Copyright Amendment Bill will not grow the economy and jobs

Coming after the devastating announcement by Stats SA that 2.2-million people lost their jobs in the second quarter, President Cyril Ramaphosa’s Economic Reconstruction and Recovery Plan highlights the urgency of getting our economy moving again.

At this point policymakers, legislators and decision-takers should be focused with a laser-like intensity on growth and jobs. One primary question must be asked of every proposed policy, piece of legislation and regulation: will it aid or impede the post-Covid economic recovery?

The Copyright Amendment Bill the president sent back to parliament in June should be no exception in this endeavour. Besides the myriad constitutional issues with the bill we need to ask whether the proposed legislation in its current form will help grow the economy and create jobs. The answer in this case is a resounding no. On the contrary, if passed the bill will hinder growth and cost more jobs.

The goal of the bill is to bring SA’s copyright legislation into the 21st century. This is widely accepted as necessary for the creative and cultural industries to flourish. The problem is the manner in which the legislature has chosen to do this — by introducing a convoluted version of the American copyright principle of “fair use”.

In the US one can make use of a copyrighted work without compensating the creator if your use of the work is considered “fair”. How you know what constitutes fair use stems from decades of precedent. There is no fixed list of fair uses. The parties have to fight it out in court and let a judge decide if the use is fair.

But there’s a catch: if the unremunerated use is not fair, there are potentially huge statutory penalties. There is a strong protection against the abuse of fair use because the penalty is harsh.

SA decided to keep a long list of exceptions, add fair use and introduce none of the penalties. The result is calamitous. Users of content could dabble between the exceptions and fair use, and if the use turns out to be unfair it’s no big deal because there is no real cost to exploiting SA’s artists.

Under SA’s proposed “hybrid fair use” there would be no incentive for creators to create. No company would want to create locally when the law leaves it open to exploitation. The ability of creators to profit from their creations would be severely curtailed.

Nearly every country that has rejected fair use has done so because, among other reasons, they recognise that it opens the door to big tech exploiting creators’ content free under the guise of fair use. Despite this issue, our parliament passed the bill. It is difficult to overstate the ruinous impact the bill would have on the creative and cultural industries.

These industries contribute far more to our economy than their size would suggest. The sector includes a range of industries from TV and radio, theatre, visual arts, music and cinema to publishing, fashion, design and advertising. While it is easy to underestimate their contribution to the national economy, they are in fact a critical component of a recovery plan.

According to the SA Cultural Observatory’s 2020 report on the economic mapping of the cultural and creative industries in SA, these industries are growing faster than the rest of the economy, at an annual rate of 2.4%. They grew from a R62bn contribution to GDP in 2016 to R73.39bn in 2018, contributing 1.7% to GDP.

When you consider the linkages to other industries and measure the creative and cultural industries’ multiplier effect, their contribution accounts for more than 5% of GDP.

Most importantly, these industries  account for 7% of all employment in the country, creating employment at a faster rate than other sectors. Our cultural goods exports in 2018 brought in $446.5m — about R7bn.

The creative and cultural industries therefore punch far above their weight when it comes to contribution to GDP and employment. They must be a priority sector if we want to fast-track growth, employment and exports in a Covid-battered economy. We simply cannot afford legislation that hinders rather than promotes growth in this sector, and therefore in the economy more broadly.

We already know the bill poses a threat to critical investment in the sector from the US and EU. It also threatens jobs. In our growing animation sector, for example, big companies like Cartoon Network and Nickelodeon have stopped using SA composers and voice-over artists in their productions because of the possible costs involved should the bill become law. These are desperately needed jobs lost to our artists.

If these trends continue the Copyright Amendment Bill will slowly grind SA content creation to a halt. The consequences will be devastating for SA knowledge production. The necessary flipside of decreased local content will be an increase in imports of cultural content, increasing the trade deficit after years of work to reduce it.

The industry needs to work with the government to conduct a full sectoral analysis of the economic impact of the bill before we embark on this dangerous legislative experiment at such a critical moment in the economic life of our country.

Though SA’s IP regime undoubtedly needs updating, we are better off taking time to do it right, considering all that is at stake. The consequences of making big mistakes in haste are too dire to contemplate.

The start of the new parliamentary term marks the beginning of another chapter in the battle over the bills. It is worth paying attention to the processes around them. The outcome will have lingering, long-term repercussions for employment, trade and investment in this vital job-creating sector.

• Makgamathe chairs the Copyright Coalition of SA.