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JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS díospóireacht -
Wednesday, 5 Oct 2005

Copyright Theft: Ministerial Presentation.

I welcome the Minister for Justice, Equality and Law Reform, Deputy McDowell, and his officials. The Minister has kindly accepted our invitation to attend to discuss the problem of copyright theft in Ireland.

I thank the committee for its invitation to discuss the important issue of copyright theft. Before going in detail on the issues raised when the committee met with industry representatives on the subject, I would like to make a number of opening comments.

It is fair to say that in tackling the problem of copyright theft, we are starting from a point where popular awareness of the problem and its consequences have traditionally been very underdeveloped. There is little doubt that, compared with other property crimes, the widespread view is that this type of theft is, if not victimless, then at most of concern only to anonymous global corporations. Organisations such as INFACT and others have done a great deal to tackle this conception in the public mind. There remains a tendency to downplay its significance and to fail to see the impact on society generally.

I will not rehash the evidence the committee has already heard but copyright theft represents a real and insidious crime which affects not just business activity, innovation and entrepreneurship but also employment and Exchequer revenue in Ireland. It also creates a group of people who live off its proceeds and who are a malignant danger to society. What they do, how they protect their rackets and what they do with the proceeds of their rackets are not without huge social consequence. Our exposure is particularly sensitive in the area of software intellectual property, given the scale of our export activity in that sector and the number of jobs at stake in Ireland. Piracy also impacts dramatically on the home entertainment industry and other domestic employers. I take seriously the concerns raised by representatives of the DVD rental business, for example, when it comes to implications for their survival in the face of illegal competition.

As well as underplaying the impact of such crime, there is also a lack of awareness of the size of the problem and its industrial scale. The technologies now available make the mass production of DVDs feasible. When allied with the access provided by the Internet, this combines to make for a serious threat to the viability of many legitimate businesses. It is also well established that organised crime and terrorist groups are involved in piracy. The networks available to such groups can be used to traffic the counterfeit goods and the considerable profits can then be used for reinvestment in other criminal and terrorist activity. One of the great advantages which organised crime and paramilitary bodies have in this area is that they have the capacity to frighten people into dealing with them and remaining silent. It gives them a head start over other people who might be tempted to go into this area of criminality.

As the committee is aware, the legislation in this area is primarily the responsibility of the Minister for Enterprise, Trade and Employment, Deputy Martin. The Copyright and Related Rights Act 2000 provides for a comprehensive regime of offences within a modern copyright protection structure. It was clear from the committee's discussion of this matter last March that the central issue of the industry was the enforcement of the law, rather than its content. No one is saying that we need a new copyright Act. The Garda authorities are adopting a proactive approach to the detection of offences through overt and covert policing activity. In this work they liaise closely with INFACT. It is also essential that the Garda work closely with the PSNI, given the extent to which this is a cross-Border activity. This co-operation is well established and advanced.

One such project is Operation Pine, which commenced in March 2003 as a joint Garda-PSNI cross-Border investigation involving the targeting of organised groups involved in the large scale distribution of counterfeit goods. The operation has involved searches and seizures at shops, markets, supermarkets and premises designed for the storage and production of counterfeit products. It has resulted in the seizure of counterfeit products to the value of approximately €6 million in 2004 and €7 million to date this year. The operation has led to the disruption of counterfeit production facilities as far afield as Turkey and Thailand. When we obtain this material, we feed it into international anti-criminal intelligence networks so that actions in Ireland have reactions elsewhere. As with drug seizures, the more one sees in terms of seizures, the bigger the problem being addressed.

The most recent large scale Garda seizure occurred on 11 August 2005 when a premises located at Inniskeen in County Monaghan was searched. During the search a large quantity of counterfeit DVDs, adult pornography, multi-drawer burners, copiers, scanners, blank DVDs, insets and cases were seized. The estimated value of the material seized on that raid was €200,000. A person was arrested under the provisions of section 140 of the Copyright Act and I understand a file has been sent to the Director of Public Prosecutions.

As the committee knows, during the lead up to Christmas every year large quantities of counterfeit goods, particularly DVDs, are offered for sale at markets throughout the country. Large public events, such as sporting and music events, also attract such activity. The Garda authorities will continue to target this business and will liaise closely with INFACT to detect and disrupt piracy activities. I will continue to ensure the Garda authorities have the resources they need to tackle such crime. The committee knows that the Garda Vote is now more than €1 billion and the force is better equipped than ever before in terms of resources and numbers to meet this and other policing challenges.

I thank the Minister. I do not know if he is aware that when the industry came before us, its representatives admitted that more than €100 million per annum is lost to the Exchequer. That is a sizeable amount of revenue for the country to lose. The door-to-door sale of counterfeit DVDs has increased substantially. It is not as easy to sell them at markets and other outlets because the gardaí, to their credit, have been vigilant. These people have had to find a new way to sell these products. I understand that in Scotland it is a criminal offence for anyone caught interfering with intellectual property or infringing the Copyright Act. Our Copyright and Related Rights Act is regarded as one of the best in the world, particularly by the United States and the UK. The Government understood the difficulties and challenges, particularly in the area of computer manufacturing. That Act was the second largest item of legislation to come before the Houses of the Oireachtas in the past 20 years.

My family has a vested interested in this area since I retired as director of the companies involved in the music industry. People are not afraid of the law. The Minister mentioned a raid at Inniskeen, which is Patrick Kavanagh country, and the fact that €200,000 worth of material was seized. However, that represents only 20,000 DVDs, which could be run off in one week in any small pressing plant. It will be difficult to solve this problem unless the offence is given criminal status. The figure of €100 million, which the industry said is lost to the Exchequer every year, could double in the next three years. Perhaps this is the responsibility of the Department of Enterprise, Trade and Employment, rather than that of the Minister. Is it possible to amend the Act to make it a criminal offence for anyone caught interfering with intellectual property or copying DVDs or videos?

I understand the Act is quite comprehensive in that regard. Section 140 of the Copyright and Related Rights Act 2000 makes guilty of committing an offence a person who, without the consent of the copyright owner, makes for sale, rental or loan, sells, rents or lends, or offers or exposes for sale, rental or loan, imports into the State, otherwise than for his or her private and domestic use, in the course of a business, trade or profession, has in his or her possession, custody or control, or makes available to the public, or otherwise than in the course of a business, trade or profession, makes available to the public to such an extent as to prejudice the interests of the owner of the copyright, a copy of a work which is, and which he or she knows or has reason to believe is, an infringing copy of the work. That is the law. Provision is made for fairly serious penalties. On summary conviction, in respect of each infringing copy, the fine is €1,500 and a term of imprisonment of up to 12 months. On conviction on indictment, however, the fine is €100,000 or imprisonment for five years or both. The five-year sentence means people can be arrested without warrant. The penalties are quite hefty.

The Chairman indicated that the extent of Garda operations in open-air markets has meant the trade in illegal DVDs is shifting to doorsteps. While I will discuss the matter with the Garda Commissioner, I can provide the committee with my immediate reaction. If one were to make it a specific offence to sell DVDs door to door, one could run up against people such as Senator Ó Murchú and organisations selling locally produced material.

God forbid.

One would have to be very careful about how one dealt with the question of door-to-door sales.

The people to whom the Minister refers would not be infringing any copyright.

While they would not, the point is that trying to stop people selling DVDs door to door is difficult.

That is not the point. The point is that DVDs are being sold door to door which are counterfeit products. Unfortunately, it is not Irish people who are selling them most of the time.

A garda cannot be at every doorstep or behind every door. While it is a question that requires some reflection, it may be that the industry should consider offering substantial rewards to expose people who offer illegal DVDs door to door. They must face the danger of being caught. Most of the vendors of illegal copyright material operate on the basis that they appeal to people's eye for a slightly dodgy bargain and think they will get away with it even if people shut the door on them. They imagine they can move to the next door without anything happening. In the same way as the insurance industry established a confidential line in the context of personal injury claims, a well advertised offer of substantial rewards in the communities in which the goods in question are being sold would incentivise people and bring negative pressure to bear.

To provide the committee with some figures, the National Bureau of Criminal Investigation has initiated 35 prosecutions since 2003, five of which were brought before the Circuit Criminal Court. These resulted in 33 convictions. While there are raids and close co-operation with INFACT, the real question — as with bootleg vodka, etc. — is how to deploy sufficient resources to catch enough people to put those behind the scenes out of business. A well advertised reward scheme such as the one I have outlined may be the way to proceed in that regard.

When one tries to find a remedy in the private sector, one considers someone who is successful. Officials of the Minister's Department and the Department of Enterprise, Trade and Employment should, therefore, research the Scottish experience where there is fear of the law. I understand that the people in question are in Ireland for that reason. They have no fear whatsoever of the law here and the rewards gained from their activities are great. Where a consumer can have something delivered to his or her doorstep for €5 which costs €19.99 in stores, he or she will be very tempted. As this form of consumption is on the increase, I strongly recommend the examination of the Scottish experience by officials and the subsequent provision of information to the committee. We are very concerned about the growth of the activity in question.

I agree with the Chairman. The Department of Enterprise, Trade and Employment has the responsibility for legislation in this area and I will convey his views to the Minister, Deputy Martin. While the Copyright Act is regarded as a model, if something is missing or a technical adjustment which could increase its legislative effectiveness is possible, there are plenty of opportunities available to make changes. The Criminal Justice Bill will, for example, be coming before the Houses soon. While we can tweak things, the question is to identify whether the problem is legislative or whether it relates to the simple ease with which it is possible to commit this crime, which is extremely remunerative in nature. If it is the latter, we must put in place counter-strategies which are adequate to deal with the prevalence of the crime.

I thank the Minister for coming. He will have gathered that the Chairman has a particular interest in this issue and a great deal of experience. During the debate on foot of which we invited the Minister to attend today we considered the legislation in this area but had no great suggestions as to how to improve it. The net issue is enforcement, which is why we wanted the Minister's view. I was interested in some of the comments he made and have a number of questions.

On enforcement, can the Minister describe the nature of the unit within the Garda which addresses copyright theft? How many individuals are involved and does the unit function on a full-time basis or do its members have other responsibilities? Given the perceived scale of the problem since 2003, 35 prosecutions does not indicate an especially great focus or frenetic activity in the area. What is the nature of international co-operation on this matter? While the Minister mentioned the PSNI, what is the extent of co-operation with police forces in the European Union and in the broader international context? Does the Minister have particular proposals to amend the law from the enforcement perspective? While we did not, as a committee, perceive any need to make amendments, the Minister may have reflected on difficulties the current law presents for enforcement which might be addressed through the action of the Houses.

There is an analogous, though not identical, area of activity which involves the duplication of credit cards and credit card scamming, about which many people are deeply concerned. Is this the responsibility of the same unit within the Garda? Can the Minister inform the committee about the monitoring of this especially nefarious and widespread activity?

There are two agencies within the Garda which deal separately with the matters raised by Deputy Howlin. The Garda Bureau of Fraud Investigation deals with credit card fraud and scams of that nature.

How many officers are in the bureau?

I am not in a position to assist the Deputy on numbers.

Perhaps the Minister will come back to us.

I will communicate further with the committee on the matter. The National Bureau of Criminal Investigation, staff numbers for which I do not have in my possession, is responsible for DVD counterfeiting and similar activities. There are two specialisms and two separate bodies within the Garda.

Are they necessarily separate issues?

While, as the Deputy pointed out, there is at least a close analogy between them, there are specialisation aspects of the matters. What used to be called the fraud squad is now the Garda Bureau of Fraud Investigation, GBFI, which addresses monetary and financial crimes, including credit card fraud.

What is the scale of such crime? Does the bureau employ civilian personnel with expertise in ICT on a full-time basis? How does it operate? That is what the committee wants to know in terms of enforcement.

The best thing to do is to call in the head of that agency to question him about it. I can only provide an outline of what the bureau does. The deployment of resources is a matter for the Garda Commissioner and we must decide whether we will deploy personnel to work in community policing or immigration control, or on Operation Anvil or these activities.

We need to know how many areas are involved before making those sort of judgments.

The Garda Commissioner will inform the committee about the number of personnel involved if it requests such information from him. He will also indicate whether he has adequate resources and whether the balance is correct. The numbers employed by Garda Síochána and the level of its resources are at record highs but the calls being made upon the force are increasing. Ireland has a growing and increasingly urban population, with attendant and ever more complex criminality. Members are aware that the number of gardaí is being increased from 12,000 to 14,000 through an accelerated recruitment programme. I have also made provision — upon which I intend to act — for the creation of a Garda reserve to assist the Garda Síochána. I hope to make public proposals in that regard before Christmas.

How will the Garda reserve work?

Members of the reserve will be similar to the reserve constables in most common law countries. The reserve will make volunteers from the community available to the police force in order to augment its strength as occasion demands. In Britain, for example, there are two categories. There are community support officers, who are full-time, quasi-policemen——

The Minister for Communications, Marine and Natural Resources, Deputy Dempsey, some time ago floated the idea of appointing wardens but nothing happened.

In Britain these are police support officers, not community wardens or local authority employees. Britain also has reserve constables. They are members of the community who receive enough training to provide reserve constable services for their local police forces. I envisage that every substantial community would have some reservists. They might be recently retired gardaí or other people of good standing who are willing to assist. It has been successful in other countries, and members of the Joint Committee on Justice, Equality, Defence and Women's Rights visited Britain to observe how the system there operates. There was scepticism about whether this was a good idea but they returned with a favourable impression.

Would the Minister make this available in areas where Garda stations, particularly those in rural areas, are not open on a full-time basis?

It would have to be available across the country. People are now commuting 30, 40 and 50 miles to their jobs. If the members of a community's police force live 40 or 50 miles away from it, policing is less effective. The connection between the police and the community is shift based. That is not ideal. The Garda reserve is part of my strategy for increasing the Garda Síochána's roots in the community. Every substantial area will have a network of people who will form community roots for the force. We are straying miles away from copyright——

It is not miles away and I will explain why. In the past, gardaí lived locally, were involved in communities and knew what went on. Now they travel to work from, for example, Mullingar to Castlepollard. This community police force would restore that local knowledge by virtue of the fact that its members would live in the areas in which they would serve.

I agree. If, for example, somebody was selling DVDs door to door in the hinterland of Castlepollard, it is more likely that it would come to a member of the force's attention via, for example, a discussion in a local shop. Ireland has so far operated without a Garda Síochána reserve but because our society is becoming mobile and urbanised, with all the problems to which that gives rise, there is a compelling argument for the reserve. The Oireachtas has made provision for a reserve and I will act upon it.

Reserve constables will not be the answer to this issue. Deputy Howlin is correct when he says that the real question is whether 35 prosecutions in three years is adequate. Could the position be better and could more prosecutions have been pursued? Is the degree of co-operation between INFACT and the Garda Síochána adequate? Are infringements of the law being dealt with adequately? Those are issues that the committee must put to members of the force because I can only provide general answers.

I thank the Minister for attending. If one goes to most markets around the country, one sees two or three stalls with DVDs, cassettes, etc. How does a garda determine whether these are genuine or copies? IMRO has some role to play in this. A constituent recently informed me that his house was raided by a security company that believed he was copying DVDs. I do not know whether he was doing so. He received compensation as a result of the raid because the security company did not have the right to raid a house. If I believe that counterfeit tapes are being sold at a market and I approach the Garda, what is the procedure, what powers does the Garda have and how does it determine whether these are genuine?

The Garda has an adequate power of seizure of material it believes is suspect. That is not a problem. The issue Deputy Martin Brady is pursuing is how a member of the Garda Síochána walking through a market can distinguish, there and then, between real and fake DVDs. This is the issue and that is why there has to be a degree of specialisation. One cannot expect a member of the Garda Síochána who happens upon an open-air market to distinguish between a real product and a clever counterfeit. This demonstrates the need for specialised co-operation between INFACT and the National Bureau of Criminal Investigation. A person must know the business. They must be able to make a sample purchase and know within a couple of minutes whether an item is counterfeit. One cannot ask every sergeant and garda throughout the country to be able to do so. That is one of the reasons it is difficult to detect counterfeit goods. The Garda has a successful policy for policing markets. Representatives of INFACT who go with gardaí are able to point out the suspect items which the gardaí then purchase. The difficulty with door-to-door sales is that one cannot have the Garda waiting for someone to come round the corner with a DVD in his or her hand.

If an item costs €9 wholesale before being sold for €19.99 in the shops, it does not take a genius to know that if it is being sold on the doorstep for €5, it is a counterfeit product.

The Ballinasloe fair, the biggest in the country, runs all week. I was there on Saturday, Sunday and Monday. What surprised me this year when I was going through the hundreds of stalls was the low number of videos on sale. Somebody must be doing his or her work. I take this opportunity to pay thanks to the Garda Síochána for the way it policed the event. The Garda presence was very evident last weekend and I hope it will be repeated this weekend.

I was interested to learn that in one case, at least, the goods seized had come from Thailand. Are criminals in Ireland working with gangs in Thailand or how does this transpire?

Counterfeit goods are produced across the world. They include counterfeit jeans, footwear, watches and so on. Counterfeiting is a vast international business and there are well established methods of spreading the wholesale goods across the world. On the occasions when counterfeit goods are found in Ireland, the Garda examines evidence and documentation and shares intelligence with its international police connections. The international dimension is pursued. However, in the seizure at Iniskeane, it was Irish produced counterfeit goods that were seized.

I am glad Deputy Callanan's personal observation backs up the point the Chairman and I made that the focus of counterfeit goods is changing because of enforcement at markets. To be brutally honest, it is a lateral displacement from markets to door-to-door and other sales opportunities.

We will try to conclude by 10.30 a.m. in time for the Order of Business in both Houses.

Theft of intellectual property by counterfeiting is a worldwide issue and much more significant than that of counterfeit DVDs. It is very difficult to counteract it.

I was impressed by the remarks about a reserve police force. In many parts of the world there is a federal police force and a county police force. Traffic wardens work well in towns under the guidance of the Garda Síochána and local authorities. Would the Minister consider whether the reserve force could come under the system of the local authority? If the reserve force worked in a similar way to traffic wardens, it could be very effective as a local policing system. I would like to hear the Minister's view on the matter.

The concept of a reserve force is not the same as what Deputy Howlin spoke about and attributed to my colleague, the Minister for Communications, Marine and Natural Resources, Deputy Dempsey. He was talking about local authority created warden services for neighbourhoods and so on. That is a separate concept, in respect of which there would be full-time jobs. What I am talking about are reservists who would assist the Garda Síochána in its functions, as and when required.

Traffic duties should be carried out by full-time staff, whether wardens or members of the Garda Síochána, because to prosecute the offences one must go to court. One cannot ask a reservist who is giving of his or her time voluntarily to spend half a day reading out evidence to a District Court judge. We are moving towards a road traffic corps. Some 600 of the additional 2,000 gardaí being recruited will augment the 600 to 700 working on road traffic duties which have recently been amalgamated in a road traffic corps. This does not mean local authorities should not have warden type services for communities which need such activity.

The traffic corps will have a staff of 1,200 in total, of which 600 will come from the 2,000 newly recruited gardaí?

That is the idea.

A certain element creates difficulties in towns and villages. A reserve police force with an input from the local authority would be very effective. Many countries have two police systems, a federal police force and a local police force.

The idea raised by Deputy Ned O'Keeffe of a type of warden is a separate concept and I believe staff, working a 40 hour week, would be required to carry out those functions. On the question of local authority involvement in policing, one of the features of the recent Garda Act which will be implemented shortly is the question of local authority Garda policing committees. For the first time local authority members will have a direct input into local policing issues and policy at partnership committees. Likewise, the Garda Síochána will have an input into what local authorities are doing in their field of responsibility to uphold the law. That will be a welcome development.

It is welcome that there will be more liaison between local authority members and the Garda Síochána on traffic and other issues.

The Deputy's party voted it down four years ago.

That it is a statutory right to do so is to be welcomed.

Members of the Oireachtas will also be entitled to attend these committees. The end of the dual mandate will not mean Members of the Oireachtas will be excluded from this important local function.

That is very welcome. On behalf of the joint committee, I thank the Minister and his officials for attending this morning. I thank the Minister for participating in what can be described as a very informative discussion.

The joint committee adjourned at 10.30 a.m. until 9.30 a.m. on Wednesday, 12 October 2005.

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