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Standing Committee on Indigenous Affairs
02/03/2018
Growing presence of inauthentic Aboriginal and Torres Strait Islander 'style' art and craft products and merchandise for sale across Australia

CHANDLER, Mr Andrew, Acting First Assistant Secretary, Traveller, Customs and Industry Policy Division, Department of Home Affairs

HLEDIK, Mr Stephen, Acting Commander, Customs Compliance Branch, Australian Border Force, Department of Home Affairs

[12:00]

CHAIR: Welcome. As these proceedings are public, they are being broadcast and recorded by Hansard. If you wish to have evidence heard in private, please let the committee know and we will consider your request. Although the committee does not require you to give evidence under oath, I wish to advise you that this hearing is a formal proceeding of the parliament. Giving false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. If you object to answering a question, please state the reasons for your objection and the committee will consider the matter. I now invite you to make an opening statement, or statements.

Mr Chandler : We've just got one on behalf of both of us. I thank the committee for the invitation to appear today to discuss further the Department of Home Affairs' submission to this inquiry. Home Affairs brings together Australia's federal law enforcement, national and transport security, criminal justice, emergency management, multicultural affairs and immigration and border-related functions and agencies, working together to keep Australia safe. Home Affairs is responsible for the facilitation of legitimate trade across Australia's borders and securing supply chains against ever-evolving security threats such as terrorism, organised crime and cyberespionage. Our trade facilitation and security roles contribute to Australia's economic prosperity and to ensuring our national security. The Australian Border Force seeks to advance trade and revenue while protecting the border by optimising legitimate trade of imported and exported goods to support Australia's economy, ensuring community protection by preventing the movement of restricted and prohibited imports and exports and ensuring secure supply chains, and managing and enhancing border-related revenue collection.

In the context of the inquiry's terms of reference, I will briefly outline our current border framework for addressing intellectual property rights before outlining how this framework applies to Aboriginal and Torres Strait Islander-style art and craft products. The system administered at the border to protect intellectual property rights is known as the Notice of Objection Scheme. Intellectual property rights holders are eligible to lodge a notice of objection, but must have their intellectual property rights registered or recognised under one of the following: the Copyright Act 1968, the Trade Marks Act 1995, the Olympic Insignia Protection Act 1987 or the Major Sporting Events (Indicia and Images) Protection Act 2014. The Notice of Objection Scheme provides officers under certain circumstances the legal basis to seize goods suspected of infringing copyright, trademark, protected Olympic expressions and indicia relating to major sporting events. As there is no notice of objection in place for Aboriginal and Torres Strait Islander-style art and craft products, Australian Border Force officers do not have the legal authority to seize goods that they suspect may be inauthentic. Individual Aboriginal and Torres Strait Islander artists, or groups of artists, may access the Notice of Objection Scheme once they have registered their intellectual property rights under one of the acts mentioned above. By doing this, it would provide the Australian Border Force the legal authority to seize goods suspected of infringing those rights.

Separate to the existing framework for intellectual property rights, a border control is a different mechanism which, when targeting a style of art or craft, would be much broader in scope. Generally speaking, a range of criteria would need to be considered when developing a new border control that would function effectively. Specifically, these would include evidence that there is a need for the proposed border control, including whether or not the product poses potential harm to the community, whether there are complementary domestic restrictions in place that run alongside the import control—for example, restricting the sale of the goods being manufactured locally that contravene the intent of the border control—and the relative cost and benefit of alternative options.

One of the most important considerations for any border control is the ability of the Australian Border Force officers to effectively administer that control at the border. Specifically, in the context of Aboriginal and Torres Strait Islander style art and craft products, there are a number of factors that would impede the effectiveness of a border control. These include the fact that there is no currently recognised authority or system in place to determine the authenticity of products outside the copyright and trademark process that ABF officers could access, the fact that Indigenous art and craft products exhibit a wide range of styles and designs that vary across geographical locations, making them hard to consistently identify, and that there is a wide array of goods that could potentially display this style of art, for example, T-shirts, pens, hats, keychains and the like—basically anything with a surface able to display a design. The volume of goods that could potentially be in scope for compliance activities involving ABF resources would, therefore, be significant.

While there would be some measures that could be put in place to help identify goods in question during importation, such as placing the onus on the importer to provide a more detailed description, this does not solve the problem of the ABF being able to assess authenticity. Without a recognised authority to assess authenticity and administer some form of import permit scheme, for example, there is no clear way that the ABF officers could differentiate between an import manufactured overseas but commissioned by the traditional owners of that design from an import that had no input from Aboriginal and Torres Strait Islander stakeholders.

I welcome the inquiry's questions with regard to the submission we have made or anything with regard to my opening statement.

CHAIR: Thank you. Mr Hledik, did you want to add anything?

Mr Hledik : No, thank you. We were fully engaged in developing that statement.

Mr SNOWDON: You two wrote it together.

Mr Hledik : We helped!

Mr Chandler : We do work together very closely.

CHAIR: I'm sure there were at least two parts of that where there was very specific input—effectively, how the heck do we determine them, and how much money do you want us to spend on trying to find them?

Mr Hledik : In plain terms, yes.

CHAIR: Blunt!

Mr Chandler : The determination there is the key issue in terms of how many resources might be put into finding them. There are an array of priorities that the Australian Border Force has in terms of what it needs to do in intercepting restricted and regulated goods. Obviously, that's everything from offensive material to guns and drugs and, indeed, people. So there are issues of resources involved and prioritisation there, but, fundamentally, in terms of the framework for this, the issue of determining authenticity and how we might actually do that is really key to it.

CHAIR: In terms of being able to easily determine whether it's authentic or not, we had the example of an Indigenous design being woven by Afghanis and brought back into the country, so it's a legitimate and authentic design but authorised. What do you think would be an appropriate mechanism if there were a system that enabled the recognition of products like that versus products where there has been no relationship with an Australian designer at all? What would you think would be a reasonable way and an easy way for Border Force to be able to detect that? Would it be related to paperwork of the assigned import or—

Mr Chandler : With regard to detection as distinct from processing and facilitating the trade, in general, a permit scheme that permitted the import would probably be the simplest and most robust mechanism you could have to facilitate that cross-border trade. In terms of detection, that's an entirely different story. We can go into that in some detail if you like, but if you've got questions on the permit—

CHAIR: I'm just thinking about how difficult it would be. Even if you had a permit for the one that's legitimised, how are you going to detect, in a massive box that says 'blankets', the same sorts of goods that are not certified? How on earth are you going to be able to find that?

Mr Hledik : Obviously, we have parallels inside contemporary commodities as well—trademarking. I heard the previous testimony about goods: copyright and the like are part of free trade agreements, ensuring that those are protected under those measures as well. For us, and for the Border Force officers: you heard about the Notice of Objection scheme in our statement?

CHAIR: Yes.

Mr Hledik : That is exercised by rights holders through trademarks and copyright mechanisms, specifically. They identify to us the registered trademark of their goods, and our officers are therefore able to look for contraventions of those as importations occur.

The indicators of that, of course, are based on the level of compliance and declarations of goods being imported. So, to assume that an officer will be able to identify copied or illicit imports merely by looking at them is not correct. There is a breadth of information that is relied on to inform an officer that what they are looking at is potentially a non-compliant or illegal import. They will then act on that, based on that information. But it will still come back to the IP holder for them to take that actual contravention of their rights forward.

We've got limited means in our own resources to confirm whether something is or is not an authentic item. It is based on an investigation at the border by the officer and advice to an authority that we suspect there may be a contravention.

CHAIR: The difficulty there is that as an artist you don't usually copyright your piece, and at the moment there are two different protocols being used for the IP. One is the more traditional IP that relates to our understanding of a person's intellectual rights over a product versus what is trying to be developed now, which is unique to culture—that it's a collective. That's not established yet. One of the earlier submitters suggested that instead of tweaking the existing system that there needs to be a new system introduced to protect community property rights rather than just the simple one. Right now, even if they put a notice of objection in, there is no legal legitimacy to that because it's neither copyrighted nor is it protected by IP—

Mr Hledik : That's right.

CHAIR: or trademarked. You've got nothing—

Mr Hledik : Yes.

Mr Chandler : In which case they could not actually use the Notice of Objection Scheme. So that doesn't provide a legal basis. To your question, though, about detection—and it's identification as well. All imports have an import declaration that goes with them. That includes, obviously, a description of the goods. The description of the goods is based around tariff classification, which is an internationally recognised system that we are part of. The international system has a six-digit code which basically identifies every good that exists by its essential character.

The challenge in this particular circumstance is that what may be on that good—so, for example, a T-shirt or a football that may have a design printed upon it—is not identified at all because those items would be identified as a T-shirt or a football, or a pen or whatever the case may be. So in terms of any of the processes around import facilitation and what the ABF has in terms of declarations to manage them there would be nothing in place that identifies the fact that there may be some particular design on one of potentially thousands of different items that could have anything on the surface—basically, anything that could have a design on.

As you said, there may be a container load of carpets. They would be identified as carpets. Carpet is wool; possibly, it's woollen carpet coming from Afghanistan, but there would be nothing in anything that we have in the system at the moment which would lead to identification of the fact that the carpet had some sort of Aboriginal or Torres Strait Islander-style design on it.

CHAIR: That actually indicates that there needs to be an identifier at the end consumer point.

Mr Chandler : There needs to be some sort of authoritative system, I guess, domestically, in terms of import facilitation. That would be essential, yes.

CHAIR: So it would be up to the consumer to discriminate as to whether it's a knock-off or whether it's fair dinkum, and the only way they're going to be able to do that is if there is some sort of universally accepted system. Okay. That's very interesting. Do you want to follow on from that?

Mr SNOWDON: No. I just can't imagine how you could possibly check for this stuff. It raises some interesting questions about whether or not the NO scheme could be adjusted to incorporate some other scheme, like a—

CHAIR: Like the new protocol.

Ms CLAYDON: Something beyond the trademark and copyright—the kind of framework set for major sports events.

Mr Chandler : I guess I could add to that that, when something is identified as possibly being subject to a notice of objection, what the Border Force does is to identify it as such. We don't do anything further in terms of prosecution or anything around that. That is then something that is notified to the copyright owner, and then it is up to them to pursue that matter in civil court. In fact, I think that's almost unique in terms of any other border controls that we might have. Obviously, if there are drugs or guns or whatever else the case might be, the Australian Border Force has the ability to conduct prosecutions as appropriate and undertake those procedures and what have you. But for the notice of objection scheme, in terms of carrying it any further, that's something that sits under the responsibility of the copyright owner.

Mr SNOWDON: What legislation is the notice of objection scheme under?

Mr Chandler : The notice of objection scheme itself sits under the Customs Act, but obviously it refers to those four other acts that I identified. So there must be that registered trademark or copyright under one of those other four acts.

CHAIR: Did I hear you start to say that you're the only similar organisation that doesn't have the ability to prosecute contraventions of copyright?

Mr Hledik : No, it's not that we don't have the ability. It's that, under the provisions of the notice of objection scheme, we identify a potential contravention on behalf of the rights owner and then allow them to decide whether they wish to pursue prosecution or not.

CHAIR: Is it the same in Britain or the States?

Mr Chandler : I'm afraid I'm not in a position to answer that.

CHAIR: Okay. I misheard something you said.

Ms CLAYDON: They were saying that that scheme is different to the extensive powers they have to do the prosecutions with guns and drugs.

Mr Chandler : Yes.

Ms CLAYDON: Under this scheme, it's the rights holder that has to pursue any civil course of action.

Mr Chandler : That's right.

Mr SNOWDON: Can you give us an example? What's an example of a notice of objection that you might come across?

Mr Chandler : Basically, anything where someone's concerned about protecting their copyright. It could be a handbag of a particular brand.

Mr SNOWDON: It might be Oroton or it could be something else.

Mr Chandler : Something like that. If they are the copyright or trademark owner on that particular product, and they have submitted to us a notice of objection, then the Australian Border Force has the legal ability to stop those goods as necessary.

Mr SNOWDON: So they'd have to be aware that the thing's in the country.

Ms CLAYDON: Or coming in.

Mr Chandler : Yes. I guess a key part of that system is the fact that copyright owners in particular—be it a major auto manufacturer or a major luggage manufacturer or something like that—have very good intelligence systems designed to globally assess the risk to their business and understand where those risks might be in terms of copyright infringements.

Mr SNOWDON: Yes, and they'll have the financial back-up.

Mr Chandler : Yes. Frankly, we don't have those systems. Obviously we have intelligence systems, but they are certainly not focused on protecting copyrights for handbags. They are really focused elsewhere.

Mr Hledik : We put out similar consumer protection advice, if you like, about not importing counterfeit or copied goods in our general advice to travellers, as, indeed, it is an economic threat to the Australian market. The purpose of the notice of objection scheme is to ensure that those who have made the investments are protected and that Australia is seen as a safe place to undertake their trade with limited imposition of illicit or counterfeit goods imposing on them.

Ms CLAYDON: What's the extent of the use of the notice scheme? How actively is it used?

Mr Hledik : It's very heavily used. We publish a weekly list of protected trademarks. It runs to several thousand entries.

Mr Chandler : I think there are about 6,000 entries at the moment.

Mr SNOWDON: Could you provide us with a copy of that list, on a confidential basis if that's necessary.

Mr Hledik : It's publicly available, and purposely so.

Mr Chandler : Could I correct the record on something I talked about earlier. The notice of objection scheme is actually enabled by the trademarks and copyright acts and the other two acts. They give the Australian Border Force the powers to seize. I said it was under the Customs Act. Sorry, I misspoke on that.

Ms CLAYDON: Does the notice scheme exist as a result of those—is it within the Trade Marks Act or something that there must be a scheme?

Mr Chandler : Yes, it's enabled under that, which then provides the legal authority and the powers to the Australian Border Force.

Mr SNOWDON: If I'm importing a carton of, say, wooden kangaroos or something—some sort of thing that might be described as an Aboriginal artefact—what do I have to put on my import declaration?

Mr Chandler : I couldn't tell you for wooden kangaroos—

CHAIR: 'Wooden kangaroos'.

Mr Chandler : but there would be a tariff classification for that and it would be based on, as I said, the essential character of whatever that item might—

Mr SNOWDON: So I wouldn't have to say it's authentic?

Mr Chandler : No, absolutely not. It might be something along the lines of 'souvenirs' or 'statues'.

Mr Hledik : There'd be a range of things that you could classify it under, and arguably each would be just as valid as the others, but it would in no way identify whether that was an authentic good or even if it was a trademarked good.

Mr Chandler : And, obviously, it certainly wouldn't identify what those items might be decorated with. They could be just natural wood or they could have a painting style on them.

CHAIR: I can get the fact that the resources that you have are pushed towards drugs and guns, and I really empathise with that. I am personally looking at the end consumer as being the resolution pathway, rather than this one, but I'm happy to take on board any suggestions that you might come forward with if you have a good idea.

Mr Chandler : I guess one of the key points that I would emphasise—and I mentioned it in my opening statement—is, for any border control to be effective, obviously there need to be the parallel domestic controls. We've seen that on a number of occasions with a range of different products where border controls have been suggested and yet those products are still produced domestically and there's no domestic control of them. It makes no sense to do that—unless you're talking about industry protection, which is a different issue. We could get into steel products and whatever, but, really, you will not get an effective control unless you've got that parallel domestic and border piece to it.

Mr SNOWDON: We might need to come back to you at some point.

Mr Chandler : We're very happy to answer anything further that the committee might want to pursue.

CHAIR: Thank you for your attendance at today's hearing. If you've been asked to provide any additional information or there is anything else you'd like to provide, please bring this forward to the secretariat by 16 March. You will be sent a copy of the transcript of your evidence, to which you may suggest corrections.