Tizard Judith: Copyright (Artists’ Resale Right) Amendment Bill — First Reading 
Tizard Judith: Copyright (Artists’ Resale Right) Amendment Bill — First Reading 
[Volume:647;Page:16083] 
Hon JUDITH TIZARD (Associate Minister for Arts Culture and Heritage) 
: 
 I move  
That the Copyright (Artists’ Resale Right) Amendment Bill be now read a first time. 
 This bill amends the Copyright Act 1994 to insert a new stand-alone part establishing a resale right for visual artists. At the appropriate time I intend to move that the bill be referred to the Government Administration Committee for consideration. It is my enormous pleasure as Associate Minister for Arts Culture and Heritage and as Associate Minister of Commerce to introduce this bill. It constitutes a separate part of the Copyright Act with its own interpretation clauses. The Copyright Act covers a wide range of creative work including dramatic literary and musical works and film and sound recordings. This bill includes visual artists and widens their right to benefit from increases in the value of their works over time. This provision gives New Zealand artists the same rights that artists in many overseas countries have had for many years. 
A resale right is a variation of the rights that exist under the Act and it recognises the unique nature of visual art. As much as possible the new resale right aligns with the provisions of the Act. The bill entitles visual artists to receive a royalty payment each time their original artistic work is resold on the secondary art market through any auction house gallery dealer or any other business that deals with artistic works. The resale right will not apply to the first sale or transfer of an artistic work and will not apply to sales between private individuals. A resale right is a moral right that recognises the continuing relationship between visual artists and their artistic works. It also recognises that visual artists unlike creators of some other types of work have limited opportunities in most cases to benefit from copyright which deals mainly with reproductions or repeated uses of works. 
Visual artists may be able to get some royalties from the reproduction of artworks in a variety of publications but most of the real value for artists is in their original one-off work or in limited editions of prints and it is currently rare for visual artists to benefit once their artistic work has been sold unless they have made special provision in the contract of sale. This amendment bill was signalled by the Labour Party manifesto in 2005 and it follows a discussion paper released in April 2007. The paper was very widely distributed to artists art collectors art dealers galleries auctioneers iwi second-hand dealers museums art institutions and lots of members of the public with an interest in visual artworks. Over 200 submissions were received on the discussion paper with most supporting a resale right. Artists made up about half of the submitters with art collectors the second-largest group of respondents. 
Generally artists and arts groups supported the resale right and auction houses and dealers did not. It is noted however that a few artists have spoken out against the resale right—something that also occurred when provisions of this sort were introduced overseas. It is also noted that a number of art dealers curators and collectors supported the resale right and some already voluntarily pass on a percentage of resale proceeds to artists. 
One argument against the resale right was the concern of increased compliance costs for businesses such as dealer galleries and auction houses. The Government has considered this and taken it on board. We are introducing a flat 5 percent royalty rate rather than the variety of royalty rates that applies in some other countries such as the UK. Monitoring and enforcement will be undertaken by one appointed collecting agency which will be selected through a tender process and will assist businesses in calculating royalties due and determining the eligibility of artists. Auction houses already publicly report sales of artistic works and all businesses have to complete sales and financial returns so any additional work to determine a resale right should not prove onerous. It is also argued that a resale right would depress the art market but there is no evidence to establish that that will occur—it certainly did not in the United Kingdom. 
There is already a range of costs inherent in the art market such as a buyer’s premium and an additional 12 to 15 percent charge by the business on top of each sale of an artwork. Dealers and agents can also charge similar amounts or more as commission on each sale. There is no evidence to show that any of these factors impact negatively on the price people are prepared to pay for an artwork nor that they reduce demand for art generally. I do not believe therefore that paying 5 percent to the creators of artworks will depress the art market. In the UK surveys show that the art market has strengthened considerably since the introduction of a resale right in February 2006. Visual artists in the UK have benefited from this demand with the main collecting agency reporting resale royalty returns of more than £4.6 million going to artists. 
In tackling this complex issue the Labour-led Government is honouring an election promise to examine international developments relating to resale royalties and their possible application to New Zealand. I also note that the Australian Government has indicated that it will undertake a similar investigation. The Government is also honouring an optional international commitment under the Berne Convention for the Protection of Literary and Artistic Works and engaging with like-minded countries that enable their visual artists to have an ongoing economic benefit from their work. Many countries already have a resale right for their visual artists including France which in 1920 was the first country to introduce this right. New Zealand will pursue reciprocal understandings with those countries particularly in the European Union that will enable New Zealand artists whose work is sold in other countries to also benefit from a resale right. 
The resale right will apply to artwork sold in New Zealand by artists who are residents or citizens of New Zealand and to artists who are nationals of reciprocating countries that offer a similar right on artwork sold in their countries by nationals of New Zealand. A resale right will apply to any visual artwork on which copyright exists. In line with the Act this includes original work such as paintings drawings photographs sculptures glassworks and ceramics. It includes limited editions made by the artist or made under the artist’s authority and it also includes unique pieces of jewellery or furniture made by an identifiable artist. 
In line with international practice a resale right will not apply to works of architecture such as a building or a model of a building. Although architecture is deemed as an artistic work under the Copyright Act overseas practice is to exclude architecture from resale right schemes and that is what has been done with a separate part of the Act in New Zealand. A drawing or a plan of a building however would be included in the resale right scheme and could attract a resale royalty if it were sold on the secondary art market. 
The bill deems an artist who creates an original artwork to be the holder of a resale right. That right will be inalienable and it protects an artist from being pressured to contract out of the right. It also protects artists from being pressured to share the rights with someone else. However the right can be left to others in an artist’s will. 
Resale royalties will be collected on artworks sold during the artist’s lifetime and on works sold for 50 years after the artist’s death. This is the same duration as for copyright under the Copyright Act. All commercial dealers will be liable for payment of the resale royalty and royalties will be collected by one appointed agency that will have been appointed under regulations made under the proposal in new section 204R. Only that agency will be able to request information from those selling artworks and it may use this information only for the purposes of the provision. Non-payment of resale royalties or the failure to provide information will be subject to civil proceedings and only the collection agency can take court action on behalf of resale right holders. 
In return for managing the resale right on behalf of artists the collecting agency will charge a fixed fee or percentage of the royalty. This is also consistent with international practice and with other agencies in New Zealand and overseas that collect copyright royalties. This fee will cover the collecting agency’s administration costs. Therefore the scheme will be self-sustaining and of no ongoing cost to the Government and it will operate the same way as the Australasian Performing Right Association and the Copyright Licensing Ltd schemes do. 
The resale royalty right will be 5 percent of the resale price of the artwork. It is a relatively small amount compared with the combined 30 percent or more that is typically collected by art dealers from buyers and sellers of artworks. A resale right will also apply only to works that sell for $500 or more. That threshold and the flat 5 percent rate make it a simple scheme and make it easy to understand and enforce. Many overseas schemes are by contrast more complex and difficult to administer. The Government is pleased that this stand-alone part of the Copyright Act recognises the contribution made by both established and emerging visual artists and that it offers some of the economic benefit that artists can derive as creators of original works as their works increase in value over time. 
Research shows that New Zealanders are more likely than many others across the globe to have original artworks in their homes be it for pleasure or because art is seen as a good investment or both. This bill recognises as most New Zealanders do the contribution that artists make to our society. The Copyright Act 1994 and amendments recognise a range of interests and rights by a wide range of creative workers and users. By its nature its use covers different rights in different ways. I am happy to see this amendment being proposed. This Government recognises that Parliament must continue to review and update copyrights so that there are clear incentives for creators to create innovate and develop across creative and technical sectors. 
I thank those parties who have supported this legislation being referred to the select committee. I urge all parties to support the first reading of this bill and its referral to the Government Administration Committee for the calling of submissions and further consideration.