard and place the burden of proving innocence in infringement cases upon the user.

Southern African Federation Against Copyright Theft

The Federation applauds the Copyright Bill. They further propose that the burden of proving innocence be placed upon those accused of copyright infringement. They too express support for Statutory Damages and end user piracy ciminalised.

BMG Records Africa (Pty) Ltd

They came out in broad support of the amendments and were particularly concerned with the impoverishment of many local artists and the absence of neighbouring rights in South African law.

Dramatic, Artistic and Literary Rights Organisation (Pty) Limited

The Organisation supports the Copyright Bill. However they are that the original proposed amendments to Sections 12, 23, 24, 26 and 27 published in 2000 by the Department of Trade and Industry have been omitted. They request that these amendments be reincluded. These state for Section 12 that copying must be done by a natural person and clarifying who will use the work and a criteria for determining the fair use of work. For Sections 23 and 27, they believe the then proposed amendments help to clarify the law around the issue of "guilty knowledge". Section 26's amendments helped to enforce copyright enforcement. They believe that bringing back these amendments will help to make the Act stronger in the end.

South African Institute of Intellectual Property Law

The Institute also supports the Copyright Bill and the reintroduction of the amendments introduced in 2000. They believe that the amendments to Sections 23 (2), 27 (1), 24(3) and 26 will criminalise copyright infringement and clarify and make more practical additional damages, and facilitate proof of subsistence of copyright and ownership.

Primedia Broadcasting (Pty) Ltd

They added their voice to those concerned with the plight of local artists. They highlighted the difficulties their company and others face in terms of paying taxes and strong international competition. They believe that the imposition of more royalties, even a further 1 or 2 %may significantly weaken the industry. They request that due to what they believe are numerous and critical problems in the Bill that they be put on hold in them meantime to allow for more studies on their effects to take place as well as a meeting to be called of all stakeholders and for them to identify alternatives.

Representing the Recording Industry of South Africa

They propose that the new amendment stating that" play the sound recording in public" should be changed back to the 2000 amendment of "communicating the sound recording to the public". They believe that this will strengthen the Copyright Bill and bring it in line with the Performers' Bill. They also propose that the Copyright Bill should stipulate that performers' shares will be determined by the performers and copyright owners or their representative collecting societies as opposed to the user of the sound recording and the owner of the copyright or their representing collecting societies.

SABC

SABC expressed concern around spelling and numerical mistakes in the Bills. They believe that the clause on royalties in the Copyright Bill will place an additional financial burden on the SABC and that it already pays R66 million in royalties per annum. This new policy will also require infrastructure and resources in order to enforce it. Until this is developed broadcasters should not be required to pay these royalties. The administrative costs incurred should be borne by the royalties. The collecting agency should also be a Section 21 company as opposed to a state run one. The latter have a history of inefficiency and corruption. The needle time policy will benefit international companies more as the majority of music played in South Africa is foreign and that South African music played internationally is not significant. They also propose that references in the Copyright Bill to laying should be changed to performing and thus be more inclusive.

With regards to the Performers Bill they propose that their needle time payment is an industrial relations issue and should not be dealt with here, that Section 1 should also cover sound recordings and that Section 5 should also deal with the assignment of copyright by a performer to a producer or broadcaster. They also propose license fees as an alternative to be considered to royalties. A provident fund for artists should be set up and run by an insurance company.

Freedom of Commercial Speech Trust

They believe that the transformative initiatives are necessary. However they called for caution with regards to copyright fees as they believe that these may be passed on to advertisers and cause them to leave the market for outdoor advertising. The net effect of these will be to pass the increases on to consumers.

South African Recording Rights Association Ltd

They support the intentions of the Bills. They further propose that a new collecting society be set up to deal with royalties from needle time, be controlled by its members and supervised by government. An Ombudsman should also be provided for to monitor these initiatives. Performers should have a say in the sharing of royalties but be precluded from participating in determining the amount. The definition of collecting societies needs to include existing ones. Broadcasters should pay performers as required and where in the absence of agreements in accordance with the Arbitration Act or if the performer wishes, the Copyright Tribunal.

South African Universities' Vice-Chancellors Association

Whilst acknowledging the need for the Bills, they express concern around placing the burden of proving innocence upon the accused in copyright infringement cases.

ANC Youth League and Progressive Artists for Change

They support the Bills and propose that a Broadcasters' Association be formed, a statutory body be set up, all performers be required to be registered with the Performers' Association, a Supervisory Board be set up and consist equally of the Performs' Association and Copyrights Association/ owners, and that the DTI and the Board supervise them.

Publishers' Association

They support the Bills and the reinlcusion of the amendments dealing with Sections 23 (2), 27 (1), 24 (3) and 26 in order to reduce unauthorized photocopying.

Individual Artist

Supports the Bills.

Melodi Music Company

Are in support of the Bills and governments efforts.

Musicians' Union of South Africa

They support the Bills and the possible introduction of flat rates for royalties in the beginning. A phased in approach may also be advisable. They also propose various specific measures to help develop the music industry, such as the creation of social security fund for musicians. They would not support the creation of another royalty society.

Association of South African Music Industry

Supports the Bills. They also propose that collecting societies be held accountable by a supervisory office and government. The Minister should also be empowered to deal with the necessary licenses and refer issues as required to the Copyright Tribunal.

National Association of Broadcasters

They are in support of the Bills' goals. However they believe that impact studies are needed to assess the effects of needle time on the industry. There may be a need to identify other strategies than needle lime to benefit artists. They also expressed concern about what they see as insufficient consultation, a disregard for international best practice, an inappropriate extension of exclusive rights, a lack of reciprocity, a calk of understanding of international obligations, potential negative effects on the broadcasting and film industry. They propose establishing a South African Music Development Fund to correct the industry's problems and empower performers. Broadcasters and other stakeholders should fund it.

BMG Records Africa

Their submission provided a history of the industry.

World Intellectual Property Organisation

They expressed concern about how will this be enforced outside South Africa and that in the absence of international agreements South Africa would have no powers to enforce this internationally.

National Film and Video Foundation

They are concerned about performers having the right to receive royalties from broadcasters for the broadcasting of performances. This will negatively impact upon their industry. They do not believe these Bills will help to achieve equity in this industry and that there has been insufficient consultation with their industry. They do not believe it will have any jurisdiction internationally and that an alternative approach is needed in support of the otherwise correct objectives.

Conclusion

The intention of the amendments is to ensure that collecting societies would be regulated for the benefit of their members. The collecting societies must serve the interest of artists. The scope of the draft regulations is only for needle time but all rights within the copyright law are also being subjected to collective management.

There is a need for collecting societies to advocate for local content levels in the industry to be increased. They also need to start confronting issues of piracy and counterfeiting and general enforcement of intellectual property protection more.

It is clear from the above discussion that the state has a role to play. The legislative framework must cover the many areas addressed by the different stakeholders. The present situation is uneven and causing some to gain at the expense of others. The intervention by the Department of Trade and Industry will help to balance the many interests in the industry.

Most of the role-players are in support of the aims of the Bills. Many have called for the reintroduction of certain amendments, whilst others notably from business have called for a rethink to the Bills in their present form. The Committee may need to see if it is possible to achieve a consensus that will have a positive impact on the industry and developing artists as a whole.

Sources

· Copyright AB [B72 - 2001] Government Printers
· Performers Protection AB [B74 -2001] Government Printers