4902

Regulating Access and Benefit Sharing

by
Achim Seiler and Graham Dutfield

Correct citation:

Seiler.A. & Dutfield G. (2002), "Regulating Access and Benefit Sharing" Biotechnology and Development Monitor, No. 49, p. .3-7

While the Convention on Biological Diversity prescribes the conservation and sustainable use of biological diversity, it also makes provision for sustainable utilisation of these resources through appropriate access and the sharing of any benefits arising. Implementation of these principles is currently subject to painstaking international negotiations between a diversity of stakeholders with contrasting interests. This article untangles the different positions, and surveys the attempts so far at interpreting and implementing the Convention's basic rules and principles.

Sovereignty over genetic resources
The economic importance of biotechnological products and processes is expected to increase dramatically in the coming years. Consequently, genetic resources and associated knowledge and technologies are seen as strategic wealth-generating assets. Developing countries have a strong interest in asserting the sovereignty the Convention on Biological Diversity (CBD) accords them over access to their genetic resources. No longer are resources and knowledge available to all and sundry without appropriate permission. Developing countries want a fair share of the benefits generated from any genetic resources they supply, to derive the greatest possible value from the utilisation of their biodiversity.
Fairly distributing the benefits arising from the use of genetic resources is one of the aims of the CBD. Article 1 (see box on page 6) states that biological diversity is to be conserved and that the benefits arising from its utilisation are to be fairly and equitably shared. The Convention points out that this sharing can take the form of an appropriate transfer of relevant technologies, and/or by appropriate funding. However, access to such technologies is also subject to conditions: the countries providing genetic resources must recognise the intellectual property rights (IPRs) protecting the relevant products and processes.
Other forms of benefit sharing could include joint publications, bioprospecting fees, advance payments, non-monetary benefits and services, training, and co-ownership of IPRs. In the event of a fully developed new product or process being marketed, royalties may also be negotiated. Given the many different routes to commercialisation, a whole range of benefit sharing arrangements have been discussed (see box on page 4).

Access and Benefit Sharing (ABS)
The CBD accords member countries sovereign rights to determine how to regulate access to the genetic resources found within their national boundaries. The Fifth Meeting of the Conference of the Parties (COP5) decided to extend rights over genetic resources to the holders of indigenous and community knowledge in so far as applications for access concern the knowledge, innovations and practices they safeguard or generate. At issue here is the right of holders of traditional knowledge to be asked and informed about requests from other parties to access their knowledge, and to extend or refuse their approval for such access. These international stipulations require national governments to recognise the special position of those biological resources that are nurtured, used and maintained mainly or exclusively by holders of traditional knowledge.

Prior informed consent
One of the main goals of the Convention is to promote access to genetic resources while respecting all rights to them. Therefore access provisions should not be restrictive in ways that run counter to the Convention's objectives. Access refers to resources but also to technologies. Access to both can be unreasonably restricted by either legislation which is too strong (in the sense of being complicated and unrealistically demanding), or by IPRs, which can effectively block access to technology.
In this context prior informed consent (PIC) means in practice that the provider of genetic resources must be fully informed in advance by the access seeking party about the objectives, as well as the economic and environmental implications involved. Language barriers must be overcome when indigenous populations are involved and their consent is required or sought. Otherwise consent can hardly be 'informed'. Still open to negotiation are issues such as who exactly the prospective recipients of genetic resources should have to obtain PIC from, and whether the rules will be voluntary or legally binding. Furthermore, it is unclear which genetic resources are affected by PIC and in what form. This uncertainty is due to the existence of a number of overlapping and sometimes conflicting rules at the national, regional and international levels. The provisions of the CBD are not retroactive, so access to genetic resources collected before its entry into force will formally not require PIC.
Also unclear is how - or indeed whether - ABS rules and contracts should accommodate the different roles of academic and commercial entities that use genetic resources. Most academic research generates no monetary wealth that can be shared. Therefore many observers contend that access legislation should be less stringent for academic research than research which has commercial ends.
Currently the role and involvement of stakeholders and their position with regard to in situ or ex situ conservation needs to be spelled out. Whereas the CBD has nothing to say about which stakeholders are to participate in deciding on ABS regulation, the Panel of Experts on Access to Genetic Resources and Benefit-sharing has drawn up a list of actor groups. Their respective roles need to be examined individually, especially since certain actors, like ex situ collections, can be involved as both users and providers.

Shaman's reciprocal benefits

From its beginnings in 1989, the United States company Shaman Pharmaceuticals has been committed to the concept of reciprocal benefits: to developing new therapeutic agents by working with indigenous and local peoples of tropical forests and, in the process, contributing to the conservation of biological and cultural diversity. Terms of this reciprocity are driven by the expressed needs of the peoples themselves. Shaman's approach to questions surrounding reciprocal benefits involves three timeframes: immediate, medium-term and long-term. This approach has been developed in part to address a potential conflict between the company's recognized obligations to local communities and the nature of the pharmaceutical industry. Although the needs of indigenous peoples are often urgent, development of a therapeutic agent generally requires a long lead-time, which can easily be a lengthy timeframe of five to ten years. Shaman considers it unacceptable to delay compensation for indigenous people until a product to which they have contributed is ready for market. It is stated company policy that their collaborators are entitled to a percentage of the profits from sales after the product is on the market, and to some return even if the product never achieves commercial potential. For every product, Shaman has committed to return a portion of the profits to all of the communities and countries in which they have worked, no matter where in the world the plant or information used

for product development, originated. Through this process, the risk of receiving no compensation for a commercial product is lessened for individual countries or communities that did not contribute to product discovery. In a financially unpredictable industry, spreading the benefits and risks among all contributors increases the opportunities for compensation and hastens compensation returns. This commitment includes profits derived from a product licensed from another company. When Shaman was formed, a non-profit conservation organization, the Healing Forest Conservancy, was also founded to create and implement a compensation process to return benefits to indigenous colleagues after a product has reached the commercial stage.

Achim Seiler and Graham Dutfield

Sources:
King, S. and Carlson, T. (1995): "Biocultural Diversity, Biomedicine and Ethnobotany: The Experience of Shaman Pharmaceuticals". Interciencia No. 3/1995, pp. 134-139.

King, S., Carlson, T. and Moran K. (1996): "Biological Diversity, Indigenous Knowledge, Drug Discovery, and Intellectual Property Rights". In: Brush, S. and Stabinsky, D. (eds.): Valuing Local Knowledge: Indigenous People and Intellectual Property Rights, Washington, USA: Island Press, pp. 167-185

The role of IPRs
In principle, based on the resources and traditional knowledge provided, ABS arrangements should contribute to establishing a balance between the technologically advanced industrial countries and the developing countries with their wealth of biological resources. The Convention obliges signatory states to respect IPRs over technologies to be transferred - where these are so protected. However, the relationship between IPRs, and especially the World Trade Organisation's (WTO) agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the overriding objectives of the Convention is highly controversial. The patent law provisions of the TRIPS Agreement in particular, have often provoked unease that their implementation could directly endanger the CBD. For example many commentators contend that the patenting of seeds leads to uniformity, which is adverse to the concept of conserving diversity.
A patent creates a legal monopoly that does not necessarily translate into a commercial one. But it definitely creates barriers to access. Essentially, it provides exclusionary powers which the patent holder can use to prevent others from using the invention for a given period of time. In the CBD context, the real problem with these rights is therefore that the Convention's technology transfer provisions - which are integral to benefit sharing - could effectively be undermined and even rendered meaningless. This poses a problem for developing countries. For many of them, the promise of technology transfer has always been the prime reason for accepting the remaining obligations imposed by the Convention, including those that may be less favourable to their interests.

Options for Regulating ABS
There are three main types of mechanism that can be employed to deal with ABS issues:

governmental legal, policy, and administrative measures;
civil-law agreements between users and providers; and
legally non-binding instruments of professional organisations and voluntary guidelines and public commitments by actors with an interest in access.

The various approaches, which can be mixed, differ in regulatory capacity. For example, regional level regulation of benefit-sharing between cooperating neighbouring countries could offer the advantage of collective bargaining power. Without a supranational approach, it may be argued, countries could be pitted against one another in a competition to supply access to the same genetic resources, leading to a price war. This may arise from the likelihood that a given species or gene will originate in more than one country. On the other hand, a supranational approach may be more difficult to set up because national legislation may be incompatible, especially in the way that core elements of the CBD are interpreted at the national level. The larger administrative framework may also increase costs.
Other instruments currently under development or already in use include model legislation, material transfer agreements, licensing agreements, letters of intent and memoranda of understanding, codes of practice, and voluntary commitments. They differ particularly in their legally binding force and regulatory scope. They all offer valuable indications for the implementation of rules and guidelines for the regulation of access and fair benefit-sharing.

Inventory of instruments in use or under development
This overview gives a comparison of how the core elements of ABS are being interpreted in different legislation (both laws in force and those being drafted or under consideration).
Prior Informed Consent: Before genetic resources are taken, explicit consent must be given by the competent national authority. There is considerable divergence in the treatment of PIC. The Andean Community Decision 391: Common Regime on Access to Genetic Resources stipulates PIC only on the part of government, while neither the Philippines nor Costa Rica require governmental consent. However, in each case, the right to authorise access is vested in the government. The ABS model legislation of the Organization of African Unity (OAU) requires PIC by both government and local communities where access is sought to community assets.
Mutually Agreed Terms: The mutually agreed terms (MAT) on access to genetic resources are also handled in different ways. The Philippines and the OAU, for example, differentiate between academic and commercial objectives with regard to access. In practice, the difference may be difficult to monitor. However, it is important to understand that extensive and protracted access procedures can be such an obstacle to academic research activities as to seriously jeopardise their continuation.
Stakeholder roles: There are marked differences in stakeholder involvement. However, whether stakeholder roles should be clearly defined is a contested point with some arguing that an open approach would allow greater flexibility.
Conservation and sustainable use: ABS should actively support the endeavours of the CBD towards the aim of conservation and sustainable use of biological diversity. Therefore rules that seek merely to prevent the biological and ecological damage associated with ABS are insufficient. Likewise with technology transfer, it should promote the conservation and sustainable utilisation of biological diversity. Access fees from commercial uses channelled to nature conservation funds could certainly help in attaining these objectives.
Benefit-sharing mechanisms: ABS rules should be part of an overriding national strategy on sustainable development. Therefore, the benefits received for granting access to genetic resources should support long-term capacity building and enhance scientific and technical potential. However, not all the instruments described place the same value on technology transfer. While Decision 391 lays down very detailed rules, and the Draft Indian Biodiversity Bill also emphasises the building of national capacities, the OAU model legislation remains very vague about benefit-sharing - regardless of its provisions on monetary transfers. It may also be the case that non-monetary transfers are preferable to monetary consideration when it comes to improving national scientific and technological capacities.
Means to ensure the preservation of traditional knowledge and innovations: Although all the instruments examined declare the maintenance of traditional knowledge and practices as important, they offer little towards implementing this objective. They address the participation of local communities in transferred benefits, their involvement in elaborating access agreements, and the development of sui generis systems to protect their intellectual assets. (Literally meaning 'of its own kind', sui generis systems can provide an alternative to monopoly IPRs like patents.) The development of sui generis systems is, however, a difficult task requiring appropriate legal expertise, which is all too often lacking where it is most needed. It can therefore be a lengthy process going beyond the development of ABS rules.
Intellectual property rights: While the Philippine legislation deliberately waives reference to IPRs, they play a central role in other approaches. Some are based on the conviction that far-reaching rights promote exploitative behaviour, and accordingly seek to curb them. Other approaches basically share this conviction, but do not attempt to restrain IPRs. Instead they impose certain administrative procedures to bring them into line with the ABS objectives of the Convention. A good example is the requirement that patent applicants provide documentary evidence that genetic material from which the invention was derived was acquired in accordance with the provider country's ABS regulations (e.g. Costa Rica and the Andean Community). A balance needs to be established between the rightful interests of investors in protecting the assets they have generated and the requirements of the CBD for the conservation and sustainable utilisation of biological diversity. In particular, any abuse of IPRs must be forestalled; for example claims that relate to knowledge that has already been widely used and therefore definitely lacks novelty since it forms part of the public domain. An illustrative example of such improper claims is the recent case of a European neem-patent that was revoked following a legal challenge.

Conclusions
For effective ABS instruments to be developed, decision-makers must possess a realistic prior appreciation of the economic and ecological context. The broadest possible spectrum of stakeholders should be involved from the outset to ensure the instruments developed are practicable. Approaches that chiefly serve the interests of influential industrial organisations may be easier to develop but are unlikely to survive in practice. A decentralised approach designed to devolve responsibility to local decision-makers while involving stakeholders in a democratic and transparent process is likely to prove more viable in fostering lasting arrangements.
Realistic expectations about the level and time scales of benefits are also indispensable if the arrangements are to work. This implies abandoning the notion that the development of ABS rules alone can decisively improve the economic and socioeconomic fundamentals in a country. The misappropriation of genetic resources and traditional knowledge is not likely to be completely prevented but at best reduced. Since the utilisation of genetic resources and traditional knowledge generally requires access to a well-developed scientific and technical infrastructure, any superficial equation of the treatment of components of biological diversity as raw materials, with the extraction of other natural resources, especially oil, should be avoided.
Nevertheless, carefully drafted ABS legislation may assist countries rich in biological diversity to participate in the utilisation of genetic resources, and help ensure that the benefits made available through them are used to attain the overriding objectives of the Convention - the conservation and sustainable use of biological diversity. Provider countries are well advised to make every effort to develop their own scientific and technical capacities to permit them to increase in-country added value through the use of genetic resources. The challenges imposed on developing countries in order to profit from the utilisation of the genetic resources they supply can be summed up as the need to:
identify the technology fields or industrial and market segments in which they are competitive; acquire and/or concentrate the material and human capital required to develop high-quality products;
develop arrangements ensuring that the utilisation of genetic resources supports rather than impairs the conservation of biological diversity.

Convention on Biological Diversity

Article 1. Objectives The objectives of this Convention, to be pursued in accordance with its relevant provisions, are the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding.

Article 18.3 Technical and Scientific Cooperation The Conference of the Parties, at its first meeting, shall determine how to establish a clearing-house mechanism to promote and facilitate technical and scientific cooperation.

Article 17. Exchange of Information The Contracting Parties shall facilitate the exchange of information, from all publicly available sources, relevant to conservation and sustainable use of biological diversity, taking into account the special needs of developing countries. Such exchange of information shall include exchange of results of technical, scientific and socio-economic research, as well as information on training and surveying programmes, specialized knowledge, indigenous and traditional knowledge as such and in combination with the technologies referred to in Article 16, paragraph 1. It shall also where feasible, include repatriation of information.

Decision V/16: Article 8(j) and related provisions […] Access to traditional knowledge, innovations and practices of indigenous and local communities should be subject to prior informed consent approved from the holders of such knowledge, innovations and practices. […]

Achim Seiler* and Graham Dutfield**
* Social Science Research Center Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany. Phone +49 30 25491 259, Fax +49 30 25491 219,
Email seiler@medea.wz-berlin.
** International Centre for Trade and Sustainable Development (ICTSD), Chemin des Anemones 13, 1219 Geneva, Switzerland.
Phone +41 22 9178319, Fax +41 22 9178093, Email gdutfield@ictsd.ch

Sources
Seiler A. and Dutfield G. (2001): Regulating access and benefit sharing: Basic issues, legal instruments, policy proposals. Study commissioned by the Federal Republic of Germany in preparation for the First meeting of the Ad Hoc Working Group on Access and Benefit-Sharing in Bonn, October 2001. Bonn, Germany: Bundesamt für Naturschutz, http://www.bfn.de or http://www.biodiv.org/doc/meetings/abs/abswg-01/information/ abswg-01-inf-04-en.pdf

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