The CBD is necessarily the beginning point of any analysis of ABS, simply because the concepts underlying ABS – an ownable or devisable legal right or interest in genetic resources – did not exist prior to the CBD negotiations.14 In this very real sense, ABS is one of the most novel and innovative legal concepts to be introduced to international law in the last century. As further examined in this chapter, however, the CBD creates only the policy concept – an outline of this novel idea. It does not provide any specific determinations of the requirements and interpretations needed for the implementation of ABS, nor any explanation of how they can be addressed through the use of existing and conventional legal mechanisms. Based on experience in other conventions (e.g., CITES) and in other sectors, we know that national legislative development to create an international system may take many years, even where the concepts are being enacted clearly defined or described in the relevant international instruments. It is, therefore, not surprising to legislative experts that the development of national implementing legislation in the concretization of this entirely new concept has been slow.
Added complications arise by virtue of the ABS system's multinational nature. Some kind of formal support (through formal documents embodying “agreed interpretations”) appears necessary to help countries take the actions required under Article 15, in a more unified way. These interpretations must recognize the different needs of the provider country and user country, as well as the needs and requirements of the user, individual providers (if authorized under national law) and other affected parties. In this connection, one should note that the “user” is a person or entity, whereas “user country” refers to each country (or countries) with jurisdiction over any user. It is important not to stereotype these terms. Often “user country” is equated with “developed country,” and “provider country” (referred to in this book as the “source country”) with “developing country.” However, a growing number of developing countries have technological capacity in genetic manipulation and synthesis of biological compounds, enabling them to be “users” by even the most technical definition. Similarly, numerous recent cases have been documented involving the acquisition and utilization of genetic resources taken from a developed country source.15 Thus, both the provider-side responsibilities and the obligation to develop and apply user measures apply to all countries. Not only must highly developed countries adopt user-side measures, but so must developing countries. Similarly, the requirements relevant to countries as providers of genetic resources (increasingly including provider-side legislation) also apply to developed as well as developing countries.
“Access and benefit sharing” or “ABS” is a short-hand way of referring to a very particular concept – “the fair and equitable sharing of the benefits arising out of the utilization of genetic resources, including by appropriate access to genetic resources...”.16 As one of the CBD's three primary objectives,17 ABS is more than just a general goal. It is also the basis of at least 10 specific commitments of the CBD Parties, including obligations to
create conditions to facilitate access to genetic resources for environmentally sound uses [and to] take legislative, administrative or policy measures... with the aim of sharing in a fair and equitable way... the benefits arising from the commercial and other utilization of genetic resources with the Contracting Party providing such resources.18
ABS focuses on “genetic resources” (whether from wild, natural or human-developed sources) that may result in financial and other benefits. It is primarily intended to mandate the sharing of those benefits with the countries that were the sources of the genetic resources used. Several basic points seem to be clear from the outset, in Article 15:
Each country (or its designee) may decide who has the right to obtain “access” to genetic resources found in that country, and may set conditions on that right.
Implicit within the system is the idea that every genetic resource has a “source country” – the specific country which originally provided those resources (or the material from which they were propagated).
ABS as set out in the CBD is strictly international in nature, and only applies where the source country of the genetic resource is different from the country with jurisdiction over the user and/or his activities utilizing the genetic resources.19
Some describe ABS as a system of individual transactions, in which “access” is given in return for “benefit sharing.”20 This trade-off is not reflected in the text of the Convention. The only quid pro quo was an international level at the time of negotiations, as described in Chapter 1. Countries agreed to adopt measures for “facilitated access” (desired by developed countries), in exchange for the reciprocal commitment to adopt benefit-sharing measures (desired by developing countries).
Under the ABS system, the concept of “benefits” to be shared specifically includes non-commercial uses,21 (including financial benefits, research and data, technology, jobs, capacity, community improvement, and other benefits).
ABS is unique among legal concepts in several ways. Foremost, it envisions/mandates the creation of a new specific legal right in the genetic properties of naturally occurring species. No such right had ever existed in any country as a separate type of transferable, legally-protectable interest. This right/interest underlies the Convention's text, but is included indirectly – it is embedded in the provisions of Article 15, which reiterate each country's sovereign rights in such resources and tells the Parties something about how those rights should be governed and their use controlled. It calls on countries and transactional parties to apply contractual and governmental provisions in realizing concepts such as “access to genetic resources” and “utilization of genetic resources.” In so stating, Article 15 essentially says that there is some type of valued tangible or intangible commodity (known in law as a res) that can be owned, transferred, restricted or granted, and which can be legally tied to other responsibilities – i.e., to benefit sharing.
The detailed nature of that res is still not agreed. A legal right relating to genetic resources cannot be asserted or demonstrated in the same ways that property rights and other ownable legal interests are established in other areas. For example, the most basic way to establish and enforce a right over moveable tangible property is by possession. In the context of ABS, however, it is immediately clear that many people, communities, countries or entities may possess specimens of a given species (where each specimen contains DNA and other genetic material), but it would not be possible to consider everyone who possesses a sample to be an owner – i.e., to have the right to decide who may use or patent – of its genetic resources. Ownership of immoveable tangible property (e.g. land and buildings) is legally established by deed and/or registry, which identifies the property through a system that is clearly known, again based on the assumption that there can only be one valid chain of title22 to a particular property right. Genetic resources, however, are not easily identified by written description, nor can a single original owner be established from whose title other interests descend. In contrast, intangible rights in “intellectual property” are based on establishing the identity of one inventor and one specific description of what is included under the intellectual property right. In a patent (as the most applicable IPR) the invention is described in words which individualize and identify it. In the case of naturally occurring genetic resources, however, there is no single innovator, and consequently neither one owner nor one single subject matter can be identified. This means that the source's rights in its genetic resources is a legal res, but the nature and form of that right may be unclear, where the same genetic resource is independently owned/governed by others as well.
At the time of this writing, most of the current controversy in ABS discussions revolves around identifying the nature of that res (which is named either “genetic resources,” “access to genetic resources,” or “utilization of genetic resources.”) Until those issues are decided, they remain serious obstacles to the development and application of user measures, as well as to the legal certainty and functionality of measures in source countries.23 Up to now, some of the simplest analyses of the issue suppose that the res in ABS transactions is physical material (specimens obtained directly from the source country or in other ways). More detailed analyses suggest that the res may in some ways be more like an “intellectual property right” (i.e., the right to control the genetic information contained in the species); and others that it might be some other kind of vested permit or contractual right, or combination of the three. This question stands at the heart of the ABS challenge. It is examined in detail in Chapter 4, in the context of user countries and the development of user measures.
The difference between genetic resources, as res, and other categories of natural resources makes it difficult to think about ownership of genetic resources in the same terms as ownership of natural resources. The questions of holders and ownership are not currently clear – neither in Article 15, nor most of the small number of national laws that have been adopted to implement it. The CBD merely notes only that “the authority to determine access to genetic resources rests with the national governments and is subject to national legislation.”24 Clearly, each country has the authority to regulate the ownership issue under domestic legislation, but has little available guidance for solving “the ownership question” with regard to genetic resources. As a consequence, very little has been done to address these issues legally.
Since the Convention's adoption, apart from the decision to “negotiate an international regime” on ABS (described in section 1.1), the primary international work on ABS has been the “Bonn Guidelines,”25 which were adopted in 2002 after two rounds of negotiations. Much concern was expressed in the last stages of these negotiations, regarding the one-sided focus of the draft Guidelines. In the final draft that was submitted to the last round of negotiations (COP-6), the draft Guidelines discussed only the “provider countries” (governments) and “users” (companies, research institutes and entities),26 not mentioning the responsibilities of “user countries.” Neither did they refer to processes and requirements the measures needed outside of the source country. After intensive negotiations, the final Guidelines were amended to include a brief specific mention of “user measures” – requirements imposed on “Contracting Parties with users of genetic resources under their jurisdiction.” These measures were expressed as issues that “these countries should consider.”27
Based on experience with those negotiations, and a review of the legal and legislative function of ABS at the time of this writing, there is a basic difference among the countries' positions on one question: Can ABS can function as a contractual mechanism operating under national and international commercial law, or is more institutional and legal development needed at other levels (including international)? At present, the answer to this question lies in the hands of user countries, without whose active support, ABS cannot function effectively as an integrated and legally certain system.
Article 15.7 requires all countries that have or may have users within their respective jurisdictions to adopt
“legislative, administrative or policy measures... with the aim of sharing in a fair and equitable way ... the benefits arising from the commercial and other utilization of genetic resources with the Contracting Party providing such resources.”28
Unlike provisions for access which focus on specific legal processes (PIC and MAT), Article 15.7 on benefit sharing is expressed in terms of results. It states what the user-side measures should accomplish, rather than listing specific actions that will satisfy the requirement. The Convention provides several additional points of guidance regarding the obligations of the user. In fact, its provisions relating to user obligations outnumber its requirements relating to access. Specifically, in ratifying the CBD, each Contracting Party committed to the following obligations relating to the use of genetic resources:29
To carry out scientific research involving genetic resources in the source country;30
To take measures with the aim of sharing results of genetic-resource research and development with the source country;31
To take measures with the aim of sharing the benefits arising from genetic-resource utilization with the source country;32
To provide the source country with access to and transfer of technology which makes use of its genetic resources (including technology protected by intellectual property rights);33
To enable “effective participation” in biotechnological research by (and where possible within) developing countries, especially the source country of the genetic resources;34
To “promote and advance priority access on a fair and equitable basis” by source countries, especially when they are developing countries, to the results and benefits arising from biotechnologies based upon the source country's genetic resources;35
To provide “financial support and incentives in respect of those national activities which are intended to achieve the objectives of this Convention;”36 and
To address the needs of developing countries through the exchange of information, which “shall where feasible, include repatriation of information.”37
These requirements call upon the each Contracting Party to “endeavor to” take the actions listed.38 This “endeavor” language does not make the Convention's requirements (effectively or actually) voluntary. Rather, at law, it creates a requirement of “good faith” – all Contracting Parties must make all reasonable efforts to implement these obligations.39 If a country has made such an effort, but not yet been successful, it shall not be considered to have failed to meet its obligations; however, a country's failure to make the effort is a violation of its international obligations. The requirement of good faith suggests that, if the first effort is unsuccessful, reasonable efforts must continue, or the issue must be reconsidered, until a means of complying is found.
Taken together, the items in the above list emphasize the extent and importance of the commitments of user countries within the Convention, and their relationship to the “great compromise” by which the CBD came into being. Moreover, the terminology of these provisions suggests that they are separate requirements and not a variety of restatements of the basic benefit-sharing requirements. That is, that the user will be required to take all of the listed measures that are relevant – it must not only provide a share of the “benefits of utilization of genetic resources,” but also share research results, information developed and new technologies developed. The Convention appears to require, as an additional component, that the user country should enable source-country participation in the research and development wherever possible. Finally, developed countries are called upon generally to provide financial support and incentives that promote benefit sharing, as one of the objectives of the Convention.
The mandatory nature of these provisions has been somewhat tarnished by the (very few) user-focused provisions of the Bonn Guidelines. Specifically, in discussing the user country's obligations, the Guidelines provide only that “Contracting Parties with users of genetic resources under their jurisdiction should take appropriate legal, administrative, or policy measures, as appropriate, to support compliance with prior informed consent of the Contracting Party providing such resources and mutually agreed terms on which access was granted.”40 This statement is, of course, significantly weaker and less compelling than the CBD provisions. The Guidelines further state that Parties should “consider” a variety of possible options. The Bonn Guidelines are, according to their terms, non-binding. They are only “recommendations.” They were not intended or adopted to change the CBD requirements. This fact was (and continues to be) underscored by almost all countries during their interventions in that meeting and all relevant CBD forums since that time.41
As regularly stated in international ABS discussions, “all countries are both users and providers.”42 While true, this does not eliminate the need for user measures – rather it makes clear that they should be adopted by all Parties, not only the highly developed ones. Nevertheless, the most complex and potentially valuable forms of utilization of genetic resources usually occur in developed countries, while most developing countries utilize genetic resources primarily or exclusively for agricultural variety development.43
Clearly, the CBD recognizes two kinds of measures, which in the past have been called “access” measures and “benefit-sharing” measures. This terminology is not particularly helpful. Rather, what is needed are measures on the “provider-side” and measures on the “user-side” (Table 1).
|Provider-side measures||User-side measures|
|Generally: the measures in our country that apply to ABS transactions involving genetic resources that have their source in our country, or where our country acquired the right to utilize those genetic resources in accordance with the CBD.||Generally: legislative, administrative or policy measures that apply to the persons or entities under our country's jurisdiction who are using genetic resources that originated in another country.|
|Controls and oversight of legal access to our resources, and coordination with ecosystem management and protection requirements.||Requirements and incentives to ensure that our users of foreign genetic resources comply with ABS requirements of those other countries.|
|Procedures for Prior Informed Consent (PIC), including which officer, agency or group gives that consent.||Mechanisms to ensure that providers of genetic resources are aware of uses and able to verify compliance with PIC/MAT.|
|Procedures for determining Mutually Agreed Terms (MAT), including requirements regarding both access and benefit sharing.||Remedies and other procedures to enable providers (individuals, communities and countries) to protect their ABS rights and enforce their ABS laws against users in our country who are violating those laws.|
Every CBD Party, being potentially both a provider country and a “country with users under its jurisdiction,” will need to address both sides of the ABS issue eventually, although at present it seems most urgent that countries with a large number of users in their jurisdictions do so. Up to now, as described in Chapter 3, nearly all ABS legislation that has been adopted consists only of “provider-side” measures, and most (but not all) of it is found in developing countries. Even where developed countries have adopted some ABS law, however, the overwhelming bulk of such measures are focused on the provider-side (access to and use of the country's own genetic resources). When this book speaks of “user measures” or “user-side” it is referring only to the measures described as “user-side measures” in Table 1. It focuses on these measures as an obligation of all countries (not singling out developed countries).
As with virtually all aspects of the ABS issue, terminology problems are adding to the controversy in the area of user-side obligations. ABS terminology is not clear, even with regard to terms such as “user,” “provider,” “source” and “origin.” In this book, however, it is obviously necessary to use these terms in very specific ways. Recognizing that many terminology questions will ultimately be resolved through the current international negotiations, we also realize that our publication deadline will not allow us to wait for that result. Accordingly, the following are the general interpretations of the terminology regarding use and provision of genetic resources which will be employed in this book.
In this book, we use the terms “user” and “provider” on an individualized basis, referring to particular situations. In developing these terms, however, it is quickly noticed that there may be other participants in the process between the time of collection of genetic resources to the time that they are utilized and benefits arise. We use the term “middleman” to refer to these. Table 2 shows how we use these terms:
Table 2: Categories/terminology of parties to ABS transactions, as used in this book
|User||A user is an individual, company, university, agency, government or other entity which is “utilizing genetic resources,”44 acquiring genetic resources with the intention to utilize them or generating benefits from that utilization.|
|Provider||A provider is one who provides those resources to the user by giving him the legal right to utilize them. The exact nature of the provider depends on national law. In some countries, the provider will be any individual which can legally collect/sell/give anyone biological material including its genetic resources.45 In other countries, rights in biological material are separate from rights to genetic resources within it, suggesting that the government is the provider of the genetic resources, even if an individual owner provides the biological material.|
|Middleman||The term middleman refers to every person who is not a provider, but who is passing on genetic resources to a user or another middleman. A user who sells or otherwise transfers his materials and/or results to another user may also be a middleman. It is not clear whether middlemen should be considered to be “users” or “providers.” Some middlemen generate (monetary or non-monetary) benefits, which are not currently captured by the ABS system.|
The terminology of national jurisdictional roles is also very unclear in current discussions. Terms like “provider country,” “user country” etc., are used very differently by many different delegations and national laws. The CBD contains two country-related terms – “country of origin” and “country providing the genetic resources,” however there appear to be about five possible roles a country could play in an ABS situation. (Given that the term “provider country” is used by different laws and authors to mean different – conflicting - things, this book will not use that term.) In our analysis, we use the following terms:
Table 3: Categories/terminology of countries involved in an ABS transaction, as used in this book
|User country46||The country with jurisdiction over a user in a given ABS transaction, whether such jurisdiction is due to nationality of the user or because the user's activities (utilizing the genetic resources) are occurring within that country's jurisdiction. In an ABS transaction, there may be more than one user country.|
|Source country47 (in some legislation and discussions these countries are called “provider countries”)||The country in which the genetic resources in question were originally taken from in-situ conditions (or if the genetic resources are agricultural varieties – where their unique properties were developed). In theory at least, this is a simple question of fact. Even where the original specimens have since died or disappeared, their progeny can usually be traced back to an original source.|
|Country of origin48||Any country in which the specific genetic resources in question can be found in-situ. It is frequently noted that many species are found in-situ in more than one country, meaning that each has, potentially, many countries of origin. Where the origin is determinable, however, only one of these countries will be the source country. This concept can also be important where a user does not know or will not disclose the specific country that is the source of genetic material he is using.|
|Secondary source49||A country that has acquired the genetic resources from a country of origin “in accordance with the Convention,” as discussed below.|
|Intermediate country (in some legislation, these countries are called the “provider countries”)50||The country with jurisdiction over a user or middleman, who is transferring genetic resources that were previously removed from another country, which is the “source country,” as defined above. It should be noted that ABS calls for benefit sharing with a provider only where that provider country is either (i) a country of origin, or (ii) a secondary source. This suggests that an intermediate country's role might be in ensuring that the duties of benefit-sharing are passed through to the user country, along with the material.|
According to Article 15.3, the rights of the “country providing resources” are applicable only to one country in each ABS transaction. That country must be either (i) the “country of origin” (where the species was found in-situ, or where the traditional agricultural variety developed its unique properties51) or (ii) some other country that “acquired the genetic resources in accordance with the Convention.” This means that a country that is not a country of origin but which formally acquired genetic resources in accordance with the CBD, would be (i) bound to provide access to those resources, and (2) entitled to receive a share in the benefits arising from their utilization.
At least in theory, the “source country” (as defined in the above taxonomy) can be factually identified by asking “Where were the resources (or their progenitors) first taken from in-situ conditions?” By contrast, the “secondary source” (as above) is a legal determination. Hence the question is “Has the country “acquired the resources in accordance with the CBD?” The CBD does not explain the meaning of the phrase in italics (which been interpreted by some as a complete exemption for any biological specimens collected before 1992). Consequently, it is not clear whether any country or institution acquired “genetic resources in accordance with the CBD” prior to 1993.
One of the most difficult conceptual problems inherent in the current ABS ambiguities arises when one asks a simple question – Is there a link between “access” and “benefit sharing” and if so, what is that link? As with virtually all aspects of ABS, no simple answer is possible until the basic concepts of “access” and “benefit sharing” are clarified.
One primary problem is the term “access” – which is completely undefined in the CBD. Unfortunately, this word is used (including by the authors of this book) as if it had a definite meaning; however, the assumed meanings differ from person to person. For some, “access” means only the right to obtain samples. This parallels the Convention negotiations, under which the developing countries agreed to facilitate researchers' desires to obtain samples (gain access to sites and the right to take samples legally), and in exchange the developed countries agreed to include the concept of “equitable benefit sharing.” Under this definition of “access,” there is no mandatory link between “access” and “benefit sharing,” because thousands of people may obtain “access” (i.e., be allowed to collect samples), but only those who “utilize genetic resources” must engage in benefit sharing. The intersection of these concepts is expressed in the text of the CBD, where clauses 15.2–15.5 deal with access, and 15.6 and 15.7 deal with benefit sharing.
A second perspective is expressed by those who would link “access” to “benefit sharing.” They assume that ABS applies only to specimens which the user collected in their country of origin and is now utilizing its genetic resources, leaving other situations unaddressed. For instance, where material is acquired indirectly (from collectors, researchers or other users) after the material has left the source country, this “second perspective” would claim that no “access” has been obtained, and therefore no benefit sharing must be given in return. As analyzed in Chapter 4, this approach is one source of most of the conceptual problems of ABS, because it creates large loopholes, which can essentially swallow the entire ABS process.
As detailed and analyzed in Chapters 3 and 4, there are many fundamental problems with the ABS system as currently conceptualized. ABS concepts are new in international law, as well as in domestic legislation. The uniqueness of ABS, combined with the global lack of experience in the implementation of any system which is similar, has made it difficult to develop any consistency within the global “regime” on ABS. Therefore, there is a pressing need to identify and clarify core issues of such a regime. One such core concept is the subject matter of the ABS contract or permit – the res – in addition to defining the activities that should trigger the benefit-sharing mechanisms of the system.
This issue is at the heart of the ABS conceptual gap, because it has not yet been explained in detail in any official document, accepted interpretation, or agreed text. Owing to looming deadlines,52 the Parties negotiating the CBD swept this and many other questions aside. The negotiators concluded that most ABS matters would be addressed by legislation at the national level, with each country making its own system, and all of those systems linking up horizontally to cover the globe. If that had indeed been possible, then Article 15 would have needed only to provide a general policy mandate.
Based on this assumption, then, the Convention's guidance is very limited.53 Article 15 consists of seven sentences, a total of 275 words (for purposes of comparison this paragraph contains 197 words). Adding every other CBD provision which directly addresses benefit sharing or its component parts (as listed in the benefit-sharing objective54) there are still only 18 sentences in the CBD addressing ABS. As noted above, only a few countries have adopted any ABS legislation, and many of them have adopted only a single paragraph or sentence (calling for further regulation). This miserly guidance, compared to the volume of guidance and interpretation available regarding the governmental regulation of other commercially valuable interests (real property, moveable property, intangible property rights, intellectual property rights, legally vested permit rights, etc.), may explain why ABS is not yet legally functional.
Many commenters and negotiators complain that the ABS concept is “flawed” or “impossible.” A more correct statement might be that the ABS concept is not yet known or sufficiently developed to enable implementation.
A number of problem areas arise consistently, across the entire range of ABS discussions and negotiations as well as in attempts at legislative implementation. To find solutions for any aspect of the regime, one must be aware of, and directly address, the underlying sources of problems encountered. For many, the systemic problem is simply this – fewer than 10% of CBD Parties having adopted any kind of legislative, administrative or other ABS measures.55 Various commentators have cited many reasons for these deficiencies, including the following four:
The “complexity” theory: Legal and practical problems encountered in attempting to adopt ABS legislation have proven to be insurmountable by national legislative/administrative experts;56 and
The “user failure” theory: One-sided implementation cannot be effective – i.e., source-country law cannot be enforced after the genetic resources or users have been taken outside the source country. The source country has no jurisdiction to regulate in the user country, even as to use of its own genetic resources.57
The “lack of interest” theory: “Source countries have concluded that ABS benefits are not worth the effort of adopting and implementing ABS laws.”58
The “cost” theory: ABS implementation systems will result in enormous costs and create legal uncertainty primarily to users and industry.59
Each of these theories, while strongly advocated by some, is also is strongly opposed. In support of the first three bullet points above, it is notable that a great many (at least 50 and possibly as many as 90)60 developing countries have attempted to develop ABS legislation, but few have yet adopted substantive measures on either the provider- or user-side. None of these, however, has formally decided to drop the ABS issue or their ABS rights, and none has announced that ABS is not worth the effort. Reportedly, several countries have indicated that legal inconsistencies within the international framework have been an obstacle to developing functional ABS legislation.61 Many countries seem to be waiting for the international negotiations to define the scope and practices of ABS. As noted elsewhere in this book, the authors perceive that there is one fairly indisputable fact – that it will be either legally impossible or prohibitively expensive to impose ABS controls using provider-side laws alone.
With regard to the fourth bullet point, there are many who claim that ABS documentation will be prohibitively expensive,62 and others that under new national “access” laws, administrative approval and benefit sharing have increased the time and cost of species collection and other bioprospecting activities.63 To date, however, “transaction cost” analyses have not been well documented. Often, they have been based on unsupported assumptions – reasoning by analogy, for example, beginning with the fact that a particular company once spent a specific amount of US dollars on one particular negotiation, then multiplying that number by all of the companies and products which use natural ingredients to arrive at the total cost of ABS to companies. These simplistic approaches do not consider the fact that other companies have spent very little, or that, when the system has been developed and unified, collaboration with national ABS authorities will actually make it easier to acquire and export samples. Some cost estimates are based on assumptions about the need for new forms and requirements. Others assume that IPRs will be filed on every species studied.64 Indisputably, many applicants have incurred substantial costs, including the costs of defending against challenges (lawsuits and other claims) by communities and others objecting to access.65 It is also undisputed, however, that current legal uncertainties and the resulting atmosphere of distrust are other important factors which, if ameliorated, would undoubtedly reduce costs and problems.
Four basic categories of specific legal/practical problems lie beneath the user side of the ABS regime.
The users of genetic resources (foreign researchers, companies seeking to develop products, and others) often focus their position on the problem of “legal certainty.” Although uncertainties exist in all fields of endeavor, companies and individuals in developed countries generally must have certain minimum types and levels of “legal certainty” as to any action, right, or property in which they will invest time, money or other value. Specifically, before investing in any kind of bioprospecting or other species-collecting activity, a company or researcher will want to be certain that he has a clear legal right to remove the specimens, to study/analyze them, and to use the results of this analysis (including in some cases the right to commercialize a product). Similarly, before entering into an ABS contract or other ABS arrangement, the company will usually want to be certain, first, that the final contract will be valid and binding – i.e., that the official signing the ABS arrangement is authorized to do so, and that all relevant laws and restrictions have been satisfied. It will also want some certainty that the contract will not be changed, invalidated or rescinded in future without cause. The lack of legal certainty has not, so far, led to a decline in industrial, commercial and research interest in biological and genetic material.66 The warning from industry regarding their ABS problems should be seen as a major indication that the sector has not yet accepted the ABS concept, however, suggesting the need to demonstrate (create) the value of accepting and participating in the concept, rather than allowing it to be molded without practical inputs from the users.
Legal certainty is a “two-way street,” however. Source countries and providers of genetic resources also need certainty – regarding the actions and commitments made by users. For this, they need to be able to confidently depend on the “other half” of the system (effective or enforceable laws governing the user's actions and benefit-sharing, adopted in user countries). Much of the complexity and demand in provider-side laws arises out of the perception that the source country's rights will have no support from user countries. The more restrictive elements of national access requirements can be understood in the light of the source country's uncertainty about its rights on the user side after the material has left the country.
Arguably, these issues can be better resolved through the development of an integrated system – whether through widespread adoption of user measures at the national level or through the creation and implementation of such measures in an international regime. Either way, such a system must clarify key ABS issues, enabling provider countries to feel confident of systemic functionality. On the basis of that confidence, source countries can adopt more streamlined legislation and effectively reduce the bureaucracy. This, in turn, will increase user certainty and decrease the costs of administrative compliance.
Under general principles of law, private persons or companies are not directly governed by international law (that is, by agreements between governments). Rather, they are bound by the laws of the (various) countries that have jurisdiction over them and/or their actions. Until the COP-7, international ABS discussions focused primarily on provider-side access legislation in developing countries. The Bonn Guidelines illustrate this by focusing intensively on measures to be taken in or by the “provider country.”67 Since then, common understanding has expanded to realize that perhaps access legislation in providing countries is not the only element needed to achieve fair and equitable benefit sharing. Value in biotechnology is often created by private users (including academic institutions, other governments, parastatal bodies, joint ventures, etc.). In most transactions, it is likely that the bulk of this work will be done in the user country, particularly in the last stages when the activity is about to produce benefits. An international decision or instrument cannot govern action by a private user or company, unless the country with jurisdiction over that user or activity adopts relevant law applying that decision or instrument to persons and activities under its jurisdiction.68 What international law can do is to develop the concept to a level of clarity and agreement that will enable countries to adopt legislation that is mutually interactive.
Some authors and negotiators have claimed that the use of private contracts and contract law is the solution to the cross-border jurisdiction issue.69 Those commenters appear to assume that ABS is solely a matter of contractual enforcement – i.e., that the only “user measures” needed are the laws that allow private parties to make contracts and enforce contractual rights, and that these laws can apply to ABS arrangements with no additional refinement.
This assumption is not legally supportable. While ABS does use a contractual mechanism, it is using that mechanism to facilitate the achievement of ABS obligations and objectives, which are not considered or supported by contract law. And it is applying that mechanism to a new order of legal rights – sovereign and individual rights in genetic resources – which have not been fully understood or enabled in any country. While some aspects of contract law are easily applied to ABS, a great many contractual concepts and practices have not yet been adapted to this area, especially the question of what happens when genetic-resource rights are taken or used by persons who have not obtained an ABS contract or permit.70
As a practical matter, most “genetic resources” are found within biological material, and most biological material may be moved across national boundaries legally.71 The current lack of clarity in the ABS regime has caused many companies and researchers to assume that, if the particular sample from which they obtain a genetic resource has already been removed from the source country, then that material may be used without ABS compliance.72
This assumption (wrong or right) may create a self-fulfilling situation. Once they have the specimen or sample, their use of that sample is generally private and cannot be perceived by external or government observers. As discussed in Chapter 3, this lack of “observability” does not excuse companies from the need to comply with the benefit-sharing obligation, but may create a de facto incentive for them to keep quiet about it. To address the activities of a private user, user-side measures must either impose controls (command and control), or construct ABS laws that provide an incentive or other motivation for compliance.
Although the practical ability to impose and oversee mandatory controls is limited, the ABS system currently does not offer many incentives. Without them, since most utilization of genetic resources happens in developed countries, the burden of control may be placed on developed countries, along with the blame, if the system does not function.
The CBD was created as a platform from which national laws and practices for conservation and sustainable use could be integrated to ensure protection of the global web of life on earth. It recognized that this objective places a critical regulatory burden on developing countries, whose level of diversity (“megadiversity”) is greatest, per capita and per hectare.73 To balance that burden, the obligation of all countries to share the burdens of conservation, with particular attention to financial responsibility, is repeatedly supported by binding provisions throughout the CBD. Benefit sharing is meant to be a manner of imposing a part of the conservation/sustainable use burden upon those private parties who derive benefits from their utilization of genetic resources.
Beyond the cost of conservation and sustainability, developing countries bear an additional burden, which can only be answered through the concept of equity (discussed in Chapter 5). While pressures for development (including the need for poverty alleviation, livelihood security, and social welfare) have continually increased, environmental restrictions on development have intensified. Those pressures were generally not present during the development phases of countries in North America and Europe, and those countries benefited from their natural bounty in a way that modern developing countries cannot.
The equity objective of the Convention grew out of the concern that further environmental limitations would constitute a socio-economic inhibition on improvement of critical indicators (livelihood and wellbeing) in countries whose development was already a critical global priority.74 This priority was heightened recently, with the adoption of the UN's Millennium Development Goals.75 Politically speaking, these negotiations strongly demonstrate a paradigm shift. The international environmental agenda is increasingly controlled and directed by the countries whose development and socio-economic future is most directly impacted by environmental obligations. Their decisions may have the greatest impact on biodiversity conservation, given their national sovereignty over the biodiversity hotspots, rare species and critical ecosystems. Overall, the most critical importance of the ABS system may be as a demonstration that international legal process is a fair exchange by which the issues and concerns of all participants are recognized, negotiated, and implemented as binding instruments.
In the end, however, each country must still adopt the necessary legislation. And national legislative processes must and do concentrate on national interests. A national legislature is, by definition, focused on the perspectives and desires of the electorate to which the legislators must be accountable. Often, to national citizens and parliaments, the value of international governance is less recognized than that of domestic wellbeing and industrial cost, particularly in countries that include a large number of users of genetic resources. It may be difficult politically for governments to adopt measures which, in essence, call on their companies to pay money to other countries. Such provisions are likely to be opposed in the same spirit that tax increases are opposed – as limitations on profitability and commercial development. They can be more strongly opposed than other taxes because the amount assessed is not predictable or based on any calculable standard. Despite these difficulties, all OECD countries willingly signed the CBD and all but one have since ratified it.76
To build domestic political support for the implementation of benefit sharing one must begin with a simple question – What interests of user countries are promoted by benefit-sharing obligations? At present, the answers are limited:
General: to meet the country's national commitments (operating in “good faith”);
Environmental: to promote the conservation and sustainable use of biological diversity, through a financial incentive tied to genetic resources;
Socio-ethical: to promote the wellbeing of poorer countries, minimize poverty, and decrease the disparity between developed and developing countries;
Functional: to protect the country's interest in access to the genetic resources found in other countries (the quid pro quo); and
Commercial: to enable full participation by the country's research and industrial sectors in the development of genetic-resource-based products.
While the first three of these interests are of longest-term importance, the fourth and fifth provide, perhaps, the strongest incentives based on the commercial, financial and related interests within national constituencies.
14 The 1991 negotiations of the so-called INBio-Merck Agreement are widely thought of as the legal predecessor of ABS, but commenced long after the CBD negotiations had catalyzed discussions of ABS and the need to develop an equitable means for addressing the interests of developing/source countries in the utilization of their genetic resources. See Reid et al., 1993.
15 In 1985, a Swiss company patented the Taq Polymerase, a remarkably valuable discovery based on US genetic resources from Yellowstone National Park (both the acquisition and the utilization of this genetic resource, however, happened well before the CBD entered into force). To this day, Taq is cited by the US Government as one reason behind efforts to develop ABS legislation by a country not yet a Party to the CBD. See, UNITED STATES: National Park Service, September 2006, Servicewide Benefits-Sharing – Draft Environmental Impact Statement, Department of the Interior, at http://parkplanning.nps.gov/document.cfm?parkId=442&projectId=12515&documentID=16763 Similarly, in 1969, Cyclosporin A was found at Hardangervidda National Park (Norway) by a Swiss tourist who worked for Novartis. Cyclosporin proved to have an active compound that helps the human body not reject organs after a transplant. See, for example, Svarstad et al. 2000. In both instances, the company later developed a pharmaceutical product which is currently marketed, with no benefit-sharing.
16 CBD, Article 1. The acronym “ABS” is often used as a substitute for the words “access and benefit sharing” and is sometimes misunderstood by those who are not familiar with the context of the term, leading to inappropriate usage. The “benefit-sharing” aspect of ABS refers only to “...the fair and equitable sharing of the benefits arising out of the utilization of genetic resources.”
17 The other two objectives are “conservation of biological diversity” (implemented through the provisions of Articles 8 and 9) and “sustainable use of its components” (implemented through Articles 6, 7, and 10). Id.
18 CBD, Articles 15.2 and 15.7. Other ABS requirements are found in Articles 15, 16, 17, 19 and 20.
19 Article 15 is an international concept. This is unlike the implementation of the other two primary objectives, both of which focus primarily on the Contracting Parties' domestic activities. Nothing in Article 15 imposes any responsibilities, or even recommends any governmental action, relating to domestic use of the country's own genetic resources. While it is unlikely that the ABS system can function if domestic uses are entirely exempt, the choice of whether or how to regulate them is the country's sovereign choice.
20 Ten Kate and Laird, 1999.
21 Article 15.2 notes that access is permitted only for “environmentally sound uses” but does not characterize the uses that are included. More relevant, Article 15.7 specifically states that users must share “the benefits arising from commercial and other utilization of genetic resources.” (emphasis added.)
22 The “chain of title” is the legal record of property ownership maintained in most countries through official records. See Pau Pedrón, 2002.
23 Source-country legislation is discussed in many books and articles, and comprehensively analyzed in Cabrera and López, 2007, Book 1 in this Series. Other books in this Series approach other aspects of these questions. Contractual issues of ABS arrangements between source countries (and source communities or individuals, where relevant) and users are discussed in Bhatti et al., 2007; and other work on legal certainty is found in Young et al., 2007, both in this Series.
24 Article 15.2. It is notable that this provision applies only to “access” – the determination of the rights to enter and remove samples and other information. Benefit sharing is bound by the broader requirements of “equity” (discussed below), and cannot apparently be limited by national legislation.
25 Bonn Guidelines were first negotiated by the first AHWG-ABS-1, Bonn, 22–26 October, 2001. They were formally adopted by the 6th CBDCOP in The Hague, 7–19 April, 2002. The documents of this meeting can be found online at http://www.biodiv.org.
26 About these entities, the Guidelines call on users to ensure compliance by persons to whom they have transferred any part of the genetic resources taken, and generally to share benefits, including by technology transfer, under CBD Article 16. Bonn Guidelines, para 16.b.ix.
27 Bonn Guidelines, para 16.d, discussed in Chapter 3.
28 CBD, Article 15.7.
29 The CBD is, of course, an agreement among sovereign nations. As such, as discussed in 1.1, it is not directly binding on individual companies, agencies, institutions and other users of genetic resources.
30 CBD, Article 15.6. All of the provisions in this list assume that each research or development activity involves specific resources, with a specific, known source country. Hence, the discussion of the “country providing resources” appears to refer to the particular source country, from which the particular resources in use, or their progenitors, were taken.
31 CBD, Article 15.7.
32 CBD, Article 15.7.
33 CBD, Article 16.3.
34 CBD, Article 19.2.
35 CBD, Article 19.2.
36 CBD, Article 20.1.
37 CBD, Article 17.1 and 17.2.
38 Article 15.7 (the benefit-sharing obligation) does not contain any of the limiting phrases, which are used in other parts of the CBD, such as “as far as possible,” (which is found in requirements of CBD Arts. 5, 6(b), 7(chapeau); 8(chapeau); 9(chapeau); 10(chapeau); 11; 14.1(chapeau)), “in accordance with its particular conditions and capabilities,” (Arts. 6(chapeau); and 20.1), “taking into account the special needs of developing countries,” (CBD Arts. 12(chapeau); 17.1), “except where ... purely an internal matter,” (CBD Art. 14.2) or “where necessary” (CBD Art. 8(b)). All these formulations suggest that, in some cases, a Party may not be able to take the action, or that the particular provision might not apply or be necessary in some situations or to some parties. Even where these words are used, international law requires the Parties to act in “good faith” to attempt to implement measures, before determining that it is not possible. See footnote 39.
39 Vienna Convention on the Law of Treaties, Arts. 26 and 27 applies the formal legal principle of pacta sunt servanda (“lawyers' Latin” meaning “pacts (or promises) shall be respected”) to all binding treaties. This principle is stated very simply in Art 26: “Every treaty in force is binding upon the parties to it and must be performed by them in good faith.” Art. 27 adds clarification: “A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.” In general, a “duty of good faith” requires a clear effort, however, so that if it makes and continues making reasonable efforts which fail to produce compliance, the Party will not be in violation of international law.
40 Bonn Guidelines, Article 16(d).
41 The Bonn Guidelines were adopted by a COP Resolution, rather than any plenipotentiary body or process. They frequently state that they are non-binding, voluntary, and non-interpretative, offered only to assist the Parties with implementing their Article 15 responsibilities. The number of repetitions of “voluntariness” is evidence that the document would not have been adopted if it were intended to alter the Parties' Convention responsibilities and obligations.
42 Discussions in CBD COPs 5 (Nairobi, 2000), 6 (The Hague, 2002), 7 (Kuala Lumpur, 2004) and 8 (Curitiba, 2006), CBD-AHWG-ABS 1 (Bonn, 2002) and 2 (Montréal, 2003), and CBD Second Expert Panel on ABS-2 (Montréal, 2001). Based on the records and data of the Consultative Group on International Agricultural Resources (CGIAR), every country has been involved in the use of germplasm from one or more of the International Agricultural Resource Centres – a primary resource base providing germplasm from all countries for the development of new plant varieties in other countries. Fowler et al., 2001.
43 Nearly all countries have some government and/or private operations for the development of agricultural varieties by conventional means and a growing number of developing countries have at least some capacity to apply laboratory genetic techniques, used to modify crop varieties to address localized conditions and problems. See, generally, reports and analysis of the UNEP-GEF Biosafety Projects at http://www.unep.ch/biosafety/resources.htm. Information on the level of national GMO development capacity is not collated under the project, however another analysis (Hårstad et al., 2005) based on 18 in-depth evaluations in less developed countries noted the existence of operational genetic laboratories developing agricultural varieties in Cuba, Mexico, Guatemala, China, India, Indonesia and several European countries which have since entered the EU.
44 The meaning and relevance of the concept of “utilization of genetic resources” is analyzed in Chapter 4.
45 See e.g., AUSTRALIA: Environment Protection and Biodiversity Conservation Regulations 2000, § 8A.04. This approach is determined by the general approach of all ABS-related Australian Commonwealth Law, which does not distinguish between access to biological resources (a concept not addressed in the CBD) and “access to genetic resources” under CBD Art. 15. Thus the owner of the land from which an individual specimen of a tree or animal is taken has the right to control physical access to that specimen. Therefore, under Australian law, that person also has the right to grant access (and obtain all benefit sharing relating to) the genetic resources of the entire species, even where the user then patents the isolated genes of that species, excluding all others from either utilizing or obtaining an access/benefit-sharing right to it in connection with specimens they own.
46 The term “user country” does not appear in the CBD. The Bonn Guidelines call these “countries with users under their jurisdiction,” which appears to ignore the fact, noted above, that “all countries are both users and providers.”
47 The term “source country” does not appear in the CBD or in the Bonn Guidelines. However, in the CBD, the term “country providing genetic resources” appears to describe this category. CBD, Art. 2.
48 CBD Art. 2.
49 These following two additional categories (“secondary source,” and “intermediate country”) seem to be useful when discussing countries which are not a country of origin, but which are asserting rights on the provider-side of the transaction.
50 See NORWAY: Draft Nature Diversity Act, at § 60.
51 CBD, Arts. 2 (definitions of “country of origin of genetic resources,” “country providing genetic resources” and “in-situ conditions”) and 15.3, noting that for ABS, a country providing genetic resources must be a country of origin or one that acquired genetic resources in accordance with the CBD (which came into existence in 1992, and entered into force in 1993).
52 The CBD was scheduled for adoption at the UN Conference on the Environment and Development (UNCED) in Rio, 1992. It has been suggested that this deadline was one reason for the urgency which impelled negotiators to find a “quick solution” to ABS that would enable the countries to adopt the CBD on schedule. As a result, many issues were left undecided, including most prominently, the remaining controversies over biosafety (article 19), ABS (Article 15), and the financial mechanism (Article 21). The biosafety issue was most directly left for further plenipotentiary negotiations, as the Convention stated specifically that “The Parties shall consider the need for and modalities of a protocol setting out appropriate procedures, ... in the field of the safe transfer, handling and use of any living modified organism resulting from biotechnology that may have adverse effect on the conservation and sustainable use of biological diversity.” Article 19.3. As to the financial mechanism, its primary political concerns were decided through the addition of Article 39, when it was generally agreed that the GEF would fill this role, but left the issue slightly open, calling for some considerations and restructuring. This decision still affects the operations of the Convention, as demonstrated by the controversies and political negotiations underlying the 2005 adoption of the GEF Resource Allocation Framework, and its relationship to the Fourth Replenishment. In the ABS context, the choice made by the negotiators was to assume that national contract and property law would resolve ABS measures, as a way of enabling completion of the convention in time for UNCED. Unfortunately, they also consciously ignored the fact that there was, at the time, no national law which imposed any control on the utilization of genetic resources, or defined them as a right or type of property, or exerted any sovereign control over them.
53 Even direct negotiation of ABS arrangements (ABS contracts with providers and source countries and ABS permits) was incomplete, for this reason. The situation of the Costa Rica/Merck arrangement was recognized, even by its participants, to be a highly individualized situation, rather than providing a model or standard of practice. See, e.g., Reid, 1993. Moreover it specifically left the issue of “benefit sharing” for future determination, only after benefits have arisen.
54 As noted in Article 1, the objective of “fair and equitable sharing of the benefits arising out of the utilization of genetic resources,” includes “access to genetic resources... transfer of relevant technologies... and appropriate funding.”
55 See footnote 3 (Chapter 1) above. Nearly all such measures address provider-side issues only.
56 Young, 2004, “Options and Processes....”; Cabrera and López, 2007; Lettington and Didery, 2007; Wynberg, 2004.
57 Tvedt, 2006; Cabrera and López, 2007.
58 Scott, P., Presentation to the International Expert Workshop on Access to Genetic Resources and Benefit Sharing, Cuernavaca (24–27 October 2005.)
59 See, e.g., Finston, 2005, pp. 141–155; Wolfe and Zycher, 2005. To some, this claim is a better indication of industry position (opposed to any ABS), than industry spokesmen's more generic statements that they support ABS, but only wish to see it rationally applied. Certainly, there is no single “industry position,” although most industrial groups are suspicious of any proposal to add administrative requirements and paperwork (as well as mandatory “benefit sharing”) which will cost them money.
60 Since 1999, it has commonly been noted that upwards of 50 countries were at the time developing national ABS legislation. Many if not all of these authors quote the one-time count of 50, found in Glowka, 1998. Since that time, however, many of those originally counted 50 countries have given up on their attempt, and others have taken up the challenge. As noted in footnote 3, only around 32 have adopted even a single line on ABS.
61 Personal communications Ridwana Jooma (South Africa), Nancy Kgengenyane (Botswana), Leonard Hirsch (United States), and others.
62 See, e.g., Wolfe and Zycher, 2005.
63 This was asserted by a large number of users (but not all) in the recent user studies in Europe. See, Latorre, 2005; Holm-Müller et al., 2005.
64 In addition, for purposes of discussion, unsupported guesses about various costs have been used, and in later discussion the resulting numbers have been cited as if they were research conclusions. The primary document alleging billion-dollar level costs of the system internationally (Wolfe and Zycher, 2005) has been widely challenged on these points.
65 Young, 2005.
66 See, e.g., Latorre, 2005; Holm-Müller et al., 2005; and Oldam, 2005. To date, claims of decreasing industrial interest in genetic resources are seldom coupled with supporting statistics or other impartial or credible evidence. Such claims continue to be made, however. See e.g., Finston, 2005, pp. 141–155.
67 Bonn Guidelines, CBD-COP Decision VI-24. Of 61 sections, only clause 16(d) discusses user measures.
68 Since the adoption of the Convention, implementation of ABS has been recognized to be a serious challenge and problem. See, Hendrickx et al., 1993; Glowka et al., 1997. More recent commentators do not appear to notice improvement. For example, Barber (2005) describes implementation as a main obstacle for benefit sharing.
69 See, e.g., Scott, 2005.
70 “Mutually agreed terms” in Article 15.4 and 15.7 are parallel (virtually identical) to the primary prerequisite of any contract – that is, that the parties to the contract come to a “mutual agreement” (sometimes called a “meeting of the minds”) as to exactly what actions, forbearance, conditions, restrictions, and other elements are included in the contract, and what they require. Similarly, “prior informed consent,” as described in Article 15.5, is exactly parallel to another general requirement of contract law – that a convention is only valid where the parties are fully aware of all relevant facts, and freely consent to be bound by the contract. (For a general discussion of internationally recognized principles of the law of contracts, see the UNCITRAL (undated), which is discussed in Book 4 of this Series.) The legal concepts of PIC and MAT have been addressed extensively both in the ABS context and more generally. See Swiderska, 2001, for an excellent treatment of these issues and their relationship to public participation.
71 There are limits, of course. Some species are thought to be dangerous, and their international movement is prohibited. Even as to these specimens, often it will not be illegal to possess them in the user country, once they have successfully crossed the border. In addition, international movement of specimens of some species may be illegal under the Convention on International Trade in Endangered Species of Fauna and Flora (Washington DC, 1973) which has been widely implemented. Some foreign biological materials are prohibited or controlled in the user country as well (narcotic substances, bacterial weapons etc.). However, these controls apply to a small fraction of the total number of species and varieties on the planet. Most of the genetic resources that have been utilized commercially or subject of research are not listed or controlled in any of these ways. In some cases, however, it has been asserted that genetic-resource-oriented research has affected the conservation status of such species, suggesting a need for better coordination between ABS and CITES implementing officials. See, Mgbeoji, 2006.
72 See, e.g., 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.
73 It is worth remembering that the CBD addresses the conservation and sustainability of the integrated web of life that sustains the earth, rather than focusing on particular species that are rare, endangered or narrowly endemic. (Discussed in detail in CBD COP-5 and subsequent SBSTTA meetings, relevant to the adoption and implementation of the “Ecosystem approach” (UNEP/CBD/5/6)). One of its great challenges is embodied in the need to ensure that conservation measures do not focus only on the special, because this focus often enables the destruction of species that are shared across many countries, of which no one country will willingly shoulder the entire burden of conservation.
74 It is not coincidental that the CBD was adopted in the second major international plenipotentiary conference on the environment, nor that the title of that conference was the United Nations Conference on Environment and Development.
75 Millennium Declaration, UNGA, 2000, Doc. A/55/L.2.
76 The 29 OECD members that are Parties to the CBD are Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, South Korea, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. The Commission of the European Community also takes part in the OECD's agenda. The only OECD member who is not also a party to the CBD is the United States of America.
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