Copyright (Infringing File Sharing) Amendment Bill

Hon Dr WAYNE MAPP (Minister of Defence) Link to this

I move, That the Copyright (Infringing File Sharing) Amendment Bill be now read a second time. On behalf of the Minister of Commerce, the Hon Simon Power, I thank the Commerce Committee for its consideration of the bill and for hearing over 200 submissions, which has resulted in changes to the bill.

As members of Parliament and those in the community who are interested in this issue will know, the bill has had a long genesis and has involved a complex debate on difficult issues. At the heart of the issues was the impact of the Internet on copyright law and the effect it had on incentivising creators to produce original works.

It is important in law that we provide appropriate protection for creative industries so that they can continue to provide jobs for New Zealanders and continue to contribute to our economy. But at the same time, the creative industries must adapt to changing technologies and the changing market place for creative works.

The Copyright Act 1994 grants exclusive rights to creators of original works so that in a sense they can make an economic return on their creative endeavours. That situation provides a vibrant industry in the fields of music, literature, films, and software, in particular. So ensuring that copyright owners have effective measures to enforce their copyright is consistent with the Government’s key goal of encouraging economic growth. However, amendments made to the Copyright Act in 2008 were intended to bring the 1994 Act in line with the contemporary digital landscape. These amendments included the insertion of section 92A in the Copyright Act—and I note that Clare Curran, the member for Dunedin South, has written extensively on this issue in her various blogs—which has required Internet service providers to adopt and reasonably implement a policy for the termination of repeat copyright infringers.

However, as the House will know, public and industry opinion was that section 92A was, in fact, unworkable. Accordingly, this Government stopped that provision from coming into force and undertook to look at the issue again. So this bill, the Copyright (Infringing File Sharing) Amendment Bill, repeals section 92A of the Copyright Act 1994, and also amends Part 6 of the Act to provide a fair and balanced process to deal with online copyright infringements.

Currently, copyright owners lack an effective enforcement measure against illegal file-sharing, which is somewhat practised by many people who use the Internet, often of a younger age group.

CLARE CURRAN (Labour—Dunedin South) Link to this

I have mixed feelings about the Copyright (Infringing File Sharing) Amendment Bill coming before the House today. The House is in urgency, and given that the bill has been sitting on the Order Paper for months, nothing about today or tomorrow requires the bill to be passed quickly. The Government uses urgency excessively. Before I get into the substance of the bill I will quickly mention some recent statistics about urgency that were compiled by my colleague Grant Robertson. In just over 2 years of the National Government, 17 bills have been passed without referral to a select committee, compared with five or fewer in the full 3 years of the three previous parliaments. There are reasons to justify urgency from time to time, but not to that extent.

One thing about the Copyright (Infringing File Sharing) Amendment Bill is sure: it did go to a select committee. There was robust debate in the Commerce Committee and throughout the community, and there has been much to-ing and fro-ing on the bill. The outcome is not perfect, but, with the support of both sides of the House, the legislation is better than what was passed in 2008. Labour supports the bill, but we still have reservations, and I will be speaking about them.

I also want to say that in some ways I am pleased the legislation has come back before the House. It was the first portfolio issue of communications and information technology that I took on board, and I realised pretty quickly that the rising discontent and dismay among the community about new and emerging technologies and the creation and distribution of digital content had to be addressed, and that we parliamentarians were mostly out of touch.

If I thought I would get a straight answer—although I think there was nearly one from over on the other side of the House earlier—I would ask all members right now to put up their hands if they have, or if they know someone who has, illegally downloaded material. I would like to think that many of us, as a result of the discussions that have gone on around the bill and in the wider context, are now a bit more in touch with reality on what people are doing on the Internet.

The bill has created a lot of interest. There were 237 submissions, including 31 supplementary submissions. In the coming years the Internet will become increasingly essential in all of our lives. Disconnection of accounts is a disproportionate remedy for file sharing. We needed a law, but we did not need a bad law. The bill represents better law. I know that it will not please everyone—in fact, there are parts of the bill that some submitters still oppose—but there are times when it is important to negotiate in order to get an outcome that is less bad than taking a high moral stand and ending up with something we fundamentally cannot live with. Negotiation is not a one-way street, and I am pleased to say that my experiences in negotiating with the Minister of Commerce, Simon Power, on the bill and in the Commerce Committee have been constructive.

Labour is prepared to support the bill through its remaining stages due only to a compromise that we reached with National that no New Zealander will have his or her Internet connection suspended as a result of the bill. Labour’s preferred option was to completely omit account suspension provisions from the bill, but National’s position was intractable. Account suspension provisions remain in the bill and could theoretically be used in the future, but any Minister who implements termination will have to wear the consequences.

Rather than oppose the bill outright, we are prepared to compromise to ensure that New Zealanders are not denied access to the Internet, which is something that so many people rely heavily on today. If the suspension penalty is used, the Minister of Commerce will have to enact the clause by Order in Council, putting the onus on the creative industries to prove that there is a case to terminate access and that the notice system is not working. Let us be very clear: if it were not for this compromise, then the bill before us today would state that New Zealanders’ Internet accounts could be cut off for 6 months. Labour would have opposed the bill, and it would have been bad law.

Although the high moral ground might be a great place, it is not much good when we are left standing on our own and the world moves on around us. Labour wanted to have an impact on the bill—and we have—but we have not got everything we wanted, and we have not got everything that many in the community wanted. This bill is not Labour’s bill. Section 92A was from our bill, and despite the good intentions to make it work, it resulted in a grand stoush between the different parties that led to a rethink. Labour pushed for, and supported, that rethink.

I will quickly mention the Supplementary Order Paper that is coming before the House today on proposed new section 122MA. I know that the proposed new section has caused some more consternation in the industry in relation to what appeared to be an attempt to push through a guilty by accusation regime, and to put the onus on the account holder to prove that he or she has not infringed when all the rights-holder has done is file a notice of infringement. What appears in the bill appears to put the onus on the account holder, and the words used—“an infringement notice is conclusive evidence”—are misleading and wrong. We understood they were wrong after the industry approached us, and we sought further talks with the Government. The Government agreed to amend the clause, and to ensure that once a notice is received and the Copyright Tribunal process triggered, all the account holder has to do is respond and challenge the notice. That will trigger a reversal of the onus and put it on to the rights-holder to prove that an infringement has occurred.

What we have ended up with is better. The bill is not perfect, but it is better than the process in many other jurisdictions. Right now in the UK, implementation of its Digital Economy Act, legislation that is designed to crack down on unlawful file-sharing, is being delayed by a judicial review in the High Court because of a challenge brought by Internet service providers. Internet providers BT and TalkTalk demanded the judicial review, arguing that the legislation was rushed through Parliament without proper debate. They claimed that the measures unnecessarily impact on users’ privacy and force Internet service providers to police copyright infringement on the Net. The courts will consider whether the Act is in line with the European legislation—in particular, as it relates to users’ privacy and the role of Internet service providers. If the court finds in favour of the Internet service providers, then the Act will no longer be enforceable.

Thankfully, the bill before us today was worked through, and compromise was reached, albeit somewhat grudgingly. That brings me to a reason why I am pleased the bill is before the House today, and why, if we had to choose, the issues in the bill that are plaguing people are kind of minor in comparison with the bigger picture. I refer to the Trans-Pacific Partnership agreement, which is a free-trade agreement of sorts that is currently under negotiation between New Zealand and eight other countries, including the US. The agreement is an attack on our sovereignty, and what it currently contains in relation to intellectual property issues is truly frightening. Leaked texts of the Internet Protocol chapter reveal that if the agreement is accepted in its present form, and if New Zealand signs up, then the bill will be chicken feed in comparison. The Trans-Pacific Partnership agreement is the next battleground for intellectual property in New Zealand, and we all need to unite around it.

Auckland-based Internet protocol lawyer Rick Shera has written about this issue recently. He said: “The return of s92A guilt on accusation, repeat infringer, termination of internet accounts—3 strikes … the US wants us to effectively scrap the last 3 years of consultation around the replacement of section 92A and the reasonably balanced (but still not perfect) approach we are working towards in the Copyright (Infringing File Sharing) Amendment Bill … Imagine you’re an ISP who has to bear the cost of gearing up for that regime only to be told later in the year that its Ground Hog Day and we’re all going back to the section 92A debacle.”

Labour has said that the leaked text on intellectual property copyright and parallel importing in the Trans-Pacific Partnership negotiations requires an emphatic rejection from the New Zealand Government. The secrecy surrounding these provisions is of real concern. The leaked United States provisions are plainly not in New Zealand’s interests.

The Copyright (Infringing File Sharing) Amendment Bill is a compromise. We support it, but we have serious reservations about suspension of Internet accounts as a penalty. Thankfully, termination will not be enacted. We are concerned about the costs of this new regime, about where the costs will fall, and about who will pay. We will keep a watching brief on the onus of proof issue raised in proposed new section 122MA and on whether mobile technology is affected and will be included in the legislation in a few years’ time. The bill is a lot better than it was. As long as termination of accounts remains unenacted, we will support the bill.

PESETA SAM LOTU-IIGA (National—Maungakiekie) Link to this

I rise in this second reading to support the Copyright (Infringing File Sharing) Amendment Bill. Before I talk to the specific sections of the bill, I will remind the previous speaker, Clare Curran, about a little of its history.

The original section 92A of the Copyright Act was added by the Copyright (New Technologies) Amendment Act, passed by the Labour Government and led by the Hon Judith Tizard. That section actually caused such an outcry from opponents and industry stakeholders that it raised serious concerns. I was not in Parliament to support that bill, but I know that Judith Tizard pushed it through. As a result, our National-led Government has not brought section 92A into force. A number of industry people were against the Labour legislation, and the Internet Blackout campaign drew international support against it. So it is rich that the previous speaker has come to this House and said that she grudgingly accepts this bill.

We did a lot of hard work on this bill, and there was a lot of consultation with various stakeholders within the industry. What has come about, I believe, is a firm but fair compromise, which is about making the legislation more workable and effective. It discourages illegal file-sharing, and it provides more effective measures in order to protect our creative industries and help them enforce their copyrights not just in the Copyright Tribunal but in the District Court.

What does the legislation do? As the Minister pointed out, the three-notice regime includes Internet service providers sending warning notices to customers informing them that they have infringed copyright. Part of that regime is about warnings, but part of it is about education. A number of surveys have shown that people who share files do not actually understand that they are breaking the law—they do not. Part of the notice regime is to educate those people. Many of them are young, but I would not totally blame young users of the Internet for transgressing the laws; I think that people across the board are part of the society that breaks the law.

The tribunal can award up to $15,000 in penalties based on the damages. The suspension regime that is part of this bill can be brought in by Order in Council. What is important here is that the Government will work with stakeholders to monitor and review the situation. We will monitor and review the situation, and if suspension is deemed to be the appropriate measure, based on the facts over time after a review, then that is what will happen. But suffice it to say that we need to monitor the situation. The Ministry of Economic Development will work with various stakeholders, including the member opposite, Clare Curran, who said she was none too happy about the result of this bill. But at the end of the day, I thought all parties were happy and that a fair and balanced process to deal with online copyright infringements had come about.

It is a good bill. I think it will be effective and workable in the long run. Stakeholders—certainly those who have come to me both personally and at the Commerce Committee—are happy with the situation, which will be reviewed and monitored going forward. I support this bill.

Hon STEVE CHADWICK (Labour) Link to this

I am not on the Commerce Committee, but it is interesting that we are talking about conflict here. When the original Copyright (Infringing File Sharing) Amendment Bill was proposed it was supported by National at the time, and it was actually the Internet service providers who as a voice, and as an industry voice, rose up and said they had some very real concerns about it. I heard the leader of our committee, Clare Curran, speak, and she did not attack it, at all; she said Labour had some reservations. I tell the House that we do support this bill, and this position.

This position has come about because this bill, I think, has not been rushed. It went to the Commerce Committee, and submitters were heard and given their day of having their democratic right exercised at the select committee. It is as the result of that, and of considerable negotiation, that we have come to this position today. We have serious concerns and reservations about the suspension of Internet accounts as a penalty for breaching copyright, but because of the compromise that has been reached democratically at the select committee—and I congratulate all members and the chair—Labour members are now prepared to support this legislation, and we reiterate that in the House tonight.

All of us in New Zealand know that it is incredibly important for copyright to protect our local artists, our musicians, and our creative industry producers. They are the heart and soul of New Zealand, and their very success shapes us as New Zealanders and the face of New Zealand internationally. We would never want to damage those creators of creative products, who are very much at risk through the copyright provisions proposed in this bill. We in Labour strongly believe that those who create music, films, and other entertainment should have their work protected from piracy. I am sure members of the Government believe the same, because we are all incredibly proud of our creative industries, which are growing industries in New Zealand. The creative industries would provide opportunities for more jobs and more work if only the Government would put emphasis into the training of people in those industries, but we do not see that, at all. Our opposition to the suspension provision takes nothing away from the support of our local artists. We agree that repeated copyright infringements deserve a penalty, but the balance is all about what that penalty is, and what that penalty regime is.

I congratulate those who spoke up and submitted to the select committee. Labour wants to give all of their industries a fair go, and to make sure that everyone pays their fair share. That is Labour’s principled approach to most of our policy positions. There are jobs in this industry, especially in the information technology industry, and especially in interactive video games that are yet to be created, but they are intrinsically linked to the development of the “New Zealand Inc.” information technology identity. I think those jobs are very worthy and need protection.

We still have serious reservations about the suspension of Internet accounts as a penalty for breaching copyright. Amendments were made and compromise was reached at the Commerce Committee—and I congratulate members on that negotiation—which means we will now support the legislation. I think that is positive. We were assured by the Minister in charge of the bill, Simon Power, that no New Zealander would have their Internet connection suspended as a result of this bill.

I think that National member Sam Lotu-Iiga was absolutely right; most people on the Internet, when they become Internet-savvy, do not use it to infringe. They do not infringe intentionally. But I know the younger generation, and I have certainly seen evidence of infringement amongst my children’s generation when they download. I do not think they see that as being illegal, at all. If they infringe copyright with what they download, then we have a problem. Information technology creatives are also creative in finding ways around, and in circumventing, any disconnection. They will do that simply by setting up multiple Internet service provider connections, and we know that. This industry moves very rapidly in creativity. When in Government Labour was very aware of piracy, and we were aware of piracy in lots of areas too, such as films and lots of other creative products. We wanted Internet service providers to do their own policing of illegal downloading, and to have a policy—just a policy—for terminating active repeat offenders.

We still have concerns about this bill, but it is great that we are debating it in the House tonight. The regulatory impact statement states there is a case for intervention, but there is uncertainty about the scale of harm done by illegal file-sharing. The case has not been clearly made that sales of music and movies via the Internet are decreasing due to illegal file-sharing. The regulatory impact statement did not have a preferred option, which shows that the case has not been clearly made that sales of music and movies via the Internet are decreasing due to illegal file-sharing.

Some sections in the bill remain problematic. The infringement notice is a burden, and the bill actually says that people will have to prove that they did not in fact infringe a copyright. Some submitters raised concerns about that point at the select committee, and I am pleased that the Minister has attempted to clarify that under the Supplementary Order Paper put forward today.

I think there has been a good process. It has been a robust process, and Labour certainly now supports the bill. I congratulate all of the committee members. I am pleased about the Supplementary Order Paper. I think we have to be very aware of the trans-Tasman implications. When we think we have fixed legislation in New Zealand, we may find some other global implications we need to be very careful of. But to all intents and purposes, we support the bill.

GARETH HUGHES (Green) Link to this

Kia ora. Ngā mihi nui ki a kotou. Kia ora. I rise to take a call on the Copyright (Infringing File Sharing) Amendment Bill. I acknowledge the hard work of the Commerce Committee members. I might be a geek, but I am not the type that can fix a computer. Information and communications technology is one of my 11 portfolios—I have a bundle—and to be honest I do not have a huge history of looking into technology or copyright issues. But I acknowledge that I really enjoyed hearing the submissions on this bill and learning more.

I love New Zealand music; I love New Zealand film. I want those artists to make a fair living through their art. I thank all the submitters. The message I heard from them was clear. The Green Party will be opposing the bill tonight, because we have always opposed, and we continue to oppose, account termination or suspension as a remedy for file infringing, whenever it is written into legislation. Even if not immediately enacted, the termination provision should not be there—full stop.

The Green Party also opposes the use of urgency to pass all stages of this bill through the House with no warning that it was coming.

Tonight I will touch a little on my personal reflections on the select committee process, highlight the improvements that have been made—because some were made in the select committee—and, lastly, explain the reasons why the Green Party will be opposing this bill tonight. Without any technical background—except maybe website surfing, gaming, and, no doubt, unintentionally listening to pirated material—I went to the select committee to hear submissions on the bill. I went in with an open mind and I met with both sides of the debate outside the room.

In my first reading speech I focused on how the Internet had built connections, increased global communications, contributed to more collaborative ways of working, and revolutionised business and the global economy. The Internet has unleashed fantastic creativity from the arts to academia and business. However, making a business out of creativity is in some cases not viable because of illegal file-sharing.

The Green Party supported this bill at its first reading, stating that although we did not think it would solve all the problems, it might play a part in the solution, and we looked forward to hearing more in the select committee. The Green Party thinks the current bill is significantly better than its predecessor, which introduced the Draconian section 92A and was put forward by Labour during the last term. This bill repeals the existing section 92A legislation and replaces it with a “notice and notice” system, which copyright-holders can then use to go to an Internet service provider, which has the power to ultimately go to the tribunal to ask for penalties for repeated copyright infringement.

I think it is important to remind this House that the Green Party was the only party in this House to oppose the section 92A nonsense at every stage. We offered amendments in an attempt to fix it.

I acknowledge that significant improvements were made to this bill in the select committee. Those changes included clearing up the definition of “Internet service provider”; excluding universities; limiting the scope to cover only file-sharing technology, not one-offs from email or websites; and amending rules so that Internet service providers are no longer required to consider whether to accept challenges, reject them, or refer them on to rights-holders. All challenges are now passed on to the rights-holder.

It is good to see that there is a Supplementary Order Paper from Minister Power on the Table addressing section 122MA, which is the “guilt on accusation” section. However, the financial damages include a punitive element and are not merely compensatory. This is especially important in New Zealand, where often we are at the end of US or European-based supply chains. We can wait months or sometimes years to get access to content that is freely available overseas. The introduction of a compensatory penalty or, more controversially, a zero-dollar penalty for infringing against international products that are not available in New Zealand may have encouraged rights-holders to provide digital content sooner to Kiwis.

Internet account suspension as a remedy for file sharing was the big issue at the select committee, and the one that many submitted on. Determined opposition was clear from independent groups and consumers, as was the desire by rights-holders to wave this termination stick. The key question at the committee was whether suspension of a person’s Internet account for copyright infringement was a needed deterrent tool that would, however unlikely, actually be used by copyright-holders, or whether it was an ineffective tool—as David Farrar put it, “an unproportional response, and a bad precedent.”

In the end the select committee reached a compromise whereby termination was drafted into law as a remedy, but available only if the Minister enacted it in the termination clause. I like compromise and the idea of parties working together towards a solution, so I was initially very keen on it. But in the end, after really searching within myself, I came to the conclusion there was no way Parliament should be drafting into law something so disproportionate to the problem. It will not stop the pirating of copyright material, and it could take away people’s access to the Internet, which in today’s wire world is, I believe, a human right.

We should remember that file infringing is a civil offence, not a criminal offence. Often people are sharing files because they are simply not available in New Zealand, because of the antiquated distribution system of the global behemoth that uses it to extract as much profit as possible. We should also remember that net profits have increased in the digital age for many film and music industry players, and only certain distribution channels have dropped precariously.

Ultimately, I think termination should never ever be written into legislation. We believe it sets a bad precedent, is disproportionate to the problem, and will not solve the issue. The Green Party asserts that there is danger in heavy-handed regulation for a problem that may be only temporary and a result of new technologies upsetting traditional business models. The use of fines rather than Internet suspension is a more appropriate sanction for file sharing, and I believe that punishment should be proportionate to the offence. Citizens are not denied the right to use a telephone just because it happened to be used in the commission of a crime, and this legislation should not set any precedent. Access to the Internet has become a necessity in an era where more and more public services are provided only online.

An additional risk from the select committee’s compromise is that, far from a compromise, it is likely to be just a delay. We cannot support this being written into law. The compromise deal reached to secure the Labour Party’s support avoids responsibility and passes the decision on to the Minister. Parliament should be the determiner of this, not the current or a future Minister, no matter how well intentioned their comments.

The Minister, who obviously supported termination in the original bill, will now likely face an intense lobbying push by rights-holders keen to have this stick and wave it at Kiwis as soon as they can. As the Creative Freedom Foundation has pointed out, this is not a solution. In fact, it is a massive problem, because there are no Government statistics about infringing Internet downloading in New Zealand. The decision will be made on lobbying. Internet termination will be enabled in Cabinet, not in this debating chamber.

In summary, the Green Party thinks this bill is significantly better than its predecessor. We are glad to see the changes made in the select committee, and we are happy that a compromise was made at the select committee so that termination will not be enacted immediately. However, we believe it is just a delay, and we cannot support termination being written into law. We support the three-strikes “notice and notice” system, and believe notices and fines will be sufficient. Research commissioned by the New Zealand Federation Against Copyright Theft found that a notice from the Internet service provider would be enough to stop 71 percent of New Zealand young people further accessing illegal copies of digital files.

We support Kiwi rights-holders and Kiwi artists, and we think the use of notices and fines, rather than Internet suspension, is a more appropriate and proportionate sanction for file sharing. Access to the Internet is vital for engagement with our modern world, and the Green Party will have no part in legislating it away from the people. Kia ora.

RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this

I am pleased to stand to speak on the Copyright (Infringing File Sharing) Amendment Bill, which deals with the concept of file sharing. In most cases the Māori Party would advocate that the art of sharing is a practice we endorse, but in this case sharing takes on the more negative meaning—what is described as unauthorised sharing, which I guess in street talk might also be called pinching or theft. File sharing is about the transfer of material, usually music, movies, or software, via the Internet between two points, usually two Internet users. Sharing of copyright works often occurs without the authorisation of the copyright owner, and that is illegal. This bill is to provide new enforcement measures against the unauthorised sharing of copyright material via the Internet. It aims to deter file sharing that infringes copyright, deter and educate the public about the problem, compensate copyright owners for damage sustained through file sharing by widening the jurisdiction of the Copyright Tribunal to award damages, provide sanctions for serious copyright infringers, and limit Internet service provider liability that may result from account holders infringing files.

The Māori Party is happy to support this bill throughout its remaining stages. Our research tells us that the creative industries are being massacred by illegal sharing overseas, and the same trends are very clearly starting to emerge here in New Zealand. We also know that there are an estimated 4,698 Māori directly employed in the creative industries, which are the most impacted by illegal file-sharing, and that does not include people in indirect employment such as lawyers or accountants. Take, for instance, local performing artists such as Stan Walker, Maisey Rika, or Bic Runga. Like most artists they will be affected by illegal downloading and file-sharing. Illegal downloading and file-sharing has resulted in a loss of income for the majority of local artists, and that has made it increasingly difficult for New Zealand artists to earn a living by making music in this country. That is despite the fact that excitement and interest in new local musical artists is higher than ever. Illegal downloading and file-sharing means that record copies are generating less revenue, which in turn means that we have fewer resources to invest in new New Zealand artists.

In our consultation with various Māori involved in the industry, we were told it would be a huge drawback for copyright-holders to chase up infringement, because most copyright-holders are people who work on their own, with no infrastructure, no administrative support, and no coffers full of money to pay for the work required to do so. We were also told that no industry can sustain itself on a free model, nor can creators make a living if what they create is free. The bill, then, goes a long way to deterring illegal file-sharing. Even from the limited and selective consultation process we have been through, we know that Māori artists absolutely support this bill, as they believe it will have a positive impact on the ability of local artists to earn a living as musicians.

We note also the advice of the Recording Industry Association of New Zealand, known as RIANZ. The association represents 60 major and independent record companies, more than 1,100 New Zealand recording artists and producers, and over 95 percent of commercially released recorded music in New Zealand. It told the Commerce Committee that the direct impact file sharing has on the record industry and its recording artists, including local New Zealand labels and artists, is substantial. Sales figures for the New Zealand music industry, including New Zealand and international artists, show that for the period from 2001 to 2009 the total value of album and individual track audio sales dropped from $119 million to less than $70 million per year. That seems a staggering reduction in sales, which essentially is at the core of the problem being addressed by this bill.

There was also some heartening evidence during the select committee stage that some basic interventions could make a significant difference. Judge David Harvey shared the results of the Synovate survey Movie File Sharing Amongst Young New Zealanders, which found that more than 70 percent of respondents in New Zealand would cease infringing activities if they received a letter from their Internet service provider. All it takes is a good old-fashioned letter. This finding has been corroborated by a similar survey in France in 2008, which found that 90 percent of users would stop illegal file-sharing after two warnings from their Internet service provider.

There are some other relevant issues we want to raise in the debate. As we know, technology changes so rapidly that a bill such as this one could well be obsolete in a year or two, as Internet sharks find new platforms and channels that get around laws such as this one. Vesting the entire Internet copyright issue in regulation will ensure that the rules for such offences can be changed quickly to keep up with the changing online landscape.

Finally, I will just touch on the two major changes recommended by the select committee that we believe do not support the general intent of the bill. We suggest that suspension is not proportionate to the crime, as most people would cease illegal downloading after the first or second notice, and it takes a particularly belligerent person to ignore three warnings from an Internet service provider. The second change is to allow lawyers into the tribunal. This defeats the whole purpose of this bill, because a situation will inevitably arise where everyone will “lawyer up” at the tribunal hearings. All that will do is exacerbate the current problem that the cost of litigation exceeds the likely payout from taking someone to court. We do not support these changes recommended by the select committee.

However, we are supportive of the Government’s proposed Supplementary Order Paper, which largely appears to be about clarifying arrangements with the Copyright Tribunal. We believe that it is a good thing that the Supplementary Order Paper clarifies that the Copyright Tribunal should not automatically presume that infringements of copyright have been committed by an account holder simply because of an infringement notice. In other words, this is akin to the concept that people are innocent before the law until proven guilty, so to speak. More important, the Supplementary Order Paper helps to clarify the process and substance of a tribunal proceeding as it applies to this issue. It also amends the Copyright Act 1994 by increasing the number of members who sit on the tribunal from three to five. One might question the increase. We hope it is to ensure that the new member will have knowledge of tikanga Māori, be confident in the application of Te Tiriti o Waitangi, and be well informed about the implications of Wai 262—the flora and fauna claim. The Māori Party will support this bill.

KATRINA SHANKS (National) Link to this

It is my pleasure to take a call on the second reading of the Copyright (Infringing File Sharing) Amendment Bill tonight. It is interesting to note that this bill repeals section 92A of the Copyright Act 1994, which was introduced under the leadership of Judith Tizard of the then Labour Government. We talk about technology and how fast it moves, and we know that since 1994 technology has moved extremely fast. What was relevant then is not necessarily relevant now. It is important when we are looking at legislation around technology—for example, this bill, which is very narrow; it is about file sharing—that we get legislation that can stay true for a period of time and will not be outdated. It is more principle-based, I believe, and that is the way it should be in order to ensure it stays current for a longer period of time in a very fast-changing environment.

The Commerce Committee worked really hard on this legislation, I have to say. The select committee had it for a long time. In fact, I felt very sorry for the officials when they first came in. I think I am relatively savvy when it comes to computers, but when it comes to file sharing my generation does not know much about it; it was not around when I first started using computers. It actually took them a while to explain file sharing to a few of us on the committee. It came down to having little boxes in front of the select committee, and the officials would explain that a bit is taken from this box and a bit from that box—a bit from this computer—until there are a thousand little bits and they make up a file. It takes a bit to get one’s mind round it.

JACINDA ARDERN (Labour) Link to this

It is my pleasure to stand and add to the very sound comments that have been made by my colleague Clare Curran, who, I want to acknowledge through this process, has made a really significant contribution to this debate. I think we all have to acknowledge, and I would like to see it acknowledged by Government colleagues, that the original version of the Copyright (Infringing File Sharing) Amendment Bill was drafted by the previous Labour Government, and it was supported by the National Opposition. We have acknowledged on this side of the House that we did not get this legislation right in its original form. We stand up and we own that, but we have not seen that kind of ownership on the other side of the House. I have some comments for the Green Party on its position, but I will leave those for later on in the discussion.

I think we should all be up front here. There is one word to describe this legislation through all its iterations and that word is “fraught”. This has been a delicate balancing act between two very important fundamental rights, particularly from the perspective of Labour members of Parliament. On the one hand, there is the issue of how to deal with the rapidly changing world, and we on this side of the House absolutely value the importance of having the freedom to access information and to access our creative industries via the Internet. That was very, very important to us from a social and a democratic perspective, and it was something that we wanted to protect. But, secondly, we wanted to protect the right of creatives, in particular, to protect their intellectual property. That is a fundamental issue for us if we are to have those people who work in the creative sector continue to make a living out of what they do. I have a few other comments to make on that further down the track.

At this point I want to declare an interest. As Labour’s associate spokesperson on arts, culture, and heritage, I have a direct interest in making sure that we protect our creative sector and everything that it contributes to New Zealand from a cultural perspective. That includes music, films, the screen industry, and all iterations of our creative sector. So at the top of my mind when looking at this issue has always been how to balance the sector’s needs with our overriding need to ensure fair and equitable access, and access to justice in considering whether someone has infringed upon someone else’s rights. But let us be clear on this: not all creatives have sat in the same boat on this issue. I have had many come to me and say they acknowledge up front that the future of their industry has changed and they are embracing that change, and they want people to be able to freely access their work. But at the same time, we had the flipside where other creatives acknowledge that there was still an element of industry for them to be able to access.

Folk on the other side of the House are holding up signs at me, and my eyesight is clearly going because I cannot read them. Perhaps Katrina Shanks will flash the sign again so that I can see it. It says: “Have you ever file shared?”. I am happy to answer that question directly for the member. To the best of my knowledge, I have not. What I will say, and this is where I will sound like a Pollyanna, is that I have always had a problem with the downloading of New Zealand music in particular, because I know New Zealand musicians. I know that they struggle to survive in the industry in New Zealand, and the last thing I want to be doing is stealing from them. That is how I always perceive them.

MELISSA LEE (National) Link to this

I would like, first of all, to thank the member who just resumed her seat, Jacinda Ardern, for her admission that Labour got it wrong with section 92A.

I rise to support the Copyright (Infringing File Sharing) Amendment Bill through its second reading. I recognise that the previous speaker referred to herself as a Pollyanna, and I think a Green member called himself a geek. I will not go as far as that, but I will follow in their footsteps and call myself creative. I will put myself in a little box, like those members have.

Ms Ardern has just made the admission that Labour got section 92A wrong. She went on to say that we should also do so. I am a little bit confused as to why we should do that. This National Government is trying to fix a problem that was created and caused by Labour, and the Internet Blackout week in New Zealand was a result of the Labour bill, the Labour law. This National Government decided not to enact it, because there was an outcry over section 92A. We went to the public for consultation, and this bill is the result, the outcome, of the consultation process, the first reading, and the select committee process, which I have to say was quite long.

I appreciate the Opposition’s support for this bill, because I also struggled with this issue. I have come from the creative sector and I see the benefit in both sides of the argument. I know that there are some brand new creatives out there, both singers and movie makers, who struggle to get noticed and often put their creative movies or music online, and it goes viral and ends up getting noticed. That is not quite the file sharing that we are talking about here, but I ask members to hear me out.

The Korean movie industry, the huge Korean wave, which earns billions of dollars, came about as a result of viral file-sharing copyright infringements in other countries like China, where people downloaded movies and copied DVDs, and now it has become a humungous industry that makes a lot of money for Korea. Even in New Zealand I know that there was a Chinese students’ group that put their drama online because they could not get anybody to make it. They virally spread the news and were so successful that it was picked up by a channel and it even went to China.

I see the benefit in promoting these creatives online, and possibly supporting the file-sharing issue. But the industry needs protection. I have come from the sector. I do not know how many other members on the other side of the Chamber have had the same experience, but as a fledgling screenwriter I know how long it takes to develop an idea, come up with a script, get that script to a producer, and get funding for something to be made. It costs time and a lot of money for that process to reach fruition and for that movie or piece of music to be made.

I know that Steve Chadwick talked about the copyright issue. The piracy issue is big, but that is already protected. But this whole copyright file-sharing issue is not done unintentionally; it is done intentionally because we have something called the Internet. The development of fast Internet means we have a major problem on our hands. People download the software to share with their friends. It is not like me buying a DVD, giving it to Steve Chadwick, and saying I am sharing the DVD—I cannot do that. I can purchase a video and share it with a friend, and I can buy a piece of music and share it with a friend. That is quite different from this. This is about people intentionally going to something like Torrent and downloading the file-sharing software intentionally knowing that they will infringe copyright.

Katrina Shanks talked about little boxes on the table, as a way of understanding how this works. Even though I worked in television, even though I worked in the film industry, I had no idea how this peer file-sharing thing worked. I am in that generation, as well. I had to learn what this was about. It is incredible how they do it. They download the software and they put it up. There is Internet chat about it. Young girls and young boys, teenagers—and I am not blaming the teenagers, mind you—basically put up on a chat site a comment like: “Anyone know how to download the latest movie?”. I will not mention what it is. They start a chat line. They help each other to download movies that are not even released here in New Zealand. So they are breaching copyright, and they do it through Internet file-sharing, which should be illegal. I am very pleased that we have had to deal with this, because apart from helping us understand what this issue is all about, we will be able to monitor our children and our families and prevent them from breaking the rules.

As I said, this is very, very different from getting a DVD and sharing it with a friend. I think it was a Māori Party member who talked about the fact that the recording industry has lost a lot of money. I know for a fact that from 2004 to 2009 the income the recording industry derived from sales actually halved. That was due to file sharing—through illegal copies being shared among friends. With the advent of faster Internet, and with broadband becoming more available, movie industries are also in major trouble. I support the bill and I look forward to the Committee stage as this debate continues. Thank you.

RAYMOND HUO (Labour) Link to this

I rise to take a call on the second reading of the Copyright (Infringing File Sharing) Amendment Bill. Before I start I wish to acknowledge the great efforts put into the bill by the Minister of Commerce, the Hon Simon Power, and also the Hon Lianne Dalziel, the wonderful chairperson of the Commerce Committee. The issue of file sharing is not easy. The bill is a great compromise. I also thank my learned colleague, Labour’s communication and information technology spokesperson, Clare Curran. Her press release dated 3 November 2010 was so good that it has been well read by stakeholders and interested parties.

Due to a last-minute compromise between Labour and National, no New Zealanders will have their Internet connection terminated as a result of the proposed new copyright laws. The compromise means that the provision for termination of Internet access as an ultimate penalty for repeat copyright infringement remains in the bill but cannot be enacted unless the Minister makes the decision to do so. The Minister would have to enact the termination clause by Order in Council, which puts the onus on the creative industries to prove there is a case to terminate access, on the Internet service providers to ensure that the system of providing deterrent notices to copyright infringers works, and on the Minister to ultimately make the call. Without that compromise, Labour could not have supported the bill. The compromise is important, realistic, and well warranted, but I acknowledge the points raised by Mr Gareth Hughes, and I look forward to seeing what his amendment has to offer at the Committee stage.

I agree that we are dealing with the real world and with reality. In this world, in our modern daily lives, Internet access is fast becoming as necessary to us as the provision of morning or evening newspapers, or as important as television, cellphones, water, or electricity.

The purpose of the bill is to establish a regime that deters file sharing that infringes copyright, to educate the public about the problem, to compensate copyright owners for damage sustained from copyright infringement by file sharing, to provide sanctions for serious copyright infringements, and to limit Internet service provider liability that may result from account holders’ infringing activities. The bill is largely about education and deterrence.

Much has been said about the controversial section 92A and the widespread objections it has attracted. Some submitters at the select committee hearing described the section as one of guilt upon accusation. The bill repeals section 92A and replaces it with a three-notice regime, backed up by a $15,000 fine and a 6-month Internet suspension. Minister Power described the three-notice regime as the major feature that educates the public about illegal file-sharing and that provides effective methods for copyright owners to enforce their copyright. The bill ensures that infringers are given adequate warnings that unauthorised sharing of copyright works is illegal. The three-notice regime, despite its gentle name, seems to have won wider support as an effective mechanism. It is believed to be more effective than the much-hyped three-strikes regime.

Following Judge David Harvey’s wonderful submissions, he informed us that a survey in France in 2008 found that 90 percent of users would stop illegal file-sharing after two warnings from their Internet service provider. Judge Harvey also made available a copy of the 2008 Digital Music Survey conducted by Entertainment Media Research in the UK. The survey showed that 70 percent of users would cease infringing activities after one notice from their Internet service provider. In a local context, the Young New Zealanders and Movie Downloading survey found that more than 70 percent of respondents in New Zealand would cease infringing activities if they received a letter from their Internet service provider.

I thank Judge Harvey for his contribution. I remember my early university days in Auckland, when I had the privilege of studying information technology law under Judge Harvey. The classes started at 8 o’clock in the morning, and Judge Harvey, who is always energetic and thoughtful, would have to rush to the city campus of the University of Auckland and, 2 hours later, rush back to the District Court in Manukau. Judge Harvey is New Zealand’s most tech-savvy jurist. His submissions enlightened me and the select committee, and I thank him for his great contribution.

Submissions from TradeMe, Two Degrees Mobile Ltd, the New Zealand Film Commission, InternetNZ, Computerworld, and the University of Auckland were good, too. The University of Auckland, in its submission, raised some important issues. It had two serious concerns, among others. The first concern was that the bill as worded is not consistent with the explanatory note. The university’s second concern was that if universities, libraries, schools, or similar organisations are excluded from the definition of Internet service providers, then they are potentially liable as account holders.

I note that the Commerce Committee report recommends that the term “ISP”—that is, Internet service provider—be replaced by the new term “IPAP”, which is Internet protocol address provider. I look forward to discussing the matter in more detail and, more specifically, relevant amendments to the Act, such as to sections 92, 29, and 122, at the Committee stage.

Labour is prepared to support the bill through its remaining stages due to a compromise we have reached with National, as was explained by my learned colleague Clare Curran, who took the first call on behalf of Labour. The compromise means that provision for the suspension of Internet access as an ultimate penalty for repeat copyright infringement remains in the bill but cannot be enacted unless the Minister makes the decision to do so. Labour’s preferred option was to completely omit the provision for account suspension, because it is Draconian, unnecessary, and would not work. The provision for account suspension remains in the bill and could theoretically be used in the future, but any Minister who implements termination would have to wear the consequences. Rather than oppose the bill outright, we prefer to compromise to ensure that New Zealanders are not denied access to the Internet, which is something that many people rely on heavily nowadays. Thank you.

JONATHAN YOUNG (National—New Plymouth) Link to this

I must admit that New Zealanders must wonder at times about the huge quantity of laws that we create. As a child I could never understand how Parliament could, full-time, create law after law, until I realised that because society, and in particular technology, changes in many regards, opportunities or technologies are created that then demand that regulation wraps around them in order to bring some order. What we are experiencing today, as we look at this copyright infringing law, is, essentially, the future meeting us. These are the sorts of things that people wrote about in times past, and today we are facing the challenges of legislating for that. When we think about it, we remember that Leonardo Da Vinci drew helicopters and that Jules Verne painted a word picture of submarines. Do members remember The Terminator? I am sure they do. The computer system—