DUTHIE, Ms Tanya, Acting Director, International Policy and Cooperation, Business Development and Strategy Group, IP Australia

JOHANNES, Mr Geoffrey, National Manager Trade, Policy and Implementation Branch, Cargo and Trade Division, Australian Customs and Border Protection Service

MINA, Mr George, Assistant Secretary, Trade Police Issues and Industrials Branch, Office of Trade Negotiations, Department of Foreign Affairs And Trade

TREYDE, Mr Peter, Civil Law Division, Business Law Branch, Copyright and the Digital Economy, Principal Legal Officer, Attorney-General’s Department

[13:46]

CHAIR: I now welcome representatives from the Department of Foreign Affairs and Trade and the Attorney-General's Department.

Mr Mina : Thank you, Chair. We also have representatives here from IP Australia and the Department of Health and Ageing. Customs Australia has also joined us.

CHAIR: Thank you. Although the committee does not require you to give evidence under oath, I should advise you that this is a legal proceeding of the parliament and warrants the same respect as proceedings of the House and the Senate. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of the parliament. If you nominate to take any questions on notice, could you please ensure that your written response to questions reaches the committee secretariat within seven working days of your receipt of the transcript of today's proceedings. I invite you to make introductory remarks before we proceed to questions.

Mr Mina : Thank you very much, Chair. I will take the opportunity to make some introductory remarks on behalf of those here today. Thank you for the opportunity to again appear before you regarding the Anti-Counterfeiting Trade Agreement, or ACTA. We used our last appearance to speak about the benefits of the agreement and to confirm that there would be no impact on Australia's existing policy settings on intellectual property. On this occasion, we would like to address some of the claims made about ACTA during the previous round of hearings. We wish to address three main issues: first, the interests served by ACTA in Australia; second, the process for consultation ahead of and during negotiations; and, third, the institutional context and settings of the ACTA initiative.

First, some have asked during these hearings whether Australia's participation in the ACTA negotiations reflected one particular set of interests more strongly than others. Australia's regime for intellectual property protection and enforcement reflects, of course, a balance between the objectives of creating and disseminating knowledge and the rights of producers and the legitimate interests of users of intellectual property. That same balance was inherent in the approach Australia took to the negotiating table for the ACTA negotiations. There was significant pressure from other negotiating partners to alter that balance in certain respects, and that is understandable. International negotiations by their nature involve countries seeking more extensive legal commitments from their negotiating partners in particular areas. We can attest to the fact that Australian negotiators fought hard in the negotiations in order to protect the balance inherent in our law. We were ultimately successful in doing so. We were of course also successful in ensuring that same balance was reflected in the emerging international standard. We were very pleased that we were able to achieve this result for Australia. There will therefore be no regulatory change whatsoever in Australia as a result of ACTA.

There were some questions put to the committee about the need for a cost-benefit study. We can again confirm that the Office of Best Practice Regulation was consulted on the issue of a regulation impact statement and had determined that such an examination was not appropriate given there was no regulatory change involved. The benefits from this initiative are in other markets where, as we have noted before, other countries will be required to adopt laws and policies similar to Australia's own for the benefit of Australian innovators and creators. We addressed those benefits in some detail during our earlier appearance.

Second, it may be helpful to address briefly some of the questions raised about the preparatory process and the consultation process ahead of and during the negotiations, whether through engagement across government or across the community. We can assure the committee of the open and effective processes undertaken in the lead-up to and throughout the negotiations. There was strong interagency coordination throughout the negotiations which led to a coherent approach in the pursuit of Australian policy interests.

A good example was our efforts to ensure our wider health policy interests were fully taken into account in the agreement. We fought hard for and secured language in the agreement that protected our public policy objectives in health. It is no coincidence that ACTA members do not need to apply the section on border measures to patents, avoiding potential impacts on trade in medicines, including generic medicines. It is not a coincidence that ACTA members are not required to cover patents in their civil procedures nor is it a coincidence that ACTA article 2.3 provides:

The objectives and principles set forth in Part I of the TRIPS Agreement, in particular in Articles 7 and 8, shall apply, mutatis mutandis, to this Agreement.

For the committee's background, article 7 of the TRIPS agreement notes the need to address the interests of both producers and users of intellectual property and article 8 of the TRIPS agreement notes specifically that WTO members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition.

These achievements were secured through the hard work of our negotiating team based on a clear-sighted understanding of the breadth of Australian interests in this treaty. Coordination and consultation with the community was equally important. Many of these strong outcomes for Australia can be traced directly to the strong process of consultation that we held to help us refine Australian views and interests in this treaty. That consultation process was open and it was effective.

We have already outlined to the committee the efforts we made advertising nationally, travelling interstate and inviting people to speak to us in Canberra, if they wanted to pursue particularly detailed discussions, as well as being open for written comment throughout the three years of the negotiations. All of these opportunities were taken up and there was a multitude of priorities and views expressed. One example of the priorities that was expressed was the need to avoid compromising Australian law in any way when it came to the impact on intermediaries. This was expressed to us by companies as diverse as internet service providers and freight forwarding companies.

But the consultations did not simply identify obligations we needed to avoid. They also reaffirmed the need for us to engage in a way that would protect the legitimate interests of both producers and users. We were successful in pursuing those interests in ACTA. For instance, article 6 of ACTA includes language on protecting all participants' rights and safeguarding against abuse of procedures. Article 27, on the digital environment, references several times the need to respect the legitimate rights of users. Comparison of earlier drafts with the final agreement confirms that the Australian views in these areas were taken into account during the negotiations. It is understandable that there would be a debate on the final text, but it is not correct to say that the consultation process was partisan in some way or that views were not taken into account.

Third, a number of comments were made about whether the institutional contexts and settings of ACTA will compromise broader Australian interests. Australia's view is that ACTA builds directly on multilateral rules and that we should work to ensure its wider adoption in the multilateral system. The ACTA treaty builds directly on the relevant multilateral agreement—that is, the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS. A number of witnesses have suggested that the negotiation of ACTA derogates from multilateral treaties on intellectual property. Our view is that we should continue to work to build support for ACTA in the WTO as the relevant international organisation that deals with trade related intellectual property and to seek to build wider membership of the agreement over time.

Some questions have also been raised about the possible role of the ACTA committee. Such a committee would likely address issues such as comparing members' experiences with ACTA implementation and working to encourage expanded membership of the treaty. Committees are not unusual structures in international agreements. No committee has the power to amend treaties without the ratification, approval or acceptance of the parties to the agreement. Importantly, under Australian law any proposed changes to ACTA, as with any other treaty, would of course have to go through the same treaty-making process and review—including, of course, JSCOT consideration—as the original agreement.

Honourable senators and members, we have welcomed this debate and the committee's interest in the ACTA initiative, as we have the interest in the initiative across the community. We look forward to your questions.

Senator LUDLAM: Thanks for coming back for a second round. I think it was March when we spoke to you last. Since then—and this is part of the reason we thought it would be useful to bring you back—the committee has taken a lot of evidence, much of it pretty damning, from experts in the diverse range of fields that make up what we are loosely and some would say lazily calling intellectual property. A lot of that evidence has been strongly negative. I have lost track of the exact number of times we have been told that this thing is broken—it cannot be fixed, it cannot be amended and it needs to be rejected in its entirety. Presuming you have had the time to review that evidence, has any of the evidence that has been put to the committee by experts in this field giving you cause to maybe pause and reconsider some of the things we are signing up to?

Mr Mina : Of course we have been taking a very close interest in the proceedings here. I should say that much of the evidence that you have heard—in fact, most of the evidence—are views we have heard throughout the negotiation and separately. So in that sense it is not a surprise that this terrain is contested terrain. The important thing to note here is that many of the concerns that have been raised are concerns with questions relating to intellectual property policy more generally rather than with the ACTA initiative per se or in its specifics. Debates about the protection and enforcement of intellectual property rights are usually vigorous debates. I am sure that the policy departments responsible for various aspects of intellectual property can attest to that. These issues do meet with quite considerable debate in the Australian context, so that is not unusual. The particular point we would make is that some of these issues, as I said, go to questions of policy relating to Australian policy settings; they do not go to the ACTA initiative itself.

Senator LUDLAM: That is partly true. The witness directly before you spoke very directly and very specifically about aspects of ACTA that he has serious concerns about. But I will take you up on this point: you are quite correct in that some of the witnesses have put forward strong views on the current framework, and their problem with ACTA is that it cements that framework and makes it really difficult to change in the future. So that is the problem they have and that is why these views are being brought to bear in the context of this instrument. The system in a sense has some real flaws. They are very concerned that Australia appears to be in the process of locking that down, making it very difficult, and will in fact narrow future legislative options. Do you recognise that that is why these are not abstract debates about other stuff; these are about why would we want to cement in these obligations and restrictions that are already part of the landscape that perhaps the parliament should be looking at rolling back or reforming?

Mr Mina : I accept that that is indeed one of the criticisms that has been made about the ACTA initiative, that as an exercise in international cooperation it is limiting policy flexibility in the future. I accept that that is certainly one of criticisms that have been made.

Senator LUDLAM: Do you think it is a valid criticism?

Mr Mina : The point I would make about that criticism is that much can be made of the point that policy flexibility is limited. ACTA, though, is a high-level agreement that sets out certain broad parameters. What it does not do, and I think we have made this point on earlier occasions, is specify in detail the manner in which certain legal parameters are to be implemented in Australian law. ACTA provides specifically for the parties to implement the agreement in a manner that is consistent with their own domestic legal framework. I may have pointed out at the earlier hearing that there are specific provisions in the ACTA agreement—in the opening provisions—for that fact to be taken into account.

Senator LUDLAM: That has been raised as a criticism, if I am reading you right, and I guess we will traverse some similar issues to those that we have already addressed. Dr Hazel Moir presented on 23 March and her evidence was compelling. She makes the point that this is an area where there is a huge amount of judge-made law. You could say certainly there is no future legislative proposal that narrows our options, that there is nothing to come before the parliament that will change as a consequence of ratifying the agreement, but this is an area in this patent-trade mark-copyright law where this is all judge-made and what we will be actually doing is skewing the direction or tilting the table in favour of a particular set of interests. Does that ring a bell?

Mr Mina : In respect of any Australian law, as I have said a number of times, ACTA will not change the balance in any respect, whether judge-made law, the body of jurisprudence that exists in our court system, or through statute. The agreement provides specifically at article 2.1 that each party should be free to determine the appropriate method of implementing the provisions of this agreement within its own legal system and practice, so providing for considerable flexibility there. The parameters that are laid out in ACTA, as I have mentioned, are high-level parameters that do not prescribe in great levels of detail in particular areas the manner in which each country's national laws will comply with the framework that is set out in ACTA. We make the point again that ACTA does not require any legislative change whatsoever in the Australian legal regime relating to intellectual property enforcement.

Senator LUDLAM: Let us hold that for one second. The same week, I think, that you gave evidence to us last time the raising the bar bill went through parliament that included increased border protection powers for Customs akin to ACTA and it actually did deal with counterfeiting, piracy and border measures and so on. So it is a bit sneaky say there will be no future legislative changes because actually we were rushing a thing through the parliament that had come into effect before we ratified ACTA. Or are those two things completely unrelated?

Mr Mina : I will be happy to pass to Tanya. Just in relation to your point, Senator, there is an idea that in some way there is something that is occurring that is somehow sneaky, as you put it, that would undermine the government's claim that ACTA will require any legal change whatsoever. The Raising the Bar Bill, like other areas of Australian policy change in intellectual property law and enforcement, is something that can occur within the constraints of the loose framework outlined by ACTA. So the point is that there is no legislative change arising from ACTA.

Senator LUDLAM: Because we already cleaned it up in that bill; that is the argument that some—

Mr Mina : Not because we have already cleaned it up in that bill, with respect—just full stop.

Senator LUDLAM: Mr Mina, were you involved in the drafting or consultation, or were you or your office, with your ACTA hat on, involved in the progress, negotiation or drafting of the bill?

Mr Mina : The Raising the Bar Bill?

Senator LUDLAM: Yes.

Mr Mina : No. This is an Australian domestic intellectual property reform exercise. We of course have been consulted in respect of international obligations.

Senator LUDLAM: So you were consulted?

Mr Mina : In terms of the drafting, it is an Australian public policy process—

Senator LUDLAM: I know what it is. But were you part of the process of that bill?

Mr Mina : Not personally but in relation to the Department of Foreign Affairs and Trade and other areas of the Australian government, I am confident—I would have to check with my colleagues—that, like in other areas of intellectual property law where there are international obligations, those departments which are responsible for the management of those international obligations will be consulted to ensure that there is no inconsistency there. I am confident of that fact. I can check on the details of when and who if you wish, Senator—

Senator LUDLAM: I do.

Mr Mina : but the point is that this is a domestic public policy process.

Senator LUDLAM: Yes, I completely understand that.

Ms Duthie : If it would be helpful at all, I would like to give a bit more detail about how the trademark penalties and civil measures and border measures came about in relation to the raising the bar bill. In late 2008, IP Australia released a consultation paper, Review of penalties and additional damages. The factors that prompted this review and the consultation paper arose from a recommendation in a 2004 Advisory Council on Intellectual Property review of trademark enforcement, with a recommendation that the penalties for offences under various sections of the Trade Marks Act should be reviewed to ensure that they are set at an appropriate level and operate as an effective deterrent. This review also suggested that the availability of exemplary or additional damages should be considered. It also considered changes that had been made in relation to copyright offences in 2006 and submissions received by stakeholders about concerns that they had with the current penalties for criminal offences and available remedies for civil action in the Trade Marks Act.

Senator LUDLAM: Are you reading from the 2004 recommendations?

Ms Duthie : One of the things was from the 2004 recommendations and the other points were in relation to the other factors that led to the review.

Senator LUDLAM: Which one of those came from 2004?

Ms Duthie : From 2004, the recommendation was that the penalty for offences under sections 145, 146, 147 and 148 of the Trade Marks Act should be reviewed to ensure they are set at an appropriate level and operate as an effective deterrent.

Senator LUDLAM: And the rest of the things that you just read in came later?

Ms Duthie : Submissions, yes.

Mr Mina : I just make the point that the law in Australia has already been compliant with the text of ACTA, well before this current policy process was introduced and considered.

Senator LUDLAM: Why do we need to sign on then? Why do we need to ratify this agreement if it is of no consequence?

Mr Mina : I would not say that this agreement is of no consequence. I think we have laid out in our previous appearance before you that this agreement effectively internationalises similar standards on intellectual property enforcement to those we have in Australia. That is not of no consequence. Those benefits from other markets adopting similar laws and standards from the international enforcement framework effectively being similar to Australia's regulatory regime, are not without consequence. There are some benefits to Australia, to Australian exporters, consumers and the government from other markets, other jurisdictions, adopting similar markets and similar standards to our own.

Senator LUDLAM: We will come to the benefits in a tick, because nowhere has anybody, as far as I can tell, been able to quantify them for us. Before we move on, if you could provide the committee on notice with the degree to which you or staff working for you on ACTA were consulted or involved in the passage of the raising the bar bill. I find it interesting, and maybe it is pure coincidence, that that bill was travelling through the parliament in the same week as you were telling us that there would be no consequential amendments to Australian law.

Mr Mina : I can confirm again that that bill comes not as a result of ACTA; Australia law was consistent with ACTA before.

Senator LUDLAM: Let us turn to benefits: from the point of view of the NIA, can you tell us what proportion of Australian trade is potentially counterfeit? What are we talking about here relative to the size of the economy?

Mr Mina : I can tell you that there are some measures of the size of intercepted counterfeit and infringing material.

Senator LUDLAM: It is about $23 million. You put that to us last time.

Mr Mina : There was a figure—that is right. If I am not mistaken, $29 million.

Senator LUDLAM: It was a proportion of the trade.

Mr Mina : That actually represents the size of intercepted shipments at the border. They were intercepted shipments that were found to be counterfeit and pirated. Is that the question?

Mr Johannes : The distinction is we were referring to the goods which have been seized.

Senator LUDLAM: That sounds about right.

Mr Johannes : Do you want the updated figures for that?

Senator LUDLAM: If you have something since March?

Mr Johannes : The latest information I have for the IPR statistics for 2011 state that there were 2,020 seizures involving 853,026 items with an estimated retail value of those goods being genuine of around $40 million. There is one potential seizure which has not been included in the stats because we have not been able to classify whether the goods were actually seized or not. They would impact on those numbers because there were some 27,000 items involved in that particular item.

Senator LUDLAM: Not to dismiss the importance of that, would you care to calculate the proportion of total inbound trade into Australia represented by $40 million? I expect it is going to be zero point, a great many zeros to something-or-other rounding error.

Mr Mina : You are testing our mental arithmetic, Senator. What I will do is say that this is one example of the way in which the benefits are flowing to Australia from intellectual property enforcement activities. It relates to imports and it relates to imports seized at the border. What we also need to take into account, as we have said before, is benefits to producers in other markets, and also the benefits in terms of reduced enforcement burden on our government vis-a-vis the enforcement burden of other governments. They are of course difficult and very complex things to seek to capture in any sort of precise way of because they are occurring in other jurisdictions, but there are benefits to our jurisdiction from others in fact adopting similar laws and standards to our own.

Senator LUDLAM: The problem is we do not even have an imprecise estimate. Dr Moir did go and do the calculations and she reckons it is about 0.01 per cent. I do not know if she is being overgenerous; she could be out by a factor of 10 and it would still be a rounding error. Could you provide for us your estimate of the proportion of Australian trade that is potentially counterfeit? We will put that next to the amount that we know is actually being trapped at the border and see what kind of proportion is there, and we will see if we can get it above 0.01 per cent of total trade. That would be really interesting if you are able to provide a number and the way you did the workings, recognising that there is going to be a bit of guesswork involved.

Mr Mina : What I can do is what has been done by the benchmark study on this matter by the Organisation for Economic Cooperation and Development in 2007, which looked at the trade globally in counterfeit and pirated material—they were tangible materials only, they were not materials of an electronic or digital nature. That study put the trend as a rapidly rising one. It put an estimate of it of approximately $250 billion Australian globally.

Senator LUDLAM: That number is in the NIA, isn't it?

Mr Mina : Yes, that is right.

Senator LUDLAM: So if you could provide us with some kind of justified reckoning of what it costs the Australian economy, that would be a useful piece of information.

Mr Mina : So of what it costs the—

Senator LUDLAM: Australian economy.

Mr Mina : Sorry, is—

Senator LUDLAM: What fraction of Australian trade is potentially counterfeit. I am trying to get an idea because, to be frank, a lot of the claims of the various interest groups pushing these agreements are totally unsupported by events. So if you are able to provide it as the negotiators of the agreement that would really help the debate along.

CHAIR: Evidence of the size of the problem to be addressed.

Senator LUDLAM: But we do not have a sector-by-sector breakdown of who is going to win and who is going to lose if this thing is ratified, so figures like that would actually help us make that judgment.

Mr Mina : Certainly we will provide you with whatever evidence that we will able to gather on that point. I simply make the point that it is an imprecise science to talk about that which may or may not have been tested in legal processes. Whether products or goods that are being traded are, in fact, legitimate or not is a difficult thing to ascertain and estimates of the size of the problem have been made by a couple of international organisations including one I have just quoted. So we will do what we can on that issue.

Senator LUDLAM: I am looking for something local or relevant. We are one of a shrinking number of countries proposing to actually ratify this. Can you provide us with an update of what on earth is going on in Europe as there is some extraordinarily strong language coming from the EP rapporteur: 'Do not under any circumstances ratify this agreement.' What is going on there?

Mr Mina : I would not describe us as alone on this issue in going through a ratification process.

Senator LUDLAM: Well, let us talk about those who are falling out.

Mr Mina : In fact, of the 37 countries who negotiated ACTA there are 30 countries that have signed the agreement.

Senator LUDLAM: How many have ratified?

Mr Mina : All of those countries, in signing, are making a public determination that their governments are seeking to go through a ratification process of some form—every single one of them.

Senator LUDLAM: Yes, a bit like what is happening here.

Mr Mina : There is a variety of different ratification processes in the different national jurisdictions. Our process here, through the parliamentary process, is but one form of those. Europe has its own quite complex ratification process underway. So I think the facts are that 30 out of 37 governments have been involved in this initiative and are now in some form of a ratification process.

Senator LUDLAM: I will characterise this and you tell me if I have got it wrong. What it looks like has happened overseas, certainly in Europe—and I believe it is happening here—is that governments and negotiating teams, guided by very narrow sectoral interests, will cook up an agreement that suits them, they will provide it to the parliament, to the legislature, and put it out for consultation—as you are doing—and there is an enormous backlash occurring in many jurisdictions and the parliaments may then choose not to ratify—and that is what I am going to propose happens here in Australia. But would you at least acknowledge that that is what is going on in Europe at the moment.

Mr Mina : On what is going on in Europe, I think that is best left to the Europeans to address.

Senator LUDLAM: Do you think it is going well?

Mr Mina : I think what is happening in Europe is that clearly there is a vigorous debate going on in their parliament.

Senator LUDLAM: There is.

Mr Mina : You have made a number of points about the manner in which you consider governments generally are engaging in this treaty. I simply wish to refer to our context and our experience. Was this driven by narrow sectional interests? I think I have explained in our previous appearance that there was an emerging international standard being put forward in the negotiation of the actual initiative and for that reason alone the Australian government took the decision that it needed to be a part of the negotiations. Were narrow sectional interests, as you put it, driving Australia's participation or engagement in those negotiations? No, absolutely not. I have made it clear in our opening remarks today that we have taken a very considered and thorough approach across the balance of Australian public policy interests in our engagement on this treaty. One particular example was the example of our public policy objectives in relation to health that I outlined earlier. We had strong consultation across government. In respect of that particular priority, we sought to pursue a set of public policy objectives on health in our participation and negotiations and we achieved our objectives in that respect. To describe it as narrow, sectional interests driving our participation in the Australian context is not correct.

In respect of the process, of course we do and we should provide the results of this exercise to the parliament at the end, and that is our process—and a thorough and robust one it is—but that is not where we started with public engagement or the sort of response to community views that you are describing. We at the very outset—Senator, I have been at pains to seek to describe this—have been fully consultative in our engagement of this treaty to try and refine Australian interests and views in the development of this treaty. For that reason, you will see in the treaty a whole range of provisions that outline for you a balance of interests. They are a balance of interests between the producers and the users of intellectual property. That is the point I sought to make at the outset of our participation today.

Senator LUDLAM: And there are a significant number of very well-informed stakeholders who believe you have got the balance wrong. I will give you the example that you should cite in your favour of getting the ISPs and the intermediaries of the hook. Great—that was important progress but we still have a number of people who are very well-informed on these matters saying, 'Don't go any further with this. We do not have the balance right. We're locking in a flawed structure.' That appears to be the approach that other legislatures and civil society groups are taking around the world, so why is Australia on the bandwagon? It is starting to feel lonely on this bandwagon, and I will leave it there unless there is time later.

Mr Mina : I do not know how many ways I can put this, but Australia's laws and Australia's approach to intellectual property enforcement is a balance. That balance is inherent in the final draft that you see before you of the treaty. In respect of article 27 that you are pointing to, we comfortably meet the standards of the impact by ACTA on the digital environment. We comfortably meet the standards in that area, and there is nothing in ACTA which would change that balance in respect of our treatment of copyright in the digital environment.

You will see also some very significant balancing language threaded through article 27.2, article 27.3 and article 27.4, all of the relevant provisions as they relate to the digital environment—yes, ISPs—and, more broadly, to pick up the legitimate rights of users.

Senator LUDLAM: Could I put one last one, Chair, with your indulgence.

CHAIR: Yes.

Senator LUDLAM: Are Brazil, China and India—for example, as gigantic emerging markets—onboard with that emerging international standard that you refer to or are they sharply at odds with it?

Mr Mina : Thirty-seven countries—and I think you know well that Brazil, India and China are not members of that group—that were involved and that are taking this back to the relevant multilateral forum, the World Trade Organisation, are, like Australia, seeking to build membership over time. Not at the outset but over time, it is entirely possible—and that is certainly our objective—that we work to build wider membership of this initiative.

You can speculate and make all sorts of forecasts about the prospects of that in the short term. The important thing is that this is the emerging international standard that builds on that relevant multilateral treaty, the World Trade Organisation TRIPS agreement, so it was important that Australian views and priorities be injected into that discussion. They were, and we will seek to build on that membership over time.

Senator LUDLAM: To be continued, I reckon.

CHAIR: To follow on directly from the last question, the information before the committee suggests that developing countries do not much like this and are not really engaged in it; that in the European Union there is a vote coming up in the European Parliament which would block out the implementation of ACTA in Europe; and that it is on hold in the United States. So my question is whether the government believes that it would be wise to proceed with ratification without knowing whether the European Union and the US are going to do likewise.

Mr Mina : Just in respect of the question directly I will make the point that I have just made. That is, this is the emerging international standard on IP enforcement that does build upon the WTO TRIPS agreement. So it was and is important that Australian views and priorities were reflected in that text—and they are.

On the prospects of developing countries adopting it over time, we have addressed Brazil, India and China. The question of other developing countries I think is one that we will need to look at. This is not a developed country only agreement. Morocco is a member of the agreement and there are others as well. It is not only developed countries who are members of this agreement.

On the EU and US situation, we will need to monitor that and see how the situation plays out there. I do not think is correct, though, to say that the agreement is 'on hold' in the United States. The United States administration has signed ACTA, as have 29 other countries. The US administration does not intend to bring it to their congress. That is not their ratification process. They have a rather more streamlined and simpler process of consideration of ratification for that category of treaty that does not require legislative change. So I do not think it is correct to describe it as 'on hold' in respect of the United States.

CHAIR: Our previous witness, Dr Palombi, said that 90 per cent of all patents are granted to foreign organisations and that therefore we are completely flying blind regarding the value or benefit of ACTA to Australia. Do you want to respond to that?

Mr Mina : The pertinent point here on patents is that ACTA does not change Australian law with respect to patents. So if you are looking at the benefits or the change to the Australian legal regime for patents, there will be no legal change in Australia as regards patents law.

Another point to make on this issue is simply that patents are not the focus of ACTA. Yes, in general terms, ACTA covers a range of different categories of intellectual property rights, but in respect of the important border and civil measures in ACTA, patents can be excluded from those sections of the agreement.

CHAIR: On the consultation process, I am not suggesting that the process has been partisan at all, but it does seem to me inherent in the system that large producers have a greater interest than small consumers. You mentioned about people flying to Canberra. If it were about milk, the large dairy producers would come but the person who purchases milk from the corner store would not. Is that a problem in trying to have a consultation process on an issue like this?

Mr Mina : It is not easy to reach every single person who has an interest. I think it is fair to say that sometimes producer groups are well organised and consumer or user groups are less well organised. I would not say that was a particular problem or an especially strong problem in this instance. There were groups represented in the consultations that did advocate very strongly and forcefully and effectively on behalf of the rights of users, whether they be in the information industries generally, including librarians and those who catalogue and use knowledge; whether they be in the digital economy, so internet service providers and their users—there were advocates of that constituency; or whether they be simply citizens that have a strong interest in internet freedom. I can attest to this fact: there is strong representation in the consultations on behalf of those groups that represent the interests of internet users in general. So would not say that on this particular treaty we were really facing the problem that you painted. But I do acknowledge that sometimes it can be difficult to reach out to those groups.

CHAIR: I have a couple of questions about pharmaceuticals, which is an issue that has been raised with us. Could pharmaceuticals patent holders use ACTA to change the legal balance currently in place in relation to pharmaceutical patents in Australia?

Mr Mina : In respect of any Australian area of intellectual property enforcement law, no, there is no legal change going to result whatsoever as a result of ACTA. That is also true, and I would even say particularly true, in respect of patent law. As I mentioned earlier, there is explicit provision for excluding patents from coverage of the border and civil measures sections of the text. There are a number of reasons for that, including our own strong view that Australian public policy priorities on health needed to be protected in this initiative.

CHAIR: Perhaps for the record you might want to explain how the TRIPS agreement is currently applied in relation to pharmaceuticals in Australia.

Mr Mina : That is a big question and probably relates to a few separate areas of public policy on intellectual property, the main one being patents. There is a set of parameters that the TRIPS agreement lays out in respect of patents and in respect of the kinds of legal parameters that are required of WTO members in their own domestic regimes on patent law and the kinds of procedures, particularly in the area of civil procedures, I think it is fair to say, that each WTO member is likely to need to adopt if they are members of the WTO TRIPS agreement.

There are also areas of change going on as well under the TRIPS agreement. One of the areas of change is, as we have seen, the Doha declaration on public health, the growing recognition of the need for some compulsory licensing arrangements when it comes to emergency situations and the need to provide for that scenario in respect of medicines. So there are a number of areas of the TRIPS agreement that are relevant and that WTO members are required to implement to give effect to the TRIPS agreement in respect of pharmaceuticals.

CHAIR: Okay. Will the ratification of ACTA impact on the development of the generic pharmaceuticals industry in Australia?

Mr Mina : No, it will not, because of the particular points I have noted: no legal change and the exclusion of patents from important parts of the ACTA text. As I said, they include the important border measures part of the text and the civil procedures part as well.

CHAIR: Okay. We were talking about the international situation earlier. I will come back to that and note that a number of European countries—the committee understands they are Slovakia, Bulgaria, Poland and the Czech Republic—have suspended ratification of the agreement and that the European Commission has decided to ask the European Court of Justice for a legal opinion to clarify whether the ACTA agreement and the implementation are compatible with freedom of expression and freedom of the internet. Do you have any response to those developments?

Mr Mina : I think you are dead right in describing the kinds of developments that are occurring in Europe. As we talked about before, there is a vigorous debate underway in Europe, including in the European parliament. Some governments have described the way that they are engaging in that process as having suspended or put aside their processes of ratification until such time as there is either a debate nationally that is of a more extensive nature or the ECJ opinion is finalised. So that is occurring. On the other hand, as you said, there is a European Commission reference to the European Court of Justice on these issues. I would simply just note that that is exactly our understanding as well of those two developments.

CHAIR: Okay. Senator Fawcett, do you have some questions?

Senator FAWCETT: I am still just bemused by the fact that your submission indicates that nothing is going to change for Australia. The input to this treaty has changed its wording for the better and it reflects broadly what we do in Australia to the extent that there will be no change required. Yet when I look at economies where there is a lot of innovation and production, good manufacturing, a lot of intellectual property, such as Germany, I am at a loss to understand why a country I assume to be on a par with us in their approach to intellectual property protecting their industry has rejected it. There is a disconnect between what I am hearing here as I compare the two countries and the response there. Can you outline for me why the Germans have rejected it? Do you understand why? If you do not understand why they have rejected it, why aren't we looking into that before we leap to the defence of the treaty?

Mr Mina : Firstly, I have to emphasise that the German government has not rejected ACTA. There is no doubt there has been a very vigorous debate in areas of Europe, including Germany.

Senator FAWCETT: My understanding here is that Germany has indicated—along with Poland, the Netherlands and Bulgaria—that they will not ratify ACTA at this time.

Mr Mina : That may be true—I have not checked on the details—but no government has indicated that it will not ratify ACTA. As I mentioned earlier, there may be some governments pausing, reflecting, consulting further while the ratification process is underway, but no government—to our knowledge—has rejected ACTA.

Senator FAWCETT: Let me rephrase the question. What has caused the government of Germany, a nation we should hold in fairly high regard, to pause—if we use that terminology—to reconsider what has caused them to do that?

Mr Mina : All I can do on this point is state our views rather than the views of the German government. You will forgive me for that.

Senator FAWCETT: I understand that, but do you accept the premise that, if another well-developed, comparable nation has chosen to pause because they have concerns, we should at least be across what those concerns are? Whether we agree or not is a completely different issue.

Mr Mina : I can certainly describe some of the concerns that are being expressed in civil society as we see reported from Europe, including Germany. I think it is fair to say that many of the concerns that we have seen on the street in German cities in recent weeks and the last couple of months pertain to internet freedom questions. You have seen a large number of young people very concerned about the potential impact on internet freedom questions. There is no doubt about that. I have addressed some of those questions before and I can do so briefly again and just make the point that nothing in ACTA impacts on internet freedom in Australia.

Our laws comfortably meet the requirements set out by ACTA in respect to the enforcement of intellectual property rights in the digital environment. So absolutely nothing will change in respect to internet freedom. I can say, without maligning the views of those who choose to protest, in respect of the Australian jurisdiction there has been some misunderstanding about the impact of ACTA on internet freedom. There is absolutely no doubt about that. I have spoken very directly to many of the people who are making some of these claims and tried to take them through the text. You can work through the text if you wish, Senator, in respect to article 27. There will be no change. So there will not be an impact on internet freedom whatsoever in Australia. I do not want to start conjecturing about the views of other jurisdictions, but that is the case in Australia. The question why is asked many times. Really the fundamental point is a simple one—it is not very complicated: international cooperation on intellectual property enforcement is a valuable thing. We can attest to the benefits that have accrued to international trade in legitimate products through the World Trade Organisation TRIPS agreement. Those benefits are widely understood now over a period of 15 years of implementation. This is no different in that respect—that it is a project of international cooperation. We are seeing other countries adopt similar laws and standards to the ones that we have in Australia. Do we value that? Does the Australian government value that? Yes, and that is why the Australian government has seen fit, after having had Australian views and priorities injected into the text of the agreements, as you note, to put it forward for ratification. Mr Treyde may have something to say about the internet freedom questions. I think they are coming to the fore in many of the public protests about ACTA that are happening in other jurisdictions. To be very frank about it, there is a degree of misunderstanding about the actual impact of ACTA, and certainly that is the case in Australia.

Mr Treyde : I can make a few general observations from Australia's implementation of those provisions. When Australia negotiated the free trade agreement with the US, much of the framework in relation to the protection of internet service providers and so on was laid down out of the framework of that agreement. At the time, there was a lot of debate and a lot of concern about those sorts of provisions. The technological protection measures in particular came into effect in 2006; I think the internet service provider liability provisions came into effect before that. If you look back through time at how that legislation has worked, certainly from the government's perspective—and I am somebody who worked in the copyright area for most of that time—there has not been huge lobbying of government to say, 'You've really got the balance wrong,' or, 'This is not working.'

I think the other thing that is important to reflect on is that these provisions come from the United States, which is the home of most of the intellectual property that Australians enjoy, be it music, television or film. It is the economy, with the framework that ACTA, I guess, supports, that has given rise to the Googles, the Facebooks and so forth. While there are many people who are concerned about freedoms being eroded, the other side of that balance is provided in creating the correct legal environment to support the establishment and growth of those industries. I think that is why we see it as being very important on a more regional level, because you will see that throughout the region and those same standards applying.

CHAIR: That brings what has been a fairly long day to a close. Thank you for attending to give evidence today. If the committee has any further questions, the committee secretariat may seek further comment from you at a later date.

Resolved (on motion by Senator Fawcett):

That this committee authorise publication of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 14:43