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Thursday, 20 August 2009
Page: 8609

Dr WASHER (12:24 PM) —The purpose of the Resale Royalty Right for Visual Artists Bill 2008 is to create a resale royalty right scheme for visual artists. The resale royalty right will be inalienable and endure for the life of the artist plus 70 years. A resale royalty right is the right of an artist to claim a percentage of the proceeds of each successive resale of their original work. It is often referred to as ‘droit de suite’, meaning right of follow-up. This bill will entitle artists to a royalty payment of five per cent on the sale price of any commercial resale of the artist’s original works of art over $1,000. The right is a means of countering discrimination against artists in the copyright system.

Artists, as copyright owners, are entitled to receive payment for reproduction of their works, as authors receive royalties for books sold and composers receive payments for a record sold. However, for many visual artists the principle purpose of their work is the original rather than the reproductions of it. Therefore, this enables them to share in another’s profit from the resale of their original.

The bill intends to give effect to article 14ter of the Berne Convention for the Protection of Literary and Artistic Works. Australia acceded to the Berne Convention on 28 November 1977, with entry into force on 1 March 1978. Fifty-four countries out of 164 contracting parties to the Berne Convention have introduced a resale royalty right, including the UK and other European Union members. This bill is supportive of our international treaty obligations and would assist artists in recovering resale royalties from overseas. This bill was referred to the Standing Committee on Climate Change, Water, Environment and the Arts for consideration. The committee, of which I am deputy chair, found widespread support for a resale royalty scheme for visual artists.

Out of the numerous issues that were raised in the inquiry, two key issues were thought to be critical to the success of the scheme. The first was whether existing artworks should be included in the scheme from the outset. Currently clause 11 excludes the first resale of existing artwork from the date of introduction of the scheme. The explanatory memorandum states:

The prospective application of the right will help protect the property rights of people who bought artwork not knowing that a resale royalty would be payable when they resold them.

In all other countries where similar schemes have been introduced, the royalties have been payable on all resales from the date of commencement. The problem with excluding the first resale of existing art work is the indication that turnover of artwork is around 20 years. This would mean minimal benefits to most artists. The Department of Environment, Water, Heritage and the Arts submitted that exclusion was not their original intention but was based upon potential constitutional issues. Section 51(31) of the Constitution states:

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth in respect to: the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has the power to make laws.

The issue is whether the proposed scheme involves an acquisition of property on just terms. Advice by Mr Robertson SC and evidence provided by Mr Dearn and Dr Rimmer drew the committee’s attention to the 2009 High Court rulings in relation to events that may or may not involve acquisition of property on other than just terms. Given the significance of these rulings, and the impact of clause 11 on the scheme and the benefits to artists, the committee recommended that the minister seek further legal advice on whether omitting the clause would make the scheme unconstitutional. The committee also asked legal advice be sought on the possibility of amending clause 20 to exclude sellers from those persons who are jointly and severally liable to pay the royalty on a commercial resale of an artwork. If this was acceptable then it may have removed the necessity to include clause 11.

The government responded to this recommendation by seeking further legal advice and is of the opinion that the removal of clause 11 and the amendment of clause 20 would expose the Commonwealth to significant risk. Therefore, although clause 11 may have had a negative impact on the benefits to artists, it would appear to be constitutionally a legal necessity for the operation of the scheme.

The second key issue raised by the committee was whether individual artists should be able to opt out completely and personally have the right to collect royalty. Clause 33 states the resale royalty right is absolutely inalienable. This is in line with article 14ter of the Berne Convention. Clause 15 does allow for artists to transfer this right to a charitable institution that works for the benefit of the community. The intention is not to create a right that is tradeable as a commodity or to be held as a commercial entity but one that can be passed to natural heirs and not-for-profit organisations. Clause 33 provides a safeguard for artists being pressured into giving up their rights to obtain a royalty for the resale of their art work. However, clause 23 states that artists can exercise their right to say no to the collecting society to collect the royalty—

Debate interrupted.