3 User Country Compliance with the Bonn Guidelines

The critical question to which the remainder of this book is directed is What measures are needed to fulfill the obligations of Article 15.7? These measures must address more than just the nature of benefit sharing but the full range of user-side responsibilities necessary to make the system function. Such measures must be adopted by all countries that have or may have users of genetic resources under their jurisdiction – i.e., probably all countries.77 This chapter identifies the laws and practices that appear to be needed to satisfy Article 15.7 through a mandatory system. Its discussion is illustrated by examples from various countries with users under their jurisdiction.

3.1 Functional approach

Legislation must begin from a functional understanding of the commercial and physical activities to be regulated. The basic flow of the benefit-sharing concept is as follows:

None of these steps is entirely under the oversight of either the source country or the user country. Thus, all three must be addressed or considered by both provider-side and user-side measures. In many cases, for example, the user obtains access to genetic resources from material that is already outside the source country. It may be obtained from an ex-situ collection, for example, or in the form of results of genetic research transferred by a middleman (researcher or another company). The application of ABS to these situations has not yet been clarified.

Similarly, benefit-sharing law can only function where the meaning of legislation and/or the ABS contract is clear, in both the source and user country. This underscores our earlier statement that under Article 15 all countries must consider themselves as both providers and users of genetic resources, and must legislate accordingly.

On the provider side, as described elsewhere,78 source countries are expected to adopt legislation in five areas:

The last element is not mentioned in the CBD, but is often listed as an obligation in many articles and nonbinding documents, including the Bonn Guidelines.79 The Convention recognizes each country's sovereign discretion regarding how it will use and distribute benefits, 80 but many experts suggest that the link between ABS and conservation means the user country has an interest in how benefits are distributed. In some countries' ABS laws, some or all benefits must be used for conservation; in others, distributed to private holders.81 The Bonn Guidelines provide additional guidance for the implementation of these concepts.

Article 15's requirements for provider-side measures include a specific description of particular measures. On the user side, by contrast, the CBD does not identify any specific type of measures that should be used for implementing the user-side of ABS, rather it focuses on the results to be sought, asking countries to adopt measures

with the aim of sharing in a fair and equitable way the results of research and development and the benefits arising from the commercial and other utilization of genetic resources with the Contracting Party providing such resources.82

The Bonn Guidelines recommend six “user measures,” and four primary administrative requirements applicable to the user side.83 They also include a few provisions regarding other potential approaches. Those measures are as follows:

Before turning to those discussions, section 3.2 describes national laws that have been examined to provide a practical basis for this analysis.

3.2 National “user measures” examined in this Chapter

For this book, it was initially expected that case studies or researched analysis would consider the user measures of many types in many countries. Ultimately, however, this analysis uncovered very few “user measures” as that term is understood and explained in 2.3. The study set out to learn from current user-side experience with legislation, but the lesson we learned was of the general absence of such experience. Given this result, information regarding existing user measures has ultimately comprised only a small part of the research and analysis that was done for this book. Rather than detailed case studies, the analysis includes only particular details and provisions that are useful to illustrate key points. The following is a brief description of the ABS laws and other instruments reviewed for this book.

Our in-depth analysis was limited to Norway and the United States.88 In both of these countries, our analysis attempted to include all relevant laws and not stopping with those that are specifically identified as “ABS laws.”89 In several other countries, we considered ABS laws and instruments only. From Japan, for example, we noted important soft law developments. In Canada, Australia, The Netherlands and the EU, (as well as the countries mentioned above) we examined ABS laws and other instruments, which although not meeting the definition of “user-side measures,” provide insights into what those countries will expect from foreign users, based on their regulation of domestic users of their genetic resources.90 We have also noted an increasing number of developed countries are adopting “provider-side measures” regarding the use of their own resources, and have attempted to draw some user-side lessons from these.91

3.2.1 Countries whose laws have been examined in greater detail

Having accessed the full body of national laws in Norway and the US, and noting that the two offer important and very different examples, we examined national law in these countries in greater detail. In addition, we examined the legislation available from Brazil and Costa Rica, both of which have adopted detailed ABS laws. In these latter two countries, however, our research was limited to specific laws which were presented through the CHM as “ABS measures.” Neither of these countries has actually adopted “user-side measures” within the understanding of this book.

3.2.1.1 Norway

Norway became a Contracting Party to the CBD in 1993 and has been a primary supporter of the Convention. Unsurprisingly, it is one of the few countries that has made a concerted attempt to adopt user measures in addition to measures which govern the use of Norwegian genetic resources (provider measures), and has worked at bridging the gap between developing and developed countries in the CBD, the FAO, the WTO/TRIPS Council and in the WIPO. Norway has experience as both a provider country and user country, and has engaged in ongoing governmental and other discussions of the need for specific ABS legislation. These discussions have evolved over time. In 1993, it was felt that Norwegian legislation was already compliant with CBD obligations and that no further legislative measures were needed.92 In the ensuing 14 years, five major legal debates have arisen in Norway regarding the CBD, giving rise to five specific measures, of which two are directly analyzed in this book:

Provisions from the first draft Nature Diversity Act and the Patent Act are referenced throughout the next chapters. Although not yet in force, the draft Act demonstrates a significant effort to meet the user-side obligation (one of the only such efforts in the world), and exemplifies challenges faced by experts developing “user measures.”

3.2.1.2 United States

The United States signed the CBD in June 1993, but has never ratified it. Although a non-party, it is an active participant in CBD policy forums (COP, SBSTTA and other meetings). Numerous authors have asserted that the US has within its jurisdiction more genetic resource users than any other country.98 As such, it has a strong interest in the ABS framework.

In addition, the US is a country of origin of a large number of species, and thus a potential provider of genetic resources. A recent US government analysis on ABS cited the 1969 discovery of the species used to create the TAQ Polymerase (patented by a Swiss company in 1985) as one justification for current legislative proposals as mentioned below. Although not a CBD Party, the US has designated a national ABS focal point, and undertaken some analysis of ABS issues.99

US delegates in CBD processes have indicated that the government believes that no new legislation would be needed in order to satisfy Article 15.7, if the US were a Party. No report of the basis of these conclusions has been made available. Although it has no plans to adopt user-side measures, the US has recently begun processes for development of a regulatory program100 governing the process for granting rights to use specimens from US national parks.101 It has stated that it considers these measures to be ABS principles. This proposal provides useful insight into the US's view of the ABS process.102 In addition to documents relating to this process, the current study reviewed the following instruments, which have been reported to be the primary basis of user measures in the US at present: the Lacey Act,103 the Stolen Property Act (NSPA),104 the Federal Technology Transfer Act of 1986 (FTTA).105 These instruments have been identified by some official commentators as measures which are sufficient to address Article 15.7.106

Two more direct US programs addressing ABS-related materials focus only on particular smaller groups or sectors. Of these, the most direct legislative relevance is the work of the National Institutes of Health, which has imposed specific benefit-sharing practices and requirements on partners and funded projects, as a condition of funding.107 The other such program with similar focus (but not referring to ABS) is the National Cancer Institute's research processes.108

3.2.1.3 Costa Rica

Costa Rica is primarily seen as a “provider country.” That is, the country assumes that its genetic resources are utilized by both domestic and foreign users, but that Costa Rica's domestic users do not utilize genetic resources from any other country.109 It has been notable as one of the first countries to adopt an institutional and legislative system for access and benefit sharing, and to apply the “provider side” of this system – but has also formally adopted some user-side measures, which are applicable only to domestic (Costa Rican) users of Costa Rican resources. The government of Costa Rica has formally recognized that the ABS system is not yet functional, due to problems with applying ABS “beyond access.”110 This book considers three primary Costa Rican instruments: its national biodiversity laws, its ABS regulations (Normas Generales para el Acceso a los Elementos y Recursos Genéticos y Bioquimicos de la Biodiversidad);111 and its national biodiversity strategy (Estrategia Nacional de Biodiversidad).112

3.2.1.4 Brazil

Brazil has also typically been considered a provider country, but is actively developing domestic industries and companies based on the utilization of domestic genetic and biological resources. Its ABS legislation is very comprehensive, addressing a broad range of activities, applicable to domestic users of Brazilian biological diversity. We have examined only Brazil's Provisional Act implementing the CBD.113

3.2.2 Other countries with specific measures and processes of interest

In addition to these countries that have been researched in depth, this study has sifted the general body of available ABS information, and identified several other instruments of provisions of interest, including the following:

The authors examined all of the other ABS laws from around the world, which have been included in the CBD's online “database of ABS measures.” Although many of these are detailed legislative efforts, none directly or indirectly addresses the Article 15.7 obligation of the users under the country's jurisdiction to share benefits with foreign source countries or providers. Accordingly, they are not discussed in detail in this chapter.

3.2.3 Other studies and analysis

This study is additionally supported by data obtained from countries which have complied with the CBD request for Parties and the Secretariat to “gather information ... and undertake further analysis relating to ... existing practices and trends with regard to commercial and other utilization of genetic resources and the generation of benefits.”124 From this process we identified four key studies which address that requirement – an excellent study undertaken by the government of Germany, regarding the use of genetic resources by German companies,125 and subsequent studies undertaken in the United Kingdom126 and Belgium.127 Although based on relatively small samples and responses,128 their results provide a kind of data greatly needed within the ABS discussions – user information. By definition, however, these studies are limited to those companies willing to respond, which restricts the potential to draw general conclusions from them.

Another important source of data is the CESAGEN study of the frequency and number of applications for patents utilizing certain categories of biological material.129 This study's methodology counted all patents that utilize key biochemical and genetic terms in their patent applications. As such it could not come to definitive conclusions regarding the number and nature of patents based on “genetic resources” or subject to ABS requirements. Within its limits, however, it too is a groundbreaking study.

We have also considered the new “Draft Guidelines regarding Benefit-sharing for ‘Natural Products,’” which is currently under preparation by UNCTAD's BioTrade Initiative.130 These guidelines are a work in progress that offers useful insights into problems encountered in the current climate of legal uncertainties.131

3.3 User-side legislative mandates

In this part, we propose to consider the first category of Bonn Guidelines user-side measures described in part 3.1.2, above132 – the creation of laws within user countries to mandate that users comply with ABS requirements. In this context, the Guidelines call for three categories of action.

First, a law must specify the users' obligations and require users to comply with them. This provision is necessary under the Bonn Guidelines requirement that countries prevent the use of genetic resources without PIC and permission from the source country. This point is dealt with in 3.3.1, below. Second, it must develop standards for implementing that compliance. These measures (described in the Bonn Guidelines as “compliance with MAT”) will be difficult to develop, since they seem to call for the user country to adopt and apply another country's laws and definitions. They are discussed in 3.3.2, below. Third, the law must create a system of enforcement and compliance which, as noted in the Bonn Guidelines, requires coordination between source and provider countries. This requirement is considered in 3.3.3.

These three obligations represent the most important unfulfilled mandate in the ABS regime, but their importance is often overlooked in favor of discussing other issues. It takes only a few minutes of legal analysis to understand their importance. When a person or company is utilizing resources from one country (the provider country), but operating in a different country (the user country), that person's activities are outside the reach of the ABS system, unless the user country law requires ABS compliance. The source country's laws only apply if the source country has jurisdiction – in other words, while the user and/or the genetic resources are inside the provider country.133 Thereafter, ABS applies only through laws of a user country.

In the analysis of these three components of legislation, it is often necessary to separately consider two situations which are usually134 recognized to be very different legally:

In this context, it is important to remember that noncompliant users often do not perceive themselves to be violating any law. They may be unaware of ABS requirements or may not believe that those requirements apply to them.

3.3.1 Requiring compliance with source country ABS law

As noted in 3.2, following the enactment of the CBD, several developed countries initially concluded that their existing legislation (contract law, criminal law, etc.) would be sufficient to implement ABS, so that no new law or interpretation was needed. On reflection, however, this initial analysis was erroneous in some respects, owing to certain oversights and to the unique characteristics of ABS issues.

3.3.1.1 The requirement as applied to ABS-compliant users

Up to now, most user-side discussions of ABS implementation have focused on the companies, institutions and individuals that have complied in whole or in part with source-country ABS requirements – i.e., users that have sought ABS contracts or permits. On the basis of this focus, some commenters claim that ABS implementation will be addressed under contract law – through actions to enforce the “ABS contract.” This view was stated in the CBD negotiations and thereafter in publications and discussions by environmentalexperts,135 it persists today in publications and discussions proposing standard contract formats as simplistic solutions to ABS difficulties.136

[a] Application of contract law to ABS situations

The main flaw in the contract law approach is its presumption that all users will obtain ABS agreements (contracts, permits or other arrangements) before obtaining or utilizing genetic resources. Even if this presumption were true, however, the availability of contract law to resolve ABS issues and problems would be dubious at best. Contract law is, by definition, a process that depends on definiteness – having an instrument or agreement, based on well understood concepts and definitions about which the Parties agree, and which a court can interpret and enforce. The functional application of contract law must also be based on a legally agreed, coherent, internally consistent, and logical system, which can be applied to the contract in question. Courts will usually refuse to enforce a contract where primary facts are ambiguous.137

Without clear means of understanding and interpreting ABS contracts and applying contract legal principles to them, it will be impossible for the courts to come to consistent, replicable decisions interpreting or enforcing those contracts. This is evidenced by the current situation, in which many users conclude that ABS does not apply if resources were obtained from collectors, middlemen and others outside of the source country. This basic dispute about what actions “trigger” the ABS responsibility suggests that ABS contracts may not be enforceable, until these conceptual issues are resolved. Even if this issue is fully determined through the international negotiations,138 it will still be necessary to integrate them into national law through legislation.139 Until (i) these issues are resolved (legislatively and/or judicially) in each country and (ii) those solutions are recognized by the user country's courts, it may not be possible to obtain (or predict) the court's interpretation of those instruments, especially when the interpreting courts will be in a different country (the user country) rather than the one that issues the instrument.

Arguably, current ABS contracts in source countries (and the laws governing their negotiation) are highly detailed and rigorous precisely because the parties to an ABS contract cannot depend on or predict judicial processes – the source country must find a way to function where there are no pre-existing well-explained legal concepts to address their particular needs. The resulting amount of detail in ABS contracts is one of the most common complaints of users.140 At present, however, there are no common principles between user and provider countries that the judiciary141 can rely on in interpreting and enforcing contracts. Source country laws can be seen as attempts to minimize the need for later “interpretation” or invalidation of the ABS contract or agreement. All countries can simplify relevant legal and contractual systems only by acting cooperatively to build confidence that each country's national law and court decisions will be consistent and generally predictable when applied in other countries.

To date, countries studied do not appear to have adopted or considered any measures to better enable the use of national contract law to address ABS issues. Such measures must consider the needs of foreign source countries in dealing with users, once the users have left the source country. Even the provider-side legislation in the user country does not create such a basis. For example, the current proposal being considered by the US government applies only to “research projects involving research specimens collected from units of the US NPS that subsequently resulted in useful discoveries or inventions with some valuable commercial application.”142 Presumably the need to “finesse” the terminology and approach arises out of the current ambiguities regarding the nature and meaning of genetic resources and the function of the ABS system. But since this terminology is completely different from all other countries' attempts at ABS legislative terms, it cannot provide a solution to the transnational questions of ABS implementation and “genetic resources.” International law provides no indications of how these issues could be resolved.

[b] Measures to assist source countries in overseeing ABS contracts and users

Contract law is not the only legal concept needed in order to enforce ABS contracts and agreements in user countries. There are many other factors that must be satisfied in order for the source country or other provider to have a realistic ability to call for compliance, or to seek and obtain legal redress if that call is ignored. One such factor is information (evidence). Given that the many of the user's actions occur outside of the source country, the provider will face many legal and practical obstacles that may prevent him from enforcing the contract (e.g., proving that there was a violation, or proof that payment is due). Even one who is not hampered by long distance, language and other obstacles would find it difficult to obtain many of these proofs. Usually, to gather information from a private entity, one must obtain a court order allowing inspection of that entity's operations and its records. Even when the order is granted, it will be necessary to hire experts to conduct the inspection and to carefully document the evidence gathered.

Given the equity concepts underlying ABS, and its focus on developing countries, it is necessary to consider the practicalities arising from the need to oversee each ABS contract and user. All of these processes and experts are expensive and time-consuming. In addition, governmental fees can be sizeable, as can the costs of local officials who monitor the inspection (making sure that access is granted, and that the rights of entry are not abused). Typically the costs of legal processes are much higher in developed countries than in developing countries. Many developing countries would not have the money, time, or knowledge to enable them to use existing user country legal processes to oversee ABS contracts. Their only practical option is to rely on the user's progress reports (if any are submitted) to know how their contract is faring. The equity orientation of ABS suggests the need for measures to assist source countries in overseeing and asserting their ABS-related rights.

3.3.1.2 Users who have not complied with source-country ABS requirements

Currently, in Europe (and presumably elsewhere), many commercial users of genetic resources assume that ABS does not apply to them.143 To some extent, the costs in time, money and risk involved in ABS compliance constitute a perverse incentive, encouraging a company to avoid ABS, usually by finding a credible legal argument that ABS does not apply.144 Such arguments are easy to find in light of the current ABS legal ambiguities. Unless countries adopt legislation to require users under their jurisdiction to comply with the ABS laws of the source country, this will create an unfillable loophole in ABS. Users will essentially be permitted to decide for themselves whether to apply source-country laws.

Up to now, very little user-side legislation has been adopted or proposed to address the possibility that a user in the legislating country might be utilizing genetic resources of foreign origin without permission from the source country. Following adoption of the CBD, several countries, including both the United States and Norway, came to the initial conclusion that Article 15.7 could be adequately implemented in their countries without additional legislation. Since that time, however, Norway has recognized that Article 15.7 requires user measures that address the possibility that a user might fail to comply with the ABS requirements of the country that is the source of genetic material it is using. Norway's draft Nature Diversity Act, although not yet adopted, is the only current example of a national law that squarely takes on this question of the responsibility of its users of foreign genetic material. This Act states that

[i]mport for the purpose of utilizing genetic material from a country which requires prior informed consent for either the utilization or for the export can only happen in compliance with such prior informed consent.145

It does not specifically impose any obligation on the government to enforce this provision, or specify mechanisms for this enforcement; however, it is probable that such mechanisms would be developed after the primary law is adopted.

In Canada, although direct user measures have not yet been developed,146 national ABS policies include the principle that Canada should be

[r]espectful of jurisdictional mandates and mindful of the desirability for inter-jurisdictional cooperation in the development of ABS policies.147

Although this provision may refer only to sub-national jurisdictional issues (in the 12 Canadian provinces), it may still provide a basis on which to consider the rights of other countries and the obligation under Article 15.7 to implement the Convention in a way that results in benefit sharing.

In the Netherlands, while the national policy assumes that the interests of the source country or other provider can be implemented by contracts, it also recommends the development of codes of conduct (discussed in 3.9).148 It specifically places this responsibility for compliance on the user and disavows any national obligation:

The application of the policy... is mainly the responsibility of the business sector, institutions, researchers and individuals.149

A similar provision is found in the US proposed legislation:

The burden of coming forward to initiate benefits-sharing negotiations with the NPS would rest with individual researchers and would conform to the provisions of research permit or MTA to which the researcher had agreed when accepting the permit or MTA.150

The US has not adopted or proposed any user-side ABS legislation.151 Reportedly, however, it has identified two existing laws as satisfying this need:152 The Lacey Act and The National Stolen Property Act (NSPA). Both are criminal statutes, enabling US officials to take actions against persons who have either (i) “transported, transmitted, or transferred goods;” or (ii) “imported, exported, transported, sold, received, acquired, or purchased fish or wildlife153 in violation of foreign law.” These laws apply to the transport, possession, etc. of “property,” “fish” or “animals.”

These laws exemplify the problem all countries face in attempting to apply general law to ABS. For example, since no law in the US recognizes “genetic resources” as property, these two laws will be triggered only if the biological specimens were obtained illegally. In most countries which have adopted ABS legislation, however, genetic-resource rights are separate from the right to take or use “biological resources.” This separation is necessary so that ABS will not interfere with normal transactions involving biological products (food, clothing, wood, plants, etc.). The biological specimens may be collected legally, even if no right of access to or utilization of genetic resources has been granted. Although possession of the biological material may be completely legal, that does not necessarily mean that it is legal to utilize its genetic resources.

In addition, like other laws against theft and illegal trade, enforcement may depend on the market value of the items taken, rather than their use value. Under the NSPA, for example, the action can be taken only where the “stolen” material's market value is at least US$ 5000. In the ABS context, however, many biological samples with low or non-existent market value have significant potential-use value. Reportedly, for example, users are collecting dung samples (of little or no cash value) in Africa, in order to research and utilize enzymes contained in it.154

Another problem encountered in applying criminal law is the manner in which these laws are enforced. Usually, enforcement decisions must be made by the government. The victim may report the crime, but may take no other action. It is the government's task to determine whether to devote its limited human resources (time and expertise) and expend other costs necessary to amass a case against the violator, and whether that case has a high enough probability of success to be worth the effort. This decision is usually made by prosecutorial officials who often do not give high priority to conservation-related crimes.155 This principle suggests a loophole in the draft Act in Norway, under which the applicant's failure to provide information on the origin or provider, and their PIC requirements (if any), is considered to be illegal and can be penalized.

Finally, reliance on the user country's governmental enforcement (criminal laws) ignores a major element of ABS – the objective of equity that underlies the entire concept. ABS can only satisfy the equity objective when benefits are actually shared with the source country. Even if they are enforced with regard to ABS violations, criminal laws against theft, smuggling, receiving stolen goods or possession of stolen goods can only be enforced by the government in which the action is filed. The results of those enforcement actions are usually punitive – that is, the government may cite or arrest the person who steals, smuggles, transports or holds such goods. If the accused is convicted, then the user government may charge a penalty (fine), which is paid into the user government's accounts, or may imprison the violator. The government may confiscate the stolen goods, as evidence, and in some cases the confiscated goods may be returned to the victim after trial. In nearly every situation, a criminal case will not result in compensation or payment to the injured party (i.e., the source country). Hence, criminal penalties against a violator alone will not meet the CBD's ABS objective.156

3.3.1.3 The roles of government, as user and advisor to users

Another element of the direct application of the primary requirement relates to the situations in which the government is directly “utilizing” genetic resources, through government research agencies and institutions, as well as through government-sponsored programs and projects. In this context, national rules for compliance with source-country ABS requirements parallel the concept of “national procurement policies” which have been suggested as a primary means of promoting international environmental objectives.157 In research for this book, the authors noted one governmental program, the International Cooperative Biodiversity Groups (ICBG), under the US National Institutes of Health, which has reportedly adopted specific rules for benefit sharing in connection with its international projects for bioprospecting and the identification and analysis of genetic resources.158

Another instrument (with less binding force) is “Principles on Access to Genetic Resources and Benefit Sharing for Participating Institutions”159 propounded by Kew Gardens as principles to be adhered to by individual botanic gardens, and endorsed by 21 other institutions.160 Relevant as user measures, the following excerpts from the principles although somewhat unspecific, indicate a basis for user guidance:

This document is not endorsed or adopted by any government. As such, its principles are expressed in non-mandatory language that would not be sufficient if adopted into the law of a CBD Party. For example, some of the principles “recommend” actions that are legally required in source-country ABS laws and/or that are binding commitments under the CBD. Although appropriate here, when these principles are included in a more formal legal instrument, it seems essential to “require” such compliance. Although not a substitute for more specific user-side laws, the Principles provide useful guidance, and serve as a strong indicator of the need to address the issues of ex-situ collections, transfers of genetic resources, and biological material that has been added to such collections prior to 1993.

3.3.1.4 Disclosures in patent applications

One of the few specific tools that have been discussed for promoting the implementation of ABS contracts is the proposal to require or encourage disclosure of origin in patent applications – a concept that has been taken up in the Bonn Guidelines at paragraph 16.d(ii). Various versions of this mechanism have been adopted in Norway, Denmark and India, as well as Peru, Venezuela and the Andean Pact Community (APC).

In terms of impact, there are many variations among the patent disclosure measures in place at present. The EU Patent Directive, while allowing countries to adopt such measures, states that the measures shall not have any impact on the granting or validity of the patent.161 This provision did not prevent Norway and Denmark from imposing criminal penalties for nondisclosure or incorrect statements in disclosures, although the failure to make disclosure is not an appropriate legal basis for invalidating a patent.162 The Indian, APC, and Venezuelan laws are written in a way that allows rejection or revocation of the patent in the case of disclosure violations. These provisions, however, apply only to patents regarding the genetic resources of the country/region passing the law.

Unfortunately, there are so many limitations in this concept that it may not be a useful solution to promote benefit sharing in practice.

First, the problems of systemic ambiguity described above are also an obstacle to mandatory or voluntary disclosure. For example, Norway requires disclosure of origin of any “biological material” on which the innovation is based. Presumably this terminology was chosen, due to the uncertainty about which materials or information are “genetic resources.”163 A recent study has shown that an enormous volume of patent applications mention genetically described biological sources.164 An even larger number would describe the use of “biological material.” Each country will theoretically have to consider thousands of patent applications each year, to find out if any of them involves the “utilization of genetic resources” or the “utilization of biological material” with origin in their country.

Second, the disclosure requirements currently do not obligate the government to verify the statements contained in the patent applicant's disclosure of origin. The government does not even commit to informing the source country named in the disclosure. Where voluntary disclosures are not made, there is no basis for determining the specific source country of the biological material used in the innovation. As a practical matter, these factors diminish the chance of full disclosure.

Third, the patent disclosure does not create any rights for the source country, but is only a mechanism that will give that country's officials some awareness that resources from their country are (or may be) being used. On the basis of this awareness, they will still have to make a demand on the user, who is located outside of their jurisdiction.165

Fourth, the patent disclosure does not confer any benefits-sharing obligation upon the user. Unless users offer benefits voluntarily or in response to non-binding “recommendations,” such a requirement might not result in any actual sharing of benefits.

Finally, of course, the system presumes that users will agree that they are “utilizing genetic resources” of a foreign country, and will disclose the origin of those resources. This means that, at most, the same parties that have obtained ABS permits will also comply with the disclosure requirements. The value added by such a disclosure requirement, therefore, will probably be less than the cost of it, even if that cost is, as some have claimed, minimal.166

3.3.2 Standards for determining performance

In most legislative mandates, the standard is as important as the contents of the mandatory requirements themselves. In the ABS situation, the standard is the legislative measurement and objective factors that enable the user country or agency to confirm that the user has complied with the requirements described in 3.3.1. It is often assumed that the ABS standard for user compliance is “compliance with the law of the source country.” As a practical matter, this can be a difficult standard to apply, for many reasons.

Legally, the most important characteristic of such a standard is “external verifiability” – the law should not depend on the ability of the agency or official to know what is in the minds of individuals nor the collective intentions of entities, in order for it to know if the standard has been met. In this connection, a problem may arise out of the need to apply the provider country's law – law which has not been adopted by the user country's legislature and may not conform to the requirements of user-country law. To fully apply the law of the source country, a court or agency in the user country must not only find the relevant law, but also learn about how it is applied. For example, to ask how the source country verifies compliance by the user, and how the source country's satisfaction can be determined.167

A country's user-side laws must govern users in that country who are using genetic resources of foreign origin. To do this, the most important single element is the requirement that each user comply with the ABS laws of the particular countries that are the source of his particular resources. Unless all countries adopt basically similar laws, this will mean that every user country must be able know and implement the laws of every other country. There is no direct experience with how such a requirement can function legally. One effort to address this gap is found in Norway's first draft Nature Diversity Act, which, as quoted above, provides that utilization or the import of genetic resources of foreign origin can only happen in compliance with any prior informed consent required by that foreign country.

PIC is, by definition, a “provider-side measure,” since the requirements and authorities for PIC are entirely determined by the law of the source country. By tying compliance to PIC, the draft Act incorporates not only the PIC process, but also the source country laws and requirements under which the PIC was authorized and negotiated and the mutually agreed terms (MAT) that were produced.168

The Norwegian draft Act touches some of the most important questions relating to user-side legislation, without resolving these issues:

These three primary matters are discussed below, as well as other basic issues, such as equity, due process and the possible need to define clear end-points for the benefit-sharing relationship.

3.3.2.1 Identifying and applying the source country law

Determining applicable source-country law is difficult, primarily because many countries prefer to regulate using a different base point. As noted above, rather than the ambiguous term “genetic resources,” they regulate on the basis of “biological material” or “research projects involving research specimens collected” from national parks, or other completely unrelated formulations. Even PIC and MAT requirements vary from country to country. In addition, many provider countries merge their PIC and MAT provisions with the concept of public participation. This causes these responsibilities to devolve onto the local communities involved, suggesting that many separate PIC requirements and MAT instruments may apply to a single bioprospecting project.169

Currently, none of the Contracting Parties have adopted any system for identifying and verifying exactly what source-country requirements must be met by a particular user under their jurisdiction. The Norwegian draft Act provides the only example of an attempt to regulate this.

That draft law would require compliance only where the genetic resources come from a source country that has adopted specific PIC requirements in legislation. This clause would suggest, for example, that a country with no specific PIC requirement in law does not “require PIC,” and thus falls outside the rule of PIC compliance.

In fact, however, this assumption is not legitimate. One cannot say that countries that have not adopted specific ABS legislation have renounced their ABS rights. Many countries' legislators have been stymied by the uncertainties of the ABS concept, for example, and have not been able to find a way to adopt ABS laws that meet national legislative standards. Some may have simply decided not to allow their genetic resources to be used by any foreign user. In others, there may be general principles of that country's law which, although not mentioning ABS, are already sufficient to control situations in which a foreign entity seeks rights in the country's sovereign property, patrimony or even private property. Hence, one should not assume that the lack of a written ABS law enables unrestricted utilization of the country's genetic resources. This complicates the benefit-sharing picture.

3.3.2.2 User measures where the source country is undisclosed

The functionality of user measures may depend on eliminating some common perverse incentives currently created by the ABS system. Of course, the most significant perverse incentive is the one described at the beginning of part 3.3.1 – the user is beyond the jurisdiction of applicable ABS laws during most or all of his utilization of genetic resources. If he can take or obtain the resources outside of the source country without the costs and difficulties of ABS compliance, he will be “home free.”

In adopting user measures, there is a strong need to find solutions that avoid creating additional perverse incentives of this type. For example, the Norwegian draft Act allows the user (only) to determine whether the source country requires PIC and to comply if it does. Moreover, if the source country is not known, then the user is not obligated to take any further action. All requirements for tracking the use of the genetic material are based on the user's identification of the source country and his determination of what obligations from source-country law apply.

There is a clear silent message from this provision – that it is better for the user if he “forgets” where he obtained the genetic resources. Similarly, this provision silently encourages the user to interpret source-country law as permissively as possible. In adopting user measures, countries might need to impose some alternative to PIC and MAT requirements, in order to avoid this problem. By linking user-side provisions so closely to PIC and MAT, the user country may tend to forget its overarching obligation to ensure fair and equitable benefit sharing in accordance with the goals and obligations of the CBD.

3.3.2.3 Practical problems: Applying source country law

As noted in section 3.3.1 above, user-side measures must require or otherwise bring about compliance with the source country's law. The application of source-country law by a user country may be very difficult, however, presenting several key challenges, particularly since the goal for a user country will normally be to clarify the ABS process for its users, agencies, and courts. Agencies are not, in most other situations, required to research foreign law, or to engage in legal or diplomatic processes in order to implement national law.

[a]Description of the basic problems

The challenges of using another country's law vary from straightforward administrative problems to underlying problems of sovereignty. For example, the source country's law may be in another language – a simple problem requiring only a technically qualified translator. But also each country's legal system and methodology is unique in some way – which raises a more complex problem that can be difficult to respond to, requiring in-depth legal research to determine how the source country interprets and applies its laws.

In general, there seem to be two options: The user country may directly interpret and apply the provider country's law; or it will ask the provider country to do so and give input into the user-country court's processes. Under first approach, the user country's courts may possibly come to a very different interpretation than the source country intended. The second approach will require the direct involvement of an official from the provider country, to determine directly whether the laws have been complied with. In practice, however, the result will probably be a combination of the two. Some key concerns that arise in this connection include:

Perhaps ultimately the best solution to these questions will be through the international regime negotiations, if it can develop internationally agreed answers to them.

[b] Current proposals for a partial solution – certificate of source, origin or legal provenance

In nearly all user countries, it is likely that the user will bear some or all responsibility for identifying and documenting compliance with PIC and MAT. For credibility and effectiveness internationally, the user's analysis of the source country's requirements should be validated by the source country. This need has led some negotiators to suggest the creation of a “certificate of source, origin or legal provenance” (in this case, best described as a certificate of “legal provenance”) in current international discussions, apparently viewing this as the primary “user measure” that the CBD calls for.170 Although a certificate-based system would address only one aspect of the issue, it could potentially be helpful in the creation of functional user-side measures. To accomplish this objective, the certificate must be designed to address this particular need.171 At present, the “certificate discussions” have attempted to develop a generic certificate without first coming to a clear understanding of its function as part of the ABS system or user-side measures.172

The use of a certificate as a way of interlinking user and source countries already has some limited basis in existing national legislation. Costa Rica is the only country studied whose national law includes a “certificate of origin or legal provenance.”173 It describes the certificate as follows: “[the certificate] certifies the legality of access to genetic or biochemical resources of biodiversity, and compliance with the terms by the permit-holder of interested party.” The law offers the certificate as an option, which CONABIO (Costa Rica's designated competent agency) may issue, if requested by a user. This provision has never been utilized to date.174

User-side laws, apart from the Norwegian first draft Nature Diversity Act, do not require the user to provide information that could be contained in such a certificate, as a tool for user-country oversight. Many current proposals involving the certificate concept focus on giving information to the source country (discussed in 3.3.1, above), however, rather than on user oversight.

3.3.2.4 “Equitable sharing”

ABS calls for “equitable sharing” of the benefits arising from utilization of genetic resources. It is important to create a standard, to guide the courts in determining whether a share is “fair and equitable.” This issue may arise especially where there is no ABS contract to aid the court in ordering payment of an “equitable share” and also in deciding how and to whom it will be given. In some countries, especially those based on the “common-law” tradition, a large body of decision-based law exists to help courts decide what is equitable. However, in other countries, the term “equity” is not well understood.175

In ABS contracts, the question of equity would apply where someone challenges whether the agreement was fairly negotiated. In some countries, these legal standards of fairness in contract law can supersede the provisions of the contract itself. Even where the contract is “fairly negotiated,” a court can revise it, if it finds that the amount paid or given is unfair in absolute terms.176

3.3.2.5 Due process of law

Due process of law in this context is not a question of enforcement, but rather of a standard for determining whether the user knows and has complied with the provider-side law. In essence, due process of law addresses the rights of the provider and user when dealing with user-side institutions. In the context of contractual relationships, due process comprises two elements – a procedural element and the protection of rights derived from compliance.

Any contractual relationship must, at some point, provide “user certainty.” In ABS, the substance of that certainty is addressed primarily through rights granted under provider-side legislation.177 The protection of that certainty, however, depends to a large extent on the user country's basic laws – sometimes called “due process of law.” Due process requires, inter alia, that the user has a right to know unambiguously what is legally required of him – exactly what provisions apply, and what he is required to do. For example, consider a law that “foreign-origin genetic resources may be utilized only if the user complies with source country ABS law.” Due process only exists, if the users (and government agencies and courts, etc.) know when/whether “genetic resources” are being “utilized.” They must also be able to determine whether a particular genetic resource comes from another country, and, if this is not known, what special requirements will apply. Currently, the ABS framework is not clear on any of these matters.

3.3.3 Enforcing the rights of foreign providers under user-country law

The next practical element that must be considered under this heading is the manner in which source countries can obtain satisfaction of claims based on access or benefit-sharing issues in user countries. The problems of enforcement have generally been recognized:

Although a number of [source-country] legislative regimes have established mechanisms for monitoring, inspections, and verifications, experience has demonstrated limited resource capacity of governments to monitor all bio-prospecting activities within national jurisdiction.... Difficulties also arise with respect to enforcement in cases of non-compliance with legislative requirements in provider countries or with contractual obligations. ... Information provided by the Parties so far indicates limited experience in this regard with disputes relating to ABS.178

So far, however, these problems have not been addressed. The following sections consider three issues – access to information, disclosure requirements and enforcement.

3.3.3.1 Source-country access to information about the utilization of genetic resources in the user country

As a practical matter, ABS compliance will only be compelled if the source country can discover that its resources are being used and/or that benefits have arisen that should be shared. Even then, a system must be found to enable source countries to enforce their rights in user countries. If ABS compliance cannot be compelled and no other incentive for compliance is found, then one would conclude that the CBD Contracting Parties have failed to meet a key responsibility under the Bonn Guidelines – to develop cooperation to address alleged infringements of access and benefit-sharing agreements.179

Access to justice under a user country's law and institutions begins from the understanding a country's justice system is open to those that are aggrieved under that country's laws, regardless of nationality. However, the bare right to bring an action in national courts or agencies cannot, by itself, provide certainty and functionality to a legal regime that operates through commercial (contractual) instruments.

Here also, the distinction between users with ABS contracts, and those without is significant. Where the user has obtained an ABS contract, legal questions will focus on the source country's powers of inspection and other matters described above in 3.3.1.1. Where no source country is known or named, however, the issue is even more difficult. How can a source country oversee the user and assert/protect its rights, if it does not know who the user is? This unawareness is another reason user-side ABS measures are needed. The user country is the only government with any chance of identifying who those users are and what resources they are utilizing.

3.3.3.2 Disclosure as a step to enforcement

A first step for source countries in seeking enforcement of ABS requirements is to have knowledge of the utilization of genetic resources. The concept of “disclosure of origin” provisions (see 6.5.2) generally serves as a means of shifting primary oversight responsibility from the user country back onto the source country. For example, under the Norwegian first draft Nature Diversity Act the information that is disclosed is not forwarded to the source country. The source country must come and find the information for itself. Disclosure places the burden of giving information on the one possessing the information – the user. In most discussions of the “certificate of source, origin or legal provenance,” for example, the certificate's objective is primarily to give each source country a tool by which it can find out about the use of genetic resources that have origin in that source country.180 Many developed countries and other commenters said that the only user-side measure they intend to adopt is a disclosure-of-origin requirement.181 In this context, however, we must reiterate the two major limitations of the “disclosure” approach:

As noted above, a few such laws have been adopted, but there has been virtually no experience with them.

3.3.3.3 Remedies and penalties in user countries

Once the source country (or source) is aware that a user is utilizing its genetic resources, that source country must mobilize processes for oversight or verification of compliance. If the user is not in compliance with the source country's law, then the country must be able to seek legal redress against noncompliant users who do not respond to less compelling processes.183

[a] Legal rights and remedies

With regard to the remedies available to the source country, the critical question is whether the user-country law enables remedies, or only imposes penalties. For this purpose, the difference between a “remedy” and a “penalty” is as follows:

The primary differences between these two are (i) who may bring the action, and (ii) who receives the money or other value paid if the defendant loses. In most countries, penalty laws are initiated by government, and all fines and other moneys collected are retained by the government that brought the action.185 Confiscated property is held, destroyed or sold by government, or may be impounded as evidence, to be returned to the legal owner at the end of the trial. By contrast, actions for remedies are initiated by the injured party; and the amounts awarded are paid to the injured party. In most countries' organic law, the government is not allowed to bring private actions on behalf of individuals – it must focus on penalties rather than remedies.186 It is rare (almost unheard of ) for any such law to mandate specific performance of a contract or another country's law. Thus an ABS action to claim a share of benefits must be brought by the source country (or other source) as a private claimant, or by some special entity acting on the source country's behalf.

A country's implementation of its user-side measures will normally be focused on penalty, rather than on ensuring or assisting the source country to obtain compliance with its ABS requirements. National courts will usually interpret their rights narrowly. If the user country's law does not specifically authorize its courts to issue an order requiring compliance, the chance of this result is very low.

Few of the national laws and other documents studied consider the provider's rights and remedies in the user country. The Norwegian first draft Nature Diversity Act notes only that the right of enforcement is limited to the Norwegian government, which “can, by court case, enforce the said conditions.”187

On questions of legal redress, however, it is also interesting to consider the measures and legislation adopted by countries which regulate domestic users of domestic genetic resources. In many of these laws, it may be argued that the same rights that the country provides for itself in dealing with users of its own resources may also apply where users in that country are utilizing another country's genetic resources. For example, Brazilian law presumes that private rights under the ABS contract are resolved in civil actions, but gives an additional, specific statutory right to the provider (country, community or individual) to receive compensation, if the user has caused any harm or damage in the course of his removal of specimens.188 It also empowers the government to impose administrative penalties189 (such as suspending permits and invalidating other administrative approvals), noting that these penalties will be “without prejudice to applicable civil or criminal sanctions.” It is possible that Brazil might take the same administrative actions, where it gets notice from another country, about utilization of genetic resources in violation of Brazil's ABS laws. Brazilian law also specifically empowers and requires “competent federal bodies” to supervise, intercept and seize samples that have been “accessed in a manner contrary to this Act.” It further provides that those powers and duties may be disseminated to other bodies.190

In Costa Rica, the particular kinds of remedial measures that apply for oversight of users of Costa Rican genetic resources have been very clearly specified. They include provisions for oversight of users, including the following:

These must be addressed in “coordination with the interested parties and resource providers.” Once the user is outside Costa Rica, there will also be a need to comply with the laws of the user country in taking these oversight actions. Here also, however, if Costa Rican officials were notified that a Costa Rican user was utilizing genetic resources of another country without ABS compliance, they might require that user to comply with the same provisions listed above, and might even apply the same sanctions.

[b] Unadapted use of existing penal laws

One approach that is frequently cited as a way of implementing ABS obligations on the user side is applying the user country's existing penal laws against a user who has violated the ABS laws of the source country. This approach has two flaws, when used as the primary (virtually the only) means of direct implementation of user-side ABS obligations:

For example, as discussed in 3.3. and 3.4, the US has identified two criminal laws – the Lacey Act and the Stolen Property Act195 – as its primary user-side measures. Both are penal laws, which must be enforced by the US government through a criminal action against the violator. Another such provision is found in Australia, where the law provides that

[a] person must not intentionally import a specimen if the person knows that: (a) the specimen was exported from a foreign country; and (b) at the time the specimen was exported, the export of the specimen was prohibited by a law of the foreign country that corresponds to this Part.196

All of these laws suffer from the two above-listed problems. The only outcome of an action under either law would be penalty (fine or imprisonment).197 There is no way that these laws can enable a private remedy or action by the source country or other provider. More important, however, these laws only apply if the government can prove that the specimen or item was “stolen” or “illegally exported” from a foreign country. Given the vast grey area in distinguishing “biological resources” from “genetic resources,” it is clear that a “specimen” (physical sample) can be exported completely legally in objective terms, so long as there is no overt statement by the exporter that the material will be used for genetic research.

As a practical matter, there is another problem – agency discretion. None of these laws in any way requires the government to take punitive action. No private person may petition for its application. An action can be brought under these provisions only where the government has both clear evidence and confidence that its interpretation of the law is correct, and the willingness to spend limited personnel, time and money on bringing such an action.

[c] Arbitration

Another direct discussion of legal redress is found in the European Commission's communication on ABS and the Bonn Guidelines, which specifically notes “the possible role of arbitration for addressing infringements of ABS arrangements,” in response to the difficulties connected to jurisdiction over the user and application of foreign law in the user country.198 This is not further discussed or elaborated in the Bonn Guidelines.

In practice, arbitration is a provider-side measure – the parties to any contract do not have a right to demand arbitration unless the contract specifically so states. This means that arbitration is only possible if either (i) there is an ABS contract (compliant user) that requires arbitration, or (ii) the parties later agreed to it. Thus the EC's comment implies that arbitration provisions will be more easily upheld by courts than other provisions of the ABS contract.199

3.3.3.4 Additional complications – undisclosed source

The more difficult question in enforcing user measures arises where there is no ABS contract or where the source country is not known or disclosed. As noted above, the law would create a perverse incentive, if it allows the use of foreign genetic resources without ABS compliance, in any case where the user does not know the source of the material. At the same time, the law needs to provide an appropriate avenue for users who legitimately do not know the specific provenance of the materials they are using.

Current scientific capability, coupled with the cost of genetic identification processes, indicate that science does not offer the user or the government a means of easy identification of the species that provided the genetic resource. Even if the species could be determined, however, the source country may still be unclear unless the species is endemic to a very narrow range, which is entirely within a single country. Narrow-range endemics constitute only a very small percentage of species.200 Thus, most species and sub-species have more than one country of origin. The “undisclosed source” problem is therefore a core difficulty for benefit-sharing negotiations.

3.4 User-side administrative responsibilities

The Bonn Guidelines also suggest administrative measures that are relevant to the user side of the ABS concept, of which the most frequently mentioned is the duty of each country to “designate one national focal point (NFP) for access and benefit sharing.”201 The primary duties of the NFP, as specified in the Bonn Guidelines, are focused on the provider side.202 There are several significant user-side issues for NFPs to address. One of these is embodied in the task of developing “mechanisms to provide information to potential users on their obligations regarding access to genetic resources.” The Guidelines also identify a role for “competent national authorities” to “be responsible for monitoring and evaluation of access and benefit-sharing agreements;” and to “be responsible for implementation/enforcement of access and benefit-sharing agreements.”203

The task of naming a focal point is quite straightforward and 81 countries have done so, as shown in the CBD's ABS database.204 These authorities, even in countries with many users under their jurisdiction, are focused significantly on issues of access to that country's own genetic resources. In general, countries assign these tasks to agencies with scientific and conservation mandates, in recognition of the biological and taxonomic elements of provider-side ABS. On the user-side, however, these elements are not so essential, and other key issues (commercial and legal matters) may be more essential.205 It may therefore be necessary for countries to consider identifying two separate national focal points or competent authorities – one for user-side issues (monitoring users and enforcing ABS contracts),206 and the other for the provider-side issues that are more commonly addressed by focal points at present. This need may become more obvious and common, once user measures are in place, and countries recognize the need for oversight of users under their jurisdiction and support for collections, researchers, and commercial and industrial entities.

It is important for all countries to address this task of providing information to users regarding access to genetic resources. ABS will be worth the effort only if users continue to want genetic resources and understand the administrative processes to obtain them. At least three developed countries have created or authorized programs to assist users by gathering information about the process of obtaining genetic resources access in various countries. Japan, through the Japan Bioindustry Association, is actively undertaking an in-depth program to pre-develop relationships with source countries to enable the development of ABS arrangements between their users and a variety of provider countries in Asia and elsewhere. Similarly, the US and the Netherlands both report that they are developing information systems to compile information that will assist users seeking access to foreign genetic resources. This work is complicated, given that in many countries PIC and MAT responsibilities are decentralized and merged with public participation processes. In these countries, ABS requirements are individually negotiated, and may be different for each user.207

3.5 Practical means of motivating compliance with user measures

As a final element of this chapter's investigation of practical needs relating to user measures, we consider the value of other legislative approaches, of using, in addition to mandatory provisions, voluntary provisions and incentive/motivation measures. The CBD and the Bonn Guidelines call for all three of these types of measures, and various countries examined in this study have used or suggested all three.

3.5.1 Mandatory

The use of mandatory provisions in the user country offers the benefit of clarity for the provider country, and at least theoretically it would promote 100% compliance simply by requiring all users to comply. As noted, there are currently numerous obstacles to the creation of a completely mandatory ABS system. In particular, currently (since no user-side legislation exists) users who are not bound by source-country ABS law once they and the genetic resources have left the country are completely free of ABS requirements. A major legislative effort would be needed to create a complete network of user-side measures.

In terms of national legislative drafting, the mandatory approach is usually rather simple to create. The challenges of mandatory legislation are not in writing clear mandatory requirements, but in practical implementation. This is particularly true in the transboundary context. In a mandatory system, implementation must be based on oversight. It must be possible to confirm compliance with ABS requirements, and lack of compliance, based on externally confirmable criteria. This is not only a requirement for enforcement, but also for basic implementation. The system's implementation can be consistent and fair only if all users are applying the same standards in the same way. Mandatory provisions must be supported by specific oversight and enforcement mechanisms. A mandatory provision that lacks such enforcement mechanisms is no different in impact from a voluntary or non-mandatory one.

Typically, mandatory measures operate in two possible ways: either (i) the law is enforced through direct governmental oversight, or (ii) the government creates the laws (and controls certain aspects), but the person or sector benefited or protected by the law is responsible for overseeing its implementation. ABS is typically thought to prefer the second type of measure. Unfortunately, as discussed in Chapter 6, such measures are usually effective only where the benefited sector is financially able and motivated to incur significant costs and efforts in order to enforce the law. In many cases, the providers of genetic resources do not have the funds or ability to take on these tasks – so that basic implementation is a challenge and potential obstacle for ABS.

3.5.2 Non-mandatory provisions (voluntary measures and recommendations)

Another kind of measure that has been discussed in detail in the ABS context is the idea of “voluntary” measures, including documents like the “voluntary disclosure of origin in patent applications.” Although castigated by some, voluntary measures can have a definite and useful role in any legislative system. The adoption of purely voluntary measures is very effective where the measures are desired by the regulated industry. This may happen where the industry recognizes a need to act in a more coherent way, but require government's help and guidance to do so. One factor that sometimes motivates an industrial sector to seek voluntary measures is their desire to avoid more restrictive legislation. Facing such a prospect, industrial groups will sometimes develop and accept voluntary standards.208

Many ABS measures, although mandatory in phrasing, will be voluntary in impact, because they do not enable oversight or any other means of government confirmation or other action to ensure or promote compliance or enforcement. Recently, several countries have suggested developing concrete information on industrial interest as a means of creating functional user measures. The Netherlands, as well as the EC and Switzerland, have all suggested creating voluntary measures, in the form of the “development and use of Codes of Conduct that contain the basic principles”209 to promote voluntary ABS compliance.

To date, the most active development of voluntary measures has been the procedures governing collection and transfer/tracking by ex-situ collections of biological specimens (which are primarily “middlemen,” although also engaging in taxonomic and other research). These procedures have been developed by botanic gardens210 and microorganism collections.211 Another ongoing effort is the work under the BioTrade Initiative (mentioned in 3.2.3) to develop a code of conduct for the use of biological extracts, focused on user activities and responsibilities. While the code's reach is much broader than ABS, the initiative has received strong indications that some users are interested in applying the guidelines to both genetic and biological materials, so long as their provisions are commercially reasonable.

Apart from these examples, most current proposals for voluntary ABS measures are not based on an analysis of their probable functionality or usefulness, but as responses to the discovery that mandatory measures are not possible or practicable. In general, this reasoning will result in voluntary measures that serve little purpose, unless they can be connected to some broadly recognized motivating factor or revised to become “incentive or motivation measures.” Recently, however, several initial studies of user practices and attitudes have been undertaken.212 These studies show that some industrial, commercial and research entities participating in the ABS processes and discussions clearly desire guidelines and assistance of this type. More clearly, however, they show that a much higher percentage of industrial, commercial and research entities do not yet hold this view.

A recent OECD assessment of voluntary mechanisms has noted that such mechanisms have limited impact, unless they are used selectively, as part of a “policy mix” that enables them to address issues where other mechanisms are either not needed (because there is a strong desire to cooperate) or not possible (because the basic system and relevant understandings are not yet developed).213 In ABS, there has been little analysis of the key question – industry's desire for such measures – except in Japan, whose user community includes many companies that have stated a strong desire to comply with ABS requirements.

3.5.3 Incentive and motivation

Where mandatory (command and control) mechanisms are not practical – i.e., where they cannot function in a way that ensures consistent compliance – and there is insufficient desire in the regulated industries for voluntary measures to have the desired impact, the use of legal and/or economic incentive measures may still provide a solution. Conceptually, legal and economic incentives and other system-created motivation measures are very simple – rather than requiring a specific action (necessitating oversight and enforcement), the government adopts an opposite approach, offering some positive benefit to those who take the action. This approach places the onus of responsibility on the user, not by mandate, but by self-interest. The user will comply if it wants to receive the benefit. Incentive measures can cover most activities that would be normally be compelled through mandatory measures. Only the reason for compliance would be changed – instead of acting out of legal compulsion (taking the minimum action required by law), the user would act out of its own interests, possibly taking more intensive action, if a greater benefit is available.

The challenge in developing incentive/motivation measures is operational. It is imperative that the benefit provided by the measure to the user should be something desirable. Its subjective value to the user should be large enough to offset the costs and other impacts of compliance. In addition, that benefit should not be available to users who do not take the desired action. This means that there must be clear methods of proving or documenting that one qualifies for the incentive. Finally, in using incentives, one must not underestimate their costs. Incentive measures are not cost-free to the government, since it will be essential to have mechanisms for confirming compliance, for preventing attempts to obtain the incentive without complying, and for keeping records.214

Up to now, relatively little attention has been given to the concept of incentive in ABS user measures, but with important exceptions.

In 2005, the Japanese Ministry of Economy, Trade and Industry (METI), in conjunction with the Japan Bioindustry Association, concluded a multi-year process through which they developed a set of guidelines for users of genetic resources (the “Japanese Guidelines”).215 Based on the Bonn Guidelines, the Japanese Guidelines provide a set of basic principles and suggestions for users seeking to comply with best practices for ABS compliance. There are two factors which cause the Japanese Guidelines to stand out when compared with other such guidelines. First, they are directly focused on clarifying the obligations of users as conceived under the Bonn Guidelines; and second, they include a direct incentive for users to comply with the guidelines. In Part IV, they discuss the ability of METI to provide assistance and advice, and other kinds of support, for businesses that “do business in a way that conforms to the [Japanese] Guidelines.” In essence, this provision is an incentive measure – offering government assistance to any company that complies with the guidelines and still encounters difficulty in obtaining provider approval and other activities. The desire to avoid being labeled or misconstrued as “biopirates,” coupled with this incentive may be a major factor in encouraging Japanese companies to comply with the Japanese Guidelines.

In addition, under their technical research ministries, several countries identify benefit sharing and/or ABS compliance as one factor in determining whether to authorize projects or issue grants.216 These programs are generally directed at the providers, organizations and agencies such as consulting firms and aid agencies, which are most likely to want to share benefits (or with a mandate to do so). It may also encourage applicants who are not so inclined to consider benefit sharing.

Legal recognition of the incentive approach exists, but has not been broadly applied. General biodiversity legislation in Costa Rica recognizes the usefulness of incentives as well, calling for the development of a variety of incentive systems, applicable to those users who are utilizing Costa Rican resources. Among these are tax credits and exemptions, administrative priority in some relevant applications and business licensing, and access to special business development incentives.217

Other suggestions have been made for the global development of a “voluntary certification” system, as another type of incentive.218 Although it may sound simple, the idea of creating an ABS certification system will be quite complex and costly, both in creation, and in upkeep.219 For voluntary certification to provide an incentive to comply with ABS, for example, it must provide a benefit to compliant users, and that benefit must not be available for users who do not comply with ABS requirements. Most important, that benefit must be of sufficient value to counterbalance the costs of compliance. Another critical point about certification is that it does not aim for 100% participation, but assumes that some percentage of the sector will choose not to seek certification. The certification idea remains a tantalizing one to some participants' negotiations. By itself, however, it is clearly not a sufficient incentive/motivation tool for ensuring benefit sharing compliance.220

The critical question underlying both voluntary measures and incentives, however, is the attitude and knowledge of the industry. In the German and British national user studies, it was quickly clear that even those users that were motivated enough to respond to written questionnaires on the topic were largely unaware of the CBD and the ABS concept and responsibilities.221 The EU has suggested the possibility of including ABS issues (compliance with the Bonn Guidelines) in its Eco-Management and Audit Scheme (EMAS), indicating that it may develop standards on ABS compliance – to be added to the existing standards by which EMAS-certified companies can “evaluate and improve their environmental performance.” At present, the EU views the EMAS as a voluntary measure, rather than an incentive, noting that such a scheme would “serve the purpose of helping users to improve their overall environmental performance, including in relation to access and benefit sharing but would not alter their legal obligations.”222

3.6 Summary – national adoption of user-side measures under the Bonn Guidelines

The current status of national compliance with the user-country elements of the Bonn Guidelines is relatively grim. Once a user is operating outside the source country – has gone “beyond access” – the user is also basically beyond the reach of the source country's laws and legal processes. This leaves all provider or source legislation vulnerable, owing to the nearly complete lack of enforcement.

At a minimum, it appears that the objectives of ABS functionality, if addressed through mandatory mechanisms, must be met by the following user-side measures:

Many difficulties and challenges of this task have been identified, which suggest that mandatory measures may not be the most effective option, and indicate a need to shift the global paradigm in a way that focuses on incentive/motivation, alone or in combination with mandatory and permissive measures. To date, however, the overwhelming view still focuses on a mandate-based ABS system. Consequently, this book's primary approach is to focus on such measures.

One significant reason behind the failure to adopt user-side measures is the lack of a rigorous analytical basis underlying ABS, which could provide legislators and draftsmen with a basis on which to build their systems. The following chapters examine and elucidate that basis as the authors' understanding after lengthy research and analysis. Thereafter we offer suggestions of user measures which recognize the realities and objectives of promoting research, development, and industrial and commercial activities, while still achieving the goals of the third objective of the CBD.


77 Depending on how the term “utilization of genetic resources” is ultimately defined, this may include virtually all countries. For example, if “utilization of genetic resources” includes conventional plant breeding activities, virtually all countries will be “user countries” since most plant breeders utilize varieties from around the world. This is the source of the separate development of the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), which as adopted is narrower than this original objective. It does not eliminate the need to apply national ABS legislation to agricultural variety development. See Moore and Tymowsky, 2003.

78 Including especially Cabrera and López, 2007, Book 1 in this Series.

79 See Swiderska, 2001. Bonn Guidelines, Art 48. The latter specifically focuses on how benefits should be distributed – a matter solely within the source country's discretion: “benefits should be shared fairly and equitably with all those who have been identified as having contributed to the resource management, scientific and/or commercial process, including governmental, non-governmental or academic institutions and indigenous and local communities. Benefits should be directed so as to promote conservation and sustainable use of biological diversity.”

80 See e.g., EC, 2003.

81 Compare COSTA RICA, in which a percentage of benefits is distributed to the protected areas agency (per Reid et al., 1993) and similar provisions in the USA proposal, on one hand, with AUSTRALIA: Environment Protection and Biodiversity Conservation Regulations 2000, § 8A.04, whose approach may be intended to provide an incentive for private conservation. The Costa Rican law considers other distribution to be a part of the ABS contract. Normas Generales para el Acceso a los Elementos y Recursos Genéticos y Bioquímicos de la Biodiversidad, art. 7.

82 CBD Art.15.7.

83 Bonn Guidelines, at paras 16(d), and 13. Although constituting less than one-half page in the 19 pages of the Bonn Guidelines, these few lines may be the most important for countries with large numbers of users and, with Article 15.7, is indeed the lynchpin of the entire ABS framework.

84 This paragraph actually refers to compliance with Bonn Guideline 16(b), which in turn addresses compliance with MAT.

85 Bonn Guidelines at 16(d)(iii), (vii), (iv), (vi) and (ii), in the order presented here.

86 Bonn Guidelines at 13, 16(d)(i), 14(c) and 14(d), in the order presented here.

87 Bonn Guidelines at 16(d)(v). Paragraphs 51 through 61 also make general statements regarding incentives, accountability, monitoring/reporting, verification, disputes and remedies, which are phrased in very generic terms. Where relevant, these are discussed in the following sections.

88 Unfortunately, budgetary constraints have meant that we were also limited linguistically to countries which provided their laws (or a detailed analysis of their laws) in English, Norwegian, Spanish, or Portuguese.

89 The authors' underlying case study may not be a complete analysis, owing to the large number of potentially relevant laws, and the fact that some documents and reports could not be found or obtained. It was not possible, within the budget of this project, to undertake a full evaluation of the laws of the 50 US States.

90 The parallel may not be complete, however, and has not been recognized as such by any of these governments.

91 See for example the US, Norwegian, Australian and Canadian examples, discussed below.

92 St. prp. Nr. 56 1992–93

93 Norway is formally an “associate country” with regard to the European Union (EU), and bound to implement new EU Directives in a number of legislative fields. It is a member of the European Free Trade Agreement (Iceland, Liechtenstein and Norway).

94 See Tvedt, 2007 (forthcoming).

95 NORWAY: NOU 2004:28 http://www.regjeringen.no/nb/dep/md/NOU-2004-28.html?id=388846.

96 NORWAY: NOU 2005:10 http://www.regjeringen.no/Rpub/NOU/20052005/010/PDFS/NOU200520050010000DDDPDFS.pdf.

97 June 2007.

98 See, e.g., Vogel, J., “Reflecting Financial and other Incentives of the TMOIFGR: The Biodiversity Cartel,” Chapter 3, in Ruiz and Lapeña, 2007, Book 3 of this Series.

99 As a non-party, the US is not specifically bound by the commitments made by all Contracting Parties to the CBD; however, it has made some serious efforts to comply with them including identification and monitoring under Article 7, and submitting one national thematic report (a Voluntary Report on Implementation of Expanded Program of Work on Forests, dated Feb. 2004 at http://www.biodiv.org/doc/world/us/us-nr-vfe-en.pdf).

100 This proposal is still in a preliminary (environmental impact review) stage. 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.

101 This term includes all units under the US National Parks Service, whether they are called “national park” or given another designation.

102 The authors are grateful for the information provided by Ms. Sezannah M. Seymour, the US's ABS Focal Point, who provided this material on current developments and reports, including the NPS report.

103 Officially known as the “Lacey Act Amendments of 1981” (replacing the original Lacey Act), enacted as Pub. L. 97-79, Sec. 3, Nov. 16, 1981 (last amended 2003), codified in the US Code at 16 USC §§ 3371–3378.

104 Included in the United States Code (federal law) as 18 U.S. Code §§ 2314 and 2315. The Stolen Property Act was originally enacted in 1949 and has been amended at least seven times since its original adoption.

105 Federal Technology Transfer Act of 1986, enacted 20 Oct. 1986 as Public Law N° 99-502, codified in current US Code as 15 US Code 2781, 3701 and 3710 and elsewhere.

106 These documents were so identified in presentations and personal communications by Leonard Hirsch, (Smithsonian Institute), US delegate to the CBD, who stated that the US has determined that they are sufficient to satisfy Article 15.7. The authors have been unable to find any public US document confirming this conclusion. His communications also identified the “Trade Secrets Act,” however, this law's ABS relevance was not clear upon review.

107 The National Institutes of Health program is described in numerous publications, including Rosenthal et al., 1999; Rosenthal, 1996.

108 Discussed in detail in Bhatti et al., 2007, the fourth book in this Series.

109 This information was provided by InBio, in October 2006, but relates to non-conventional uses of natural species only. Costa Rican agricultural researchers also engage in plant variety development using varieties from international collections. See, e.g., Moore and Tymowsky, 2005. A more in-depth analysis of the current state of Costa Rica's institutional and legal framework is available in Book 1 of this Series. Cabrera and López, 2007.

110 COSTA RICA: Estrategia..., at 2.4: “Knowledge in these subject areas is scarce, the ability to track ABS permits is limited. Practical ABS application under the legislation which has created the institutional framework is still in development.” Informal translation for purposes of this book only, by T. Young.

111 COSTA RICA: Decreto No. 31 514, 2003, issued pursuant to the Organic Law on the Environment (N° 7554 of 4 Oct. 1995) §§ 46–47; and the Biodiversity Law (N° 7788 of 30 April 1998), § 62.

112 COSTA RICA: Estrategia..., 1999. Accessed via the CHM's ABS Measures database.

113 BRAZIL: Provisional Act N° 2, 186-16, implementing CBD Arts. 1, 8j, 10c, 15 and 16, Act. No 2, 186-16, (Aug. 23, 2001). Several other instruments were available in the CBD database, but only in Portuguese, so the authors were uncomfortable using them for specific analysis.

114 JAPAN: METI/JBA, 2006, Guidelines for Access to Genetic Resources for Users in Japan, Ministry of Economy, Trade and Industry and Japan Bioindustry Association (adopted March 2005, published in English, 2006) available online in English at http://www.mabs.jp/information/oshirase/pdf/iden_tebiki_e.pdf.

115 AUSTRALIA: Environment Protection and Conservation Regulations, 2000, Statutory Rules 2000 N° 181, as amended (taking into account amendments up to SLI 2006 N° 131. ABS issues are addressed primarily in Parts 8A and 17, but also critically affected by Parts 9 and 10, which address protected areas and species and the manner in which resources within them can be used.

116 AUSTRALIA: Queensland Biodiscovery Act, Act N° 19, 24 Aug 2004; and other documents available on the CBD's ABS measures database through March 2007.

117 A variety of non-legislative documents obtained through the CBD were also examined, but did not contain information on “user measures” as that term is used in this book.

118 NETHERLANDS: State Secretary of Agriculture, (undated), Nature Management and Fisheries, Sources of Existence: Conservation and the Sustainable Use of Genetic Diversity, available online at the website of the NL's ABS focal point at http://www.absfocalpoint.nl/documents/note_on_biodiversity_Complete.pdf.

119 Guiding Principles and Features of ABS Policies in Canada (undated) obtained from the CHM.

120 See generally, EUROPEAN COMMISSION: EC, 2002, as well as the national ABS reports provided by other EU Member States: AUSTRIA, ESTONIA, and POLAND.

121 EUROPEAN COMMISSION: EU Directive on Patents in Biotechnology (EC/98/44); “Communication from the Commission to the European Parliament and the Council, the implementation by the EC of the “Bonn Guidelines” on access to genetic resources and benefit sharing under the Convention on Biological Diversity,” COM(2003) 821 final, Brussels, 23.12.2003; and EC Regulation (EC) No 761/2001 allowing voluntary participation by organizations in a Community eco-management and audit scheme (EMAS).

122 These include the “Innovation and SME (small and medium enterprise) program,” the “Partnership Agreement between Members of the African, Caribbean and Pacific (ACP) States and the European Community (Cotonou Agreement), and its Compendium on Cooperation Strategies,” mentioned in EC, 2002. None of these documents specifically mentions ABS or is, in its current form, applicable to ABS.

123 Although no legislation has addressed these matters, they have been prominently discussed in the EC's primary report on ABS. EC, 2003, at 9 and 22.

124 CBD COP Decision VII-19.

125 Holm-Müller et al., 2005.

126 Latorre, 2005.

127 Dedeurwaerdare, 2006.

128 The German study's questionnaire was circulated to a list of 597 users, receiving 136 replies (23%); the British study's was circulated to 600 users, receiving 127 replies (21%); the Belgian study's was circulated to 400 organizations (heavily weighted in favor of the public sector), receiving only 57 replies (14%). All three studies noted significant differences among the 10 sectors sampled, but were forced to base these conclusions on as few as four respondents in a given sector (possibly less in Belgium where graphs did not clarify numbers and other factors). Often all responses in a particular sector would have no response to a given question. Another limitation in the conclusions that can be drawn arises from the fact that all studies were anonymous, and that this might have enabled multiple replies from the same user.

129 Oldam, 2005.

130 See UNCTAD, Draft concept note: Practical Guidelines for Equitable Sharing of Benefits of Biological Resources in BioTrade Activities, 3 March 2007. Discussion in this book is based on the 31 January 2007 draft (not yet available for citation). It is discussed here with permission from the BioTrade initiative.

131 This draft is not available for citation, and is not quoted in this book.

132 Bonn Guidelines at 16(d)(iii), (vii), (iv), (vi) and (ii), in the order presented here.

133 This point is best illustrated by noting how desirable it would be for a government if it could impose taxes only on persons from other countries, thereby protecting its citizens and voters from increased tax costs. Obviously, such a situation would not be desirable to the persons taxed in this way. National sovereignty is a concept that ensures that only the sovereign government can legislate matters and persons within its borders and jurisdiction – it is, in essence, a protection to its citizens.

134 The EC and many other comments on “user measures” do not acknowledge this distinction, and take the view that the entire implementation of ABS can be satisfied by provider country legislation, supplemented by user country adoption of patent disclosure requirements. EC, 2002 at 7.3); see also UNU-IAS, 2005 (directing nearly all attention to this issue.)

135 See, e.g., Glowka et al., 1998, at 4.

136 See, Scott, 2005.

137 The difficult issues surrounding the application of contractual law to ABS are examined in Part II of Bhatti et al., 2007, Book 4 in this Series.

138 It is doubtful that all contractual interpretation issues will be fully addressed in the negotiations; however, it is hoped that enough clarity is provided to enable countries to adopt internally consistent systems, and to find ways of interlinking these systems to form the “international regime.”

139 In many countries, the interpretation of contracts is aided by legislation that provides standards for contract analysis. For example, a section of the California Civil Code identifies many provisions which are assumed to be part of any contract, unless the contract specifically provides the opposite. UNITED STATES: CALIFORNIA: Civil Code Division III (Obligations) §§ 1427–1725. (General contract law only; approximately ten times that amount addresses more specific issues, such as credit transactions and consumer's rights). One such issue is order of payment and services (See, e.g., Restatement (2d) Law of Contracts, vol. II “performance and non-performance.”). Unless the contract specifies differently, in a services contract the amounts due will be paid for only after the services are provided. Currently, there are no provisions in US law to define “genetic resources” or provide any guidance or indication as to how the unique elements of ABS agreements will be addressed by US courts.

140 See, Latorre, 2005; Holm-Müller et al., 2005.

141 Courts and other judicial and quasi-judicial processes and institutions.

142 US NPS, 2006, Draft EIS, presented as Alternative B. In this regulation, there is no need to distinguish between biological and genetic resources from national parks, because both are restricted. In the United States, it is specifically forbidden to take any material, living or non-living, from a National Park, without permission from the NPS. Outside of national parks, this approach would not help, since no US law has yet clarified the ownership of genetic resources.

143 Holm-Müller et al., 2005, at 37; Latorre, 2005, at 28–30; Frison Dedeurwaerdare, 2006, at 34–38. To a large extent, the latter two surveys also assume that genetic resources from domestic providers need not comply with ABS (without consideration of species origin).

144 Within the provider country, the applicant's interest and plans are often matters of public knowledge, particularly where the country has delegated its PIC responsibilities to local communities, merging them with general provisions relating to public participation. The result of this widespread awareness is often that the application is subjected to legal challenges from a variety of sources. Beyond the access phase, the user is frequently identified in the press and electronic media as a “biopirate,” despite the fact that his genetic use and objectives became known because he acted in a non-piratical way – he applied for government approval. Young, 2006a.

145 NORWAY: draft Nature Diversity Act, § 60, and similar language in provisions governing use of genetic material from these sources. All translations from Norwegian are informal translations for the purposes of this book only, by M. W. Tvedt.

146 National processes are ongoing, but reportedly will focus on provider measures. Based on informal discussions, it appears that the legislation will be equally applicable to foreign and domestic users.

147 CANADA: Guiding Principles, supra., last bullet point. Another principle calls for policy to be “... building on and respecting Canada's international commitments.”

148 NETHERLANDS: “Sources of Existence” at 2.1–2.4.

149 NETHERLANDS: “Sources of Existence...” at 3.2.

150 UNITED STATES: National Park Service, September 2006, Servicewide Benefits-Sharing – Draft Environmental Impact Statement, Department of the Interior, U.S. at 2.4.1, page 41. A less complete cession of primary responsibility is found in the Norwegian draft which says, “The entity with the genetic material in hand is bound by the conditions imposed on the use of the material,” NORWAY: draft Nature Diversity Act, at § 60. Similarly, BRAZIL, Provisional Act, Title IX, Art. 34, provides that “the person who uses or makes economic use of [genetic resources and TK] should make their activities compatible with the provisions of this Act.”

151 As noted above, the current regulatory proposal being aired by the US National Parks Service (NPS) focuses only on the provider side – i.e., NPS's ability to enter into benefit-sharing agreements for research specimen collection.

152 Presentation by Leonard Hirsch, see footnote 105, supra. He noted another law, a “Trade Secrets Act,” but the authors research found only laws (with this name or on this topic) that are not relevant to ABS. Further inquiry did not produce other citations. Mr Hirsch also indicated that the US government subscribed to guidelines developed by the Public Interest Intellectual Property Advisors (PIIPA), a US NGO of IPR lawyers; however, those guidelines were not available online as of the date of finalization of this book.

153 The former requirement comes from the NSPA, the latter from the Lacey Act. That second provision probably does not apply to plants (other Lacey Act provisions make it illegal to take “fish, wildlife or plants,” suggesting that plants are intentionally omitted from the international provisions). They do not mention microorganisms.

154 Personal communication, Robert Lettington, May, 2005.

155 See Anton et al., 2002.

156 Tvedt, 2007.

157 See, Young, 2004 (unpublished).

158 Discussed in Rosenthal, Joshua, “Measure to Ensure Compliance with CBD and Access Legislation,” Presentation at the International Expert Workshop on Access to Genetic Resources and Benefit-sharing, Cuernavaca, 24–27 October 2004. The policy is not available on the ICBG website and could not be obtained from the program manager so its specific contents cannot be discussed. See also Rosenthal, 1999, which describes the system in terms of a set of goals including conservation equities, but without specifically drawing out the ABS elements. (Experiences with ICBG projects are detailed in Chapter 9 of Bhatti et al., 2007).

159 The full text of the principles is found online at http://www.rbgkew.org.uk/conservation/principles.html.

160 http://www.rbgkew.org.uk/conservation/endorsements.html.

161 EUROPEAN UNION: EU Directive on the Protection of Biotechnological Inventions, EC/98/44.

162 See 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. Submissions of Denmark, Sweden and Norway.

163 See, NORWAY: draft Nature Diversity Act, at § 60.

164 Oldam, 2004, notes that nearly 500,000 of the patent applications filed between 1990 and 2003, that are listed in the Worldwide Database, include genetic-related keywords (protein, gene, DNA, amino acid, nucleic acid, enzyme, polypeptide, peptide, nucleotide, RNA, microorganism, human gene, genome, plant gene, animal gene, microbe, deoxyribonucleic, ribonucleic, proteome) in their abstracts of publication.

165 As discussed in Chapter 4, this is one of the primary fallacies in the patent disclosure idea – the fact that the IPR system functions through legal action initiated by the protected party.

166 Tobin, 2004.

167 Often this will require formal (diplomatic, in some cases) contact with another country. In many countries, direct contact between any governmental agency and its counterpart agency in another country is not simple, but requires that diplomatic officials be involved. See, e.g., Anton et al., 2002, at 82–92. Such contact may not always provide the needed information, which may, in some cases, be unobtainable.

168 CBD Arts. 15.4 and 15.7. In this connection, it is important to recognize that the CBD requires two separate MAT requirements – one for access (paralleling the PIC requirements), and another for benefit sharing. While the two may be negotiated together in some cases, this may not be possible in all situations, and it is possible that the duty to ensure that this second negotiation occurs is assigned to the user country. The inclusion of a second MAT process in Art 15.7 seems to indicate that user countries are expected to ensure that the user negotiates MAT with the provider country, regarding the benefits to be shared and the manner of that sharing.

169 See Cabrera and López, 2007, at Chapter 2. In particular, for example, the Philippines requirement, calling for a separate PIC/MAT process for each area in which a collector is operating. This will mean that the same collector will be bound by many different sets of MAT, if his collection activities include more than one community.

170 See, e.g., Barber et al., User Measures, 2003, which focuses on disclosure and tracking issues, including electronic and other data-sharing, border control, certificates and disclosure of origin, as three of the four topics (the other being “access to justice”) that comprise “user measures.”

171 Normally, the certificate or documentation element of a legal system is created after the rest of the system is designed. In that way, the certificate's contents and the procedures for issuing the certificate will be appropriate to the need. The simplest example, in many countries, is the “birth certificate,” which ensures that each person has access to an official document, in order to prove the country of his birth, his age, his parentage, etc. Although birth certificates vary from country to country, and sometimes may include other facts as well, these documents are relatively uniform in providing these three elements. It is not clear how successful the certificate discussions under the current negotiations will be given that they reverse this process, specifying the information that would be included in the certificate, before knowing what the certificate will be used for.

172 Tobin, 2004.

173 “...se certifica la legalidad del acceso a elementos o recursos genéticos o bioquímicos de la biodiversidad y el cumplimiento de los términos en los que fue autorizado al interesado el permiso de acceso correspondiente.” COSTA RICA, Normas... at Arts. 6(f ) and 19. A similar provision is found in AFGHANISTAN: Environment Act (unofficial translation from CHM) at Art. 66

174 Personal communication with Jorge Cabrera. (Reconfirmed, 23 March 2007.)

175 See, Chapter 5.

176 NORWAY: Avtaleloven 31 Mai 1918 No. 4 § 36.

177 See Young, 2005.

178 Jalbert, 2005.

179 Bonn Guidelines, Art. 16(d)(iv). This obligation is also implicit in CBD Article 15.7's call for measures “with the aim of sharing ...benefits.” See also Bonn Guidelines Arts. 55–57, calling for national monitoring and verification processes, and Articles 58–60, noting the need to consider various means of settling disputes, sanctions and remedies..

180 The extent to which this information will actually be conveyed depends on many factors, as discussed in paras 3.3.2.3, 3.3.3.1 and 6.5.2 of this book, particularly where disclosure is not mandatory and loopholes are not addressed.

181 See, e.g., EC, 2002, THE NETHERLANDS: “Sources of Existence...”

182 Many such users, as noted in footnote 284 and accompanying text, will conclude that they are not required to disclose. Some will refuse to disclose, or identify the source incorrectly, recognizing that a small penalty is the only actual risk of such a choice.

183 These issues are also addressed in detail in Book 5 of this Series, Young et al., 2007. As noted there, the best approach for the source country will be informal and non-public, in most instances, given that many users will be happy to avoid legal processes or bad publicity. The net result is to everyone's advantage, since it is obtained without the cost and difficulty of a legal case. However, once litigation or media allegations of biopiracy have begun to be public, this opportunity will be gone (bad publicity is nearly impossible to reverse).

184 Some kinds of penalties can be enhanced by the creation of a permanent public record of the offence. For example, the revocation of a government permit or license may be enhanced by the creation of a list of offenders. Being named on such a list may affect the chance that the violator will ever be able to obtain a similar permit in future. See e.g., BRAZIL: Provisional Act, Title VIII, Art. 30, par. 1.XIII, which allows administrative violations to be punished by inter alia, “prohibition of entering into contracts with the Public Administration for up to five years.”

185 The disposition of fines differs from country to country. In some cases, administrative fines are retained by the administrative agency that assessed and collected them, in others they are deposited in the country's general fund.

186 Typically, the only civil actions a government may bring will be those alleging a violation of a contract with the government or a tort against the government. See, e.g., BRAZIL: Provisional Act, Title VII, Art. 28, par. VIII “When the Federal government is a party [to the contract], the ABS contract shall be ruled by public law.”

187 NORWAY: Draft Nature Act, § 60, and similar provisions throughout.

188 BRAZIL: Provisional Act, Title V, Art. 16, par. 10.

189 BRAZIL: Provisional Act, Title VIII, Art. 30, par. 1.

190 BRAZIL: Provisional Act, Title IX, Art. 32.

191 COSTA RICA: Normas... at Art. 20.

192 Ibid.

193 COSTA RICA: Normas... at Art. 27.

194 COSTA RICA: Normas... at Art. 2.

195 Described in 3.2.1.2.

196 AUSTRALIA: Environment Protection and Conservation Regulations, 2000, § 303GQ (1).

197 The Australian provision specifies a period of five years imprisonment for violation; however, it is possible that concepts of judicial discretion (found elsewhere in Australian law) would consider this to be an “indicator” of possible penalty range, or a maximum penalty, giving the judge the power to set a lower penalty, or suspend the penalty with no time served.

198 EUROPEAN COMMISSION: EU 2003, at 7.4.

199 The authors have not reviewed this issue completely, but note that, in the US, arbitrators remain bound by the same contract law as the courts would apply, so that an ambiguous contract or one whose terms were subject to inconsistent interpretations would probably not be enforceable. Some aspects of arbitration are discussed in Book 5 of this Series – Young et al., 2007, in Chapter 5.

200 See generally IUCN SSC Red List of Threatened Species available online at http://www.iucnredlist.org. Joseph Vogel notes that the rarest species are often uninteresting to genetic research and development, owing to the uncertainty of a permanent source for research (or if the relevant biological material is not easily replicated). Personal communication, February 2004. In addition, Dietrich Jelden (Director of the German CITES Management Authority) notes that scientific analysis of the world's rarest species has been ongoing for a long time, so that these specimens are often the best known, rather than the least. Personal communication, March 2003.

201 Bonn Guidelines, Art. 13.

202 Specifically, to “inform applicants for access to genetic resources on procedures for acquiring prior informed consent and mutually agreed terms, including benefit-sharing, and on competent national authorities, relevant indigenous and local communities and relevant stakeholders, through the clearing-house mechanism.”

203 Bonn Guidelines at 14(c) and (d).

204 http://www.biodiv.org/doc/lists/nfp-abs.pdf, as of 15 May 2007.

205 This side of the NFP's responsibility is often ignored. The British user study, for example, assumes that the ABS focal point will focus on ecosystem management collection practices, and possibly collection of returns on British genetic resources, rather than commercial and contractual matters: “In the UK, where there is a wealth of expertise in conservation and reserve management, the nature reserve authorities are well placed to negotiate any possible benefit-sharing returns (which are generally likely to be modest) and to control any collecting abuses (i.e. over-exploitation).” Latorre, 2005, at 5.3.1.

206 The authors have not done a census of national ABS competent national authorities (CNAs) to determine which, if any, have user-side responsibilities. We note that, in the Norwegian draft Nature Diversity Act, the agency responsible for provider-side measures is also tapped to oversee users. The US presumably expects user oversight to be undertaken by the criminal enforcement agencies. See footnote 105.

207 One prominent example is the Philippines, where all aspects of PIC and MAT are devolved to the local community level. Consequently, every ABS arrangement is different in each locality, and they can be particularly complicated where numerous localities are being studied in the same project. Benvidez, 2003.

208 Several historical examples of this process are discussed in Young, 2006b, at 50. In some cases, the government formally adopts the voluntary standards, to ensure that the system is uniformly recognized.

209 NETHERLANDS: “Sources of Existence” at 2.4, 3.2.

210 See the International Consortium of Botanic Gardens (ICBG) principles - “Principles on access to genetic resources and benefit sharing for participating institutions” (available at www.rbgkew.org.uk/conservation) and the International Plant Exchange Network (IPEN) Code of Conduct (www.biologi.uni-ulm.de).

211 Micro-organisms Sustainable Use and Access International Code of Conduct (MOSAICC), available at www.belspo.be/bccm/mosaicc.

212 Holm-Müller et al., 2005; Latorre, 2005; Frison Dedeurwaerdare, 2006.

213 Börkey et al., 1999, at 42 and 129.

214 See, Smith and Young, 2006.

215 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).

216 According to the CBD Secretariat, “Denmark and Sweden provide examples of situations where access and benefit-sharing requirements are to be met as a prerequisite for funding. In Denmark, as set out in the submission, providers of funding for research and development projects should, by contract, include the application of the Bonn Guidelines as part of the conditions for funding. In Sweden, a policy adopted by the Swedish International Development Cooperation Agency requires the establishment of a material transfer agreement between the provider and receiver of genetic material in research cooperation activities financed by the Agency where those activities involve genetic material. From the Note by the Executive Secretary, “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, at para 29, “Incentive measures,” citing “Communication from the Commission to the European Parliament and the Council,” “The Implementation by the European Community of the ‘Bonn Guidelines’ on Access to Genetic Resources and Benefit-sharing under the Convention on Biological Diversity,” Brussels, 23.12.2003, COM(2003) 821 final, p. 22.” The US's ICBG under the National Institutes of Health reportedly also uses benefit sharing as a factor in the grant approval process. Rosenthal, 1996; Rosenthal, 2006; and Rosenthal et al., 1999.

217 COSTA RICA: Ley de biodiversidad, No 7788, Art 100 (Incentivos). Similar attention to incentives, which may be applied to ABS, is found in El Salvador, Ley del Medio Ambiente, Decreto N° 233, 1998, at Capitulo VI, Art. 32 (incentive objectives include incentives to promote sustainable use).

218 The primary proponent of this approach has been the Swiss government, which has undertaken some intensive work, originally focused on “ABS certification.” Ultimately, that initial work has converted into the development of a guideline for negotiating ABS Agreements. See IISD, Stratos and Cabrera, 2005. The Swiss government continues to promote the idea of an ABS certification system. Following its lead, the EC and others have suggested further consideration of this concept. See, EC, 2003; and Holm-Müller et al., 2005, at para 2.4.1. The Costa Rican law cited in the previous footnote also suggests the creation of an “ecological label” as a possible incentive measure.

219 See Young, 2004. In Holm-Müller et al., 2005, at para 5.2.4, this result is seen in ABS, where the MOSAICC system was cited as a useful voluntary system that “can be disseminated in the entire concerned sector at low transaction costs.” The authors noted that MOSAICC is now facing temporary difficulties arising out of the fact that, although heretofore realized only through government financing, MOSAICC's funding is now dwindling and a more permanent funding basis is needed.

220 The fact that ABS issues are relatively unknown and complex make it unlikely that consumers or others will be interested and knowledgeable enough to choose products or convey other benefits based on whether they have the “ABS label.” This suggests that it will probably be more effective for ABS proponents to approach existing social and environmental certification bodies and ask them to add ABS points into their certification standards. For certification to have a positive impact on the environmental or social issue it is addressing, it is necessary that it must certify some behavior that is actively beneficial and that can be objectively verified. These elements may not be easy to find in the ABS context. A general discussion of the use of certification to achieve environmental objectives is found in Young, 2004. An initial essay on the idea of certification in ABS, but not touching any of the above issues, can be found in Glowka, 2001, “Towards a Certification System for Bioprospecting Activities” (Swiss State Secretariat for Economic Affairs).

221 Holm-Müller et al., 2005; Latorre, 2005. In the German study, for example, out of more than 150 respondents, only 30 indicated that they had sufficient knowledge of the CBD and ABS to answer questions regarding their compliance with ABS responsibilities, and far fewer than that actually knew what ABS was. The British study (at 3.1.1) indicated that more than 80% of respondents were aware of the CBD, but that this “general awareness of the CBD does not necessarily imply the understanding of its provisions” and finding that “a large proportion of [respondents] have only a basic grasp of the relevance and implications of the CBD to their work.” Similar results appear to have been found in the Belgian study (Frison Dedeurwaerdare, 2006), though these did not follow the template of the two earlier studies and are thus not directly comparable and did not provide the same level of specificity in reporting results.

222 “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.

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