Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — Second Reading Instruction to CommitteeCWH In Committee Speaker Recalled In Committee Third Reading 
Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — Second Reading Instruction to CommitteeCWH In Committee Speaker Recalled In Committee Third Reading 
[Volume:612;Page:9391] 
Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill 
Second Reading 
Debate resumed from 14 October. 
Bill read a second time. 
Instruction to CommitteeCWH 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill that it take the bill part by part and consider any schedules as one question. 
Motion agreed to. 
In Committee 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I raise a point of order Mr Chairperson. It may be appropriate for you to take advice from the Clerk about the motion that has just been moved because I think it is incorrect. I point out that the Opposition has been denied an opportunity to participate in the second reading debate. If you recall—and Minister Tizard had just indicated this—that after she spoke last week in the second reading I stood and had about a minute and a bit of a response as the senior Opposition member on this bill. The House then adjourned during my contribution. 
Brent Catchpole 
: That’s correct. 
Hon TONY RYALL 
: That is correct as Mr Catchpole confirms. The appropriate order would have been for the Speaker to say: “Interrupted debate on the second reading and the Hon Tony Ryall has 3 or 4 minutes to complete his speech.” The Speaker did not say that. In my discussion with the Clerk as the Speaker was leaving the Chamber he indicated there was no record of my having taken that call last week. The Opposition wants to participate in a report-back debate on this bill and I ask you to take the advice of the House because I believe we have moved into the Committee stage inappropriately. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member for his contribution. The House has moved into Committee so we cannot go back now. We need to progress with the Committee stage. 
BRENT CATCHPOLE (NZ First) 
: 
 My recollection of proceedings is that the Minister moved the second reading and then you called the Hon Tony Ryall but he had barely got to his feet when the House adjourned. He did not get a chance to even get into his speech. 
The CHAIRPERSON (H V Ross Robertson) 
: We have moved beyond the second reading the vote has been cast and there the matter ends. Now we need to progress. I say to the member that we have moved on— 
Hon Tony Ryall 
: Yes and what I am saying— 
The CHAIRPERSON (H V Ross Robertson) 
: I have made a decision and I refer the member to Speaker’s ruling 17/3. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I raise a point of order Mr Chairperson. I would like to make two points. First will you draw this matter to the attention of the Speaker because my rights as a member of Parliament have been denied because of a clerical error in the Clerk’s Office? Frankly it is not good enough when every other member of the House who participated in the debate knows that the Clerk’s Office has denied the Opposition its right to participate. I want to know what you will do about fixing that. Secondly will you therefore give us a more generous opportunity to express our views in the Committee stage given that the Clerk has denied our rights to participate in a second reading debate? 
The CHAIRPERSON (H V Ross Robertson) 
: Can I say to the honourable member that if he wishes to draw the issue to the attention of the Speaker then it is his right to do so and he should do so. As for the other matter I will always consider the issue when it comes to the Committee stage and ensure that people are given adequate time to make their point of view known. 
Brent Catchpole 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (H V Ross Robertson) 
: I have already suggested to the member on my left that he should look at Speaker’s ruling 17/3. I am going to say the same to the member. He should look at that ruling because it basically states that members have a right to raise points of order but once the chair has made the decision then for the member to continue after having been asked to desist is highly disorderly. That leaves me very little alternative about what I can do. I will hear the member but that will be it. 
BRENT CATCHPOLE (NZ First) 
: 
 I suggest that we recall the Speaker and have him reassess the situation. We have been denied a second reading of this bill. I have not spoken on the second reading. Tony Ryall was given the call on the second reading and he did not have a chance to even deliver his speech. The only person to speak on the second reading was the Minister and the rest of the House has not had an opportunity. If we need to have the Speaker recalled then I will move in that way. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is perfectly entitled to move that that be done but I say to the member that the reality is that the vote has been taken. Therefore it is not possible to relitigate the matter. 
JILL PETTIS (Junior Whip—Labour) 
: 
 We can resolve this quite rapidly. Mr Speaker called the second reading quite clearly. People were communicating with each other and not paying attention. That is why we are now in this situation. I sat here and said “Aye” in response to Mr Speaker’s prompts. It is not the fault of the person in the Chair that members on the other side of the Chamber were not paying attention. If you go back and look at the record you will see that that is exactly what happened. 
The CHAIRPERSON (H V Ross Robertson) 
: I ask members to reflect on what is actually happening here. The reality is that the vote has been taken. I have already said to members that I recognise that they want to make contributions during the Committee stage and they will be given adequate time to do that. Because the vote has been taken and the Speaker has agreed to it the matter rests there. I would now like to move on. 
LINDSAY TISCH (Junior Whip—National) 
: 
 I raise a point of order Mr Chairperson. I hear the point you are making. If we look at Government orders of the day under this bill it states that this is an interrupted debate on the second reading. In my view that means that 11 speeches remain—that is what it states—and because Mr Ryall had started to speak in the previous debate the Speaker should have offered him the opportunity to continue with his debate. In fact Mr Ryall was never given that opportunity to continue with his debate. The Speaker went straight to the Minister and that is where it progressed. Because Mr Ryall had already spoken and not taken up his allotted time the first call should have gone directly to him. That is the issue that the Opposition feels aggrieved about. Mr Ryall was only a minute or so into a 10-minute speech and he was not given the first call today. That is the issue. 
Jill Pettis 
: He wasn’t even called. 
LINDSAY TISCH 
: The junior Government whip might say that the member was not called. She is also interjecting on a point of order while I am bringing forward a very important point. The Speaker should have given the call to Mr Ryall because he had started his debate. Although you have said it is too late to do that it is our view that the correct process was not followed and Mr Ryall should have been given the call not the Minister. 
The CHAIRPERSON (H V Ross Robertson) 
: This is outside my jurisdiction. The second reading has been agreed to. I ask that we all be sensible in recognising that fact and that we progress to the Committee stage. Members will be given adequate time to put their case to the Committee. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Chairperson. Can I draw your attention to the commencement of proceedings today. We have an unusual situation whereby the Speaker is in error but of course according to the Standing Orders the Speaker is not to be challenged. When we commenced proceedings this morning the Speaker rose and declared that we were commencing the interrupted date on the third reading of the Counter-Terrorism Bill and he stated: “When the House rose Mr Ron Mark was speaking and had 5 minutes 30 seconds remaining.” That is precisely the procedure that should have been adopted a few moments ago. The explanation made by the junior Government whip—that people were not paying attention—is irrelevant because the Speaker did not repeat those very same words with regard to the second reading of this bill so there has been an error in procedure. 
The problem we are left with as you quite rightly acknowledge is that members are aggrieved that their speaking rights have been curbed. We have a breach of the Standing Orders failure to comply with procedure and failure to follow the legislative procedure. That is in error. Unless the Government whip can come to some understanding with Mr Ryall that redresses his grievance then I am sorry but Mr Brent Catchpole has already indicated that he will move that we recall the Speaker. That is the only way in which we can get out of Committee and back into the second reading of this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: I have not heard from the senior Opposition whip the honourable member John Carter and I intend to listen to him. 
JOHN CARTER (Senior Whip—National) 
: 
 If there is a motion to recall the Speaker having just spoken with the senior Government whip then the most expedient thing is to recall the Speaker and I think we can resolve the issue. 
The CHAIRPERSON (H V Ross Robertson) 
: Does the honourable member Brent Catchpole still intend to seek the recall of the Speaker? 
Brent Catchpole 
: Yes I do. 
The CHAIRPERSON (H V Ross Robertson) 
: Would the member like to put the motion please? 
BRENT CATCHPOLE (NZ First) 
: 
 I move  
That the Speaker be recalled to give a ruling on the matter. 
Motion agreed to and House resumed. 
Speaker Recalled 
The CHAIRPERSON (H V Ross Robertson) 
: Mr Speaker some concern has been expressed that Opposition members were not given their right to speak in the second reading debate. As a result there has been a long debate in the Committee that has necessitated your recall. 
Mr SPEAKER 
: I think I had better state the facts as they are because I have had an opportunity to listen to the tape. The tape shows quite clearly that when Judith Tizard sat down Mr Carter moved that the House adjourn at that stage and no one was called. That is what the tape shows. If members look at the Order Paper they will see that it states: “11 x 10m speeches remain.” When I called the second reading I was waiting for the first person to get up to take a call. No one did and I put the question. I am obliged to do that. No one sought the call. There is no clerical error whatsoever on behalf of the Clerk’s Office. We have listened to the tape. 
JOHN CARTER (Senior Whip—National) 
: 
 In accepting that advice to the Parliament and in view of perhaps getting some movement on this—because otherwise we may end up with some frustration—I wonder whether it would be sensible if I were to seek leave of the House for us to get agreement to recommence the second reading so that members who want to make a contribution to a second reading might do so. Following that we could then go back into Committee. I seek leave of the House for us to resume the second reading. 
Mr SPEAKER 
: No leave has to be sought to rescind the motion. 
JOHN CARTER 
: I seek leave to rescind the motion. 
Mr SPEAKER 
: Leave is sought to do that. Is there any objection? There appears to be objection. 
In Committee 
Debate resumed. 
Clause 1 Title  
Hon TONY RYALL (National—Bay of Plenty) 
: 
 Although it is not strictly within the Standing Orders I apologise for the confusion caused on the last matter. I would observe that other members of the Opposition were of the same view as I was and indeed as was the Minister—she thought I had the call as well. As the Minister has pointed out it appears that we were confused with the Credit Contracts Act which was also split during the debate. We apologise for that confusion but it was widely held on all sides of the House. 
The National Party will strongly oppose the passing of this bill because we believe it is a hugely privileged piece of legislation that will favour only a few in the community. It will not work and what is more it breaches a promise the Government made. In her Speech from the Throne the Prime Minister promised that she would deliver to the arts community a 2-year prohibition on the parallel importing of CDs videos films books and software. Where is the Prime Minister’s promise of a 2-year import ban on software in this bill? Nowhere. Where is the Prime Minister’s promise of a 2-year ban on the importing of books in this bill? Nowhere. Where is the Prime Minister’s ban on the importing of CDs and videos for 2 years? Absolutely nowhere. We think the title of this bill should more appropriately be the “Copyright (Broken Promises by the Prime Minister) Bill” because it fails to do what the Prime Minister promised she would do. 
When she got the Greens’ support for this bill the Prime Minister said she would have a 2-year ban on the importing of books videos CDs and DVDs to protect the New Zealand arts community. That is what she promised the Greens when she said: “Help me get this bill passed.” Is there a ban on any of those things for 2 years? No so it is incorrect for the Prime Minister to try to tell this Committee that this is a Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill when what it is really about is her broken promises to the Greens. 
We know that what is in this bill will not work. This bill should more correctly be called the “Copyright (Put up the Price of DVDs and Videos) Bill” because that is the consequence of what this Government is trying to do. We know that the evidence from Australia is absolutely clear that parallel-importing bans do not assist in the development of the arts industry. It has been estimated by the Government’s own advisers that as a result of the parallel-importing ban in Australia consumers there pay $6 more than American consumers for musical recordings. That means that over $1 billion more is paid by Australian music listeners and video watchers than would have been the case had the ban not been in place. 
Hon Judith Tizard 
: Music is not covered. 
Hon TONY RYALL 
: That is absolutely right. It is not covered because the Minister and Helen Clark have broken their promise to the Greens and to the arts community of New Zealand because they said they would have this ban. What is more in each part of this debate we intend to go through page after page of official documents that show time and time again the Government’s advisers saying that the Prime Minister’s promise was not practical and would not work. This is the “Copyright (Broken Promises by the Prime Minister) Bill” because yet again another promise made by the Government in the Speech from the Throne is not included in the bill. 
We will be talking about this issue later in other parts of the debate but there was the extraordinary circumstance of the former Minister of Commerce Paul Swain thinking that there should be a ban on the parallel importing of books everywhere except in libraries. How minute how detailed can Government interference get in respect of reading material? 
The CHAIRPERSON (H V Ross Robertson) 
: Just before I call the next speaker I point out that the title debate is a very narrow debate. Members need to ask themselves whether the proposed title adequately describes the bill. I just say that to indicate to members what I will be looking for. 
BRENT CATCHPOLE (NZ First) 
: 
 The title of this bill—Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill—is a load of rubbish. This bill is nothing more than a “Guilty Until Proven Innocent” bill because that is what it sets out to do. The bill contains a clause that provides that a person is guilty regardless of whether he or she is a legitimate business person. You are guilty until you can prove that you—[ 
Interruption 
] 
BRENT CATCHPOLE 
: I am not talking about the Chairperson. 
David Benson-Pope 
: Yes you are. 
BRENT CATCHPOLE 
: I am not talking about the Chairperson I am talking about the public in general—the business people. [ 
Interruption 
] I raise a point of order Mr Chairperson. We have just gone through the second reading without an opportunity to speak on the bill. I ask you to keep the senior Government whip and the Minister quiet during our speaking time. If you want us to continue on this bill I suggest that you keep those members quiet. 
The CHAIRPERSON (H V Ross Robertson) 
: I am the sole judge of the situation in the Chamber. I will call order when I believe that someone has gone outside Speakers’ rulings or the Standing Orders. That has not happened at this stage. 
BRENT CATCHPOLE 
: I raise a point of order Mr Chairperson. I ask you to keep a very close eye on those members on the other side to give us a fair chance to have a say. 
The CHAIRPERSON (H V Ross Robertson) 
: I always do Mr Catchpole. 
BRENT CATCHPOLE 
: As I was saying the title of the bill should be nothing more than “Guilty Until Proven Innocent”— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
BRENT CATCHPOLE 
: I was not referring to the Chairperson at all. 
The CHAIRPERSON (H V Ross Robertson) 
: You cannot the use the word “you” because it refers to the Chair. 
BRENT CATCHPOLE 
: The general public is guilty. Every businessman or woman in the country who imports any sort of books DVDs or CDs is guilty unless he or she can produce the paperwork when asked at any time to prove whether that business is legitimate. According to this bill the general public and every business person is guilty until they can prove that they run a legitimate business. Those people could have been running a legitimate business for many years importing DVDs CDs and books. However this bill turns the onus of proof around completely and makes those people guilty until they can put all the information on the table. The request for information can be made purely on the whim of the Customs Department or the Comptroller of Customs. If they feel they want to slow down the importation of other goods they just have to say that that person is guilty and prove it. Businesses will come to a halt unless they can prove that they are not bringing in pirated copies. 
That is where the bill goes wrong. It attempts to try to prove that everybody is guilty rather than put the onus on the ones who want to bring charges to prove that they have a case before they can stop a situation. It is a misnomer to name the bill the “Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill”. It is a “guilty until proven innocent” bill and that is the wrong way to go about it. It hinges on our civil rights. All that is needed is another genuine importer to lay a complaint and a person is considered to be guilty and that person will have to go through all the hoops to prove that he or she is not guilty. That is where this bill goes wrong. This bill should be named the “Guilty Until Proven Innocent Bill”. 
DEBORAH CODDINGTON (ACT) 
: 
 I rise on behalf of the ACT party to speak to the title the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill. There are a number of variations we could have of the title. As the title stands at the moment it does not convey the intention of the bill or what the bill is all about. It is not about copyright at all. It is not about protecting copyright. Copyright is an intellectual property. There is no threat to any copyright owner here. The bill is actually about protecting the licensing rights of big US companies and it could be called a number of things. One title that I am sure the Minister would have loved to call the bill is the “Currying Favour with Dubious Artists Bill”. 
The Government when it set out the purpose of the bill said it was to protect local artists in creative industries. The Minister nods her head. The bill could more honestly be called the “Currying Favour with Local Artists Bill” because that is exactly what it will do. It will give them a false sense of security for 9 months in terms of trying to send people rushing out and forcing them to buy local stuff when the Minister knows that they can use a computer. They can go online and download anything they want—and that leads me to some other titles we could use. Instead of calling the bill the “Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill” we could call it the “Extra Cash for Pirate Burners Bill” or the “Boost the Piracy Market Bill” or even better still the “Extra Cash for School Kids Bill”. We all know that all kids need do is go on to the Internet—and I do not know how many people in New Zealand are online these days but it is huge proportion of the population—and go into one of the websites that teenagers are very skilful at doing burn their own CDs and sell them in the playground. That is why I say the bill should be titled the “Boost the Piracy Market Bill” or the “Extra Cash for School Kids Bill”. 
Another title for the bill could be the “New Zealand Customs Protecting US Incomes Bill” because that is what the bill will do. That is what the title should state in order to reflect the purpose of the bill because US incomes will be protected by free policing at the border by the New Zealand Customs Service. We could call the bill the “Customs Officers Film Club Maintenance Bill” because customs officers will now be required to view all the DVDs etc. that come through to make sure that they do not breach the legislation and this legislation—as the Minister nodded her head before—is to protect local creative industries. I come back to the title we have now the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill. The other point Brent Catchpole alluded to was the onus of proof. Those words in the title turn the whole onus of proof thing on its head and we will come to that later on in the Committee stage when we get to the onus of proof aspect. The Government is stepping on to a very slippery slope with that onus of proof clause in the bill. How far will it continue this—when it slips those sorts of things into titles and uses them as a way to slide things through? 
The other thing I would like to address in the title is the year—2002. Members should look at how long it has already taken us to deal with the bill and every time we go into urgency we get into the situation where we look at how we pass legislation in urgency. The 1999 Speech from the Throne referred to the fact that parallel importing of CDs videos films books and software would be prohibited for 2 years. The Ministry of Economic Development did do a review. We are now at the end of 2003 passing this bill under urgency—and I am sorry that we are keeping the Minister up but these are the facts. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 69 
New Zealand Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Clause 1 agreed to. 
Part 1 Commencement and amendments to principal Act 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 Part 1 contains the essential provisions that make a number of changes some of which are less inflammatory than others. In particular the National Party Opposition refers to clause 4 and the provisions that amend section 35 of the principal Act and particularly new section 35(3) which states that if a person imports into New Zealand a copy of a film within 9 months of that film first being made available to the public in New Zealand then that is a prohibition and a breach of the copyright. What that means essentially is that if a film is showing at a cinema in New Zealand no DVD or video of that film can be brought in. That means for example that we will not be able to go and buy a DVD or a video of  
Finding Nemo— 
which was released in New Zealand by the Walt Disney Company—for our children for Christmas because it is within 9 months of the first release of that movie. As people who have young children will know  
Finding Nemo 
 is a big hit. They all want to get the DVD or the video for Christmas and this bill when it is passed will prevent that from ever happening again. That is just plain outright protectionism for a very small group of people. 
If members read the Cabinet paper that went through it will be clear to them that the Cabinet has put in that 9-month prohibition in order to protect small provincial cinemas. They have accepted the argument that because people in Whakatane Tokoroa and Hawera can go to the video shop or import a DVD that will stop them going to the cinema there will be fewer people going to the movies and movie theatres will close. I have news for the Government. Sky City Leisure which owns a chain of cinemas throughout New Zealand which are heavily weighted to the provinces has recorded its biggest ever profit. What that tells us is that there is no problem with small rural cinemas needing protection because they are all making money. Let me assure members that in provincial New Zealand we are getting the latest movies within a few weeks of them appearing in Auckland and people being able to go down to video stores to get the video or the DVD is not having any effect. As the officials quite rightly told the Government there are a lot of factors affecting the impact of cinema attendance including the lower drinking age live sport on television the Internet the cost of petrol and ticket prices. Those are some of the things that might have an impact on cinemas—it is not just the importing of DVDs. 
My view is that the Government realised that it could not meet the promise the Prime Minister made to the Greens and in the Speech from the Throne that the Government would put a 2-year ban on the importing of books videos CDs and DVDs so it has come up with the idea of a 9-month ban in order to stop DVDs and videos of the latest movie releases being available. Frankly that will affect poor New Zealanders more than it will affect rich New Zealanders because rich people from Remuera are still allowed to import DVDs and videos directly—they can bring them in from their overseas trips—whereas poor people in Hawera do not have that ability. Normally they hire the DVD because it is a heck of a lot cheaper than buying one. This Government says that it is all right to buy the DVD within a few days of the cinematic release but it is not all right to rent the DVD within a few days of its cinematic release and that is a privilege that is afforded to rich people but not to poor people. The Minister in the chair Judith Tizard should take a call. 
Hon David Cunliffe 
: Like you care. 
Hon TONY RYALL 
: I do care because poor people should be entitled to go and rent  
Finding Nemo 
. It is not fair that only rich people can go and buy the DVD. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future the common-sense party that supports this legislation. The public out there listening can be a little bit more encouraged about this legislation—United Future will be backing it so it is good legislation. The protection of intellectual property is an issue of considerable importance throughout the global marketplace we now live in. The bill before us today is a step towards correcting the abuse of copyrights and the increase in piracy within the film industry and I am very surprised that ACT and National are not supporting it. The bill will have relevance both nationally and internationally. Technology and the sheer pace and extent of global trade are transforming our world almost faster than we can bear let alone keep up with. One thing that I have against the human rights perspective is that we work in a global village. We really need to come away from human rights and begin to deal with human requirements as our global village begins to emerge because that throws a whole different light on things. 
Let me explain the reasons why this bill deserves passage and is receiving United Future’s support. The first reason is that the bill changes the onus of proof which we have already heard some comment on. A defining aspect of this bill is the reversing of the onus of proving copyright infringement in relation to imported copyrighted goods. Under the existing law a copyright holder who takes action against an importer will need to prove to the court that the imported goods are not genuine. As a result it is the importers of pirated goods who at present hold the upper hand. At the moment the bad guys normally win and United Future does not agree with that principle. 
Because pirated goods are increasingly difficult to distinguish from genuine goods the process of ascertaining guilt is often tedious. For example a lot of goods made in Third World countries look identical to the genuine article. They have the same labels and so on and the ones that look identical are very difficult to distinguish. At the moment copyright owners must track the goods to their country of origin. Then they need to prove that the goods were actually made there. Then they need to prove that they were made without the permission of the rights holder in that country and therefore infringe copyright in that country. This bill will shift the responsibility on to the importer for whom it will be markedly easier to prove that the goods are indeed genuine. When this bill is passed it will be up to the importer to prove that the imported goods are genuine. 
This change of onus of proof for the importer is both fair and practical even though as we have heard it does move us away from the “innocent until proven guilty” scenario—which I personally agree with—but let me give the reasons for this. Given that the evidence importers will need to prove the legitimacy of the goods will be no more than an importer would reasonably be expected to maintain as a matter of good business practice this change in civil procedure is pragmatic and based firmly on reason. 
This bill offers benefits for importers and copyright owners alike. From the importers’ point of view this bill affords them protection. Built into the bill is the provision that the court will not require a person to disclose any information about his or her sources of supply if it appears to the court that it would be reasonable to do so. That ensures that copyright owners do not use infringement procedures to force parallel importers to reveal their trade sources. From the copyright owner’s point of view this bill also makes it easy for a copyright owner to prove that the importer knew that the goods were pirated copies—something the owner must establish to be entitled to a remedy. Under the bill the importer must know or reasonably ought to have known that the goods were pirated goods. That points to an elevated more objective test than presently applies. It is a vast improvement. 
BRENT CATCHPOLE (NZ First) 
: 
 It was interesting to hear the United Future member supporting the onus of proof required by this bill. I wish that party had also supported the rules we tried to put in place to prevent the clocking of used cars brought into this country but no United Future members wanted that thrown out because they did not believe that it was the ideal thing to do. 
I will pick up on a point that Tony Ryall made about small cinemas. The Minister in the chair Judith Tizard believes that this bill will protect small cinemas. I suggest that small cinemas are not protected by this bill at all because the 9-month ban dates from the time of international release. If the local distributor does not allow the film to be distributed in this country until the 9 months have elapsed then DVDs and other parallel imports will overtake it. Therefore local cinemas will be protected only if there is a simultaneous release with the international date. For small cinemas that is not a protection. The Government announced in the Speech from the Throne that it would put in a 2-year protection for operators of small cinemas in this country but this bill is a complete cop-out and a backtrack. 
Authorised distributors have control over what is distributed in this country. They decide whether catalogues that are available overseas are to be distributed. This bill blocks distribution of those back catalogues. There is a huge back catalogue of particularly region 1 films. Most of the films are not distributed in this country because the authorised distributors have not allowed their distribution. Therefore parallel imports of those films are the only way to allow them to come in. If this bill as it tries to do prevents the parallel import of films until they have been released and distributed here then those operators are missing out on a very large catalogue. 
Piracy has been going on for many many years probably for as long as the recording industry has been in existence. Piracy has accelerated in recent years with technology with the means of the Internet. But that is not the major difficulty with films because those files are of such large volume that it would take many many hours to download a complete film on the Internet and most people do not want to waste their time doing that. I know that a lot of young kids do it but they would never be able to afford to buy the film in the first place. Some of those kids might download music but they turn round in later years and buy back catalogues of the music they downloaded because it becomes a nostalgia thing and they enjoy the music. So I do not see that the problems with piracy affect the industry as much as we are led to believe. I do not believe that the bill really addresses the problems that it is aiming to address and protects the local industry. The local industry distributes locally. If the local industry is lucky enough to have a film captured by the overseas market that is wonderful but we are not likely to parallel import it back into this country when it is available here at probably much the same price as the industry can get it under a parallel importation. 
We have heard Tony Ryall talk about the cost of films and music overseas in Australia particularly where it is only slightly below the cost in America. Why are New Zealand prices so much higher? That is one of the areas that this bill should have addressed and put at a more realistic level. The cost of films and music that can be bought in this country is so much higher and that encourages people to parallel import. 
DEBORAH CODDINGTON (ACT) 
: 
 I would like to respond to the accusations from the member of United Future who accused the ACT party of— 
Brent Catchpole 
: Who? 
DEBORAH CODDINGTON 
: United Future—the one whose leader will be the Prime Minister in a couple of years! That member accused ACT of not protecting intellectual copyright. This bill is not about protecting intellectual copyright. I accept that “intellectual” is a word that probably does not pass into that member’s focus very often. This bill is about protecting the licence rights of overseas distributors and the right of big theatre chains in New Zealand to have an exclusive statutorily legalised monopoly for 9 months on the showing of films. 
Nobody is supporting the importation of pirated videos and CDs. If that member had read the bill he would know that it says one cannot import anything even if it is legally obtained and does not breach copyright. The bill is about parallel importing. Is that member suggesting that the Warehouse breaches copyright every time it sells books that are parallel imported because they are half the price of Whitcoulls’ books? I would be interested to know if that is what he is suggesting. If he were consistent he would be accusing the Warehouse of breaching copyright by selling books published outside the copyright—which is parallel importing. Parallel importing is not the same as breaching copyright. The banning of parallel importing protects exclusive licence rights. 
The Hon Tony Ryall was absolutely correct when he said that this bill would be a bonus for big business and wealthy people. It will be bad for people who cannot afford for whatever reason to take six kids to the movies in the first 9 months that a movie comes out and who want to buy a video or a DVD— 
Hon Tony Ryall 
: Even rent a video. 
DEBORAH CODDINGTON 
: —or even rent a video of  
Finding Nemo 
  
The Lion King 
 or any of those movies that come out and which we used to be able to get. The Warehouse is a classic example of a place where families on low incomes could do their Christmas shopping at an affordable rate but this bill will stop that. 
This bill will not do anything to protect copyright at all. That member is confused. I think he should read the bill again because it will encourage the breaching of copyright. When the parallel importing of popular products is banned for 9 months people who want them will find other illegal ways to get them. The ACT party does not support that. It does not support the burning of CDs on the Internet. It does not support the selling of them. We know that it already goes on. Young people do it a lot. They seem to have some sort of unwritten code—which is nice—that they do not do it to local artists such as Bic Runga Stellar and all those groups. Some young people have a sort of code that they do not burn the works of New Zealand artists. Nevertheless $33 to buy a CD is a lot of money so the temptation is already there to burn CDs and pirate their use. I can guarantee that when this bill is passed burning piracy and breaching of copyright will go up. I think we should make it very clear that this bill is not about protecting copyright at all; it is about protecting the licence rights of especially American big business. 
Why was this bill brought in in the first place? It was to do with in the Government’s own words the US 301 Watch List. It had nothing to do with the fact that our copyright laws are poor. There is nothing wrong with our copyright laws. If there was why is the Minister not amending the Copyright Act? She is not amending that Act; she is amending this Act. This bill was not brought in because our copyright laws are poor; it was brought in because by our allowing parallel importing overseas copyright owners and local exclusive licensees were placed in the same position as the New Zealand originators of unique or branded material—that is they had to enforce their rights themselves. They could not get protection from the Government. 
MIKE WARD (Green) 
: 
 The Greens support this bill. It does not give all the protection we might like to small bookstores and small record stores around our community but it does give protection to local cinemas. New Zealanders go to the movies in large numbers. Cinemas have worked hard to combat first television then DVDs and they have done it fairly successfully. Many have suggested that viewers should be able to decide for themselves whether they watch a movie at home or on the screen in a theatre. They can do both but they may have to wait a little longer to watch it at home. 
We would contend that the movie experience and that of watching a DVD at home are different experiences. We can do one activity in the privacy of our own homes which just cements in alienation from the community. The other activity takes us out into the community. Protecting cinemas is about protecting the community. Going to the movies is an affordable social outing—an opportunity to mix with other human beings. It is more than just watching a film on a big screen. Being with other people is an important part of belonging. Sharing experiences is the stuff of communities. Many cinemas have bars and restaurants attached so that movie going is an even more interesting experience. Cinemas are meeting places. This bill protects interesting experiences. It protects the ability to go to the movies. In some urban shopping centres cinemas are another excuse for patronising the local shops. They are an important element in local economies at a time when malls shopping chains and big block stores have made the survival of neighbourhood shopping centres tenuous at best. The bill protects that important area of neighbourhood. 
So what has all of that to do with the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill? Why could we not just have both? Some folk given the choice are likely to rent a video and sit at home with a friend and watch it on the box and as large-screen televisions take on the numbers who stay at home are likely to make the survival of cinemas—particularly the smaller suburban and rural variety—even more uncertain. The bill gives some certainty to cinemas. 
When movies first come out the new prints are expensive. The large chains can afford to buy those expensive prints. They have larger auditoriums larger audiences and larger runs. The rural cinemas and smaller suburban cinemas are not able to afford them and this bill gives a window so that those small threatened rural and suburban cinemas can survive. Why should we not let the market decide? I ask why we should run the risk. The market has a place but if there is a chance that stripping away the rules might also strip away choice and undermine important community assets and experiences we ask again why we should run the risk. This bill helps to lessen that risk. 
The bill makes liability for infringement dependent on the defendant knowing that the goods in question were not infringing copies. That to me sounds like good business sense. Why would we not take that precaution? When we take on a product to sell why would we not make sure that it was legitimate? That sounds to me like a reasonable thing to do and a much simpler option. I imagine that it is what most prudent business people do. 
I have been aware for some time of the problems with cinemas. I have a friend who has built and run cinemas and I know that the threat of DVDs to cinemas is real. The marketplace is appropriate for making some decisions but this is a situation in which the community has a right to expect us to make decisions that give it another measure of protection. Tony Ryall says he wants to buy a DVD for his kids for Christmas. I say he should take his kids to the cinema and buy the DVD next Christmas or for a birthday present—he will get the chance. He also says rich people can import DVDs. I tell him that that is a little patronising. The rules apply to everybody. Anybody can import DVDs directly for himself or herself. 
Hon Tony Ryall 
: But can you afford them? That’s the point. 
MIKE WARD 
: Well if someone cannot afford a DVD it is not the end of a child’s childhood. As one who brought up his children without DVDs I say that their lives have not been horribly blighted. This bill does not undermine childhood— 
Hon Tony Ryall 
: That’s what you say. 
MIKE WARD 
: I can promise the member that. Deborah Coddington has said that American big business is protected by this bill. I tell members that American big business will do well with or without the bill. This is important legislation. It is a protection of community assets. 
Hon DAVID CUNLIFFE (Minister of State) 
: 
 I move  
That the question be now put 
. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I would like to pick up on a point made by the United Future party which together with the Greens and the Progressives will be supporting the left-wing Labour Party on this bill. I draw to the attention of members in the Chamber that I think the United Future members are in danger of making the same mistake they did with the Care of Children Bill. Members will recall that when the Care of Children Bill was tabled Judy Turner Paul Adams and Marc Alexander came out and said they supported it. Then they found out that there would be lesbian fathers and abortions for 10-year-olds without the parents being advised. They changed their minds and they are now against that bill. I think they need to listen to the debate on this bill instead of just following the notes the Government gave them. It was clear in relation to the Care of Children Bill which United Future members are on record as supporting that they did not know what was in it and I do not think they know what is in this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: The member will come to the point. 
Hon TONY RYALL 
: Let us just go through some of the facts in respect of this bill and why it is about denying choice for New Zealanders. We heard a speech stating that it is all about protecting small cinemas. We know that the 9-month provision applies from the first international release of the film. If the film is released in summer in Europe and is going to be released in summer in New Zealand that is 6 months of the 9 months gone already. We also know that the DVD can be imported by the owner of the copyright without any fetter by this bill. That means that Disney can import  
Finding Nemo 
 as a DVD to be sold at Disney shops but parallel importers such as the Warehouse—Mr Tindall is a good supporter of the Labour Party—will not be allowed to parallel import DVDs into the country. Disney can do it but the Warehouse cannot; so there is another anomaly there. 
I also say to United Future that significant numbers of New Zealanders like the choice of being able to rent a DVD or video of a film currently being screened. This bill will prevent them from having the opportunity to rent the DVD or video but it does not stop them from getting on the Internet and ordering and buying the DVD or video from Australia. The issue here is that only some people can afford to buy the DVD or video. They are quite expensive. As Mrs Coddington said if people have four five or six kids they are probably looking at paying between $36 and $45— 
Deborah Coddington 
: It’s $78. 
Hon TONY RYALL 
: It would cost $78 in Auckland to take the kids to see  
Finding Nemo 
 as well as cost $12 to $15 for the supervising parent. People could be looking at paying $50 to $60 to take their family of four to six kids to the movies. That is really expensive and it is why a lot of people like to have the choice of whipping down to a video source and renting a DVD or video for the kids. It is all about choice and I can tell United Future that this bill denies choice to a whole lot of people. It denies them the choice of an alternative form of entertainment. 
As a form of protectionism for small cinemas it will not work. We know that people can import DVDs and videos directly off the Internet. We know that the copyright owners can import directly into New Zealand and sell through their own shops but that the Warehouse and other parallel importers cannot. We know that the provision applies 9 months after the international release which in New Zealand may be only 2 or 3 months. So the bill will just not work as a form of protectionism. 
I ask United Future to please consider the amendment that I have put forward which would allow everything else in the bill—some of the good stuff about defining copyright title and rental rights—to be left in it but would remove that foolish prohibition of 9 months. I know that the notes from the Government will not cover this matter but I am happy to give them a copy of the final Cabinet legislation committee paper on it which basically says the ban is not going to work. I bet Labour did not give that to United Future. I say that United Future should learn from the Care of Children Bill and read the stuff that the Government does not give its members because material from the Government’s own official documents shows that nothing about this prohibition is going to work. People who want to obtain  
Finding Nemo 
 on DVD will be able to do that but they will have to be people who are prosperous enough to afford it. 
PAUL ADAMS (United Future) 
: 
 I raise a point of order Mr Chairperson. I believe that the Hon Tony Ryall has mischievously misled the Committee about United Future’s position on the Care of Children Bill. 
The CHAIRPERSON (H V Ross Robertson) 
: That is a debating point. 
DAVE HEREORA (Labour) 
: 
 I move  
That the question be now put 
. 
BRENT CATCHPOLE (NZ First) 
: 
 I would like to pick up on a point that I made in an earlier speech with regard to parallel importation and the 9-month ban. As Mr Ryall pointed out the ban is only on parallel importation and is not on genuine authorised licensee-distributed goods. So Disney can distribute them. Closer to home the distribution of the third  
The Lord of the Rings 
 film on DVD and video can commence on the day it is premiered in Wellington. Distribution can occur from the first day a work is published or opened for viewing by the public anywhere in the world—the bill clearly refers in section 35(3A) in clause 4 to a work first being made available “in New Zealand or elsewhere”. Generally it refers to international release but in the case of the  
The Lord of the Rings 
 film the premiere will be here in New Zealand and genuine authorised licensees can commence distribution of videos and DVDs on the day the film is released. 
There is no protection for small cinemas in that case. Small cinemas will no doubt have a huge influx of customers when the film comes out but the bill will not protect them by delaying the release of DVDs until a date 9 months afterwards in the way that the Minister is suggesting because those restrictions are on distribution through parallel importation. 
The other thing I would like to point out is something that the learning institutes raised with the select committee. They are concerned that the bill now forbids them from parallel importing e-books that have clips of movies within them. If the 9-month period has not been passed those e-books cannot be imported and shown within learning institutes. The learning institutes expressed that problem to us. Beyond that there is the problem of the licensing of the software required to run those movies and e-books. If learning institutions have to rely on distribution by the local distributor then that creates a long delay before they can use the learning material in the manner they wish. They will have to reprogramme their timetables and either wait the 9 months or pay a huge cost to buy the licence themselves. That was a major concern for the learning institutes. 
In summary the 9-month delay in parallel importing is not going to help small cinemas because it is up to local distributors to decide when they want to distribute DVDs. It will stop only parallel importation. If a DVD is released on the day a work is released internationally then the small cinemas are not going to be protected or assisted in any way. Learning institutes will have to wait for a much longer period before they can start showing imported e-books; the inclusion of film clips in them means that learning institutes will not be able to show e-books unless they buy the licence separately or buy directly from local distributors. That may not suit local distributors because they may not want to bring in the e-books as well; so it is not necessarily going to help anybody and will only delay the whole process. This bill will not help local cinemas as was claimed but it does bring a lot of the high technology into line. 
Hon DAMIEN O'CONNOR (Minister for Racing) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 4 be agreed to: 
to amend new section 35 of the principal Act by omitting subsection (3). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
New Zealand Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 82 
New Zealand Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 1 agreed to. 
Part 2 Consequential amendment to Trade Marks Act 2002 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 The effect of Part 2—while described by the Government as only technical—is that a registered trademark will not be infringed by the use of the trademark on parallel imported goods where a trademark has been applied to the goods that have been put on the market anywhere else in the world. The National Party’s concerns with this part of the bill relate to the fact that we do not believe that the Government should be trusted in making these sorts of changes. We think that the cavalier attitude displayed by the Government in earlier parts prevent it from being given the trust of the Committee in respect of any other amendment. We are concerned because we simply do not believe that the Government has any commitment to the benefits of parallel importing. 
 It is clear when we read the pages and pages of documentation we received under the Official Information Act that this Government does not believe in the benefits that parallel importing has given the consumers of New Zealand. This Committee needs to be reminded that the Labour Party in Opposition opposed the legislation that brought parallel importing into New Zealand and dropped the prices on a whole lot of consumer items up and down this country. Previously exclusive rights saw a number of holders of those rights extract extraordinary rents and premiums on the goods and services on which they held those rights and that was paid for by ordinary New Zealanders. As a consequence of the previous National Government moving to open up parallel importing in New Zealand we have seen a dramatic improvement in choice for ordinary people and for business in this country. 
What is the consequence of that? The consequence of that is we have managed not only to reduce the inputs to many businesses in New Zealand but to open up the quality and the variety of goods that ordinary New Zealanders are able to purchase and that was opposed by the Labour Party in Opposition. Labour members believe that any opening up of trade has to be bad. That is the argument they made in the debates. They argued that we should support the sort of arrangement that allows people to control the flow of goods into New Zealand and deny the rights of other New Zealanders to pass the benefits of cheaper goods on to ordinary people. 
Members need just look at the reduction in prices we have seen in computer software. The price reductions we have seen in that area have been absolutely phenomenal and that is the result of parallel importing brought in by the National Government. Members should just look at the cost reduction we have seen in designer products like perfumes clothing and household goods. They have reduced in price dramatically because of parallel importing—which was opposed for days hours on end by the Labour Party when this was first proposed by the National Party in Government. 
We oppose this Government wanting to make changes in this bill because we do not believe that this Government can be trusted to make changes that will preserve the integrity of parallel importing. We have just seen during the debate on the previous part that even when the advice they received from every Government agency told Government members that their 9-month ban on importing videos and DVDs would not work they still did it. When this Committee was told time and time again in this Committee stage that that ban on parallel importing would not work the Government has not listened. Parallel importing introduced by the previous National Government has been a runaway success. It has lowered the cost of inputs for hundreds if not thousands of businesses around the country. 
PAUL ADAMS (United Future) 
: 
 I would like to pick up on a point that Deborah Coddington made. She said that I am not an intellectual. She is right; I am not an intellectual and many times I am thankful for that. But what I do recognise are things that are common sense as I am used to working as they say where the rubber hits the road and people actually have to get out there and do something to make a dollar. That is where I come from and that is why United Future will still be supporting this legislation. 
As for the Hon Tony Ryall he could not even interpret United Future’s position on one bill and he maintains that people should be able to sell things that they have stolen from somebody who legitimately made it at a cheaper price for the benefit of consumers. I say to Mr Ryall that if I steal a car I can sell it obviously cheaper than can the person who may have owned it legitimately. So I do not think that that argument cuts much ground at all. But under this bill the importer must know or reasonably ought to have known that the goods are pirated copies. This is what we are dealing with. This is a vast improvement because under the current law copyright owners find it difficult to prove knowledge. It is open to importers to argue that they did not know or have reason to believe that the goods were pirated. Under this bill the copyright owner will have to prove only that the importer knows or reasonably ought to have known that the goods were pirated. This is fair and of use to both importers and copyright owners. 
Let us look at the issue of film distribution which has been much spoken of in the course of conversations. This bill affords relief to those organisations involved in film distribution. By introducing a ban on parallel importation of videos and DVDs for a period of 9 months from the date of international cinema release this bill addresses the concerns of film distributors—the ones that have put all the money into making the films etc. and who are concerned about the protection of their rights to control the intervals between video and television releases of films. It is giving protection to the people who have put all the money time and effort into producing something to be able to globally control the release of their product and as we move into a global economy I think that this makes sense. 
The scope of this bill has clear parameters. It does not prohibit importation for a person’s private or domestic use. Private individuals can rest assured that if they want to import a copy of a film for their own use ahead of the New Zealand cinematic release they are free to do so. This bill has already had a noticeable effect on New Zealand’s good name in the international community. United Future is very interested in New Zealand having a good name in the international community. Partly as a result of the introduction of this bill into the House last December the US trade representative has recently removed New Zealand’s name from the Special 301 Watch List. This watch list is a register of countries that trade representatives have concerns about regarding the effect of the parallel importing ban on US citizens’ intellectual property rights protection. 
Before New Zealand was taken off this dubious list we were tagged with the likes of Bolivia and other countries hardly known for protecting intellectual property rights. Now with the help of this bill New Zealand’s international reputation as a protector of the intellectual property rights of our citizens and those of our trading partner is demonstrably healthier. 
This bill is many things to many people. Importers and rights owners benefit from its passing. This bill goes some way to affirm our country’s intent and international standing with regard to the protection of intellectual property. Our trading partners are assured of our statutory obligations to outlaw abuses and infringements to intellectual property in the film industry. United Future stands proudly as a common-sense party in support of this legislation. 
BRENT CATCHPOLE (NZ First) 
: 
 What a pity it is that Paul Adams and his “sensible party” do not understand and are totally confused by the difference between parallel importing and piracy. He has assumed that they are both the same. Parallel importing is the term for bringing goods in under a legitimate licence parallel to the authorised licensee. Piracy is producing or importing goods without any licence and without any authority whatsoever. So Mr Adams should understand the difference between those two before he starts spouting on about how sensible his party is. 
I would like to carry on the debate on Part 2. The trademark of parallel importation is that it is done with a legitimate licence. It is a legitimate means of importing and generally it is at a lower cost to the authorised licensee. Because a person has purchased it and has used the exchange rates of a much cheaper source he or she can bring it in and distribute it here at a more realistic price for general consumption by the public. 
 One of those wide distributors is the Red Shed which brings items in from overseas and is able to distribute them at a much lower price than a lot of other distributors can. It does not mean it has purchased pirated copies; it has purchased legitimate copies but has sourced them from a cheaper location. 
Protection of the trademark is most important. Technologies these days have advanced to a great extent and that means that a lot of products can be purchased over the Internet. Trademarks need to be protected and I see this bill as a means of protecting them. The bill brings a more modern style of technology to the whole industry. The old Copyright Act of 1994 has fallen behind in terms of the technology side of things. It was put in place before DVDs were even thought of and certainly before any were being distributed in this country. I suggest that this bill will fall behind in terms of the technology of the future but at least it brings the current technology into line. 
As far as protecting small cinemas is concerned the bill attempts to do that but unfortunately it allows the genuine distribution by the authorised licensee to distribute from the day the films and products are distributed to the public internationally. There is no limit on when distributors can distribute so if an authorised distributor decides it wants to distribute within a small range of cinemas only then other cinemas outside that range will be limited. They will not be able to get access to the films and they certainly will not be able to make any profit or gain on them while they are in high demand in the initial stages of their release. Finally when the authorised distributor allows the small cinemas to show the film it is usually at the slack period when the demand is falling off. So because of the general control by the authorised distributor the bill does not really protect smaller cinemas. I think the bill should have looked a little closer at that. 
But in general New Zealand First supports this bill because it brings the technologies up to date and recognises technologies we could not even imagine when the original bill was discussed and debated. New Zealand First will be supporting the passage of this bill into the third reading. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 82 
New Zealand Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 2 agreed to. 
Bill reported without amendment. 
Third Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a third time 
. This bill amends the Copyright Act in five areas. First it implements a ban on the parallel importing of motion picture films for 9 months after their first release. The Government did indeed state in the Speech from the Throne in 1999 that we would look at imposing a ban on the parallel importation of films CDs books and software for a period of up to 2 years. However after extensive consultation—in fact two rounds of consultation—with users producers and distributors of copyright goods this bill is the result. We have also put a great deal of support into the New Zealand creative industries concerned and I think we are seeing the results of that. 
The aim of the proposed bans in the Speech from the Throne was to ensure investment in New Zealand’s creative industries and a decent income for people who put their lives energies and creative talents into films CDs books and software. The consultation showed that banning parallel importing would not necessarily affect the investment in all those areas. However it was clear that there were problems in the area of films and this legislation addresses that area. It also addresses the major issue of piracy and covers many copyright goods and other creative industry goods. We have introduced these targeted measures because they are a good idea. However because we do have a commitment to ensure that New Zealanders have access to the widest range of goods at the best price within the rights of copyright holders and licensees we have made a limited provision that will remain in place for 5 years during which time we will review it. 
This amendment is also partly about ensuring the continued viability of picture theatres and the services they provide to communities particularly in rural and provincial areas. A comment was made in the Committee stage that because picture theatres and their owners are doing very well this ban is not necessary. However in the Government’s review of this issue significant concern was raised by many people about the viability of picture theatres in rural and small communities. We recognise that this environment is a changing one. That is why we have put into the legislation a provision that after 5 years the ban will lapse unless we decide to keep it going. 
I also make a point relating to rental rights—again another point that was raised during the Committee stage. Concern was expressed that people on lower incomes may not be able to rent videos and DVDs within days of a film’s theatre release. However videos and DVDs of  
The Lord of the Rings 
 a New Zealand - produced product were in video stores in New Zealand within days of the American premiere. They were pirated copies. It is absolutely unacceptable that people who have put their life’s work into those areas should have their income undercut in that way. It was never intended under the Copyright Act that films would be available for rental within days of their theatre release. In fact the High Court of New Zealand confirmed and now this bill confirms that rental rights on films software and sound recordings do apply to parallel-imported goods. It has never been the intention to alter the rights of copyright owners in respect of the rental of those types of goods. The bill merely confirms existing rental rights and clarifies that right. We should also point out that the reality is that the cost of CDs and movie tickets in New Zealand is very low internationally. I believe that New Zealanders are getting very good value for money. 
Coming to the piracy issue this bill reverses the onus of proof. It makes changes to the onus of proof in civil proceedings relating to the importation of infringing films sound recordings and computer programs. The onus will be on the defendant to rebut the presumption that the imported works are an infringing copy. Some copyright owners have sought more extensive changes to the onus of proof to cover circumstances other than the act of importation. I want to keep that under review. However we believe that it is appropriate to limit the amendment now to importation. 
Changing the onus of proof involves a change to a fundamental legal principle and requires a measured approach. This bill focuses on importation as importers rather than copyright owners are more likely to have access to information that demonstrates the goods’ authenticity. We give warning that where people are importing copyright goods they will need to be able to demonstrate that those goods are not pirated. Reputable importers would keep such records as a matter of good business practice. In the Committee stage there were suggestions that that was a major problem but we do reiterate that the provision applies only to importers. It applies to films sound recordings and software. It is not onerous as importers will have to have that necessary information in order to defend their right to import. I also note that if the owners of copyright are also business people they have a legitimate right to be able to enforce their copyright in goods that they have invested in. 
I also point out to the ACT speaker that the bill does not impose any new responsibilities on the New Zealand Customs Service. The idea that customs officers would sit and watch every video or listen to every CD is just ludicrous. It is a matter of being able to demonstrate that those goods are not pirated. That is a moderate and reasonable test. 
The bill introduces an objective knowledge requirement in relation to importation cases. Under the current Act the defendant must not know or have reason to believe that the work is an infringing copy. The new test will be that the defendant knows or has reason to know that the work is an infringing copy. That change applies only to films sound recordings and computer programs. The current test continues to apply to all other copyright works. Those changes in the onus of proof and knowledge requirement apply to products that are particularly susceptible to piracy. The changes will assist copyright owners to take effective action against piracy which is destroying the incomes of many New Zealand creative producers and the people they license to sell those goods. 
The bill also clarifies the scope of the rental right granted under section 9 of the Copyright Act. I have talked about the fact that it confirms the High Court’s interpretation of section 9 of the Act in the case of  
Video Ezy International (NZ) Ltd 
 v  
Roadshow Entertainment (NZ) Ltd 
. It also makes consequential amendments to the Trade Marks Act 2002 so the trademarks and copyright legislation are consistent on the issue of parallel importing. 
In conclusion I thank the members of the Commerce Committee and the officials particularly the officials from the Ministry of Economic Development for their work on this bill. These changes form part of the Government’s overall commitment to encourage and facilitate the growth of New Zealand’s creative industries and New Zealand’s opportunities to get employment and income from those industries. They will also ensure that our intellectual property regime is robust and balanced. I commend this bill to the House. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 In reporting back to you Mr Speaker on the Committee stage of this bill I draw to your attention the lengthy comparison members made between what the Prime Minister promised and what the Government is delivering. In her Speech from the Throne which followed only a few days after she gave $89 million of taxpayers’ money to the arts the Prime Minister promised to deliver to the arts community a prohibition for 2 years on the parallel importing of CDs videos films books and software. It has to be asked where any of that is. Helen Clark promised a 2-year import ban on software in this bill. Is it there? No. She also promised a 2-year ban on importing books and films in this bill. Is it there? No. Helen Clark promised in the Speech from the Throne a ban on the parallel importing of CDs and DVDs for 2 years. Is it there? No. 
The Government was told by its officials and by many submissioners in its consultation process on this issue that Helen Clark did not know what she was talking about. That was a promise made on the hoof to try to curry favour with a small group that the Prime Minister likes to be fêted by. It never stacked up it was always a joke and the Prime Minister was told that by the public servants and by those people who made submissions during two rounds of consultation. The papers showed the ridiculous situation of Paul Swain saying that we would have a 2-year ban on books being imported into New Zealand after their release but libraries would not be banned from doing that nor would the Government. That was quite ridiculous. That is how bad it was. It is no wonder he was dumped as the Minister of Commerce with that sort of woolly stupid thinking. 
The National Party in Opposition opposes strongly the Government’s silly 9-month ban on the importation of DVDs and videos. We oppose it because it is stupid anti-competitive and anti-choice. It will deny choice to a whole lot of New Zealanders. On the other hand it may be nothing but puffery because we have been told in the Committee stage that the 9 months applies from the international release of the video DVD or film. That means that if a film is released in the summer in Europe—I am sure Mr Speaker you have been in Europe in summer and you will know that a lot of films are released at that time—it may be another 6 months before it comes here. So this ban may apply for only 3 months. 
We also know that there is no ban on the owner of the copyright importing a DVD into New Zealand even before the international release of the film. There is no ban on the owner of the copyright to the video or DVD importing it and putting it on the shelves of video shops around New Zealand on the very day of the international release. That is not caught nor is the personal importation of DVDs or videos. While we are not allowed to go down to the video shop in Hawera or Eketahuna to get a video we can get on the Internet order it and have it within 2 days. So if people can afford to buy a DVD or video this bill will not apply to them. There are so many problems with this bill and with the Government’s programme to try to ban the importation of videos and DVDs within 9 months of the international release of films. 
The National Party asks why the Prime Minister did not just admit she was yet again foolish and spoke before she thought about it. She made a silly election promise trying to pander to the favourite little group that she likes to pander to and nothing has come of it. The official papers which we managed to prise out of the Government under the Official Information Act show that the Government spent 2 years trying to find something that it could window dress to look like the Prime Minister’s promise in the Speech from the Throne. The fact is that the Prime Minister has delivered zip. She promised a 2-year ban on videos DVDs books and software and what has she delivered? She has delivered a 9-month ban on that. 
What does this legislation actually do? It tries to affect a few people who the Government thinks are somehow people who have their hands in the till. Those are the people whom the Government wants to target: people who may have their hands in the till. The Government is trying to say to them that they should not be allowed to act in a way that satisfies the demands of ordinary New Zealanders. It is the ordinary New Zealanders who will miss out—the ordinary New Zealanders who are hard-working stay in their jobs and obey the law. They are the people who will miss out under this ban because they will be denied the right to go down to the local video shop and hire a DVD or a video within 9 months of the public release of the film. Frankly I think that is outrageous. It is outrageous because it is a denial of the choice that New Zealanders have become used to. 
New Zealanders have become used to the fact that they can go to the video shop and rent a recent release. That is why that stand at the video shop is called “Recent Releases”; they are quite recent in terms of the release date of the film. This Government has now proposed that ordinary people should not be able to rent a video within 9 months of the release of the film. That is the consequence of this bill. 
Larry Baldock 
: No! Absolute rubbish! Get back on to the subject. 
Hon TONY RYALL 
: I tell Mr Baldock that this legislation is a denial of a right of ordinary New Zealanders to go to their video shop. The United Future party endorsed the Care of Children Bill endorsed lesbian fathers and endorsed 12-year-olds having abortions without informing their parents because United Future members had not read the bill. I say to Mr Baldock that he has not read this bill. If he reads this bill as he should have read that bill the Care of Children Bill which the United Future party endorsed— 
Mr SPEAKER 
: The member will come back to the bill. 
Hon TONY RYALL 
: The point I am making is that the member has not read the bill. If he had read the bill then he would not have made the interjection he just did that this measure will not restrict people’s choice at the video shop. I can table the press release of United Future supporting the Care of Children Bill—endorsing it in this House—because United Future members had not read it. If they had read it their position would now be to oppose it. 
Larry Baldock 
: Table it! 
Hon TONY RYALL 
: I will table it later—the press release showing United Future supported the Care of Children Bill. 
Jill Pettis 
: What’s that got to do with this? 
Hon TONY RYALL 
: It has to do with the fact that they have not read the bill. If they had read the bill they would know that it denies ordinary New Zealanders the choice of going to the video shop. 
The Government was told this legislation would not work. This will not save one provincial theatre in New Zealand. It will not save a picture theatre in Temuka from closing. It will not have any effect whatsoever on that and the Government was told that it would have no effect. On the very day after we heard about a record performance by Sky City Leisure which owns a chain of theatres up and down New Zealand including provincial New Zealand the Government is trying to say provincial theatres need protection. The fact is that they do not. 
Ordinary New Zealanders need choice. That is what we in the National Party Opposition stand for. We stand for choice. Parallel importing has delivered huge amounts of choice to ordinary New Zealanders. It has reduced the cost of books videos CDs and software but it was opposed by the Labour Party. The Labour Party has to realise that this proposal to stop people buying  
Finding Nemo 
 for their kids for Christmas is a joke. It is a denial of choice and it says to New Zealanders that they have no right to get those cheap products. That is quite wrong. 
BRENT CATCHPOLE (NZ First) 
: 
 I am pleased to take a call and speak in support of this bill. First of all I would like to thank the chairman of the Commerce Committee Mark Peck for all the work he put into this bill the officials for the tremendous amount of support they gave the select committee and for the work they put into the bill as well. 
Generally New Zealand First is supportive of this bill as it updates the Copyright Act to bring it into line with rapidly changing technology and film formats. Since the introduction of the Copyright Act in 1994 we have seen an expansion of VHS videos video CDs and the introduction of DVDs. We have seen the development of the Internet to levels that were not imagined in 1994. We have seen the introduction of electronic books and the expansion of parallel imports. Parallel imports have grown beyond all expectations particularly the parallel importation of films for distribution and rental prior to cinematic release in New Zealand helped by the development of the Internet. That has resulted in a decline in cinema patronage and in the New Zealand film industry. 
This bill provides a ban on parallel imports of films including DVDs VHS videos and video CDs for a period of 9 months from the time the title is released internationally. It is important that we realise that it is from the time the film is released internationally. We are lucky that  
The Return of the King 
 the final in the triology of  
The Lord of the Rings  
is to be released internationally here at the end of next month. Genuine authorised licence-holders are allowed to distribute DVDs and videos of that film from the date it is released internationally. If they choose to release them on the day the film is presented internationally then they are entitled to do so. The 9-month ban does not restrict the distribution of DVDs through the authorised licence-holder. 
In its submission the New Zealand Motion Picture Exhibitors Association expressed concern about the unrestricted parallel importation of films DVDs and videos and supported the 9-month ban on the parallel importation of film. The bill’s original intention was to protect cinematic distribution from the release of the DVD and other formats. However in its present form the bill allows the authorised distributor the right to determine those protections and when the release will take place. 
This ban—and it was not mentioned during the Committee stage which I was quite surprised about—lapses after 5 years. The assumption is that technologies and the means of distribution will have changed dramatically in that 5-year period. But a lot of the equipment still around today for the general distribution of film is many years old. I suggest that any projection equipment that has been purchased in the last 5 years will have another 10 15 or 20 years of life left in it and therefore the 5-year lapse period is a bit optimistic. 
We received submissions expressing concern that a large proportion of region 1 catalogue films have not been released in New Zealand and are being restricted by the local distributor. That means that local distributors control the release of those products and therefore they are managing to restrict the distribution of those films and sound recordings because they are not allowing those catalogues to be distributed in New Zealand. Parallel importers can if they wish get a licence to import those catalogues but many of them do not have the opportunity because of the restrictions put on them by the authorised distributor. 
In their submissions learning institutions expressed concern that although they are able to parallel-import electronic books journals and other films and DVDs they run into the problem of a sound clip or movie clip embedded within electronic books that has not been officially released in New Zealand and is within the 9-month period of international release. Under this bill they are not allowed to distribute that film within their learning institute as freely as they would like. As a result of that restriction they are then forced to rely on importation through the authorised licensee who might well restrict the time period in which they are allowed to show it and that would certainly add considerable cost to the importation of that sound bite. It might be only a portion within a particular e-book or e-magazine imported by the institution but it was a major concern. 
The bill changes the onus of proof to the importer of the films DVDs videos CDs and sound recordings compelling him or her to prove that those items were not infringing copies. In other words those people are assumed to be guilty until they prove that they have received those items from a legitimate source. The concern here was that those importers are running a legitimate business importing from legitimate parallel-importers and have done so for many years. I suggest that the likes of the Warehouse could be in that position. It could quite easily be stopped from importing some of its goods simply by an authorised licensee stating—without any proof or evidence just the suggestion—that he or she believed that some of those goods were pirated. That would make the Warehouse guilty until it proved it was innocent. Yet it would have been parallel-importing from legitimate sources for a long time and have had no intention of importing pirated goods. But this bill puts that inference there and it could make the Warehouse guilty. 
In winding up I want to say that New Zealand First supports this bill simply because it updates the old bill with the new technologies and brings it into line with modern technology. 
DEBORAH CODDINGTON (ACT) 
: 
 The ACT party opposes this bill. It is just a pay-off to the Prime Minister’s supporters in the arts and it is also a feeble attempt to appease American interests. In 1999 in the Speech from the Throne the Prime Minister included a statement that parallel importing of CDs videos films books and software was to be prohibited for 2 years after the first release. As we have already heard the Ministry of Economic Development conducted a review because of this. It was claimed that this review was announced because plans to ban parallel importation had secured New Zealand’s removal from the United States Special 301 Watch List for nations with as the US said inadequate copyright protection laws. 
As I have already said this bill is not about protecting copyright. Copyright is an intellectual property right and the ACT party protects property rights probably more than any other party in this House and intellectual property is no different. But this is about protecting the licensing rights of certain distribution companies and it is about protecting the market for theatre companies throughout New Zealand. This legislation will do more to promote the breaching of copyright than if there were no law protecting copyright at all. 
As the bill states the ban on parallel importing was this Government’s warped attempt to try to promote New Zealand’s creative industries. The Minister stood up before and said that it heard submissions from rural and provincial theatre companies that were not doing well in the market and that needed protection from the Government and she said that they were struggling to survive. So this Government has brought in legislation to protect rural and provincial theatres. What is this Government doing to protect rural and provincial schools that are being closed down in an unprecedented way around this country? 
Mr SPEAKER 
: Would the member please come to the bill. 
DEBORAH CODDINGTON 
: Yes I will return to the bill but I just ask the Government to think about this. Does this Government consider only the friends of Judith Tizard in the film distribution business when it thinks of creative industries? Is the knowledge wave economy not something to do with creative industries? This bill is ostensibly to protect creative industries. 
I would also ask that the Minister stop and think what this legislation will do to the local New Zealand music industry which I would argue is one of the best in the world. We have in this country some of the best songwriters and musicians in the world and when I was in Cambridge earlier this year I was proud to take New Zealand CDs with me. But this bill will create monopolies and protect those who have lobbied hardest at Government level to ban parallel importing. Where will this drive consumers who do not want to pay inflated prices for their CDs? It will drive them to the Internet. It will promote the piracy and the burning. Worldwide music sales are down and the major reason is CD piracy. Modern computer technology makes it very easy to copy music and young people think it is normal to get free music downloads off the Internet. They are actually growing up now to think it is normal to breach the copyright of music and to burn CDs. They do not even think of it as pirating. Many of these people copy for personal gain which is a breach of copyright and then they go further and sell pirated CDs at school gigs markets and universities. 
If one needs any further proof of what a parallel importing ban will do to the music industry look no further than the well-publicised trial in America where Napster was taken to court by Metallica—the hard-rock music band—which along with the rest of the music industry was screaming blue murder over copyright infringement. Napster argued that it was only providing a forum for music swaps and thus not infringing copyright. How will this bill protect this dubious practice from happening? It will not. The Internet drills holes through international boundaries and this legislation is a 1950s solution forced on to New Zealanders who are no longer locked up behind the Government’s patrolled fences. 
New Zealand is not on the US Special 301 Watch List because its copyright laws are poor but because overseas copyright owners and the local exclusive licensees were placed by the parallel importing allowances in the same position as New Zealand originators of unique or branded material. That is they had to enforce their rights themselves. In other words the US copyright holders lost their free New Zealand - supplied enforcement service at the borders of this country—the New Zealand Customs Service. The Minister argued that customs would not be involved in this at all and argued that there would be no onus on customs officers to view what is coming in to see whether it will breach this legislation when it is passed. 
 If that is the case why are we passing the legislation and who will enforce it? I see that the Minister cannot address that question any more but what is the point of going through the farce of passing this legislation if it will not be enforced? All it will do is raise the uncertainty and doubt in the minds of people who are not breaking the law and then when they find that they have to try to defend themselves the onus of proof is reversed so that they are guilty until proven innocent. 
So this Government will give our American friends free protection of their licensed rights their exclusive licensees free protection. It will protect their copyright because they will not be required to do it any more—not for 9 months anyway. It will also give a guaranteed protected monopoly market until a film DVD or piece of music is no longer in high demand. I have already said that the people who will be worst affected by this legislation are the people the Labour Party used to count on as its supporters. It will be the people who cannot afford to take six children to the movies to see  
Finding Nemo 
 when it is first released who would have been able to rent it from the local Video Ezy but will no longer be able to do that. 
How far behind this bill will the print publishing industry be? Will the Government now move to ban the parallel importing of books? How will it control that industry as the print-on-demand book technology develops? The Warehouse has benefited thousands of New Zealanders by being able to offer books at a fraction of the price the big book chains demand. The Government has said that it has backed off books including books in this bill “for the time being”. I would say to the people out there who enjoy reading books to be very afraid. There is some weird belief that this bill will encourage an increase in international investment in and overseas promotion of New Zealand creative talent. The biggest barrier to investment in New Zealand creative talent in this country is the fact that the Government especially in the film industry and the New Zealand Film Commission scares away investment by behaving like some sort of commissar of culture in a studio. 
I finish by saying that parallel importing has benefited all consumers at the expense of a few monopoly-licence holders. Consumers will suffer as a result of this bill and we do not support it. 
MIKE WARD (Green) 
: 
 The Green Party is pleased to support the protection and the check on unscrupulous and powerful interests that this bill provides. We would not have been unhappy with a greater level of protection to small local specialist book and record stores. In an earlier speech the Hon Tony Ryall lauded the availability of cheaper products that resulted from the introduction of parallel imports by a Government of which he was part. Cheaper products have been won at the expense of local businesses and local manufacturers frequently. That provision has made small specialist stores in smaller provincial and rural communities largely extinct. Even in the cities it has threatened the species. 
Those are the stores that provide the real choice of which the Hon Tony Ryall spoke. They are the ones that will give people the specialist products such as blues records and those specialist things that one does not get and are not the bulk-purchased products. They have been put at risk by earlier parallel importing provisions. 
The bill is modest legislation that we hope ensures that the provincial cinemas do not become similarly threatened and extinct because they provide another level of choice in those small communities. It is not a choice between cheap cheaper or cheapest version of the DVD but a choice between the right to go to a movie and the right to watch it in one’s own home. 
It probably is not possible to protect or give absolute protection in the age of the Internet. That perhaps relies on the integrity of ordinary New Zealanders to have some respect for the rights of people who have put the energy and creativity into producing the kinds of movies that we all enjoy. 
The “onus of proof” provisions may ring alarm bells but they are really a common-sense measure at a time when technology makes pirated copying a simple process. In fact as I said earlier businesses would be wise to make sure that the products they are dealing in have not come from illegitimate sources. As I said earlier film makers who have provided us with creativity and the energy have a right to the protection that the bill provides and we are pleased to support it. 
A party vote was called for on the question  
That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a third time. 
Ayes 82 
New Zealand Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Bill read a third time.