South Africa’s advertising production industry is headed to the Constitutional Court this week in support of President Cyril Ramaphosa’s concerns regarding the constitutionality of the Copyright & Performers Protection Amendment Bills, which were passed by the National Assembly in 2024.
The advertising industry – represented by MASA, ACA, CPA, SAASP, NAMA and SAPAMA – has partnered with like-minded associations and stakeholders from the book publishing, film and television, and music industries – to make submissions as Amici Curiae or “friends of the court” to oppose the enactment of the Bills. The group is represented by Adams & Adams Attorneys and constitutional & international law expert Advocate Max du Plessis, SC and Advocates Sarah Pudifin-Jones & Catherine Kruyer.
The case has been set down to be heard on Wednesday and Thursday this week. The Democratic Alliance (DA) and Freedom Front Plus (FF+) have, as interested parties, made submissions arguing that the Bills are unconstitutional while Parliament will likely come out to support them. Blind SA was erroneously added as a party to the proceedings, even though the copyright exception they have been campaigning for is not subject to the President’s Referral matter.
In addition, seven other stakeholder groups have also been admitted as Amici Curiae. These include the National Association of Broadcasters (NAB), the Copyright Coalition of South Africa (CCSA) and the Recording Industry of South Africa (RiSA) which oppose the Bills; the South African National Editors Forum (SANEF) / Campaign for Free Expression (CFE) and Jonathan Shapiro “Zapiro” which oppose only certain sections of the Bills which directly impact them; and the pro-Bills lobby which includes Recreate Action and the Centre for Child Law.
The case is incredibly complex and the Court Record comprises over 15,000 pages including summaries of Parliamentary consultations on the Bills, stakeholder submissions, and evidence placed before the Court by parties and amici. The Bills were drafted by government without it first conducting meaningful economic impact assessments to determine how the invasive new proposals they advance in the Bills would impact on the affected industries. The result is a complete misunderstanding on government’s part that there is not “one creative industry” to legislate for. A set of provisions that may be beneficial in a way to some stakeholders in one sector, could have devastating effects if applied indiscriminately to all other industries. The Bills contain provisions that could amount to unjustifiable expropriations of intellectual property rights without compensation, and severe limitations on contractual freedoms that would preclude clients from being able to own all of the rights of copyright in works produced in South Africa for the life of copyright therein. The sum total is that these Bills as they currently stand will be deleterious to brand and copyright owners and advertisers alike. As such, industry bodies and associations have come together from across the spectrum as the common thread which links them is the substantial risk this legislation poses to the integrity of copyright ownership and the future of South Africa’s vibrant creative sector.
The sticking point for everyone across the marketing, advertising and communications (MAC) ecosystem is that the Bills give the Minister of Trade, Industry & Competition (DTIC) the power to dictate “standard elements” in contracts between agencies/production companies and performers. This term has yet to be defined and will therefore presumably be at the discretion of the Minister. Furthermore, the Copyright Amendment Bill proposes statutory royalty entitlements
for all performers featured in audiovisual works in a way that will compel copyright owners of content produced in South Africa to share profits from all commercialization activities with performers in or to pay them so-called “equitable renumeration” which may also become a moving target for “successful productions”. If remuneration of performers cannot be pre- negotiated or determined to the satisfaction of the parties to an agreement, the Bill proposes that the dispute be referred to a tribunal of retired judges for a final decision, which presents a highly problematic solution for an industry that operates on extremely short timelines.
In principle, the marketing, advertising and communications (MAC) sector has no issue with performers receiving royalties for specific and agreed uses made of their image rights in marketing and advertising campaigns. Our sector is already well regulated in this regard, and “usage fees” are part and parcel of any campaign where extended use of image rights will be made.
There is, however, no logic to performers, on top of their existing entitlement (made provision for in the Performers’ Protection Act) for compensation to be paid for the use of their image rights, for them to now gain an additional income stream which is a new statutory entitlement (proposed in the Copyright Amendment Bill) to share in all profits generated by the copyright owner of audiovisual works produced in South Africa. Content owners and creative agencies are obligated to report to new performers (or their collective rights management organizations that will still be accredited) on each and every act of commercialization of audiovisual content including television and online advertisements, failing which rightsowners, creative agencies and production companies would be at risk of criminal sanctions and potentially crippling financial penalties (minimum of 10%-annual turnover).
The problem created by the legislation is that it will make talent budgets impossible to set in advance, it will slow down the production process (particularly when disagreements arise), it will threaten the disclosure of clients’ confidential and proprietary financial information, it will curtail their freedom to contract and increase their legal risk of doing business in South Africa. Added to all this is the huge administrative burden the legislation will place on clients & agencies which will be required to report on every instance of commercialization to a collection agency which, it appears, has already been set up to collect the anticipated royalty payments. Non-compliance – which is very easy to monitor given the high visibility of advertising – will result in hefty fines and even imprisonment which will set up corporates with perceived “deep pockets” as prime targets for prosecution.
When considering the above, the question arises: in a world where production is truly global, will any client – foreign or local – chose to continue to produce commercials in South Africa if these Bills become law? We believe it is highly unlikely and consideration must be given to what this would mean for agencies, production companies and the hundreds of suppliers and thousands of people who derive their living from the industry.
Ahead of the hearing, the group is feeling confident as their legal team is well prepared, knowledgeable and highly experienced – having started work early last year to petition the President to refer the Bills in the first place. There is always a risk, however, that the case may not go their way and that the impact of such an outcome may have repercussions for many years to come.
We will know soon enough. Iacta alea est – the die is cast!
