Without the more extensive safe harbour provisions under the proposed Copyright Act amendments, Australia will be in breach of its obligations under the Trans Pacific Partnership (TPP), according to the Copyright Advisory Group.
The TPP, signed by all 12 member states in February, will regulate trade between Australia, the United States, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.
Speaking at the Joint Standing Committee on Treaties: Trans-Pacific Partnership Agreement hearing, Delia Browne, national copyright director for the Copyright Advisory Group, which sits under the Council of Australian Governments (COAG) Education Council, said the current safe harbour scheme was based on a similar scheme in the US, which was required when signing the Australia-US Free Trade Agreement.
However, a "drafting error" caused Australia's safe harbour regime to apply only to commercial internet service providers (ISPs), and not schools, universities, and libraries providing the same service.
"This means that commercial ISPs, like Telstra, receive legal protection for complying with copyright infringement takedown notices, but there is no protection for schools and universities," Browne said.
"We cannot see any policy reason why Telstra is protected but a school is not, but there was an inadvertent error made at the time."
Browne argued that these safe harbour provisions need to be redrafted through the proposed amendments to the Copyright Act in order for Australia to be compliant with both the Australia-US Free Trade Agreement and the TPP.
Section H of the Intellectual Property chapter [PDF] of the TPP mandates that member states implement both fair use and safe harbour provisions.
"Each party shall ensure that legal remedies are available for right holders to address such copyright infringement, and shall establish or maintain appropriate safe harbours in respect of online services that are internet service providers," Article 18.82 says.
Articles 18.68, 18.69, and 18.74 also provide that criminal and civil penalties do not apply to "a non-profit library, museum, archive, educational institution, or public non-commercial broadcasting entity".
Jessica Coates, executive officer of the Australian Digital Alliance (ADA), agreed that Australia will risk breaching the TPP unless it extends its restrictive safe harbour provisions.
"Australia cannot meet its TPP obligations without it first extending existing safe harbour schemes ... we will be in breach of the agreement if we do not do so before ratifying," she argued in front of the joint standing committee.
Coates said the fact that Australia's current safe harbour scheme applies only to commercial ISPs puts the nation's startups at a disadvantage internationally.
"Libraries, schools, universities, and Australian startups like Redbubble and Umberto all provide exactly the same services -- the services that are described by the provision -- and yet are not covered by our current safe harbour provisions," Coates said.
"This puts our startups, in particular, at a commercial disadvantage to their international counterparts, creating a substantial disincentive for tech companies to set up hosting services and other new technology services in Australia, and raising their risk compared to international groups that are working in the same area."
Browne added that in addition to introducing a more extensive safe harbour scheme, the government needs to implement a fair use provision in order to comply with the TPP. Referring Article 18.66 of the TPP, Browne said it is a "positive obligation" in order to maintain balance within copyright law.
"This is an active obligation to ensure an adequate balance between the interests of rights holders as well as copyright users in the wider community," Browne said.
"The Australian Law Reform Commission [ALRC] and the Productivity Commission recently found that our existing fair-dealing exceptions do not achieve this balance, and have recommended that Australia introduce a copyright exception called 'fair use'."
Associate professor Kimberlee Weatherall, speaking at the joint standing committee hearing in a personal capacity, said the length of copyright terms also needs to be shortened, as proposed under the Copyright Act amendments. Among other things, "overly strong and overly long" copyright laws stymie innovation, Weatherall said.
"You are preventing further innovation, you are increasing costs to the health system for drugs, and you are increasing costs for schools and libraries to get access to copyright material," Weatherall said.
"We need to be constantly having a debate about how innovation policy can be done better, how changes in technology mean that we should change our laws. Those debates either are not going to happen or are going to be much harder to have.
"Everyone knows that copyright lasting for the life of the author plus 70 years is too long.
"We are increasingly seeing that we are cementing down these details of incoherent rules and leaving no space for change, reform, flexibility and responsiveness."
Despite the arguments that not shortening the length of copyright would put Australia at risk of not complying with the TPP, Communications Minister Mitch Fifield in May dismissed "conjecture" that the Australian government would adopt the recommendations made by the Productivity Commission to amend the Copyright Act.
Shortening the length of copyright from 70 years after the author's death to just 15 to 20 years after creation would not occur because "the Coalition values Australian literature and Australian writers," according to Fifield.
"Recently, it has been wrongly claimed that the government is planning to reduce the life of copyright to 15 to 25 years after creation, rather than 70 years after the death of the author as it is currently. This is not something the government has considered, proposed, or intends to do," Fifield said at the time.
"The false claim is based on a finding in a recent draft Productivity Commission Report into Intellectual Property Arrangements."
The amendments proposed to the Copyright Act were designed to ensure that libraries, archives, educational facilities, cultural institutions, and the disability sector have "reasonable access" to copyrighted content, with usage of a copyright material not constituting infringement.
"The proposed preservation exceptions apply to public libraries and archives, parliamentary libraries, and prescribed key cultural institutions. It is envisaged that this will generally include a library or archives that forms part of an educational institution, but that there may be library or archival material held by an educational institution (or another institution such as a museum) that is not accessible to the public either directly or through inter-library loans," the Guiding Questions document explained.
"This means that, potentially, the exception would not apply to library or archival material held by an educational (or other type of) institution that is not accessible by the public."
The proposed amendments also acceded to Article 18.81 of the TPP by pushing broader safe harbour provisions to cover online copyright access.
"The proposed amendments expand the current 'safe harbour' provisions in the Act to cover a broader range of entities, including educational institutions and other online services (such as online search engines, bulletin boards and cloud storage services)," the Guiding Questions document said.
The former Labor government had initially called for a review of the Copyright Act in 2012 to consider whether the Act had been outdated by the changes in digital technology, and whether it should consequently be updated.
This was followed soon after by the ALRC submitting a report to the government on the matter. However, in December 2013, Australian Attorney-General George Brandis indicated the government's intention to put the report on the backburner until 2014.
In February 2014, the ALRC's report was finally tabled in Parliament, setting out various provisions to be added to the amended legislation.
The ALRC had argued that similar to the laws in the United States, a "fair use" exception when a person is accused of copyright infringement should be outlined within the revamped Copyright Act.
Research for the purposes of news reporting, review, criticism, satire, parody, quotation, non-commercial private use, professional advice, and incidental or technical use were also recommended by the ALRC to be exempted from prosecution for copyright infringement, but were not included in the exposure draft.
The technology sector would in particular have benefited from the addition of the non-commercial private use and technical use exemptions, as they would cover data caches, cloud computing, digital recording, and transferring of content.
Updated at 2.30pm AEDT, October 19: The safe harbour amendments to the Copyright Act are yet to be decided upon.