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Monday, 25 June 2018
Page: 6222


Mr FLETCHER (BradfieldMinister for Urban Infrastructure and Cities) (18:41): I present the explanatory memorandum to this bill and an addendum to the explanatory memorandum to the bill and I move:

That this bill be now read a second time.

There are significant opportunities in the digital environment for improving the way we provide educational services, provide services to people with a disability and promote cultural and historical experiences in Australia. Many of these opportunities, however, may put Australia's educational and cultural institutions and organisations assisting people with a disability at a high risk of copyright infringement. There is a balance to be struck between encouraging the development of new and innovative services for the benefit of all Australians and ensuring that Australian creators can retain control and derive value from their copyright-protected material. Ensuring respect for the creative efforts and economic rights of creators is an ongoing challenge for all participants in the digital environment. Extension of the safe harbour scheme to service providers in these sectors will provide greater certainty to educational and cultural institutions and to those organisations assisting people with a disability about their responsibilities in engaging in the online space.

The current safe harbour scheme in the Copyright Act 1968 was introduced following the commencement of the Australia-United States Free Trade Agreement in 2005. The scheme in the Australia-United States Free Trade Agreement was intended to provide an alternative to court proceedings for copyright owners where their infringing material is hosted, cached or linked to by a service provider or where a provider's network services are used to infringe copyright. It sets out conditions with which a service provider must comply, including, in some situations, taking down infringing material or removing links to infringing material when they have been notified of a suspected infringement by a copyright owner. When the scheme was originally implemented in Australia, it was restricted only to carriage service providers—or providers of telecommunications services (such as internet service providers) as they are more commonly known. This cautious approach was taken because the internet was still in its infancy.

This bill, through the extension of the existing safe harbour scheme, will ensure that a greater range of service providers can work with copyright owners to effectively protect copyright material without recourse to litigation. The extended scheme enabled by this bill will apply the safe harbour provision to educational institutions such as universities and schools as well as libraries, archives, museums and organisations assisting people with a disability. Where these additional service providers comply with the requirements of the safe harbour scheme, including the operation of a 'notice and take down system', their liability for monetary remedies will be limited.

The education, cultural and disability sectors generally take a very risk-averse approach to protecting and managing the copyright of others. Many of the institutions and organisations who, under this bill, will be covered by the safe harbour scheme already comply with the requirements of the scheme and actively work with copyright owners to remove or disable access to infringing material residing on their systems or networks or to take action against repeat infringers. In doing so, they dedicate a significant amount of resources on their processors. Yet they still remain potentially liable for the infringement of their users, which is beyond their active control.

This bill will reduce the potential exposure of these sectors to legal liability for authorising copyright infringement when third parties use their networks or services in a way that breaches copyright. This amendment will provide certainty to a group of institutions and organisations which provide services that are in the public interest and will support them in being more innovative in the online environment. This will therefore encourage these institutions and organisations to create and deliver enhanced online services for all Australians.

Copyright owners will benefit from the extended scheme as it will provide them with a consistent mechanism for working with those organisations covered by the bill to address copyright infringement on a broader scale rather than having to pursue each and every individual who infringes copyright online.

Last year, the government introduced and passed the Copyright Amendment (Disability Access and Other Measures) Act 2017 which was the result of a collaborative effort between rights holders, the education and cultural sector and the disability sector. The passage of the disability access act was an important step in simplifying and modernising the Copyright Act 1968 in response to specific challenges and concerns identified by rights holders and those sectors of the community. This bill now builds upon the effective working relationship that already exists between these sectors and copyright owners as a result of the disability access act.

Users of these institutions' and organisations' services will also have additional protection under the safe harbour scheme. The changes will give users a clear process for ensuring that, where their material is removed from the institutions' or organisations' systems or networks, in line with a notice under the safe harbour scheme, it can be reinstated when the user can demonstrate that the material is not infringing. This will ensure, for example, that students and researchers can protect their legitimate use of copyright material in online forums.

The government has made the decision to make this incremental expansion of the safe harbour scheme so that it can continue to consult on how best to reform the scheme to apply to other online service providers in the future. In Australia, the expansion of the safe harbour provisions has been reviewed in six separate government reviews over a period of more than 10 years. Each of these reviews called for submissions from the public. The Productivity Commission's 2016 review of Australia's intellectual property arrangements was the most recent of these reviews and it recommended that the scheme be extended to all online service providers.

The government is, however, aware that a blanket extension of safe harbour remains a highly contested reform. This is why we chose to undertake further consultation last year. The consultation demonstrated the full spectrum of views from complete support to strident opposition. Both sides are worthy of a full examination. The government has appreciated the open and frank dialogue that we have had with representatives from both sides.

On the one hand, we have heard that extending safe harbour would encourage piracy, contribute to the gap in revenue between subscription and ad based content services and remove the ability for rights holders to seek licenced revenue from online services. Of particular concern have been scenarios in which service providers derive profit from the infringing activities of their users. There are also strong concerns that the current conditions in the safe harbour scheme are no longer effective in addressing infringement and that they need to be reconsidered to ensure they promote a collaborative and supportive online environment.

On the other hand we hear that Australia has legal uncertainty about the extent to which service providers can be liable for the actions of their users, which has a chilling effect on innovation. Service providers, who in many cases perform the same role as a carriage service provider, have pointed out that they are the ones that have no protection and that this makes Australia uncompetitive compared with other countries who have a safe harbour scheme. Internet users and service providers alike have argued that safe harbour provides a simple non-court based option to address infringement on the internet which should be a good thing for the creative sector.

The worst outcome would be for the government to inadvertently impact on rights holders' ability to realise returns on their creative and financial investments. Australia has thriving creative industries whose work contributes enormously to our economy and our cultural life. The government is trying to achieve an environment that encourages innovation, but does not want to do that at the expense of a vibrant cultural and arts sector and the thousands of Australians it employs. At the same time the government recognises that there are many institutions and organisations that operate in the public interest of all Australians and there are actors on the internet who are trying to build a robust and innovative Australian digital economy.

So far, opposing parties have been unable to meet in the middle of this protracted debate. So this bill starts the process of safe harbour reform by responding to where there is broad consensus and extending the scheme to a group of institutions and organisations that all agree are responsible players in the copyright space.

The current Australian safe harbour scheme, which this bill will extend, is governed by procedural provisions in the Copyright Regulations 1969. These regulations provide the additional details about exactly how the safe harbour scheme works including: how industry codes must be developed, how notifications and notices should be issued and received, and the procedures for notice and takedown of infringing material. As part of the Department of Communications and the Arts review of the sunsetting Copyright Regulations 1969, last year stakeholders had an opportunity to indicate how these provisions might be updated. The government remade these regulations in largely the same form as their sunsetting version, save for some further enhancements to give effect to provisions contained in the Copyright Amendment (Disability Access and Other Measures) Act 2017. However, the passage of this bill will require some further updates to the regulations.

Therefore, the government recently released an exposure draft of amending regulations to facilitate the extension of the safe harbour scheme for consultation prior to passage of this bill. The government will focus on ensuring that the mechanics of Australia's safe harbour scheme, contained within the regulations, operate effectively in Australia's digital environment for copyright owners and the broader range of service providers defined in this bill.

The government will continue to work with stakeholders seeking to find a way to further extend the safe harbour scheme in a way that allows Australian businesses to harness the significant opportunities of the growing digital economy while ensuring respect for the creative efforts and economic rights of creators. The government is confident that through this staged approach it can find a way to provide a practical and responsive safe harbour framework that operates effectively in the Australian environment.