At this point, it is appropriate to attempt to synthesize and apply the information from chapters 2–5 into a single discussion of measures that can be taken and how such measures can be analyzed and developed. This chapter begins (section 6.1) with a legislative evaluation of the nature of the obligation of all CBD Parties regarding users under their jurisdiction. Section 6.2 discusses the fact that simple legal mandates and permissive instruments will not achieve the user's objective, unless the motivational structure of the user country's laws is designed to promote achievement of these goals. In section 6.3, the international systemic needs and their relationship to the success or failure of user-side measures are discussed. Section 6.4 presents the authors' primary suggestions regarding the manner in which ABS legislation can be conceived and adopted from the user side – always assuming the various challenges described in parts 6.1–6.3 can be resolved. The final section looks at a variety of proposals that are currently being discussed internationally, and considers their potential applicability, and the factors that must be determined before any of these provisions could be finally adopted and utilized.
Although it is often overlooked, the phrasing of obligations in Article 15.7 is very important. Those obligations are expressed in terms of results rather than specific actions. Where other parts of Article 15 call for specific action, Article 15.7 requires a specific result – equitable sharing of the results and benefits of genetic resource utilization with the country from which the resources were taken from in-situ conditions. The CBD specifically chooses not to list specific actions that will be considered to satisfy the Article 15.7 obligation, but leaves the selection of specific measures open. Article 15.7 is still obligatory. Thus, the Parties' obligation is to arrive at the result, no matter which legislative, administrative and/or policy paths are taken.
There are a variety of kinds of measures, legal obligations, policies and other incentives that a country may choose from to meet its Article 15 commitments. In selecting among them, the country should attempt to ensure not only that it will alter behavior, but that this alteration should result in actual sharing of benefits. In particular, the Bonn Guidelines, although only non-binding suggestions, offer a brief but specific range of actions that may be utilized to comply with Article 15.7.341
Essentially, the measure of successful compliance with ABS will be the extent of benefit sharing. On this measure, the future of ABS is dubious. There are virtually no user-side measures, and a large number of users have concluded that they are not obligated to comply with ABS. If the lack of user-side measures continues, the current situation will probably continue – that is, benefit sharing will continue to be nearly non-existent. In some cases, it is strongly asserted that mandatory or “binding” measures are needed. However, if other kinds of user measures are developed which lead to a significant level of benefit sharing, then it will not matter what type of measures are used.
This suggests that countries have fairly wide latitude to craft user-side measures that will achieve international (CBD) objectives, in conjunction with national interests and objectives of the user country. If these measures are tried and proven insufficient to achieve the results required, however, the Party or Parties must find new options and recommendations and possibly amend the Bonn Guidelines to reflect such new experiences. A measure that is adopted with great fanfare, but does not add value to the ABS process by resulting (directly or indirectly) in additional benefit sharing is not a meaningful step towards meeting the Article 15.7 objective and obligation.
Countries have been discussing whether or not ABS measures or the ABS regime should be “legally binding” since the World Summit on Sustainable Development. In this context, a perception that ABS compliance can be achieved through “voluntary” user-side measures has also been a subject of significant discussion. These discussions have been complicated by an incomplete understanding of these legal concepts, especially the terms “binding” and “voluntary.” An accurate understanding of “binding and non-binding” and “voluntary and mandatory” provides a very important basis for discussing user-side measures.
It is important to recollect that the term “legally binding” refers to particular obligations or commitments, rather than to entire concepts. This means that the term “legally binding regime” is not meaningful – a regime is simply a combination of measures. Measures within the regime may be “legally binding,” but the regime is simply “in existence” or “functional.” Under international law, provisions in international agreements are generally binding on governments – even those that may not be mandatory. These provisions are not directly applicable to individuals or private entities, however, before they are implemented in domestic legislation.342 Countries must adopt legislation that implements the international requirements, applying them to individuals and entities under their national jurisdiction.
In the ABS context, Article 15.7 is a binding and mandatory obligation of every country that is a Party to the CBD to adopt user-side measures. In order to meet their CBD obligation, all countries must adopt measures that result in benefit sharing. Many in the ABS negotiations presume that this requires national implementing legislation to impose a binding legal obligation on all users of foreign genetic resources. To date, however, no country (developed or developing) has adopted any legislation that does this.
Other parts of the ABS system do impose binding obligations on private parties through contracts. A contract is binding wherever its parties agree that it will be so. In the ABS context, private parties seeking genetic resources must enter into an agreement (mutually agreed terms) through which they agree to be bound.
It is not difficult to create legal obligations in legislation or contract that are binding in theory. One simply has to write binding language – e.g., “the user shall...”. The difficulty is to design the legal system so that the relevant obligations are binding in fact – i.e., that the users will either want to comply, be compelled to comply and/or be subject to penalty or other negative consequences if they do not comply.
Discussions of “voluntary approaches” often misunderstand the nature of the legal concepts underlying voluntary measures. At base, a “mandatory” user-side measure is any legal provision (requirement or prohibition) that is directly applicable to every user of foreign genetic resources. All mandatory measures share this quality. There are two very different kinds of “voluntary” measures:
Motivational measures provide that “if the user does XX, then he will receive or qualify for YY;”
Permissive measures are simply statements that “the user may do XX.” In some cases, permissive measures are stated as recommendations.
The key to both types of measures is that the user has a choice: he may choose not to take the voluntary action, and that choice will usually be perfectly legal. In impact, however, the two kinds of voluntary measures are very different.
Permissive measures do not provide the user with any personal reason why he would want to act. This means that they are most useful where the target populations already want to take the action, but need guidance or want the government to adopt a unified approach.343 To date, as noted in 3.5, nearly all proposals of “voluntary” ABS measures are permissive in nature – that is, they are recommendations, not tied to any substantial motivation or incentive. For example, discussions of “voluntary disclosure in patent application” do not include any reason why a patent applicant would want to make that disclosure. Discussions of the possible creation of a “certificate of source, origin or legal provenance”344 are entirely permissive – stating that a certificate may be issued, but not indicating any particular role for the certificate, or the reason why the user would need or want one. There is, at present, no ABS situation that requires or will be made easier or more effective by a certificate.345 Unless the regulated community wants them, permissive measures do not provide a reason for altering behavior.
By contrast, motivational measures (including financial and other incentives) can provide some benefit or other desired outcome that can convince users to take an action that they would not otherwise consider. This will happen when the result of action YY is more valuable to the user than the costs of the other option (action XX). Motivational measures can function without using financial incentives, where they provide other benefits, such as protection from liability, increased legal certainty, tax deductions, access to special governmental services, priority treatment, etc. The primary question is whether the particular motivation is sufficiently desirable to give the users a reason to comply.
It is important to remember two things about the use of either type of voluntary measures. First, even motivational measures have varying levels of effectiveness. Some kinds of motivation are virtually 100% effective – by giving a protection or benefit that is considered by all users to be essential. Many registration systems and some tax benefits are examples of this type of motivation measure.346 Other motivational measures, however, (such as social and environmental certification systems) are considered highly successful if 10% of the target population complies.
Second, many measures which are phrased in law as “mandatory” are effectively voluntary in impact, owing to lack of enforcement. If it is impossible to enforce a mandatory provision against a user, then the measure will be effectively voluntary. Consider for example, the user who has left the regulating country and is now be operating in a country which does not require him to comply with the source country measures. It may be impossible for the source country or any other person or entity to obtain knowledge or proof of violation, if the user's activities are protected by confidentiality or trade-secret principles. If the user is intent on full compliance with source-country law or his ABS contract, then the law and contract will operate as motivational measures. To other users, however, the effect of these instruments may be only permissive. Consequently, in drafting mandatory measures, it will be important to consider the user's motivation to comply.
As discussed in more detail in 3.5, voluntary mechanisms will have the strongest impact where the target population desires them, or where it provides a sufficient motivation. A system which consists solely of voluntary measures will rarely be effective, but when used selectively as part of a “policy mix,” it can provide a useful tool.
A specific user-side system must be adopted in order to comply with the Article 15.7. Such a system will be very unwieldy, however, and possibly unworkable, if it depends entirely on oversight and enforcement (by the source countries, user countries, NGOs or private claimants).
This situation is not hopeless, however. It is true of nearly all non-criminal legal regimes.347 To address it, the legislative body must focus on “system design.” Simply stated, it must adopt a law that (i) requires compliance and (ii) is structured in a way that causes most persons to prefer to comply. For example, many laws require the registration of certain kinds of businesses or experts. On one hand, these laws encourage compliance through the knowledge that one who is found to be non-compliant will face penalties or other punishments. At the same time they provide a motivation as well – by complying with the registration law, an expert may be included in a public registry of experts, or a business may be entitled to claim special deductions from its taxes. Both mandatory and motivation elements are important. Without incentive, the expert or business might be less likely to comply, unless the government undertook regular inspections or audits of the entire sector.
The most important element of system design is the elimination of “perverse motivations.” It is here that the current ABS legislative frameworks find problems. As a result, users often express a strong motivation to avoid any compliance with ABS. This desire may also appear indirectly, in the form of corporate statements that ABS does not apply. Companies making these statements may not have researched the issue, but simply concluded that if they acquire their specimens in the user country – from an ex-situ collection, another user, a researcher or some other person – then, by definition, they are utilizing domestic genetic resources, regardless of the actual origin of the genetic resources acquired.
Currently, no law or other incentive in the user-side or provider-side national legislative frameworks creates any motivation for companies, researchers and others to confirm that this assumption is correct.348 The following sections briefly discuss the motivational structure of user-side measures, and consider how incentive/motivation provisions can be used, either as alternatives or complements to mandatory provisions.
The first step in creating a positive ABS motivational structure is the elimination of perverse incentives. Presently, the legal, practical and financial situation of users who are unaware of or intentionally violate ABS administrative and other requirements can be significantly better than those who comply. By violating or ignoring ABS, the user saves time and money which the compliant user spends in meeting the administrative and regulatory requirements of source-country ABS law, including PIC and MAT. Users who avoid ABS compliance may also be saved the direct financial cost of paying the source country an “equitable share” of benefits received. In essence, the costs and time spent in compliance with bureaucratic requirements constitute a competitive disadvantage for the compliant user, as compared with the non-compliant user.
At present, the only existing user-side measures are voluntary disclosure of origin in patent applications and the draft Norwegian Nature Diversity Act. Both of these measures would increase this disparity, rather than remedying it. The only users that would be affected are “ABS-compliant users” – that is, those users who have already incurred additional costs and lost time, in order to comply with source-country ABS requirements and who are willing to comply with the additional user-side requirements to disclose the source of genetic resources used. Even under the Norwegian draft, compliance is effectively voluntary. To avoid the requirement, the user must either (1) make the determination that the source-country law does not apply, or (2) decide that he cannot be sure which is the source country. No evidence or proof of either conclusion is needed. The user would not be obliged to comply with the draft Act.
As noted above, it is essential that ABS-compliant users should be at least on equal terms under the law, with those who are not compliant. The mandatory provisions described in 6.3.2 are designed to accomplish this, essentially ensuring that all users, whether they have an ABS contract with the source country or not, shall be under an obligation to comply with source-country requirements, including their benefit-sharing obligations.
A second aspect of the motivational structure of a legislative framework is its ability to discourage users who choose non-compliance. While penalties and punishments are one potential type of disincentive, they are not the primary tool, since they generally apply only to a small group of intentional or reckless violators. Other kinds of disincentives, however, can also be effective.
For example, consider a user without an ABS contract. The law could impose strict legal requirements on every user that has passed the legislative triggers of utilization of genetic resources, and “benefits arising.” At this point, a user who has not obtained an ABS contract could be required to meet some particular requirement. The law might require that benefit sharing compliance should be set by either (i) post-facto negotiation with the source country, or (ii) benefit-sharing obligations that are defined by the responsible agency or court, in accordance with statutory standards. Any of these options would theoretically yield a final result that is less favorable to the user than his own negotiation of an ABS contract at the beginning of the transaction.
This could create a positive incentive to obtain and comply with PIC and MAT at an early stage in the utilization process, because the user will have more control over the ultimate requirements in that way.
As detailed in other works,349 there are numerous disincentives which discourage ABS compliance. In addition to the significant time and money that they must spend on administrative processes, many users find that ABS compliance results in a potentially harmful lack of “legal certainty” regarding rights obtained. Users who participate publicly in ABS negotiations are often the only available targets for claims of “biopiracy” in the press as well as the courts.
Without belaboring a point which has been made throughout this book, the adoption of user-side measures may actually decrease the amount and detail of provider-side measures that are currently in place in countries with ABS legislation. Many of those intensive requirements exist as part of the source country's desire to strictly impose controls and oversight on users. Because the users are not governed by any ABS legal requirements after they or the resources are outside the source country, responsible agencies in source countries attempt to develop very detailed requirements within the ABS contract, in the hope that those provisions can be enforceable under contract law.
If user-side measures in the user's home country are in place and sufficient, then the source country will be able to dispense with much of the most onerous of its requirements, and focus on collaborating with user countries to ensure that all users are integrated into the ABS system. The net result will level the playing field between compliant and non-compliant users (elimination of the competitive disadvantage), leading to relaxation of the intensive demands of source-country ABS legislation.
The most important question in ABS relates to the development of positive incentives and motivators. No matter how completely ABS laws eventually cover the globe (both user-side and provider-side measures in all countries), one key difficulty will remain – activities in laboratories are difficult or impossible for governmental inspectors to confirm with certainty. It would be very costly and ineffective to rely on periodic inspections or other methods of finding out whether particular users are utilizing genetic resources with origin in another country. In addition, testing or other scientific mechanisms to identify genetic material are not only costly, but may not be able to identify specific varieties, local populations or other genetic differences that would help pinpoint their source country.
This means that, although full coverage of user-and provider-side measures in all countries would create a legally functional system, it would hardly be sufficient to ensure universal or near-universal compliance by users. To achieve this goal, and to eliminate the need for costly governmental oversight, it would be advisable to link ABS compliance to positive incentive and motivation measures – that is, to provide some (financial or non-financial) benefits for users who comply with ABS requirements. There are many areas in which incentives would be possible and would inspire companies and other users to participate. In order for incentive/motivation measures to function in this way, however, they must meet two basic criteria:
The incentive or motivational advantage must be sufficiently valuable to the user (in financial or non-financial terms) that it offsets, in whole or in large measure, the additional costs of compliance; and
The system must ensure that this incentive or motivational benefit is only available to those who comply with ABS requirements and cannot be obtained by others who do not meet the requirements.
If either of these criteria is not satisfied – that is, if the advantage is not particularly valuable or if it can be obtained without compliance – then the incentive/system will fail.350
There are a number of incentives which can be provided through the user-side legislation that may be sufficiently valuable to provide a real motivation for user compliance. For example, the Japanese Guidelines351 include an incentive measure under which the government of Japan will help the user if some difficulty arises in negotiations or discussions with source countries, so long as the user has complied with the Guidelines. This type of motivation could be extended to include a broader range of protection from liability (both liability to source countries and other formal claims) for users that have complied with user-side measures. This kind of liability protection would not be “immunity,” but would require the user to fully comply with clear and concrete laws and legal requirements of the source country, as specified in the user-country's law. It would have to be carefully drafted to avoid sanctioning illegality.352 If it is carefully drafted, however, such a provision would have a double impact, providing an incentive for user compliance, and also providing an incentive for more R&D involving genetic resources from source countries.
Another type of positive incentive would arise from user-side measures that help to increase the user's legal certainty regarding his rights to use genetic resources. As challenges and claims relating to the use of genetic and biological resources increase in frequency and stridency, user measures which clarify the specific user rights that will be protected and supported through ABS compliance can provide an important incentive for users to comply with ABS, as a means of avoiding or nullifying such claims. (As noted, in some cases it has appeared that ABS compliance may actually increase the chance that the user will be targeted.)
Other simpler, but highly effective, forms of incentive might also be offered with limited impact on the budget of the responsible agency, including the following examples:
the creation of special tax credits for ABS compliance and special higher levels of tax deductions for the costs involved;
access to special governmental services, including priority for certain kinds of permits and other legally controlled benefits;
qualification for participation in government projects programs;353
preferential status in the government procurement policies; and
participation in national programs for assistance and support to technological development.
It may also be valuable to consider the incentives which might be provided by other countries, especially countries in which the products of genetic-resource utilization are marketed. Such incentives might include administrative priority in certain applications or recognition of otherwise-disputed patents.
The most important aspect of these incentives, however, is the fact that they are not entirely cost-free. In a few cases, these incentives cause some level of reapportionment of costs (for example, countries giving tax credits do not lower their total income from taxes, the credit merely reapportions some part of the taxpayers' obligation from the credited sector to other sectors). In all cases, however, it is essential to develop means of confirmation of the critical elements of the incentive. If there is no confirmation, then the necessary criterion – that the incentive is only available to those who comply – would be lost, and the measure would not promote the objectives of ABS.
Particularly since 2002, when the World Summit on Sustainable Development and CBD COP-7 raised the prospect of new international negotiations on ABS, new attention has been given to the systemic aspect of the ABS framework and the need for an internationally negotiated perspective on the ABS regime. To do this, countries must recognize several existing elements of the ABS system, including the international laws that mandate national implementation, national laws that govern both user and provider side of the transaction, and all relevant types of contracts.
The CBD was designed to be implemented by national law. It created no international mechanisms, apart from designation of the GEF to serve as its financial mechanism. The only international institutions it created were the COP and Secretariat, both of which have coordination and review functions, but no direct implementation responsibilities. This general view is clear in the Convention, under which both access and benefit-sharing obligations are to be met by national measures. During the negotiations, many concerns about the nature of genetic resources and how they could be regulated were dismissed as matters that would be settled under national law.354 Both during and after the negotiations, many user countries took the view that the user side of ABS could be addressed by national law without any specific legislative support or additional measures.
As noted in 3.3.1, however, the national legislation expectation has resulted in two serious problems. The first is an area of operational confusion. Fewer than 15% of CBD Parties have attempted to adopt any type of separately designated “ABS legislation.” This creates a dilemma for user-side implementation. Where the source country has no ABS legislation, ABS issues must be addressed through general principles of its national law.355 This heightens legal uncertainty for users, for user-side ABS focal points, and for the creation of user-side legislation that mandates compliance with source-country requirements.
The second problem – an unfilled gap in the current ABS regime – is much more serious. As discussed in Chapter 3, no country has adopted user-side ABS legislation – that is, a law that directly requires users of foreign-origin genetic resources to comply with source-country ABS requirements (and/or to share benefits). Lacking such a provision, users are not directly bound by the ABS regime, except when they are in direct contact with the source country. This omission creates a large loophole in ABS, essentially freeing all other users from any legal obligation of ABS compliance. It also constitutes a significant and perverse incentive, counteracting any “recommendations” by user governments calling on their users to comply with source-country ABS law. For the functionality of the international regime, this system presents a contradiction. Unless all countries have met their obligation to adopt user-measures, those that have imposed access restrictions on their own genetic resources are in effect placing their domestic users at a disadvantage. They can compel their domestic users to comply with ABS requirements, but have no ability to compel compliance by other users who have left the source country.
Until user-side measures are adopted, requiring or enabling benefit sharing, other elements of the international regime cannot ultimately be effective. Many of the ABS concerns that led to the current negotiations could have been resolved without further attention if a consistent system of user-side measures had ever been adopted.
Beneath the basic failure of any Party to adopt user measures, however, is the underlying fact that the ABS concept was not well enunciated in the CBD. The original expectation that it would be clarified through the cumulative impact of 190 countries' legislation and experience was ultimately not met. It is strongly argued that further international development is needed.
A brief examination of existing national legislation provides clear evidence of the reasons that ABS cannot function solely through uncoordinated national legislation. The basic disconnection is obvious from the outset of any ABS transaction. The source country's legislative requirements may be built on one framework of definitions, scope and triggers, while the user country will impose measures on the basis of a slightly different framework. This may lead to a controversy over whether the source country's requirements have been met, or need to be met, by the user. For example, the US's provider-side legislative proposal would regulate “research projects involving research specimens collected from specified lands.”356 Consider the outcome if a foreign user obtains specimens in the US and then uses them in a country, whose user-side measures apply only to “genetic material.” In that case, the US might have no recourse under the other country's law, if the user country's law does not apply to research samples taken in this way. Until all countries share an understanding of “utilization of genetic resources” and how ABS functions, the dramatic differences between countries' “provider-side” measures will make it very difficult or impossible for user-side measures to function.
At the time of this writing, negotiations are ongoing in the CBD for the elaboration of the “international regime on ABS.” There is some hope that these negotiations will ultimately result in one or more documents that clarify the overall framework, and enable all countries to meet both sides of their legislative/institutional obligations under Article 15. It is equally possible, however, that these efforts will not resolve key questions, leaving the Parties in essentially the same state that they have been in to date, but having spent a good deal more money and time in negotiations.357 In either case, the legislative problem will still have to be addressed by every country – converting the ABS commitment into provider-side responsibilities and implementable national user-side measures.
Ultimately, the regime negotiations may address many political matters, but may also create an “agreed interpretation” of the primary unanswered questions that currently obstruct national implementation. For the purposes of this book, the latter is of greatest interest.
The primary discussion throughout this book has consisted of an examination of the obstacles to ABS implementation and options for addressing them through national legislation. Lack of international consensus on these topics places heavy burdens on each legislating country. Thus, international negotiations may support national implementation and coordinated operation of the ABS system, if they provide clear answers to as many of the following issues as possible:
(i) The exact nature and precise role of “genetic resources,” “utilization of genetic resources” and “benefits arising from the...utilization of genetic resources.” (Section 4.1 analyzes one option for development of these concepts in an integrated way);
(ii) The manner in which these three concepts interlink to form the ABS functional system. (Section 4.2 presents one option for functional interlinkage);
(iii) Whether there are particular activities or subject areas that can/should be separately dealt with, as the ITPGRFA seeks to deal with the ABS aspects of agricultural use of specific crops, and how they can be identified, developed and integrated. (In section 184.108.40.206 and elsewhere this book considers the possibility of defining and regulating categories of utilization of genetic resources);358
(iv)   Either an approach for determining the “source country” of a particular genetic resource where the user does not know or disclose that fact359 or some mechanism for benefit sharing that automatically applies in such instances. (Some of these issues are described in more detail in 3.3 and 3.4);
(v) The manner in which the country of the user will enforce or determine compliance with the law of the source country. (Some of these concerns are described in more detail in 3.3.3);
(vii) The manner in which these issues and the ABS framework can be responsive to changes in the fast-growing field of biotechnology that may affect it;361 and
(viii) The possibility of adopting a system for evaluation or transparent negotiations and setting standards for determining what is fair and equitable benefit sharing. (This issue is generally dealt with in Chapter 5.)
The choice among the various possible specific answers to these questions is not as important as getting some answer for each one, so long as the answers are internally consistent. In Chapters 4 and 5, we have emphasized an approach which we think provides a logical consistency on which a functional ABS regime can be based. We offer this set of solutions not only for its own merits, however, but as evidence of how the final agreed approach (whatever it is) can be conceived, analyzed and regularized before it is adopted.
No country may legislatively control any person's actions under the jurisdiction of another country. Even where one country seeks to punish a person who has fled to a second country after being convicted of a serious crime, the second country must adopt and apply law that enables it to take action (to extradite the person, or to make some other arrangement) upon the request of the first country. Consequently, the entire ABS objective is made nearly impossible by the lack of user-side measures. As a result of this omission, the entire ABS system is effectively voluntary-permissive (i.e., not required and not supported by motivation factors).
On the road to a functional international system for genetic-resource regulation, a legal framework in the user country is necessary in order to enable the source country to assert its sovereign rights over genetic resources in the place in which those rights are infringed. A collector may, while in the source country, obtain biological samples in accordance with the source country's sustainable-use laws362 and the laws governing the ownership of biological material. If he later begins to utilize its genetic resources in another country or transfers it to some other person who does so, the laws of the source country no longer have any direct impact on either the collector or user.
To achieve the desired results, however, user-side measures must be integrated into a coherent, internally consistent framework of legal requirements, administrative agencies and regulatory systems, motivational provisions, and enforcement standards. This is not a pessimistic view and does not assume that users are non-compliant and/or that the ABS system will only function if users are forced and penalized. A great many users who have made intensive efforts to comply with ABS requirements have been labeled as “biopirates” in the press and subject to other kinds of ABS claims.363 On the other hand, many entities that are using genetic resources with origin from other countries have specifically and flatly denied that their actions give rise to ABS obligations. Clearly, the rights and duties of users must be clarified, to protect them, as well as to make the system function.
With no current replicable standards and comprehensible framework for determining what they must do, users have very little basis for analyzing and predicting the costs and risks connected with ABS.364 The objective of “legal certainty” in ABS will be met when, at a minimum, the users (i) know what specific actions are required of them; (ii) can be confident that compliance with these provisions will protect them against such claims; and (iii) can pre-estimate the costs of compliance with a fair degree of certainty.
Ambiguities in the ABS framework appear to be preventing the adoption of user-side ABS legislation.365 It is also true that the primary user countries have not made serious attempts to do this, despite having access to some of the foremost legal scholars and institutions in the world. As leaders in legal development, these countries might have been able to head off the current round of costly and time-consuming international negotiations (and the risk that they will come to undesirable conclusions) had they developed and implemented effective and balanced user-side measures following the Convention's adoption.
Although international regime negotiations are in process, many regulatory questions will remain to be decided at the national level, even after the conclusion of those negotiations.366 Many of the primary questions identified in this book may not be formally resolved by the international discussions. Hence, national legislative measures, and the leadership of key developed countries in their adoption, can still have a major influence in forming the international regime. The following discussion focuses on the drafting of legislation and its role in defining and enabling implementation of the benefit-sharing obligation, with particular attention to the legislative problems of interacting with source-country law, and integrating motivational and incentive elements. These issues address two primary applications of benefit-sharing responsibility, (i) the responsibility of users who have obtained an ABS contract from the source country, and (ii) the responsibility of users who have not done so.367
In adopting user-side measures, legislators must consider more than the words of the CBD – they must think about how the user-side measures will function legally. Although very difficult, this issue is also very basic – how can one country impose a blanket requirement to comply with the ABS laws of other countries? Although it may sound simple to those who are not legislative experts, this question is very challenging.
The challenge arises from the basic concept of national sovereignty – from the fact that national law of one country cannot generally control the rights and actions of another country. Most discussions of user-side measures assume that the user country will require its users to comply with the ABS laws and contract terms as defined by the source country, through PIC and MAT. In essence, this provision amounts to allowing another country's legislators to govern the user-country's citizens and companies. This raises a number of problems, owing to the complexity of implementation. A “simple” statement that users of foreign genetic resources must comply with the source country's ABS law will require the user to engage in a complex legal analysis, including:
(i) identifying the source country;
(ii) identifying the relevant provisions of the source country's law and determining how they are applied by the source country;
(iii) determining whether the user has complied; and
(iv) if not, determining how to compel compliance.
This requires a significant level of effort by the user country, which must confirm each of these elements, even if the user has done so and submitted a primary analysis. Worse, since no two countries are alike, the user country must undertake a new analysis for each ABS situation.368
Once the source country is identified, especially if there is an ABS contract in place, steps ii and iii of the above analysis might be answered directly by the source country. In most countries, however, government agencies and courts are not usually willing to take direction from another country on primary matters of governance such as the decisions of national courts. Consequently, the law will usually require the user country's own agencies to make this determination. Although they may seek input from the source country, to avoid any erosion of their country's sovereign authority, they must retain all other rights and duties of governance, including the right to refuse to take actions that violate public policy.
The alternative would be to simply require users of foreign genetic resources to share benefits based on standards and laws of the user country. In effect, this approach creates two levels of requirements. To meet the user country requirements, the user must prove that he has shared benefits with a source country. He must simply document (in a manner acceptable to the user country) that he has taken the minimum actions necessary under the user country's law to satisfy the benefit-sharing requirement that is imposed on all their users, by the user-side government. This will in essence create a double-permit system, since the user must meet the source country requirements, as well. As noted in Article 15.7, the user can only get credit for sharing benefits with a source country, if he has that country's knowledge and approval.
Where the user does not know (or will not tell) which is the source country, or where the source country has not given ABS permission, a more difficult question arises – how to provide for benefit sharing, where the source country is not participating. The basic problem can be stated simply: It is not appropriate for any other country to determine how a source country's genetic resources shall be governed. A user country which legislatively adopted provisions mandating specific benefit-sharing in the event that the user did not get an ABS contract is essentially authorizing its users to obtain and utilize source-country genetic resources without source-country approval. In effect, it would be usurping the source country's sovereign rights to dispose of or control its genetic resources.
In practice, however, it is essential to apply benefit-sharing requirements to situations in which the source country is not known or has not been contacted, for at least five reasons:
System integrity: If the user can avoid the ABS system by stating that he does not know the origin of the specimen (or by refusing to state the origin), a loophole is created that could easily swallow the entire system.
Commercial motivation: Any system which imposes extra costs on the compliant is at risk. Companies that incur additional costs (financial, human and regulatory) to comply with benefit sharing are placed at a competitive disadvantage as compared with other companies that avoid those costs. In practice, companies that operate at competitive disadvantage face a higher chance of commercial failure than those that avoid unnecessary expenditures. The ABS system without a “default payment” provision would thus promote the survival of non-compliant companies.
Perverse incentive: As noted above, a perverse incentive is created, if ABS requirements only apply when the source country is known and disclosed. Similarly, if a country imposes only provider-side measures, and imposes them on both domestic and foreign users, it creates a preference for foreign users, and an incentive for its own users to obtain resources in foreign countries, given the difficulty or impossibility of enforcement of ABS outside of the source country.
Reciprocity: The equitable principle of “clean hands” says that “one who calls for equity must do equity.” If a country does not apply ABS requirements to all users, then it may not be able to call for similar protections from other countries.369
International objectives: If the countries continue to adhere to the objectives of the CBD, then they have both moral and political reasons to promote its equitable, conservation and sustainability objectives.
Solutions are generally difficult. The national positions of developed countries studied for this book have ignored this issue. In some cases, it has been suggested that use of genetic resources without ABS compliance could be overseen by national penalty legislation (a process that might allow the user country to fine or imprison the violators, but would not result in any payment to or other sharing with a source country). It is relatively rare to find any current example of a law under which a government is required to obtain redress on behalf of any private person or for any foreign person, entity or country.
Where the source country is undisclosed, or has no ABS legislation, the issue may be significantly more complicated. The user country would need to identify the source country, if possible, and find some replacement for the PIC process of another country. The only “legally comfortable” solutions would be either:
to create “default” processes and requirements applicable wherever the source country does not have legislation in place; and/or
to create an international fund or other mechanism for collecting “orphan shares” – where the source country is not known, not disclosed, or not participating.
Both approaches would appear to require international agreement, and would still require the user country to oversee use of genetic resources, and to adopt procedures for determining the source of resources utilized in their country.
Although many other user-side measures are relevant and necessary, they all revolve around a clear benefit-sharing obligation on the user side – the requirement that users must comply with source-country law and/or share benefits, when using genetic resources with origin in another country. Without such a provision, user-side law can never be more than permissive voluntary provisions, and the ABS regime cannot be functional as a system to achieve the Third Objective. At most, users who are outside of the source country may engage in benefit sharing with the source country. If he does not think the source country's law applies to him, a user will have no incentive to confirm this conclusion, and if he prefers not to comply with ABS he will not (cannot) be compelled.370
Accepting the need for these measures, the country must adopt several elements:
Direct benefit-sharing obligations;
Implementation and oversight structure;
All of these seem essential to the overall functioning of the ABS regime, although for many countries, only the first two will be needed immediately, accompanied by a commitment to future legislative development for its implementation, and many countries may choose to delay the adoption of incentive measures while experience with the basic system develops.
If a country is going to require all users of genetic resources to engage in a benefit-sharing process, it will be necessary to have a clear legislatively applicable framework which clarifies (i) which persons are users of genetic resources (and when); and (ii) which benefits must be shared (and how). Thus, one must know at the outset, what activities constitute “utilization of genetic resources” (since a person or entity is a “user of genetic resources” when he engages in these activities). It must also be legislatively clear what results constitute “benefits arising” from such utilization (since the benefit-sharing obligation is triggered when benefits arise) and how one determines a “fair and equitable share” of such benefits. Consequently, the conceptual clarification of terminology is vital.
[a] Definitions and scope for the triggers of the benefit-sharing obligation
At a minimum, this seems to require clear definitions or scoping provisions to clarify which activities/resources are covered (“genetic resources” and/or “activities utilizing genetic resources”), and when benefits arise that trigger the sharing obligation. The most important fact of these definitions is their interrelationship. Chapter 4 discusses a basic approach to this, creating a carefully nuanced understanding of this suite of concepts based on pre-existing international commitments and the assurance that they are specifically applicable – that one can know objectively which activities (or resources) are governed by this law, and which benefits shall be the basis for the benefit-sharing obligation. In these processes, it may be useful to indicate how (if ) the outputs of the international regime negotiations will impact the scope and coverage of these measures at the national level.
[b] Stricter or different coverage
The scope of national legislative measures on ABS can have a significant impact not only on the rights and activities in the legislating country, but also on the manner in which national law integrates into the international ABS system. Often, in discussing national legislative measures, an international regime or convention will state that the Parties may adopt stricter or different measures than those set out in the convention.371 “Stricter measures” are often a way of ensuring that certain minimum requirements can be adopted in all countries, even those which do not have the ability to make complex determinations. For example, a simpler regulatory scheme will often be stricter in coverage, to ensure that it covers all species and actors that must be addressed under the international commitment. In other instances, however, the international agreement intends to create an inter-functional commercial process. In such systems (such as the WTO, IPPC and other instruments), it is not permitted to impose stricter measures, although it may be permissible to choose to adopt less strict measures.372 In these cases, countries do not actually commit to regulate. Instead, they promise that their regulations in a particular area will not exceed a certain level of strictness or control.
The CBD does not make either statement, probably because it was originally expected that the Convention would be implemented by national legislation, and because nearly all of its provisions relate to matters solely within a single country's jurisdiction.373 With regard to Article 15, it is difficult to guess whether stricter measures are allowed or prohibited. On one hand, many countries have adopted very limited definitions of “genetic resources,” or applied ABS to narrower substitute terms.374 On the other hand, however, some countries have maintained a very general definition of “genetic resources” or even broader terms, to ensure that their ABS law accommodates the maximum coverage possible.375
Based on the obligatory language of Article 15.7, it would appear that user-side measures must be designed to cover all genetic resources regulated by any source country. This means that, where a source country's ABS provisions extend to other resources (beyond “genetic resources”), the user country will have a CBD duty to ensure benefit sharing of at least the “genetic resources,” and the option to extend these protections to other resources.376
The functionality of ABS, which depends on each country's ability to achieve the results required under Article 15.7, may be possible only if there is a clear international standard of coverage. Left up to individual countries, a serious problem would exist for a country with a very limited definition and scope in its provider-side measures, when applying the law of a source country that uses a broader scope or definitional structure. This disconnection will be an obstacle for ABS functionality, even if all countries separately adopt both provider-side and user-side measures.
It is hoped that this critical gap can be filled by the international regime negotiations. As shown in our analysis in Chapter 4, however, it will still be possible to resolve the issue through dispersed national legislation, if key countries with large numbers of high-profile users under their jurisdiction (and others) would adopt user-side measures based on a shared understanding of the three interlinked concepts – “genetic resources,” “utilization of genetic resources” and “benefits arising from the...utilization of genetic resources” – as described in Chapter 4.
The most direct element of user-side legislation is relatively simple to draft. The user country's law could simply state, in appropriate legislative terminology, that users of genetic resources with foreign origin must comply with all relevant laws of the source country including the responsibility to equitably share the commercial and other benefits arising from the utilization of those resources.
For countries that do not have significant number of users under their jurisdictions, this provision may be nearly all that is currently needed to satisfy their Article 15.7 obligation. For example, in many countries, the only users are developing agricultural varieties using conventional methods. If these countries are Parties to the International Treaty, and have developed the legislation necessary to implement it in their country, they may need only a simple statement about benefit sharing as to resources not on the ITPGRFA's Annex (and a call for the responsible agency to develop further regulations when/if other users and utilizations occur).
For all countries (including those with many users), this basic provision can support actions by source countries, communities, NGOs and others in user-country courts and agencies. It is not a complete solution; however, if even one user has been subject of an effective ABS lawsuit, knowledge of that action may motivate other users to comply with ABS measures.
Finally, where a country's law imposes a clear duty on its own users, that provision may be a tool for motivating other countries to adopt user measures. Although no country has done so, source-country law could require that no user shall be given ABS permission unless the resources will be used in a country that provides basic user measures377 – i.e., a country that requires users of foreign genetic resources to (i) comply with the laws of the source country; (ii) comply with the terms and conditions of any relevant permit or contract; and (iii) notify the source country when the resources have been accessed.378 In essence, this approach reflects a basic fact of international trade law – WTO member countries cannot unreasonably control the entry of goods into their territory, but they clearly have a sovereign right to decide whether or not to sell, license or grant other rights to their own resources. A country would be legally within its rights to refuse genetic-resource access rights, unless the resources will be used in a country that will support and protect those rights.
Once a user-side requirement is in place, it must be implemented. The law and/or the responsible governmental units must develop mechanisms and regulations clarifying how the requirement will be applied in practice, and how those practices will be overseen and confirmed. This step is essential to the functionality and fairness of the regime. It enables users to know exactly what they must do or document in order (i) to comply with the user-side measures, and (ii) to be able to prove that they have compiled. It provides a standard that the government or other users can apply when they need confirmation that the user has complied. Necessary regulatory provisions might include the following:
Objective, externally determinable indicators by which a user can know that he is “utilizing genetic resources,” including the manner in which the government or a court or litigant can objectively determine or confirm this issue;
Indicators that define the various points at which a “benefit has arisen”;
Regulations that clearly spell out the benefit-sharing process, in three possible situations:
Where no benefit sharing is required by the source country – to confirm/document that conclusion;
Where the relevant source-country law is identified – to comply with relevant benefit-sharing provisions and confirm or document that compliance; or
Where neither option is reasonably possible for the user – to comply with user-side provisions by which the user country's government takes on the responsibility of benefit sharing.
Mechanisms for documentation of these components, which will enable the user to prove their compliance.
No matter what the laws of the source country say, the measures in countries with jurisdiction over the user's activities will have the most direct impact on most users. Thus user-side measures will ultimately determine the functionality of the ABS regime.
[a] Clarification/specification of coverage questions
For purposes of legislative and regulatory clarity, mandatory measures applying the ABS requirements (and incentives) must be based, to the greatest extent possible, on concrete factors – specifically, the three concepts and triggers described in Chapter 4 – genetic resources, utilization of genetic resources, and benefits arising from that utilization. For example, the adoption of a list of practical steps for case-by-case analysis to determine which resources are “genetic resources” does not appear to be possible. It might enable a few commodities to be completely excluded,379 but would not provide much help in determining whether the benefit-sharing obligation applies.
In general, for purposes of giving effect to user-side measures, it will be critical to develop objective methods of determining
whether a person's or entity's actions constitute the “utilization of genetic resources,” and
which results and interim outcomes of that utilization constitute “benefits arising” from that utilization, triggering the user-side obligation to share benefits.
As discussed in 4.1.2 and 4.1.3, one of the most effective ways of “concretizing” these two concepts is through the use of listing provisions and other descriptive legislation. For example, to determine which activities constitute the “utilization of genetic resources,” the law would usually create two specific components:
(i) a description of the attributes of “utilization of genetic resources” – describing observable characteristics or indicators
which, if present, trigger the “utilization of genetic resources” element of the law; and
(ii) either a list or a process for developing a list of specific activities or categories of activities that constitute “utilization of
A user who is engaging in a listed activity should have the right to prove that his specific activities are not “utilization of genetic resources,” based on the descriptive criteria. The government or other person seeking to require benefit sharing may seek to apply the law to an unlisted activity, based on those same criteria. A similar approach may be used to identify “benefits arising” from such utilization, and to specify when a benefit has “arisen.”
[b] How the “triggers” function in practice
It is important at this point to compare the difference between the legislative triggers and the practices of access and benefit sharing. Currently, it is still expected that benefit sharing will normally happen through the ABS contract between the user and the source country, either directly or derivatively through some other provider. To date, although many ABS contracts are not available for review, a number have become public, in whole or in part. These agreements generally share a number of common factors, including the fact that some or all payments are made before any actual benefits have arisen.380 In some cases, these initial payments are specifically dubbed “access” payments (fees charged for collecting the specimens, etc.), but in others they have been designated as “milestone payments” or “progress payments.” The Bonn Guidelines recognize this practice, noting that the timing of payments is a matter that may be agreed among the Parties,381 and that
[n]ear-term, medium-term and long-term benefits should be considered, including up-front payments, milestone payments and royalties. The time-frame of benefit-sharing should be definitely stipulated. Furthermore, the balance among near-term, medium- term and long-term benefit should be considered on a case-by-case basis.382
With regard to benefits, the Guidelines focus on the type of asset that may be transferred to the country under benefit-sharing obligation, rather than on the particular “benefits arising” from the utilization of genetic resources.
Thus, the legislative “triggers” do not tell all users what they must give in benefit sharing or when they must give it. A user with an ABS contract must simply comply with that agreement. Rather, the triggers are designed to create a specific point at which the duty of users is legally clear and applicable. When a user has met both triggers – utilizing genetic resources and receiving one or more benefits arising from that utilization – then the user country will be able and obligated to determine if that user has complied with ABS. Prior to triggering both, a user's obligation is still inchoate – that is, there is still no non-contract basis for claiming that he has violated his ABS responsibilities.
In addition to identifying the specific triggers, user-side legislation will have to provide specific steps that must be taken. For instance, some countries may wish to generate a list of “users of genetic resources,” by requiring any user to file a notice at the time of the first trigger – i.e., whenever that user commences an “activity utilizing genetic resources.” This approach may be useful, as it may cause users to realize at an earlier stage in their activities that they must comply with ABS responsibilities. It also enables a broader range of oversight, since the government will have a basis for confirming that a person or entity is complying with these requirements at an earlier stage.
Other countries, however, may prefer to minimize record-keeping – requiring proof of compliance only after both triggers have occurred. To apply the triggers in this way, the government could require that
within XX days after the user receives any benefit arising from the utilization of genetic resources, he must provide (or be able to provide) appropriate documentation showing that he has complied with national benefit-sharing obligations of the source country.
This provision does not release the user from the duty to make earlier payments, if required under the ABS contract, but only provides a clear point at which the user country can confirm compliance generally. At that point, a user in compliance with an ABS contract must only provide documentation of that compliance; however, a user without such agreement will have to comply with user-side measures governing his benefit-sharing obligation.
[c] What is required? A category approach
One of the most difficult aspects of the benefit-sharing requirement is the determination of what specific payments, forms of payment, shares, etc., are applicable to particular activities and users. Where the user has negotiated an ABS contract that specifically addresses benefit sharing, these matters are usually resolved. The only open questions might arise where the user is accused of not giving full disclosure or otherwise engaging in unfair commercial or contractual practices. If both sides of the ABS contract mutually agreed to fair and un-coerced terms of benefit sharing, then compliance with these terms should satisfy the user country's measures as well.
Where no agreement exists, however, a different question arises – what benefit-sharing requirements should be imposed by the user country, and how should those benefits be distributed? One way of resolving this question involves the application of the “list” or “category” approach to “utilization of genetic resources,” described in [b]. There may be activities in which the activity itself appears to share benefits without further need to impose obligations on the user. This might happen where the benefit is universally available without any cost, for example. Other activities that involve more conventional uses of genetic resources (development of plant varieties, apart from LMOs, for example) may involve a lower level of benefit sharing (possibly under the ITPGRFA). It may be possible to develop a rather comprehensive “scaled” approach to benefit sharing, under which some activities are subject to lesser requirements and others to greater requirements, depending on the extent to which the contribution of the genetic resources is compensated in other ways and the nature of the activity involved.
The scale of benefit sharing as developed might ultimately serve as a basis for increasing the transparency of benefit-sharing negotiations, addressing one of the problems most frequently cited by both source countries and users – the fact that parties lack a shared understanding of the cash amounts involved in reasonable benefit sharing. A category system can be a focal process which finds a way to value various elements described in Chapter 5:
the value of the genetic resources;
the value of the benefits to users arising from the use of genetic resources;
the “contribution” which the genetic resources make to the product or other benefit-arising;
the value of benefits to be shared;
the share of benefits that the source country should receive; and
the value or comparability of the kinds of benefits paid to the source country with the source country's share of benefits arising.
[d] Non-commercial benefits
One particular area of concern relates to the sharing of non-commercial benefits – particularly research results and preliminary findings. A problem that has been confronted by some innovative analyses in recent years is the question of determining whether, when and how non-commercial benefits should be shared.383 There are very strong and compelling arguments suggesting that these benefits cannot be “shared” under conventional economic approaches, given that the sharing of preliminary data is an “all or nothing” proposition. One either receives the information or not. It is not usually possible to apportion data, since (i) random excerpts from the data will not have any value, and (ii) in order to agree that a “fair and equitable share” of the data is provided, someone will have to review all the data. In addition, it is hard to know when research results cease being preliminary, and become a “benefit arising” from the utilization of genetic resources.
In highly competitive commercial R&D sectors, there is often a strong interest in protecting all types of information. Some researchers and bio-prospectors legitimately fear that others may preempt their findings, if those others are able to find simple non-scientific facts, including which species are being studied, where bioprospecting is being undertaken, etc.
In this atmosphere of rivalry and accompanying secrecy, requirements to share preliminary data, including the taxonomic identification of the species or varieties collected or the provision of reference samples (sometimes required by law in the source country384), may raise concerns about confidentiality for the user. This is particularly true in some developing countries, where controls on government-held information may sometimes be less dependable. Even where the country's laws require government to keep certain information confidential, the environmental or wildlife ministries who are charged with ABS oversight may not be trained or equipped in a way that ensures compliance with those requirements. Even giving duplicate samples to the agency might have this effect, if the agency later sells them to another user, for example.
It is possible that user-side measures can address some of these issues. One option might be based on national cooperation. If the user country has effective and protective laws governing trade secrets,385 it can serve as the holder of confidential information. A researcher whose activities utilize genetic resources can declare relevant information about the species, specific origin, particular research, etc., in a notification to the user country at the time of the first trigger (see [b], above). The source country could derive certainty regarding its rights in these benefits from knowing that the user is under government oversight, while the user could have a greater level of confidence in the protection of his trade secrets, if they are held in a country whose governmental trade-secret protection he trusts.
A more recent concern, however, has arisen with regard to researchers whose only goal is publication of their research results and data. As noted earlier, if those results enable other users to develop commercial products on the basis of genetic information, then the decision to publish and timing of publication may be of interest to source countries.386 In this case, a user country that keeps a list of users of foreign-origin genetic resources may be able to intercede between the researcher and the source country, to ensure that similar situations do not occur, further increasing source countries' desires to control, limit or otherwise stifle biological research.
A serious impediment to the numerous calls for streamlining and regularizing the ABS process is the fact that most ABS contracts and negotiations are not transparent. This fact arises out of the very different perspectives of the parties to such an agreement. To the user, the ABS negotiation is a commercial negotiation – something which is confidential between the parties to the agreement in most similar situations. To many source countries, however, it is an agreement to transfer a national asset. Most countries require government officials to be very transparent in such negotiations, both to protect the official from later claims of improper or self-interested conduct, and to enable the civil society to serve as a watchdog.
The problem of “unrealistic expectations” cannot be addressed when the parties cannot obtain key information about the costs and value of similar properties. It is easy to see the value of public records of real-estate transactions, daily stock-market quotations and other transparency systems, in ensuring that negotiations are based on reasonable knowledge and expectations. It may be possible for the user country to provide an intermediate option in this regard. They could agree to maintain “blind” statistics (verified by the parties, but otherwise reported anonymously) regarding ABS contracts involving users in their country.
[f] Benefit-sharing without an ABS contract
It is critical for user-side legislation to avoid creating a “loophole” with regard to users who do not have ABS contracts or disclose the source of the resources they use. There appear to be a variety of options, some or all of which may be combined in legislation.
Requiring post-facto negotiation of ABS contracts:
In this case, where the source country is known, but the user has failed to obtain an ABS contract, it may be appropriate simply to give the user a specified time to comply with the source country's laws – that is, to undertake PIC and MAT procedures, and comply with whatever benefit-sharing provisions are required. After a “hit,” source-country expectations may be inflated by inputs from a variety of information sources. This might provide an incentive for users to obtain agreements at an early stage.
Intergovernmental negotiation of ABS contracts:
Another option, which could be used alone or in conjunction with the first option (applied where the first option is not possible or if the user does not comply within a specified time), would require the user country to inform the source country directly, after which the two countries could jointly determine the benefit-sharing responsibilities that should be imposed on the user.
Depending on how this option is worded, the government's involvement might lead to a more appropriate solution than the user could obtain alone. If so, it might be useful to impose conditions on the user which, if satisfied, could entitle the user to seek government assistance with the negotiations.387
Where source country is not known or disclosed:
For user-side legislation, the greatest difficulty arises where the source country is not known to or disclosed by the user. In those situations, it would be difficult for the user country to impose a benefit-sharing obligation. It may not be possible to determine the source country of a particular sample through scientific analysis, even where the relevant equipment and technicians are available within the country.388 Legislatively, it would seem essential to provide a mechanism for benefit sharing in these cases. Any practical approach to addressing this situation would appear to require two elements:
a mechanism for less direct benefit sharing, such as the creation of a trust fund used to assist developing countries, or a mandatory process under which the user gives such assistance directly to one or more developing countries; and
a legislative formula or formulas for determining the appropriate amount and form of benefit-sharing payments.
While the creation of a trust fund will be a relatively manageable task,389 the valuation element, as discussed in Chapter 5, is a very difficult legislative measure. To date, little effort has been made to address the economic valuation issues most relevant to legislative development.390
[g] Confirmation of the data provided by the user
The final legislative challenge to be considered in this section is data confirmation. In order for a legislative framework to be effective, it is essential to provide some mechanism for ensuring that notifications, documentation and reports are complete and correct. Recent experience with CITES implementation has demonstrated how easy it is to manipulate reports, statements, notifications and documentation with regard to species origin and other factors.391 Although these violators constitute only a small percentage of the number of persons importing and exporting CITES species, they involve a very large volume of illegal traffic in controlled specimens and parts.
In ABS implementation, the opportunities for such abuses and the difficulty (near impossibility) of confirming the validity of statements made constitute major problems for legislative drafting of both provider-side and user-side measures. While most users may honestly comply with reporting obligations, the failure to provide confirmation mechanisms is one way in which national legislation might create a perverse incentive, encouraging the unscrupulous to find ways of manipulating the system, particularly given the potential value of genetic resources.392
In some cases, policy-makers and international negotiators are quick to suggest that ABS oversight can be added to the responsibilities of other agencies (customs and patent offices are two that are most commonly mentioned). Owing to the specialized and technical nature of many ABS claims, documents, notifications and reports, however, it is probably not within the qualifications of officers in other agencies operating with different mandates to take a major evaluative role in ensuring ABS compliance.
In recent years, the problems of ABS implementation have been considered by a number of experts, as well as by national and regional institutions, and the international discussions under the CBD. Concerns about the various gaps in the ABS system have led to a variety of proposals for individual measures or tools designed to address such gaps. While none of these tools would substitute for user-side measures, they might be of use, once most countries have formally addressed their basic national responsibilities.
The following discussion considers five types of measures that have been formally or informally proposed or suggested. The first measures it considers are focused on the problem of international communication between the user country and the source country. This is a critical element of the ABS system, but also a matter which is often very difficult to address in practice.393
In the current discussion, the problem of transboundary information flow is addressed in different ways, depending on which direction information is flowing:
“Certificates of source, origin or legal provenance” – proposals designed to provide information from the source country to the user country; and
“Disclosure of origin” e.g., in patent applications – to provide information from the user country to the source country.
The other three proposals discussed here relate to substantive problems of identifying source countries and determining how benefit sharing should be undertaken. These proposals include
The “internationalization” of benefit sharing through the use of central funds and other tools;
The development of “standard” or “minimum” provisions applicable to countries which have not adopted formal “ABS law;” and
The creation of a “standard contract” to regularize ABS negotiations.
The idea of creating an “internationally agreed certificate of source, origin or legal provenance” (to which some add “compliance”) is now being discussed.394 It may be obvious, even from the title, that this discussion is a bit premature, since the primary negotiators do not know what element (source, origin, legal provenance or compliance) must be certified. The various certificate proposals embody quite different concepts. As to each bit of information included in the certificate, one must ask “Which agency or other person is able to certify this fact?”
For example, as noted in 2.4, the terms “source,” “origin” and “provider” are still not clearly defined in CBD discussions. It is entirely possible that, for a particular genetic resource, the source country, country of origin and provider country might be three different countries. A specimen may be native to (found in in-situ conditions in) several different countries, it may have been originally collected in the wild by a researcher, ex-situ collection or other person who took the resources out of one of these to his home country. From that researcher's country, it may have been sold or transferred to a user (directly or through other intermediary transactions). It is questionable whether a single person, community or agency that granted the ABS could certify the “legal provenance” of the resources in this example.
Neither can that person validate the “legal provenance” of the specimens, nor the user's or collector's “compliance” with the ABS laws of the source, origin or provider country). Similarly, “compliance” is an ongoing process in ABS, since the user must not only obtain PIC and MAT, but must continue to comply with them throughout a long period of access and utilization of the resources.
Thus, the context, purpose and use of the certificate must be known first, before a certificate can be created. If the “certificate of source” is needed (where a law requires the user to verify the source of the material), then it will be necessary to adopt standards for determining the source country – including for documenting the path by which a particular resource got into the hands of the user. In some cases, it may also be necessary to determine the source very narrowly, where, for example, there is a claim that the material was collected on indigenous lands, which are subject to special treatment under national law.
If a “certificate of origin” is called for, standards and mechanisms for making this broader taxonomic/geographic determination (possibly through integrated searching of all national biodiversity inventories) will be needed. Because there can be many countries of origin for most species, it may be necessary to include some cut-off mechanism so that the search process is reasonable.
Certification of “legal provenance,” “compliance” are also problematic from a practical perspective. Here the main problem is the need for such a certificate to be “binding” in some way. The certificate will be used by some purchaser or agency as proof, but the question is “proof of what?” “Legal provenance” is often taken to be proof that the user complied with the initial requirements relating to PIC and MAT prior to access or utilization of the resources. Normally, to avoid legal abuses, the agency that issued the ABS contract or permit would not be authorized to certify legal provenance. Hence a certificate of “legal provenance” would normally be issued or validated through a different agency or office or through the Attorney General, to ensure that governmental processes are undertaken in a legal and non-biased way.
Similarly in a certificate of “compliance” one may be essentially certifying that the genetic resource is being utilized with permission, or that the user has complied with relevant obligations, etc. However, if this is the objective, the source-country government can usually issue such a certificate only for a single point in time. In essence, the certificate says “As of the date shown below, the official signing this certificate can attest that, to the best of his knowledge, that XX.” A year (or a month or a week) later, the statements made in the certificate may no longer be true, or the official may have discovered some condition or violation that invalidates the certificate. The only solutions to this problem appear to be either –
(i) to create a certificate that is fully binding on the country (so that the official's lack of knowledge, or subsequent changes or
discoveries cannot override the statements in the certificate); or
(ii) to tie the certificate to a specific point in time only, and create a system that transfers responsibilities to the source country along with the transfer of the resources.
Other kinds of certificate requirements have been suggested, including most prominently certificates regarding the transportation of genetic resources across national boundaries. All these must face the questions of verification and other implementation problems, once they have been designed and agreed (see 220.127.116.11[e]–[g]). Before that can happen, however, it is necessary to determine what specific function the certificate is intended to fulfill in the ABS system, and to ensure that legal consequences follow any person who fails to obtain a certificate.395
The development of certificates and other mechanisms for improving transboundary information flow with regard to ABS compliance may be extremely useful in many ABS contexts. Until the contextual needs are developed sufficiently, however, it is probably unprofitable to engage in more detailed discussion of the mechanisms that need to be created to address them.
One conceptual problem with the ABS framework as it currently is discussed, is that it will require source countries and providers to undertake the lion's share of ABS enforcement. This burden may eliminate most possibility of enforcement. If they are to enforce their rights, however, source countries must have detailed information concerning the utilization of genetic resources by users operating in other countries. As noted in 18.104.22.168[e], the source country's complete lack of access to any such information (apart from the unverified reports by users who have ABS contracts) provides a major obstacle to the functionality of ABS as it is currently conceived. Over time, it has been recognized that some other mechanism is necessary to provide information about users who are generating benefits through the utilization of genetic resources. Up to now, the only laws or proposals which address this concern relate to “disclosure of origin.” Disclosure measures of this type have been adopted as laws in three European countries.396 Proposals for mandatory disclosure have been aired in both CBD and IPR forums.397
Under the mandatory disclosure proposal, patent applicants whose innovation was created utilizing genetic resources would be required to disclose information about the source, provider and/or legal provenance of those genetic resources in their patent application. Without commenting on the political processes or various technical arguments against such a requirement,398 we note that little attention has been given to date regarding the questions of primary relevance to this book – how the disclosures will operate, and what impact they could have on the achievement of the objective of fair and equitable benefit sharing.
The potential effectiveness of disclosure proposals for fair and equitable benefit sharing is questionable at best.399 Many experts have noted that the work of officials processing patent applications is already both difficult and time-consuming. Some have cautioned about the additional costs to the patent system, which is entirely separate from environmental and conservation ministries and finds its funding in the private sector, and as such will have a very weak institutional incentive (at most) to implement this requirement.400 It has also been noted that the object of the ABS disclosure is not related to improving the patent. The few mandatory disclosure proposals that exist generally state that false disclosure or other violation of this requirement will not result in rejection or revocation of the patent.401 The failure to meet the ABS disclosure requirement in Norway is regarded as a crime, punishable by fines and imprisonment... but the patent will still be valid. And the possibility of imposition of those fines is relatively limited. It is far from easy to convict a person guilty of not providing such information.402
Moreover, unless these disclosures are verified in some way, they would seem unlikely to provide any value not already provided by national ABS legislation in source countries. Those who feel that they need not comply with source-country ABS – because, for example, they assume that resources are not subject to ABS requirements – will probably also feel that they are not required to comply with the patent disclosure requirement either.
Suggestions have been proposed for addressing the problem of identifying the source country or country of origin, in cases where the actual source is unknown, forgotten or undisclosed. The following sections discuss proposals for “internationalization” as a means of simplifying the issue.
One option, which was first suggested in the CBD negotiations,403 is the creation of an international system under which benefits, in the form of a standard payment, would be collected from users without reference to specific uses or specific resources. In this system, “users” would be defined by category of operation (e.g., pharmaceutical companies, seed companies, etc.) and all persons and entities within those categories would be charged. Such benefits would be paid into an international fund and used for particular activities designed to promote conservation, sustainable use, and the livelihoods of rural communities and indigenous peoples.
A variant on this approach would create a system wherein benefits from the use of a particular species would be shared among all countries that constitute “countries of origin” for that species, under the CBD definition.404 Although the technical and technological aspects of this approach are somewhat prohibitive at present, it underscores the problem posed by having multiple countries of “origin” for each species.
The “fund” option, although generally preferred by the legal experts and those charged with implementing ABS, did not find general favor in the negotiations. It was eventually dropped, in preference for the model in which each country separately controls all genetic resources found within its jurisdictional boundaries through a combination of national legislation and private contracts. In the ensuing 15 years, however, the failure of ABS to develop into a thriving market tool paying benefits to individual countries has been recognized as a system-design problem. As noted in 22.214.171.124[f], above, some kind of “fund” or other more general benefit mechanism may be needed in order to apply ABS to users who do not know or will not disclose the source of the genetic material that they use. It may be possible to develop this mechanism internationally and/or to link such a mechanism to other elements of the ABS process. There are some who feel that such a fund could create positive incentives for companies to enter into regular ABS contracts.
A modified, narrower form of this approach has been adopted in the form of the ITPGRFA's Multilateral System (MS) and Fund. Its basic premise is that agricultural varieties (in the international collections and elsewhere) should be exempt from standard ABS processes, because the benefits arising from utilization of these resources are already shared by the world both through unrestricted access to the collections and through the development of varieties and processes that enhance food security, directly benefiting all countries. The MS serves in the first instance as a vehicle for maximizing access to listed plant genetic resources. In addition, however, the access provided through the MS is itself considered the primary benefit of the system.
The International Treaty has recently adopted a “standard material transfer agreement” (SMTA) to be the form contract that will be used in all MS transactions between collections and users.405 MS users must pay a specific benefit (currently set at 1.1% of the profits from the product, except for sales of the product as a commodity) into the Treaty's financial mechanism (expected to be a Trust Fund), which
should flow primarily, directly and indirectly, to farmers in all countries, especially in developing countries, and countries with economies in transition, who conserve and sustainably utilize plant genetic resources for food and agriculture.406
This obligation will not apply, however, when “such a product is available without restriction to others for further research and breeding.”407
The most important element of the ITPGRFA system is the International Agricultural Research Centres (IARCs), many of which include large collections of plant germplasm.408 These collections offer many functional supports to the Treaty's operation, including the fact that they were generally using a standard MTA system and international oversight mechanism before the Treaty went into force. If the ITPGRFA system functions effectively, it will provide several additional incentives for countries to provide material to these collections.
As of this writing there is relatively little information about how the Treaty, MS, SMTA and Fund are operating, since the system has been completed very recently. If it is found sufficiently useful, the ITPGRFA might provide a useful approach which could be applied to other resources. Already, FAO is considering whether there is a need to develop a separate mechanism for “Animal Genetic Resources for Food and Agriculture,” but has recognized that existing animal breeding practices have very different legal needs from those of plants.
Another international approach has been suggested for various types of research institutes. The most basic form of this approach is found in the “Micro- Organisms Sustainable use and Access regulation International Code of Conduct” (MOSAICC),409 created by a consortium of culture collections, their users, and governmental, industrial and environmental authorities, directed at providing good practices and traceability with regard to this important aspect of biological diversity. Although implementation of MOSAICC is voluntary, the target group is generally very interested in implementing this system, given their particular concerns with preserving both research and sources of specimens.
In some discussions, it has been suggested that the Parties should consider the development of a “standard contract” for ABS, following the lead of the ITPGRFA and its recently adopted SMTA. Given that such an approach may become an option at some point, it is useful to consider how it would be adopted and used, before setting it as a current goal.
Initially, one must consider the major systemic obstacle to this approach – in the current ABS system, standard contracts could apply only to “access” situations where users collect resources directly from the source country. Hence the adoption of a standard contract would not eliminate the need for user-side measures and would not solve the problem of lack of implementation in the user country.
One aspect of the creation of a model agreement is the need to get all parties to agree in advance to use it. In effect, this constitutes a pre-negotiation of at least part of all future ABS contracts. However, if adopted in international negotiation, the agreement would bind only the source countries – who constitute less than half of the future parties to ABS contracts. Most users are not governments but private companies and researchers. In addition, in some countries, the provider-side of ABS negotiations is also devolved to private landowners, who negotiate on their own behalf, and who receive benefit sharing directly.410
Many countries consider genetic resources to be part of their national patrimony or state property, protected by the government's fiduciary duty to its citizens. By agreeing to the model, all countries would in essence be limiting their ability to control, negotiate and vary the terms and conditions by which they are selling/transferring this property.
The negotiation of standard or model agreements usually focuses on two questions: (i) Which provisions will be standardized in the model and which are left blank to be filled in individually? and (ii) Which model provisions may be changed or cut in the course of the negotiations, and how? The model only streamlines negotiations where it minimizes the ability of the parties to alter model provisions. This approach was relatively straightforward in the ITPGRFA process, given that the SMTA's primary use will relate to accessions from the IARCs. Those collections are all part of a single system (the CGIAR) that had already been increasingly under unified governance and contracting structure prior to the adoption of the Treaty. Even so, the negotiations of the SMTA were difficult and controversial.
In the case of ABS, there is currently little standardization as all countries are operating under their individual governance systems. They have been encouraged to adopt individualized “benefit-sharing plans,”411 further entrenching the uniqueness of each ABS negotiation. If the CBD Parties generally agree to adopt a standard contract which includes sufficient flexibility to address all the variability of the ABS concept and the legal and political differences among source countries, it is quite likely that the document may not resolve negotiation problems. Users of model documents often create inadvertent problems, by writing in new provisions that conflict with model provisions, and then failing to exclude or cancel the model provision. These cases often lead to litigation to determine whether the contract is binding, and which provisions apply. If the standard provisions are problematic, the Parties will ultimately convert them into guidelines or recommendations, allowing the negotiators of any ABS contract to choose other options. Premature model development may result in the (costly) creation of a model that is never used.412
In general, model contract provisions are best created when there is significant experience with the operation of the contractual system or sector involved. As any contract lawyer knows, experience rather than legal analysis is the best source of knowledge regarding issues, operations, surprises and controversies that arise under contracts.
This general rule is also applicable in international negotiations. The ITPGRFA's SMTA could be negotiated early in the Treaty's life, because the Parties already had many years' experience with the IARCs and their model contracts. There is another risk in international negotiations that does not trouble the drafters of model contracts for private negotiations – international documents must often be adopted by plenipotentiary negotiation processes, which means that it is much more difficult to revise or amend them when experience shows that some provisions are not functioning well. Accordingly, it may be better to wait until there is broader experience with ABS contracts, and their content and functionality are more generally known.
Another option that has been informally suggested is the development of “standard legislation” – measures that will apply to transactions in any country that has not yet adopted its own provider-side legislation (including PIC and MAT). Here also, the rights and uniqueness of each country would suggest that it would be difficult to develop a single document that would function as default legislation for countries that do not have a specific ABS law. As noted above, for example, the fact that a country has not adopted a specific, separate written law exercising its sovereign rights under Article 15 does not eliminate those sovereign rights. Most countries already have some law (written or not) defining the government's role with regard to its own resources, patrimony, state property, and other matters over which it has sovereign rights. Often, this law will be sufficient to enable the government to address at least some key aspects of the access side of ABS without adopting any separate law.
The problem with standard legislation might be more obvious, if one considers the same option for user-side measures. Most countries with many users under their jurisdiction would be unwilling to accept externally derived user measures that they have not adopted legislatively.
Thus, default legal provisions directly contravene the most basic sovereign rights of each country – the right to govern themselves and all matters within their jurisdiction. Default legislation can only be effective where the country has specifically signed and ratified it and then adopted it as national legislation, which somewhat defeats the purpose of creating default measures.
341 Bonn Guidelines, Article 16(d), discussed in 3.1 and considered in developing the recommendations in section 6.3.2, below. Although nonbinding, these recommendations were intensively negotiated.
342 Some countries' national legislation says that all international agreements automatically become law within that country. Although this sounds like a simple answer, it presents a problem. International laws describe what countries must do, but usually say nothing about regulated persons or entities. An international law may call on countries to “adopt legislative measures,” for example. This requirement cannot be imposed on an individual. And until the country does adopt those measures, the individual cannot guess what those measures will say. Hence, until the national implementing law is adopted, the international instrument is not binding within the country. A small number of international instruments are “self-executing” – that is, they include all of the relevant provisions of national law in the international instrument itself. The countries that become parties to such an instrument may instantly apply it, from the day that the country formally ratifies it. (See, for example, the international contract law treaties of UNCITRAL and UNIDROIT). Very few countries actually ratify most of these treaties, however. (Some of the UNIDROIT and UNCITRAL instruments have only a few parties.) Typically national legislatures prefer to make their own choices about these matters.
343 Börkey et al., 1999.
344 See, e.g., CBD COP Decision,VIII-4, paragraph A.2.a et passim. In the most recent discussions a fourth possibility – “certificate of compliance” has been suggested, however, it has not been formally adopted by the AHWG-ABS, and does not markedly change the current analysis. CBD, Report of the Meeting of the Group of Technical Experts on an Internationally Recognized Certificate of Origin/Source/Legal Provenance, UNEP/CBD/WG-ABS/5/2, 20 February 2007.
345 This permissive approach already exists in national legislation in Costa Rica – the country with the highest profile ABS legal system – however, no user has ever sought a certificate. Cabrera Medaglia, Jorge, Personal communication, 26 March 2007.
346 Discussed in detail in Ruiz and Lapeña, 2007 (Book 3 in this Series) at chapter 4.
347 A more detailed examination of how the success of a legal regime depends on the motivations of the persons/entities regulated is found in Ruiz and Lapeña, 2007, at Chapter 4.
348 Henkel, Thomas, “A Perspective from Pharmaceutical Industry,” Presentation to High-level Experts Meeting – Addressing the Access and Benefit-Sharing (ABS) Challenges in the Context of the Convention on Biological Diversity (Tokyo, 8–9 February 2007) and other remarks in that meeting. See also Latorre, 2005.
349 See, Young, 2006a, and Young, 2005.
350 See, e.g., Young, 2004
351 JAPAN: METI/KBA, 2006, Guidelines for Access to Genetic Resources for Users in Japan, Ministry of Economy, Trade and Industry (adopted March 2005, published in English, 2006) available online in English at http://www.mabs.jp/information/oshirase/pdf/iden_tebiki_e.pdf.
352 For example, the law would have to address the impact of a claim on the user's ability to continue to use the resource or to market products based on it, during the pendancy of a legal claim.
353 The United States National Institutes of Health (NIH) provides an example of this approach through its recent Program on International Cooperative Biodiversity Groups (ICBG), where access to ICBG funding opportunities and other coordinated government projects was conditioned on compliance with provisions relating to equity and the obligation to share the (research) benefits with the country in which the project was operating. Rosenthal, 2004.
354 See, Glowka, 1998 at 4. To this day no country's property law has ever found an effective way to address this issue or to consistently integrate it into national property frameworks. Given that the ABS regime addresses only transboundary transactions, it could function effectively only if all countries either addressed it in a harmonizable way in national law, or came to concrete agreement on this concept.
355 CBD, Article 15.5, provides that PIC and MAT are required in a source country, “unless otherwise determined by that [country].”
356 This example is based on the proposed regulations currently being discussed by the US National Parks Service, as discussed in Chapter 3.
357 At present, after four meetings of the AHWG-ABS, three technical expert meetings, and lengthy multi-day discussions in at least three COPs, the Parties have not yet been able to agree on the practical objective of their work (adoption of a protocol, adoption of some other instrument, etc.).
358 Pythoud (2005) raises a question: “[Is] there a specific type of use of genetic resources that might require additional international instruments to support implementation of CBD Art. 15?” See also Tvedt, 2006. The ITPGRFA will provide a testing ground for this approach, as it comes to be adopted and fully implemented by the countries that are Parties to the CBD.
359 See, Ruiz and Lapeña, 2007, at Chapter 5.
360 One aspect of this process might be the use of a “certificate of source/origin/legal provenance” or of “compliance” which might (depending on its contents) provide an initial one-way method of communication between the source country and the user country. However, processes of verification of the contents of the certificate, and of ongoing compliance with relevant laws and with the terms of the ABS arrangement, will seem to require other communication systems as well. See, Ruiz and Lapeña, 2007, at chapter 4.
361 The slow process of recognition of the implementation problems of ABS, and of getting to the point of knowing whether international action will be taken to solve some of these problems indicates that a flexible mechanism is needed. Otherwise, any ABS system that is concrete enough to be functional will probably be too slow in adjusting to changes. In this connection, a lesson can be learned from patent law where all the main criteria (e.g. invention, novelty and inventiveness) are dynamic and evolutionary by nature, making the patent system robust enough to adapt to changes in technological research and development. Flexibility is provided through the practice of altering and reconsidering the interpretation and practice of the terms rather than amending the wording of the acts.
362 Laws often govern sustainable collection practices. See, e.g., the “FAO The International Code of Conduct for Plant Germplasm Collecting and Transfer,” found online at http://www.fao.org/AG/AGp/AGPS/PGR/icc/icce.htm.
363 Young, 2006a.
364 See, the Japanese Guidelines, footnote 113. A significant part of those guidelines is directed at the numerous “grey areas” on the user-side of ABS that are not answered by the Bonn Guidelines or any other consensus.
365 Most such countries have not formally stated this. A few have indicated (directly or by implication) that no formal ABS legislation is needed on the user side.
366 See, for example, the Cartagena Protocol, which calls for many specific results and requirements, but enables many different approaches to their implementation.
367 This second category might include some users who are intentionally violating the source country's law (biopirates), but also many users who do not know about ABS requirements, or who believe that those requirements do not apply to the particular situation.
368 Presently, as noted in Chapter 3 (and see Cabrera and López, 2007), the breadth of the concept “genetic resources” differs greatly from country to country, and most countries use a different term when speaking of genetic resources, to make it clear that they have carefully and separately determined which precise resources and activities will be covered by their ABS law.
369 Note that the US documents on genetic-resource issues specifically mention the genetic resources used to create the TAQ Polymerase – extremophiles collected in Yellowstone National Park. See, UNITED STATES: National Park Service, September 2006, Servicewide Benefits-Sharing – Draft Environmental Impact Statement, http://parkplanning.nps.gov/document.cfm?parkId=442&projectId=12515&documentID=16763. U.S. Department of the Interior. Although this happened long before the CBD was adopted, it demonstrates the relevance of user measures as protections for both developed and developing countries.
370 This is essentially the current status quo. Consequently, the fact that many companies and researchers engage in intensive efforts to comply with ABS requirements, including by sharing benefits, says a great deal that is positive about the existence of a core of social responsibility in these institutions, and perhaps about the power of civil society and other groups to use pressure to push some institutions in the direction of social responsibility.
371 For example, the Cartagena Protocol or CITES must be at least as strict as the basic international requirements in those instruments. See, e.g., Cartagena Protocol, Art.2.4.
372 See e.g., International Plant Protection Convention, Art. 1. This provision notes that the Convention does not require any controls on species imports. In operation, Parties agree on a maximum level of national controls on plant products in trade, stating that no stricter standards may be used.
373 Even matters of cross-border liability (Arts. 4.b and 14) are only within one county's jurisdiction, in the sense that an action against a cross-border source of pollution must be brought in the country of the polluter, unless some special agreement with that country is applied.
374 As noted in Chapter 3, national systems currently utilize very different definitions of “genetic resources,” sometimes creating and using different terms including “genetic heritage.” (BRAZIL: Provisional Act N°2,186-16.) Another approach is found in the Norwegian draft Nature Diversity Act, which also avoids the term “genetic resources,” focusing on “genetic material from other countries” and on those who import it “for the purpose of utilizing genetic material.” (NORWAY: draft Nature Diversity Act at §60). The US National Parks Service regulations on benefit sharing are focused exclusively on research samples: “research projects involving research specimens collected from units of the NPS that subsequently resulted in useful discoveries or inventions with some valuable commercial application.” (US NPS, 2006, Draft EIS, presented as Alternative B).
375 The African Model Act (African Union Model Legislation for the Protection of the Right of Local Communities, Farmers and Breeders, and for the Regulation of Access to Biological Resources, formally endorsed by all African Union States, 2003) specifically applies its ABS processes to all biological resources.
376 As noted above, virtually all transactions involving biological material are already governed by contract laws, and laws relating to illegal taking of the physical materials. It is only in the context of “utilization of genetic resources” that legal rights are not tied to the legal possession/acquisition of the physical sample. Hence, if one has violated national laws regarding biological resources, the source country will have normal recourse through existing laws and practices.
377 In the Seychelles, a proposed draft law was prepared by a team of foreign consultants, under a consultancy financed and undertaken by IPGRI. It is contained in Lettington and Dogley, 2006. In Article 20, that draft law provides that “The Competent Authority, in consultation with the Coordinating Agency and lead agencies, shall have the discretion to refuse access to the genetic resources of Seychelles where it is reasonably believed that the applicant is from, or otherwise based or operating in, jurisdictions that do not provide adequate guarantees for the respect and enforcement of this Act.
378 Ibid. The user measures described in the text are Articles 32–34 of that draft law.
379 For instance, purified vegetable oil contains no DNA or RNA. (Personal communication, Seizo Sumida.) If the ABS regime were to determine that “genetic resources” means “DNA or RNA or any specimen or part containing DNA or RNA,” then that definition would exclude processed vegetable oil, and possibly some other products.
380 See Cabrera and López, 2007, and Rosenthal, et al, as quoted in footnote 279.
381 Bonn Guidelines, at § 45.
382 Id., at §47.
383 Fernández Ugalde, 2005.
384 See, BHUTAN: Biodiversity Act, Art 9.b “Competent Authority, through the Authorized Agency, may grant access if ...[inter alia].... The applicant agrees to deposit with the Authorized Agency duplicates of each sample collected and the associated information on collection sites of collected materials gathered from farmers' field or government forest.”
385 “Trade secrets” laws generally provide that, where one is required to disclose confidential information to the government, that information can be tagged as a “trade secret” and the government must ensure that the information so provided is not made available to anyone, whether directly or indirectly. These provisions are common in IPR law, but also appear in nearly every law under which a commercial or industrial operation is required to file detailed technical information (reporting laws, permit applications, etc.).
386 Mgbeoji, 2006.
387 A version of this approach is found in JAPAN: Guidelines for Access to Genetic Resources for Users in Japan, under which users may call upon the government for help in ABS negotiations and processes in source countries, so long as the users have complied with the Guidelines.
388 Personal communication, Leif Christoffersen, Diversa Corporation, 7 May 2005. A further discussion of the legal capability of modern technology to identify the species that is the source of particular genetic resources is found in Ruiz and Lapeña, 2007, at Chapter 5. In all cases, identification will not discern the source country unless the species is already known to be a narrow-range endemic found only in a particular country. In addition, each use of this kind of analytical process may be very expensive. It may be difficult to use these processes as a primary enforcement/oversight tool – i.e., for general determination that the species involved does not have its origin in the user country, but it may be possible to require the user to undertake such analysis, where the source country is unknown or undisclosed.
389 See, e.g., Burhenne et al., 2003, International Issues in the Governance of Protected Areas at Chapter 3 (“International Funds, ‘Partnerships’ and other Mechanisms for Financing Protected Areas”). The normal problems faced by environmental trust funds are (i) finding sources of the funds (not a problem for this particular type of fund); and (ii) ensuring that the funds involved are protected from being redesignated for other purposes (not normally a difficulty in developed countries).
390 A Norwegian study by Romstad and Stokstad, 2005, discusses valuation of genetic resources but focuses only on the genetic resources as an input to biotechnology rather than looking at the social and biological contribution made by genetic resources in situ. Their literature review concludes that due to the lack of alternative scenarios, “...the value estimates of most applied studies to date are questionable” at page 24.
391 These matters were discussed in detail in the Expert Workshop for EU-CITES Authorities on EC Legislation on Wildlife Trade – Experiences, Challenges and Future Perspectives (14–17 November 2006, Vilm, Germany). Smugglers and other violators have been found to be manipulating CITES export and import permits, listing the wrong species, duplicating the permit for “species parts” and using it to justify re-exports and sales of a number of specimens far in excess of the original amount imported, etc.
392 In recent years, many criminal enterprises which formerly focused on drugs and other criminal sectors have turned their attention to crimes such as illegal wildlife trade, since the penalties and level of enforcement and prosecution are significantly less in these sectors. Anton et al., 2002.
393 Most countries, for example, do not authorize government officials below the highest levels to interact directly with government officials of other countries, unless there are clear limits and controls on that interaction.
394 See the original mandate for work on this issue, at UNEP/CBD/COP/7/21 VII/19 E, (request) 7, page 304: “Requests the Ad Hoc ...” UNEP/CBD/COP/7/21 VII/19 D.
395 Tvedt, 2006.
396 Note by the Executive Secretary, 2004, “Analysis of Measures to Ensure Compliance with Prior Informed Consent of the Contracting Party Providing Genetic Resources and Mutually Agreed Terms on which Access Was Granted, and of Other Approaches, Including an International Certificate Of Origin/Source/Legal Provenance,” UNEP/CBD/WG-ABS/3/5, section II, D. The submissions of Denmark, Norway and Sweden address this issue. The full submissions are found in “Submission to the CBD, in preparation for the third meeting of the CBD Ad hoc Working Group on ABS,” reproduced as UNEP/CBD-WG/ABS/INF/3/1.
397 Proposals have been aired before the TRIPS Council of the WTO (see the proposal from the EU WTO document IP/C/W/383); the WIPO meetings on the Patent Co-Operation Treaty (see the Swiss proposal, WIPO document PCT/R/WG/4/13); and the WIPO Intergovernmental Committee on Genetic Resources, Traditional Knowledge and Folklore (IGC). So far, however, it has not been suggested in the Standing Committee on Law of the Patents for the draft Substantive Patent Law Treaty (draft SPLT). Such a solution to the benefit-sharing challenge was suggested by Hendrickx, Koester and Prip in 1993.
398 An excellent and detailed analysis of the “mandatory disclosure” proposals, in terms of their impact on patent law, is found in the WIPO response to the CBD, currently in interim form as Annex to WIPO document WO/GA/32/8. These matters have also been one important part of the discussions in the Intergovernmental Committee on Genetic Resources, TK and Folklore.
399 Tvedt, 2007.
400 While additional costs will undoubtedly arise, the question of the cost of the system should be a balance between cost and benefit – what additional value to the ABS framework will be derived from the additional institutional costs? It will also be necessary to determine how these costs will be allocated among governmental sectors, and borne by the most appropriate agencies and individuals. All of these matters are clearly important. Unfortunately, much of the discussion of this issue is steeped in invective, and some of the most widely publicized comments about the costs of a disclosure system have been highly controversial, but easily discounted because they appeared to have been based on insufficient data and understanding of both ABS and IPR law. Wolfe and Zycher, 2005. This document was circulated very widely in many languages prior to CBD SBSTTA-11.
401 See e.g., EU Directive on Biotechnological Patents EC/98/44 (preamble).
402 Tvedt, 2007.
403 Glowka et al., 1994, introduction.
404 See, Vogel, 2007. This approach would be based on the “species inventory” – a primary requirement of the CBD (Article 7) which has been incompletely addressed in many countries.
405 Standard Material Transfer Agreement, adopted at the first meeting of the Governing Body of the ITPGRFA, accessible online at http://www.fao.org/AG/cgrfa/itpgr.htm.
406 ITPGRFA, Art. 13.3.
407 ITPGRFA, Art. 13.2(d)(ii).
408 The IARCs are generally unified under the overarching Consultative Group on International Agricultural Research (CGIAR), see http://www.cgiar.org/who/index.html.
409 Online at http://bccm.belspo.be/projects/mosaicc/.
410 One example that was studied in the context of researching this book is found in Australian law.
411 ten Kate, K., A. Wells, M. Baudoin and B. Zapata, “The role of strategic planning in the design of national policy on access to genetic resources and benefit-sharing: The genetic resources component of Bolivia's National Biodiversity Strategy and Action Plan,” Royal Botanic Gardens, Kew (UK) and Directorate General for Biodiversity (Bolivia).
412 One possible example of this is the provisions of the UN Convention on Law of the Sea (UNCLOS. Montego Bay, 1988), with regard to “marine scientific research.” UNCLOS, Arts. 143, and 238–265. The wide latitude of countries to use other means of authorizing researchers in waters under their jurisdiction or dominion has meant that the MSR provisions are rarely used and have not developed into a useful part of marine governance.
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