Shakeel Bhatti* and Tomme Rosanne Young**
Dating from the CBD negotiations, it has been frequently stated that ABS would be implemented by contracts between the user (individual or entity) and the source country (and/or the private provider where national law gives private individuals or entities the right to contract as providers of genetic resources.) The intention of the persons making these statements was to support their claim that ABS would operate on the basis of an existing legal system, so that countries would not have to create detailed national ABS provisions, nor would any system be needed in the CBD. These statements grew more emphatic as the deadline for adoption of CBD approached with the parties still unable to agree on clear statements about how ABS would function.
In order to rely on contract law, however, CBD negotiators and advisors made several additional assumptions. First, they specifically stated that questions of ‘ownership of genetic resources would be decided under national law of property,’1 assuming that existing property law in all countries would be sufficient to address these matters. Second, they assumed that it would be possible for all countries to control the access to and use of genetic resources – to detect access and prevent use of genetic resources, unless it was based on a contract. Finally, they assumed that, despite the significant lack of agreement among the countries regarding what ABS would do and require, it would be possible for the courts to apply and enforce ABS contracts in transborder (multi-country) transactions without any special adjustment to existing international law and practice. As discussed in the next section, however, none of these assumptions was ultimately true.
This chapter cannot provide a complete or detailed summary of the ABS system and processes. The authors presume that any readers needing such a description will turn to other sources, including the other books in the ABS Series, as well as numerous publications, case studies, and other documents available through the CBD-CHM,2 the ITPGRFA website,3 and elsewhere. Instead, this chapter will provide a ‘contractual perspective’ of ABS, discussing
the challenges and obstacles that indicate that contractual negotiators need to investigate ABS issues more closely;
the CBD provisions most relevant to ABS contracts;
how ABS contracts fit within the ABS system;
two of the most important international instruments which have sought to clarify and simplify ABS contractual discussions (the Bonn Guidelines and the SMTA of the ITPGRFA); and
obstacles and disconnections which are currently impacting the role of contracts in the negotiation, implementation, and enforcement of ABS contracts.
The current gaps and ambiguities in the ABS concept have existed since the CBD's adoption. This is one of the main reasons that new international negotiations have commenced regarding ABS. This book is not aimed at remedying those gaps and obstacles, or at advising or predicting the outcome of those negotiations. Rather its goal is assisting countries and users who are today negotiating ABS contracts, licenses, and permits, under the current legislative and political systems. Given that most contract parties engage in that work without first studying the ABS issue, it seems appropriate to summarize some of the conceptual obstacles that are most directly relevant to ABS contracts, before beginning a more systematic examination of those issues.
The heart of the problems facing ABS implementation arise from the fact that there is little legislation implementing ABS at the national level, and most of it is not functioning effectively. Although a few countries have adopted legislative systems for granting permits to use their own genetic resources, none has yet complied with the CBD's requirements regarding user measures4 – measures applicable to the users under their jurisdiction when they utilize genetic resources of foreign origin.5
Even from the provider side, at the time that the CBD was adopted (and still today) no country had adopted a workable system for identification of ownership of genetic resources.6 Although the definitions are contested, ‘genetic resources’ can be found in and derived from virtually any biological material. Consequently, it is normally not possible to control or track the physical ability to obtain (and thereafter test) samples, unless either (i) the users voluntarily provide the relevant information and agree to these controls, or (ii) both source and user countries (and other countries in which the biological material has been held) are willing and able to oversee all potential utilization activities involving genetic resources derived from any biological material.7
It is still unclear whether either challenge must be addressed under the CBD. It remains true that many parties to the current ABS negotiations expect users and user countries to ‘control’ the utilization of all genetic resources of foreign origin. This approach appears to assume that any person/entity whose products are based on genetic information from species not endemic to the user country are by definition potentially engaging in ‘misappropriation of genetic resources’ regardless of the conditions under which the resources or information was acquired, unless the user previously obtained ABS permission from the country of origin.8 By contrast, most users feel that ABS responsibilities apply only where the user specifically obtained the resource from the source country directly – i.e., by engaging in direct bioprospecting under a permit.9 They appear to feel that, if the material is acquired from another collector, it is not covered by ABS. This approach appears to create a significant ‘loophole.’10
From the most basic legal perspective, it is not yet even clear what kind of property genetic resources might be. This determination would be critical to any attempt to deal with genetic resources as ‘property’ under national law, given that in virtually all countries the rules governing ownership of land and permanently constructed improvements are very different from those governing ownership of other types of property, such as movable property, common property, sovereign property, patrimony, ‘intellectual property’ and other kinds of ‘intangible property’. Within these categories, there are often dozens of more specialized categories which again are subject to unique rules, including rules determining who may own (or have rights to control) them, how ownership is obtained and what limits or duties apply to owners.
There is no ‘standard’ way of addressing property rights, even within a single country.11 For a person or company attempting to acquire rights in genetic resources, however, this uncertainty becomes an even more considerable problem, embodying both the new problem of determining what a ‘genetic resource’ is in any of the countries involved and the age-old challenge of trying to address property issues across multiple national jurisdictions. Contract provisions and rights may differ markedly depending on which category of property is under discussion. In the area of ABS, however, it is very difficult to determine what category of property genetic resources are. There is no single view among countries regarding what kind of ‘property right’ is involved. Often, it is difficult to answer this question even for a single country.12 Each country divides resources among these categories differently, and allocates rights and duties of ownership differently. 13 Researching this legal question in each country is a time-consuming process which no one has yet undertaken. Proceeding to contract without an answer, however, is a major source of legal uncertainty in ABS contracts.14
Finally, the question of ABS enforcement is intensely difficult. ABS laws and negotiations have still not found answers to straightforward questions such as what actions are illegal and how they are documented, in 15 years of trying.15 It is important to remember, that contracts can provide legal certainty and clarify the rights and duties of the contracting parties only where the contract terms are unambiguous and mutually agreed. For a private contract to be fully ‘binding,’ it must be ‘enforceable’, in cases of disagreement between its parties. This can create difficulties in the ABS context, where many basic components of the contractual system are un-agreed, indistinct or vague, since courts and government agencies normally will not even attempt to enforce contracts that are ambiguous. This is not a choice on their part – it is mandatory. It is impossible to apply the rules of law to achieve reproducible results, when primary facts cannot be pinned down.
Consequently, it is the ABS ambiguities, as discussed above, that have generally prevented parties from asserting ABS claims in courts. The result ultimately is that such claims are tried in ‘the court of public opinion’ (the press, the internet and other forums) resulting in negative publicity for the entire ABS concept, harms to users and no remedy for providers, without ultimately providing any lessons-learned on which to build a constructive and legally supportable way forward. This creates a spiral of increasing distrust, more administrative requirements (in an attempt to make the ABS responsibilities stronger and more binding) and, often, increased transaction costs and longer processing time in obtaining the rights to use genetic resources. ABS provisions generally require that source countries can only receive benefits if users achieve results, or patent or market new products.
All of this leads to a basic truth known to all lawyers, government administrators, and commercial entities: If a system is non-functional or imposes insurmountable obstacles to the Parties, it does not matter what the system says – nobody will use it. No sector will be served if the ABS system becomes unusable or so unwieldy that is discourages or prevents users from seeking ABS through contractual or other instruments.
Although the ABS concept employs elements from both IPR and more conventional types of property, it is rather clearly an entirely new kind of legal or property regime. As such, it will need to be based on a new framework – one which addresses the unique nature of ABS. In addition to the need for legal consistency of that framework, however, its nature and provisions will depend in large part on the objectives of ABS. This is an element of the ABS concept which has not yet been well recognized by many sectors and actors.
For example, the common approach for the commercial sector, in considering ABS is to evaluate its purpose and value in commercial terms. Consequently, some commentators have focused on the fact that few countries report having received a significant amount of benefit from ABS and the fact that the ABS regime was not necessary from a user perspective – i.e., that utilization of genetic resources was entirely possible before the ABS concept was created. And indeed, it is indisputable that the ABS idea would have been abandoned some time ago, if its purposes were solely commercial.
This important conclusion however, does not necessarily imply that ABS is meaningless, but that its meaning is not strictly commercial. According to several commentators, ABS was created to address critical social and environmental objectives of the CBD. In essence, these social and environmental objectives were agreed upon, and then a commercial mechanism was created as a means of implementing and transferring them to the private sector. This was a common approach in international law in the 1990s. In order to create a new international instrument or program, it was necessary to try to mitigate or minimize the governmental costs of that program. The private sector was identified as the appropriate party to be brought into the framework and to address these responsibilities.
This approach is not new. Most countries' governments pass some part of their social and environmental responsibilities to the commercial sector. Examples include (i) environmental permit requirements by which the government gives business the direct responsibility for environmental actions; (ii) ‘social security systems’ for workers which are paid in part or in full by the worker's employers; and (iii) special taxes and fees charged only to companies and commercial operations, which fund new social programs.16 In each of these examples and many others, governments disseminate responsibility for certain socially necessary actions among companies and commercial actors.
It may be easier for users to participate in ABS transactions, if they recognize ABS as simply another such situation – one that has not yet been expressed with legal clarity, and which their participation can help to establish as a reasonable system. Based on the policy rationale of current discussions and negotiations, ABS is understood as a social/environmental program, rather than as a ‘new commercial market.’ To use an example that has been used in the past and will reappear below, the creation of ABS is very similar to Environmental Impact Assessment (EIA) in several respects.17 Conversely, however, in developing the ABS regime, it will be necessary for governments to ensure that both provider-side and user-side measures are designed and interlinked in a way that encourages and rewards compliance by both users and provides an integral and positive contribution to their commercial activities.
The ABS concept was created in the CBD – it did not exist before 1992.18 Consequently, it is important to begin this book with Article 15 of the CBD (See Box 1). It is important also to focus this analysis of it on the full Convention, and the points from it that are most relevant to ABS contracts and their implementation.
The ongoing political debates focus primarily on the roles and positions of governments, and are thus of limited interest in this book. They will be included only where they address the primary question – What are the rights, duties and limits on ABS contracts? The authors are aware, however, that too narrow a focus on this question could potentially be harmful. Many companies and researchers encounter major ABS problems when they base their activities on the assumption that ABS is simply a permitting process or contractual/financial concept. This perspective creates a conceptual gulf between commercial negotiators (viewing ABS negotiations commercially) and the country/agency/community that is the ‘provider’ (viewing ABS as either a social-welfare system, or an environmental protection measure, or both).
Comprising only seven clauses, Article 15 was the first international binding instrument to address the commercial and non-commercial utilization of ‘genetic resources’ or recognise them as a type of property or right that can be separately controlled and transferred through national law. Like all other provisions of the Convention, however, Article 15 is not a regulation of private actors. It is instead a series of commitments made by governments, clearly specifying that governmentally adopted measures shall be the mechanism for implementing ABS.19
The following sections identify the legal components of Article 15 most relevant to ABS contracts.
Clause 15.1 specifically states that each country has full sovereign rights over its genetic resources. This provision reiterates or clarifies CBD Article 3, which specifically recognizes each country's sovereign rights over all of its biodiversity. Although simply stated, these provisions are complex in practice, because
many species move or migrate across national boundaries (so that two or more countries may have temporary sovereign rights in the same specimen, at various points in its life) and
each specimen of a particular species, variety, or subspecies has many of the same ‘genetic resources’ as all others,20 so that even where a particular specimen is permanently located in a particular country, its genetic resources may be essentially ‘shared’ with every other country in which the same species is found.
Logically, then, the only situation in which a single country's law will undisputedly decide the ownership of a particular genetic resource will be where the species involved is a ‘narrow range endemic’ found in situ in only one ‘country of origin.’ Even then the issue of rights to provide or use genetic resources are not clear if more than one owner within the country has the rights of a ‘provider’ of the genetic resources of that species. These questions can become further complicated, when we remember that in some cases a particular genetic characteristic is shared by other varieties or by completely separate species within the same genus or higher taxon.
The legal impact of Article 15.1 has not been completely felt as yet. The concept of ‘sovereign rights’ over genetic resources clearly refers to more than simply the right to adopt and implement ABS laws. Legally, in addition to its sovereign right to particular genetic resources, the sovereign also has the right to determine how other legal regimes within the country apply to genetic resources. For example, at present, each country has the right to adopt its own national patent law.21 Consequently, each country has a right to decide that it will not grant patents that do not comply with the patentability requirements set out in the country's law. One recently arising area of debate relates to patents of naturally occurring genes, as discussed in 1.2.3, below. This may create inconsistencies between national availability of patents on one hand and the negotiating positions taken by that country with regard to ABS patents.
The scope and coverage of ABS provisions is set by two key points of terminology. First, Article 15's benefit-sharing objective focuses only on the ‘utilization’ of ‘genetic resources.’ Second, for each species, subspecies, or variety, national rights to control access and to receive a share of benefits are available only to ‘countries of origin’ of that species and countries which ‘have acquired [its] genetic resource in accordance with the Convention.’
Within the CBD, the term ‘genetic resources’ is only used in reference to the third objective (benefit-sharing and ABS).22 Thus, the first scoping conclusion is simple – the scope of ABS is limited to ‘genetic resources.’ Unfortunately this answer necessarily leads to a further question: ‘What are genetic resources?’ As noted by several authors,23 this question is not answered in any effective way within the CBD. The Convention's three linked definitions of ‘biological resources,’ ‘genetic resources’, and ‘genetic material’ indicate an outer boundary of the concept – it is limited to life forms or their parts or extracts. Beyond that, those definitions do not provide clarity or specificity. They do not, for example, provide an objective means of determining the difference between ‘genetic resources’ and ‘biological resources.’24
In negotiating any contract, its parties have a strong incentive not to use any term that is unclear. This is because the entire raison d'etre of a contract is to create a legal relationship that is clear and understood identically by both parties – to avoid later disagreement to the greatest extent possible. Rather than use an ambiguous term, the parties may sometimes create a ‘contractual definition,’ clarifying what the term means when used in this contract. Another practical/contractual solution will be to use a completely different term. Often, however, these approaches are not available when dealing with ABS terms. There is a possibility that, for purposes of source-country law, if a contract that does not use the (legally ambiguous) CBD terms and definitions, it may be found to violate national ABS law or it may be found that after a first contract is completed using a different term, a second negotiation will be necessary to address the transfer of ‘genetic resources.’
Clause 15.3 of the Convention states that ABS applies only where the ‘country providing genetic resources’ meets one of the following criteria:
It is a ‘country of origin’ of that resource – that is, the resource was found in situ, within that country, rather than having been introduced or obtained from a collection in that country; or
It has ‘acquired the genetic resources [from a country of origin] in accordance with this Convention’ i.e., the country has obtained an ABS contract or other formal right to the ‘genetic resource’ or its utilisation.
This limitation on who may be ‘providers’ raises some as-yet-unanswered questions –
How does one determine which country is a ‘country of origin’?
As of what date is ‘origin’ determined?25
Is it necessary to trace the precise origin of every specimen back to a specific ‘country of origin’?
What happens if the user obtained biological samples from a local collection or propagator, but that propagator had not formally obtained the rights to use the genetic resources ‘in accordance with the CBD’? and
What happens when two different users obtain identical genetic resources from two different countries?
When one remembers the increasing prominence of patents and other IPR laws in the ABS context, these questions take on a new meaning. It is easier to understand some of the national concerns about ABS rights, when they are viewed in this context. Countries fear that they will lose rights over their genetic resources by granting access to a user whose home country allows it to patent naturally occurring genes. As discussed in the next section, commentators have noted that, if allowed, such a patent could devalue the source country's interests in its genetic resources.
In expecting ABS to operate through contracts, the CBD negotiators and advisors assumed that ‘genetic resources’ could be owned, or at least that the right to utilize them could be legally controlled by the ‘country providing the resources’ (in this book, called the ‘source country’) or the person(s), agenc(ies), or communit(ies) designated by that country. Among other ambiguities, however, there is still no legally rational system for explaining what it means to ‘own’ (or have the right to control) genetic resources. This is because of a basic paradox in the ABS concept, as expressed in the following four-step analysis:
Step 1: Genetic resources have a broad range of potential sources:
The gene sequences and biochemical formulas of an entire species (subspecies or variety) are potentially duplicated in all members of that species.26
The only physical control on the ability to research these characteristics is whether the researcher (or some previous researcher) is able to gain access to sufficient samples on which to conduct research.
Step 2: ‘Ownership’ and/or the legal right to control or dispose of genetic resources, may be disseminated among many separate, unrelated holders:
Article 15 says, at minimum, that every country in which a particular species is found in situ has sovereign rights in the genetic resources of that species. However, nearly all species have a natural distribution that extends to more than one country.
In some countries, national law or practice has disseminated genetic-resource ‘ownership’ rights more widely, stating that every person who owns any specimen of the species owns that specimen's genetic resources. In some cases, one can own a specimen simply by owning the land on which it is found. This point multiplies by hundreds or thousands the number of persons or entities that have a right to control the genetic resources of each species or variety.
Despite this diffusion of ‘ownership’, however, it is generally assumed that any person or country that is an ‘owner’ of genetic resources may grant access to those resources, without consulting other owners/holders of specimens of that species, and without recognising their separate rights in the same genetic resources.
Step 3: The user of genetic resources may need only a relatively small amount of sample material of a species in order to be able to utilize its genetic resources permanently.
Modern industrial and commercial development processes can often find ways to duplicate or synthesize a species' genetic and biochemical elements based upon only a few samples or in some cases, no samples at all (if they receive detailed research data).
Once the initial research and development is complete, the user will often need no further physical specimens from any source.
This will be true regardless of whether the user first obtained an ABS contract or permit.
Step 4: Following access, many users seek to convert the non-exclusive genetic resource (legally held and potentially usable by a great many providers) into an exclusive resource, which no other person, country, or entity may use.
The user, if located in a country that allows this, will sometimes attempt to patent specific genes from that species or variety.27
The patent or other exclusive right could prevent commercial or pre-commercial use of the genetic resource (gene) by the country of origin,28 other countries-of-origin, by other holders in those countries or by users who seek access to that genetic resource, unless those holders and users pay a royalty to the patent holder.
Arguably, this kind of IPR defeats the purpose of ABS (which was intended to provide an incentive for conservation and sustainability), since the financial or potential value of species will be devalued following the issuance of the patent, thereby diminishing the conservation incentive.29
It seems clear that this type of IPR would also defeat the purpose of patents, which has been described as encouraging and protecting innovation. By contrast, an IPR which restricts the ability of other innovators to use the naturally occurring genetic resources to build new products would appear to be an impediment to innovation, as well as a serious financial harm to the countries of origin.30
This paradox boils down to a simple question: If the user may obtain the right to genetic resources from any holder, how can he rationally convert it into an exclusive right (patent of the natural gene or traditional variety), without permission from all other holders? In essence, why should the right of one person or community or country ‘win’ over the identical right of others and obtain a benefit-share?
Two concepts – prior informed consent (PIC) and mutually agreed terms (MAT) – were clearly considered essential by the drafters of Article 15, appearing in three separate places. Clause 15.4, requires that access may be granted only on the basis of mutually agreed terms; Clause 15.5 adds that the country must also give its ‘prior informed consent’ to that access; and Clause 15.7 notes that benefit-sharing, too, must be conducted on the basis of mutually agreed terms.
To the commercial user or contract lawyer, these provisions appear to be simple restatements of two of the most basic contractual principles:
that all contracts are valid only when the parties both consent, based on the receipt of all relevant and proper information (i.e. that neither party is concealing something that he would be obliged to disclose31) before consent is given; and
that the terms of a contract are only binding where they are ‘mutually agreed,’ so that if one of the parties does not consent or agree, there is no contract, no matter what reason lies beneath that failure to consent.
In the CBD's environmental context, however, PIC and MAT are not viewed in this ‘normal’ (contractual) light, but are given special meanings. For example, a number of countries have chosen to merge their PIC and MAT with public participation principles. In some cases, the participating public is directly part of the consent or agreement of PIC and MAT. This might mean that the user must get separate consent from each community, and may even be required to hold a public meeting – even whether the country has already given its contractual consent.
In some cases, the law provides that MAT too must be directly approved by the community or other provider. This can create difficulty for the user, researcher or other access seeker who wants to collect material in a large collection area. He may have to agree to completely different contractual requirements in each community.32 If the communities are adjacent, the researcher may be expected to know precisely where each sample was collected, and to know exactly where the boundaries between various communities are located.
Clearly, the policy reasons underlying PIC and MAT in the ABS context may be very different from the purposes driving the parties in normal commercial negotiations. As a consequence of this difference between ABS contracts and other contracts, the parties to ABS contracts often find themselves in conflict with one another. This conflict is often born of misunderstanding. To resolve these misunderstandings, the user must recognize that ABS-requirements of PIC and MAT are not simply a restatement of contract law. As noted above, the task of obtaining PIC and agreeing to MAT are very similar to environmental permit requirements, rather than commercial negotiations. In many respects, they can be likened to ‘environmental impact assessments’ (EIA) or a land-use variance decisions. Viewing the process in this way gives the would-be user a basis for planning how he will approach the process, and for evaluating the commercial risk that it adds to his proposed activities. Like EIA and land-use approvals, PIC and MAT processes for ABS can be very unwieldy and can be delayed or stymied by public opponents.33
Conversely, the provider must recognize the commercial role that ‘informed consent’ and ‘mutual agreement’ have in contracts, and be clear about what PIC and MAT mean.
The CBD's discussion of access to genetic resources is the source of one of the Convention's greatest ironies. Clause 15.2 requires countries to ‘facilitate access to genetic resources,’ but clearly does not require legislation. Its only reference to legislative measures is to impose a limit on legislation – that countries should ‘not impose restrictions that run counter to the objectives of this Convention.’ The other two clauses relating to access – clauses 15.4 and 15.5 – also do not directly call for any kind of direct governmental measures.
Paradoxically, however, nearly all of the ABS legislation that has been adopted by any country or regional body to date relates to access.34 Following the adoption of the CBD, many countries' adopted new access controls where none existed before, and few (if any) loosened preexisting restrictions. As a consequence, many researchers claim that the impact of ABS was to make access more difficult and regulatorily complex – the opposite of the expected and desired outcome.
Under Clause 15.5, the PIC requirement applies in all countries, except those that have specifically ‘determined otherwise.’ The CBD provisions regarding MAT are not dependent on law at all. One cannot simply assume that a country has renounced any control over its genetic resources simply because that country has not adopted a piece of legislation with the name ‘ABS Law’ or something similar. PIC and MAT requirements always apply in all countries, except if the country has made an affirmative statement that it will not assert rights over its genetic resources. At present only about 10% of CBD Parties have adopted specific ‘ABS law’ governing ‘access’ issues. To date, no country has adopted any law, policy, decree or other instrument which specifically states that it categorically allows any users to gain access to or utilize the country's genetic resources without PIC and MAT.35
In the absence of such legislation, all users must obtain PIC and MAT with regard to all access to or utilization of genetic resources of foreign origin. PIC and MAT can be very difficult to apply, however, especially if a country has not adopted specific ABS legislation. In that case, the user's compliance must be determined on the basis complex research into the source country's laws. For example, virtually all countries have very complex rules governing:
ownership of various types of property,
the rights and duties of government as sovereign over all resources in the country,
the rights and duties of government as trustee of resources that are (i) part of the national patrimony; (ii) common property of all citizens; and/or (iii) unowned until someone takes specific steps to obtain exclusive rights to them.
These laws apply to all property within the country, including genetic resources, even if there is no ABS law. A relatively detailed legal analysis of relevant law (or assurances from a qualified and authorized official) will be needed in order for the would-be user to know what law applies. A number of countries have begun efforts to help their users in this difficult task, obtaining information from key source countries regarding how PIC and MAT requirements can be satisfied. At present, however, these informal efforts include some risk, since few countries are willing or able to make a firm statement about how their courts, agencies or central governments will interpret ABS requirements in future.
Although not required to do so, a number of countries have attempted to develop ‘access’ legislation.36 Indeed, most users and countries have recognized that there are certain aspects of access that can and should be clarified by the adoption of legal or administrative provisions.37 To date, national legislative draftsmen have found it difficult to adopt functional law, because of the legally confused nature of Article 15 and the relevant definitions. At present, about 18 countries have formal ABS access laws, and few if any would claim that they are functioning well. Thus, the experience of more than a decade of trying to comply with the few examples of access legislation or apply it legally suggests that there is a need to rethink what access means, if access laws and procedures are to be useful.
If a national legislative regime answers the following questions in a legally clear and sufficient way, ABS contract negotiation could be easier for both user/applicants and provider-countries38:
Who (which agency or official) is authorized to make decisions regarding access to genetic resources including giving PIC and agreeing to MAT?
Who can issue PIC and MAT and who what types of applicants may obtain them?
What information must be provided in order to comply with PIC and MAT requirements?
What criteria are applied in granting or denying applications?39
Does the country have mechanisms for designation of trade secrets or other confidential information, and for maintaining confidentiality of information that is so designated?
In legal terms, what rights are granted by PIC and MAT decisions?
Are there procedures for appeal from the decision, and if so, at what point is the decision ‘final’ (giving legal certainty to the successful applicant)?40 and
What powers, rights and duties exist regarding monitoring, oversight, revision, revocation, and other post decision actions by government?
Beyond these basic procedural requirements, however, the looming difficulty for the adoption of access legislation and procedures relates to ‘post-access’ concerns (discussed in more detail below.) As noted by other authors, ABS cannot be functional unless it operates both in the source country and in the country or countries with jurisdiction over the user.41 Many of the countries which have imposed strict and detailed access requirements are, in essence, trying to find a way of ensuring that the user will continue to comply with ABS, even after the genetic resources (in physical or information form) are no longer in the source country. Upon analysis of existing national ABS laws and international discussions, it appears to be a strong possibility that source countries would be happy to streamline their access provisions, if there was an international system on which they could confidently rely to support their rights after the resources and user are outside of the source country.42
At this writing, the issues of post-access legislation and the need for a linkage between provider-side and user-side measures have been taken up into the international debate on ABS in several ways. Some negotiators propose ‘standard legislation’43 based on two apparent needs – on one hand, the need of users for a simple uniform system which will streamline their efforts to obtain access, and on the other, the need of user-side courts to have a consistent basis for interpreting other countries’ national ABS provisions. The concept of standard legislation is normally not effective in international law, given that few countries will agree to be bound by law that was not created through their own legislative processes.
Clearly, there are possibilities for resolving this conflict, including through further clarification of what would be meant by ‘minimum standards for ABS legislation.’44 Possibly the best approach would be to identify a range of possible provisions and options, and then adopt an ‘agreed interpretation’ of each option explaining how it would be applied in law. This approach would give flexibility to each country, while providing the needed clarity for the overall regime. Although far from simple, this solution appears to be legally and practically possible,45 if the rest of the ABS regime is agreed.
Clause 15.7 specifies the duties of each country with regard to users under its jurisdiction. This is the only provision in Article 15 that specifically requires governments to adopt legislative or other measures. It requires each country to take legislative, administrative or policy measures (whichever are appropriate), ‘with the aim of sharing’ (i.e., which lead to the result of sharing) two things –
results of genetic-resource research and development and
benefits arising from the commercial and other utilization of genetic resources.
The law does not require new legislation if the country already has laws which meet this obligation. To date, however, no country appears to have adopted such legislation, and no country already had legislation in place that meets this requirement.46
In addition to the fact that they are required,47 ‘user-side measures’ are absolutely essential to functional ABS. No country can regulate persons or activities that are outside of that country's own jurisdiction. Consequently, unless the overall ABS regime mandates or effectively motivates benefit-sharing, the ABS measures of the source country become effectively voluntary measures, even if they are stated as binding measures.
This is the other half of the irony mentioned in 1.2.5, above. While there is considerable ongoing discussion of the need for ‘access’ legislation (which is not formally required in the CBD), no country has adopted any of user-measures (which are expressly required.) The reasons behind this failure in developed countries seem to be legal, political and technical.48 Developing countries may have an added reason – their (unfounded) belief that this clause applies only to developed countries.
Although the current state of compliance with Article 15.7 is not very promising, there are a few examples of positive efforts. One of the most important is the ‘Japan Guidelines on ABS.’ Although a completely voluntary instrument, the guidelines are formally supported and used by the Ministry of Economy Trade and Investment (‘METI’), which pays particular attention to the relationships between Japanese companies and other countries. Where any ABS claim or allegation is leveled against a Japanese company, the Guidelines serve as a basis for discussions between METI and that company. As a result of cultural and other factors in Japan, a company that is singled out for such discussion is intensively motivated to come into compliance with the Guidelines, and other companies have a similar interest in avoiding being singled out at all. Consequently, the use of voluntary guidelines has a high level of effectiveness in Japan. Currently, however, the practical value of those guidelines in reducing disputes and claims of biopiracy has been limited by the lack of clear international standards regarding ABS and genetic resource issues.49
Similarly, in Chapter 6, this book describes provisions used by the US's National Institutes of Health, providing an incentive to those who seek to provide technical assistance under NIH grants. Such applicants must prove their compliance with certain ABS-like requirements that have been adopted by that agency, in order to receive assistance. Although focusing on technical assistance providers (who are presumably more likely to recognize the underlying equitable purpose of ABS), this program is linked to business/commercial activities, given that the NIH and other US Governmental programs are specifically intended to acquire rights to genetic and biochemical compounds which can later be transferred to commercial entities.
Finally, although Article 15 essentially creates the core framework of ABS, there are many other provisions which are clearly considered to be part of the ABS concept, which were not significantly addressed in the Bonn Guidelines or the discussions of the AHWG-ABS. Potentially critical and useful to a balanced and functional ABS process, these components are as follows:
Clause 15.6 calls on countries to ‘endeavor’ to develop and carry out scientific research based on genetic resources ‘with the full participation of, and where possible in the country providing the genetic resources [source country].’
Clause 16.3 requires countries to adopt legislative, administrative or policy measures to provide the source country with access to and transfer of technology which makes use of genetic resources provided by that country on mutually agreed terms, and with appropriate protection to the innovator's intellectual property rights in the new technology.50
Clause 19.1 requires countries to adopt legislation ‘to provide for the effective participation in biotechnological research activities’ by source countries, especially those that are developing countries, and states that ‘where feasible’ these activities should take place in the source country.’51
Clause 19.2 calls for parties to take ‘all practicable measures to promote and advance priority access to the results and benefits arising from biotechnologies,’52 and
Article 17 requires countries to ‘facilitate the exchange of information, from all publicly available sources..., taking into account the special needs of developing countries’ and notes specifically that ‘Such exchange of information shall where feasible, include repatriation of information.’
These provisions mostly call upon governments to take action. No country has adopted any measures that would tie these laws to ABS objectives and commitments. For commercial and non-commercial users, however, they may have other impacts.
A country might make significant progress in achieving its user-side ABS obligations by attuning its technical assistance and technology transfer programs to reflect ABS objectives. Such provisions could be designed to have two impacts: (i) to provide recognition and incentive to users and other private actors taking these measures as part of their benefit-sharing programs; and (ii) to specially recognize special rights or priorities for ‘the country providing the genetic resources.’ As an example of the latter, national technology-transfer laws might give priority or other incentives to users of foreign genetic resources that comply with the source country’s ABS requirements.
The Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization53 are the final outcome of a multi-year process directed at improving the performance of the ABS concept. They represented an effort to make ABS functional, through soft law and COP mechanisms, to avoid the need to negotiate some other solution to the ABS problem.
Although they did not succeed in eliminating the need for further international negotiations, the Bonn Guidelines may indicate a broad level of agreement across all CBD Parties regarding some aspects of ABS. Unfortunately, however, the level of consensus is not clear. Owing to many unresolved controversies, the Guidelines ultimately are ‘voluntary’ and ‘evolving’ – indicating that their contents are neither ‘recommendations’ nor ‘best practices,’ but rather a list of possible actions.54
The following summary describes only particular Guidelines most relevant to ABS contracts. Following these points, we discuss the Bonn Guidelines' provisions regarding the possibility of ABS incentives, and some perspectives on why the Bonn Guidelines did not succeed in forestalling the need for more ABS negotiations.
The Bonn Guidelines focus on five overall issues, which could affect how users interact with providers: (i) international and national institutional matters, (ii) contractual elements and roles, (iii) public participation, procedural matters, (iv) benefit-sharing and distribution and (v) implementation.
Institutionally, the Guidelines strongly recommend a number of institutional elements, which were not previously required by the CBD's text. In particular, they specifically call on the Parties to designate a specific national focal point (NFP) on ABS issues to better enable contact with those seeking access, and to specially designate ‘competent national authorities.’ These provisions focus on ‘provider side’ ABS responsibilities (access). In fact, however, national competent authorities must also ‘monitor and evaluate access and benefit-sharing agreements [of other countries; as well as the] implementation/enforcement of ABS agreements’ by their users.55 Agencies with commercial responsibilities must be a main participant in the NFP processes. To date, however, most NFPs are chosen for their biological responsibilities and expertise.
One possibility with regard to the NFPs is that they can form a functional link between the source country and the user country or countries. NFPs may play an important role in supporting both users and providers, with information on national ABS laws and procedures in other countries. As noted above, few CBD Parties report that they are undertaking this work. At least one user country (Japan) is going beyond this passive role, developing formal and informal agreements with source countries, to help ease the procedural and diplomatic burdens experienced by its users in seeking ABS permission.56
The basic message of the Guidelines' regarding the duty of participants involved in ABS can be summarized in five words:
‘comply with the ABS contract.’57
In elaborating on this basic message, the Guidelines offer other comments on the roles of stakeholders and the processes and procedures.
The Guidelines mix legislative guidance with advice about matters that would (or could) typically be addressed in individual ABS contracts. This may lead to some confusion, since some matters must be fixed by legislation, where others may be more flexible ‘negotiating points’ that the parties to an ABS contract would normally decide by agreement. Some matters may be either one or the other, depending on whether the country wants to control them strictly or to enable the parties to use them as negotiating points in their individual negotiations.
For example, the CBD calls on Contracting Parties ‘as much as possible’, to use the genetic resources ‘in, and with the participation of, the providing country.’58 This requirement is imposed on user countries, not suggesting that they should pass this responsibility to the users directly.
Regarding this requirement, the Guidelines do suggest that each ABS contract should call on each particular user to bear this responsibility. As a practical matter, however, some countries will prefer to leave this matter flexible for negotiation, allowing the location of the user's operation to be a commercial benefit or trade off, in exchange for other concessions.
By contrast some elements of the ABS process that are considered ‘possible components’ under the Guidelines (prior informed consent, agreement on mutually agreed terms, assignment of tasks) are normally thought to be required by the CBD text. The Guideline list examples of the many other issues that could be included in law or regulations defining these processes,59 but might also be considered negotiatable or variable (preferred in some cases or inadvisable in others).
‘Participation’ (in the sense of the ‘public participation’ processes recommended in the Guidelines as an element of good governance) is not required under CBD Article 15. (In fact, the CBD's only reference to direct public participation is found in its provisions for environmental impact assessment.60) Nevertheless, several countries, and a great many commentators and technical assistance providers have stated that the CBD's requirement of ‘prior informed consent of the country providing the resource’ specifically includes public participation by some group of individuals within that country.61 The selection of which groups may participate, and what form that participation takes is tied to a number of current uncertainties, including especially the ‘property rights’ and ‘ownership’ issues mentioned above. This has contributed a measure of confusion and difficulty for ABS applicants attempting to obtain PIC and negotiate ABS Contracts.
In practice, ownership and right-holding with regard to genetic resources differ from country to country. As a result, the extent and nature of public participation in ABS transactions may also be dramatically different. Where genetic resources are entirely considered ‘property of the country’ or ‘national patrimony’ or similar status, public participation would apparently require a very general level of participation – all citizens and residents have an interest in ensuring that these resources are used properly.62 If each particular landowner has owner-ship/disposition rights and responsibilities over the genetic resources found on his lands, then some countries assume that public participation will be relevant only to the person, entity or community which owns the land. to individual (whether private individuals or the government as to lands it holds specifically) or specific types of communities.63
The Bonn Guidelines have taken a variety of inconsistent positions regarding participation issues. 64 They do not provide any guidance for users, at most suggesting possible approaches for national legislation. The most that can be concluded from the Guidelines regarding this issue is that genetic resources in each country will probably fall somewhere on the spectrum between ‘entirely with the national government’ on one hand, and ‘entirely vested in private owners and communities’ on the other. (Normally, the public does not have significant rights to participate in the private negotiations between the private owners of property and private purchasers seeking to acquire it.)
Participatory processes are very demanding and difficult obstacles for ABS applicants. Some of these obstacles have their source in broader ambiguities in the ABS concept. With no clear international answers for these complexities and demands, users can find little guidance or assistance. The only solution appears to be research – to determine each country's law and recent experience.
Many Guidelines discuss ‘benefits,’ however, these discussions generally focus on the forms of payment that can be used to meet users' benefit sharing obligations under the ABS contract. They do not clarify the meaning of the term ‘benefits arising from the utilization of genetic resources’ – i.e., the benefits which are to be ‘shared.’ The Guidelines do not provide any Guidance about how to value the ‘benefits arising’ or how (and in what percentages) they should be shared. 65
Instead of the direct benefit-sharing obligation, the Guidelines provide guidance regarding the distribution of benefits within the country. This issue, however, is entirely a matter of national sovereignty. This approach is clearly reflected in the CBD, which suggests that distribution of benefits is determined by the source countries themselves. As noted above, Article 15 includes a separate MAT requirement relating to benefit-sharing. In essence, this provision ensures that the distribution of benefits to particular individuals or communities is not decided by the user and those individuals/communities alone, but must be approved by the provider country as well.
As a consequence, the Guidelines provision on this point cannot be applied by a user unless the particular source country has specifically agreed to adopt this Guideline. It is not clear whether this guidance is offered to the source country only, or also to the user. Those provisions recommend that
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 in such a way as to promote conservation and sustainable use of biological diversity.66
The most important aspect of the Guidelines' provisions regarding the distribution of benefits, however, is the fact that they are limited in scope. They focus on financial benefits (money payments and the transfer of material items of value) and do not consider the more difficult questions involved in the sharing of data and technology. In particular, the Guidelines leave open questions regarding the confidentiality of data, samples and other information which is identified in the Guidelines as a ‘benefit’ for purposes of ABS.67
The guidelines provide a limited advice on the negotiation, issuance, execution and enforcement of ABS contracts. Although relatively sketchy, these provisions may provide a base for legislation on a few issues. For example, they require
that the decision to either grant or withhold PIC should be in writing,
that it may be in the form of a permit or license, and
that the procedure for granting it should be transparent.68
The Guidelines on MAT indicate strong recognition of the importance of legal certainty for source countries, and strong support for reduced transaction costs, expedited or streamlined procedures and other steps to avoid placing an undue burden on users. They are not clear on how to balance these matters against the provider-country government's fiduciary obligations to its citizens.
Regarding enforcement, the statements in the Guidelines provide few comments, which are not clear about which actor or role is being discussed. For example, in Guidelines 59 and 60, enforcement is discounted with only the (generally unsupportable) implication that (i) only contractual law will be needed to implement ABS; and (ii) source countries can penalize users who violate ABS requirements, by actions under their own (source country) law.69 Both of these assumptions are legally incorrect, since the ABS system is too ambiguous to enable the use of contract remedies,70 and such remedies cannot be applied where no contract has been obtained. In that case, there is presently no way for the source country's laws to be binding on users and resources that are outside of the source country's jurisdiction.71
The poor performance of ABS prior to the Bonn Guidelines, although generally recognized, was not ascribed to any particular structural or political source. Consequently, the Guidelines do not deeply consider the possibility of other approaches as alternatives or enhancements to the mandatory, contract-based conceptual model. In Guideline 51, however, they do indicate some possibility that incentive mechanisms might improve ABS performance. These were not offered as ‘best practices,’ but only ideas and suggestions, which ‘could be used in the implementation of the guidelines’:
(a) The identification and mitigation or removal of perverse incentives, that may act as obstacles for conservation and sustainable use of biological diversity through ABS, should be considered;
(b) The use of well-designed economic and regulatory instruments, directly or indirectly related to ABS, should be considered to foster equitable and efficient allocation of benefits;
(c) The use of valuation methods should be considered as a tool to inform users and providers involved in access and benefit-sharing; [and]
(d) The creation and use of markets should be considered as a way of efficiently achieving conservation and sustainable use of biological diversity.
Some further discussion of incentive and regulatory design concepts, based on analysis of the manner in which successful incentive mechanisms operate in other contexts, is found in other books in this Series.72
Although intended to help avoid further negotiations, the Bonn Guidelines did not manage to do so. Although including many uncontroversial and well understood aspects of ABS administration, such as PIC, MAT and methods and forms of payment, they did not fulfill the Parties' intensive need for implementable solutions nor provide mechanisms for addressing integral obstacles to the realization of the third objectives and of Article 15.
As discussed in greater detail elsewhere, many of those obstacles cannot realistically be addressed unilaterally by source countries' national law or by contract/permit processes alone. Many of these obstacles are obvious, such as the vagueness of terms like ‘genetic resources’ and ‘utilization of genetic resources,’ which prevent the ABS concept from achieving the definiteness required in order to be legally functional.
The greatest obstacle to ABS functionality and legal certainty is the internationality of the ABS process. This is one issue that absolutely cannot be addressed by national law, or by voluntary guidelines. In a very real sense, this is why the current negotiations were and are necessary. By definition, every ABS contract or permit is international, since Article 15 applies only to situations in which the user is from a different country than the source country. The ‘internationality problem’ in ABS has two faces. First, it can only function if every country adopts both provider-side and user-side legislation. This is essential, because each country's national laws apply only to persons, activities and property within that country or directly under its jurisdiction. If the country with jurisdiction over the user does not require its users to comply with the source country's ABS requirements and/or to engage in benefit-sharing, then the user will not be under any legal obligation after he leaves the source country. Until this issue is addressed, the ABS concept will be legally unstable no matter how uniform national PIC and MAT processes might become.
Second, even with user-side and provider-side legislation in every country, it is necessary that certain aspects of that legislation should be written and implemented in a way that promotes trans-border application. For example, the coverage of ABS – i.e., the list of resources and activities that are covered under ABS law – needs to be somewhat uniform. Consider what will happen if the source country has a very broad definition of ‘genetic resources’ and/or ‘utilization of genetic resources’ and the user country defines them very narrowly. This will mean that the users' obligation will be different in the source country and in the user country. As a consequence, he may again be free of ABS compliance requirements the instant he is operating in a country in which his activities are not covered by ABS.
As a result, even after the Bonn Guidelines were completed, international negotiations were needed to resolve critical problems of ABS functionality. In 2002, the delegates to the World Summit on Sustainable Development, and later the Parties to the CBD, agreed that it would be necessary to address these needs in a more formal way.73 In the ensuing years, another important contribution was added, providing additional basis for these discussions – the International Treaty on Plant Genetic Resources entered into force.
Adopted in November 2001, the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) represents a serious step forward in developing the mechanism(s) through which ABS will become effective. In essence, the Treaty negotiators' task was to address the distinctive existing practices and institutions in the field of agriculture, and specifically to find a way to regularize those activities within the new concept of ABS. The Treaty covers the full range of obligations and commitments regarding ‘the conservation and sustainable use of plant genetic resources for food and agriculture and the fair and equitable sharing of benefits derived from their use, for sustainable agriculture and food security.’74 Only one element of the ITPGRFA – the ‘Multilateral System of Access and Benefit Sharing’ or MLS75 – directly implements ABS.
Negotiation preliminary to the development of the ITPGRFA began rather quickly after the CBD's adoption. The reasons for this immediate response were very apparent and urgent. For example, the International Agricultural Research Centres (IARCs) – a system mandated to promote transfer of plant germplasm for agricultural variety development – was already in place and operational. The IARCs perform an important and necessary role in enhancing food security and livelihoods around the world. It was thought (or perhaps feared) that the transfer of ‘plant germplasm’ would be considered to be a transfer of ‘genetic resources’ under ABS. There were concerns that the original country that contributed each specific ‘accession’ might insist on receiving ABS benefits from any user who obtained its germplasm through an IARC. One goal of the ITPGRFA negotiations was to ensure that the IARCs' operations, and if possible other transfers of food-related genetic resources, were internationally recognized to be ‘in harmony with the CBD.’
In addition, the Treaty has a second and very important impact – it provides primary lessons for future ABS activities and negotiations, regarding the ability to carve out special issues and sectors for specialized treatment harmonized with the CBD. To understand those lessons, it is necessary to consider the four basic ways in which the Treaty's development was quite different from other ABS work:
it was directed primarily at one particular sector (agricultural plants) and a small number of stakeholders (germplasm collections and variety developers);
it focused its most urgent attention on the utilization of a specific type of resources (seeds and other germplasm in formal collections);
it sought to apply ABS to an existing international system which is already in active use by every country on the globe (according to CGIAR, every country has utilized at least one of the IARCs to obtain foreign germplasm for use in variety development and other agricultural research76); and
its system for control of the sharing of plant germplasm was already well established and operating through an internationally standardized contractual document77 that identified the rights of the user, including prohibiting him from patenting the material obtained and other actions.
Other collections and sources, in addition to the IARCs may be included within the MLS. The system enables them to choose whether and how to include other collections, at some point in the future – i.e., after the country has become a Party to the Treaty.78
In addition to its direct impacts on agricultural development, the Treaty provides some useful clarification of particular CBD requirements (access, mutually agreed terms and benefit sharing) as they apply to agricultural variety development. Perhaps most important to the purpose of this book, the Treaty has taken the step of adopting a ‘standard material transfer agreement’ (SMTA), which must be used, without significant amendment, for all transfers of germplasm under the MLS. Key provisions of that agreement are discussed below, particularly in Chapter 3.
The most important aspects of the ITPGRFA system, for purposes of ABS contracts, are coverage, enforcement and provisions for farming communities.
From the ABS perspective, the Treaty operates as a sub-agreement detailing how ABS applies to one group of genetic resources. It provides a legal standard for determining which resources are covered – only those that meet both of two tests – the ‘resource test’ (genetic resource criteria) (Box 2) and the user/use test (Box 3).
Where a transfer passes both tests, the Treaty predetermines many ABS rights and responsibilities relating to the use of the genetic material being transferred. There is no need (or possibility) for new ABS negotiations for each transfer.
Article 1.2 of the Treaty states that the objectives of the Treaty ‘will be attained by closely linking this Treaty ... to the Convention on Biological Diversity.’ However, there are some aspects of the coverage question which have not yet been decided. In these aspects the precise relationship between the CBD and the ITPGRFA will still be determined by governments. In particular to clarify how ABS rules apply:
where a company uses germplasm obtained through the ITPGRFA for non-agricultural products;
where various kinds of germplasm are transferred in a single transaction;
where germplasm is transferred that is not listed in the MLS; and
where particular individuals transfer their own material that is not in the public domain;
and many other possibilities. It will also be necessary to consider how to integrate decisions of the ITPGRFA Governing Body, under ITPGRFA Article 12.3(h) into national ABS law and/or general provisions of law in member countries.
Regarding the critical issue of implementation and enforcement, the Treaty says that
Contracting Parties shall ensure that an opportunity to seek recourse is available, consistent with applicable jurisdictional requirements, under their legal systems, in case of contractual disputes arising under such MTAs, recognizing that obligations arising under such MTAs rest exclusively with the parties to those MTAs.88
Beyond a generic call to enable enforcement, one implication of this provision is that enforcement actions could not be taken against the user country when the user (individual, company or entity) defaults or fails to comply with the MTA. Only the user will be responsible for that violation.
Connected to this, it will be essential to have some level of international agreement regarding the interpretation and application of the Treaty. At present, some of the Treaty's provisions are still in the process of such interpretation,89 with the goal of creating a streamlined process that eliminates needless delay and obstacles to the food and agriculture-related transfer and utilization of germplasm samples and other genetic resources.
Finally, in Article 9.2, the Treaty addresses another element which relates to the CBD and which is often closely related to ABS – the rights of traditional and indigenous communities. Its work in this connection extends to a different group, however, through the concept of ‘farmers' rights’:
each Contracting Party should, as appropriate, and subject to its national legislation, take measures to protect and promote Farmers' Rights, including (a) protection of traditional knowledge relevant to plant genetic resources for food and agriculture; (b) the right to equitably participate in sharing benefits arising from the utilization of plant genetic resources for food and agriculture; and (c) the right to participate in making decisions, at the national level, on matters related to the conservation and sustainable use of plant genetic resources for food and agriculture.90
This provision extends beyond the CBD, by specifically identifying ‘rights’, including rights ‘to equitably participate in sharing benefits’ – beyond the CBD's provisions regarding traditional knowledge. This extension may be explained in terms of the text of the ITPGRFA. One essential difference between the Treaty and the CBD regarding benefit-sharing is its adoption of a broad-dissemination system for distribution of benefits, which does not require identification of the precise source of each genetic resource. In this way, the ITPGRFA negotiators made it easier for countries to provide specific ‘right’ to traditional, local and farmer communities to share in these generalized benefits.
Regarding access, the Treaty makes two specific statements applicable to all resources that meet the resource criteria, above,91 regarding (i) the sovereign rights and duties of Parties; and (ii) emergency powers in times of food shortage.
By executing the ITPGRFA, each Party specifically agrees that it will either:
(i) adopt special national legislation regarding ‘access to plant genetic resources for food and agriculture found in in-situ conditions’ or
(ii) allow any person to access those resources ‘in accordance with such standards as may be set by the Governing Body.’92
This provision is essentially an agreement by all Parties to trade the individual exercise of their sovereign rights regarding access to their own PGRFA, in exchange for participation in the establishment and operation of the Multilateral System of Access and Benefit-sharing. By contrast, Article 15.5 of the CBD takes the opposite approach, requiring PIC from every country, unless the country specifically gives up its ABS rights.93
The second critical ABS provision of the ITPGRFA relates to food shortages and other emergencies. The Treaty specifically states that
In emergency disaster situations, the Contracting Parties agree to provide facilitated access to appropriate plant genetic resources for food and agriculture in the Multilateral System for the purpose of contributing to the re-establishment of agricultural systems, in cooperation with disaster relief coordinators.94
This provision will almost certainly be interpreted to dispense with ABS issues for PGRFA where an emergency exists. This provision does not appear to constitute an exception to coverage, however. The resources remain under the coverage of the ITPGRFA, but are excused from its procedures, during the time of the emergency. There is no parallel provision in the CBD regarding urgency, but the idea that special flexibility may be needed in emergencies would appear to be implicit in the Convention's preamble.95
For many commentators, the most important provisions of the Treaty relate to the various provisions which eliminate contract-by-contract MAT negotiations for resources transferred through the MLS. Where a potential user meets the user criteria (box 3, above) and the germplasm sought meets the resource criteria (box 2 above), the MAT are pre-agreed. Regarding access to germplasm covered by the MLS, Parties to the ITPGRFA have specifically agreed in advance to the following Mutually Agreed Terms:
All access to germplasm through the MLS will be under an agreed ‘form contract’96 – the Standard Material Transfer Agreement (SMTA);
Persons, companies, and entities receiving plant germplasm through the MLS, ‘shall not claim any intellectual property or other rights’ over the material, its parts and components in the form received if such IPR claims could operate to limit other peoples facilitated access to same genetic resources;97
If the specific ‘plant genetic resources for food and agriculture’ are protected by IPRs, the person providing them must ensure that access is ‘consistent with relevant international agreements, and with relevant national laws.’98
Of these, the first point – use of the SMTA in all transactions – is most relevant to this book. The SMTA has had a major impact on ABS, with many countries recommending that all ABS negotiations follow the same path, adopting a single-form agreement, which eliminates the need for individual negotiations of ABS contracts. Some have even suggested that the SMTA should simply become the model for all ABS documentation.99
As further discussed in Chapter 3, the SMTA is already one of the best known ‘ABS contracts’. Unlike other ‘model contracts’ that have been prepared or proposed, it has already been adopted by over 100 countries which are, in essence, the ‘providers’ of the PGRFA described in the MLS. Because of its importance, the SMTA's individual provisions will be discussed in detail in Chapter 3.
The ITPGRFA and the SMTA also constitute a pre-agreement on the benefit-sharing obligations related to assets transferred through the MLS, eliminating individual negotiations on this point as well. The following sections briefly describe the two types of pre-agreed benefit-sharing under the SMTA – sharing at the country level and sharing at the individual level.
Unlike CBD Article 15, the ITPGRFA's benefit-sharing obligations are the duty of each country that is Party to the Treaty. This is different from the CBD, which requires Parties to impose benefit-sharing requirements on its citizens and entities – the users – but does not require the countries to be responsible for benefit sharing.100 At the country level, benefit sharing and access are basically identical. The Treaty specifically states that access to the MLS is itself ‘a major benefit of the Multilateral System,’ which is, by definition, shared fairly and equitably.101 Connected to this, the Treaty requires all countries to provide benefits on a general level (i.e., without the need to identify particular source countries), in the form of –
‘access to technologies for the conservation, characterization, evaluation and use’ of MLS crops,103 (i.e., through the sharing of specific improved varieties.),
the mutual responsibility for scientific and conservation development,104 and
commercial benefit-sharing through partnerships and collaboration.105
In this way, the Treaty identifies cooperation and access as the main benefits under the treaty. Participation in the treaty is a stepping stone to accessing this cooperation, and to promoting maintenance of the IARCs and other collections. This in turn benefits all users of those resources.
In addition to ITPGRFA's systemic benefits, the Treaty also imposes specific benefit-sharing obligations on each individual user. The Treaty consolidates and standardizes these obligations, by agreeing on three kinds of individual benefit sharing:
Financial benefits of commercialization: Each user must either pay a specific share of its proceeds from commercial marketing of new varieties, or provide greater access to the resources they are using.
Data/information sharing: the Recipient must make available through the ITPGRFA mechanisms ‘all non-confidential information’ from their R&D process. It is encouraged, but not required, to contribute a sample of the final variety to one of the IARCs, once any IPR has expired.108
Predictably, most of the attention to the Treaty's benefit-sharing provisions has focused on the payment requirements – the share of commercial benefits that the Recipient is required to pay into an international fund. The Treaty's most important innovations relating to this type of benefit sharing are (i) the ITPGRFA Fund itself and (ii) the ‘available for unrestricted use’ exception to the payment obligation.
[a] The International Fund
Article 19 specifically calls for the creation of an International Fund (herein the ‘ITPGRFA Fund’) to receive and distribute monetary benefit payments.109 This approach resolves a very difficult problem relevant to applying ABS to the agricultural seed sector – the fact that most new varieties include contributions from an enormous number of species. Through the ITPGRFA Fund, the Treaty can function with no need to identify the particular countries' resources used in each new product.110
[b] Amounts to be shared
In Article 19, Treaty requires all users to make a payment into the Fund as benefit sharing for the resources used. The SMTA (as adopted and amended from time to time by the Governing Body) sets the amount of such payment, in relatively circular terms. At present, the basic rate is ‘one point-one percent (1.1 %) of the Sales of the Product or Products less thirty percent (30%).’111 Applying this language in practice, it appears that the payments must be 1.1% of 70% of gross sales of the product – in other words, 0.77% of total sales.
The SMTA allows Recipients (users) to choose an alternative payment option, under which they pay what the SMTA calls a ‘discounted rate’ of
‘zero point five percent (0.5 %) of the Sales112 of any Products and of the sales of any other products that are Plant Genetic Resources for Food and Agriculture belonging to the same crop, as set out in Annex 1 to the Treaty, to which the Material referred to in Annex 1 to this Agreement belong.’113
On the surface, this option does not appear to provide a discount. In addition to requiring payment on all products within the same ‘crop,’ the discount rate provisions requires the user to pay this amount for a minimum of 10 years, regardless of whether the product(s) using the genetic material are still marketed. At the end of this period, the recipient has the option of switching to the primary rate (payable only on sales of the actual products that utilize the originally acquired material), or continuing to use the alternate rate for another 5 years. It is possible that the rules for applying this rate may clarify the reasons that a user might choose this alternative option. For example, it might offer benefits to companies with many MLS-connected products, especially those who prefer to limit the amount of detailed financial information that they make available to the public.
In addition to standardizing payment, the Treaty sets the criteria for use of the moneys in the Fund.114 It opens a link to Food Processing Industries, by allowing and encouraging them to provide ‘voluntary benefit-sharing contributions' to the MLS.’115
[c] Exception: Results ‘available for unrestricted use’
The Treaty provides one significant exception to the basic payment requirement, through which are many users will be exempted from making any payments. It suggests that only a very small number of users will actually pay into the Fund at present, although this situation may change.116
This exception is contained in an SMTA provision that gives a user two options whenever he ‘commercializes a product that is a plant genetic resource for food and agriculture and that incorporates material accessed from the Multilateral System.’ Specifically, that user must either
make that product is available without restriction to others for further research and breeding; or
pay the specified amounts into the Fund as described above;117
A user can comply with the product availability provision, even where he commercially markets the variety created using germplasm from the MLS, and/or patents that variety. He may be excused from paying the specified amounts as to a commercially sold or patented variety as long as he is willing to provide samples of the product to other users (i.e., other variety developers) for research use in making their own products. He need not take specific action to promote this use, so long as he is willing to provide such samples upon request.
[d] Obligations of subsequent users
The first user's completion of a product also breaks the chain of benefit-sharing responsibility. If a subsequent user develops a product using the first user's product, he owes no benefit sharing.118 He is encouraged, but specifically not required, either to make his product available without restriction, or make the relevant payment.
In the area of benefit sharing, as in the case of access, the primary remaining work for the ITPGRFA parties will be the task of ensuring ‘harmony’ in implementation. Although describing itself as ‘in harmony with the CBD’ at the international level, that statement only refers to the wording of the instrument. There are many ways in which national level implementation of the ITPGRFA might not be easily harmonized with national ABS policies, objectives, and implementation. Most important, as mentioned above, it will be essential to delineate the boundary between ITPGRFA's coverage and that of CBD Article 15.
The future of ABS includes many possibilities for change, most of which are essential in order for ABS to become a functional system. Some of these changes may have a significant impact on existing contracts and current users. This state of legal uncertainty creates a serious problem for users, providers, and source countries. ABS contracts continue to be needed, and parties do not have time or willingness to wait for the results of multi-year negotiations. In fact, for some companies, the current situation of legal uncertainty appears preferable to the creation of a clear and predictable regime. They may believe that they continue to have an advantage as long as the ABS concept is ambiguous. In practice, however, this ambiguity can be very negative to users as well as providers. Until source countries can have confidence in their legal remedies for ABS transactions, they will probably continue to insist on a high level of procedural and contractual protection measures, thereby increasing transaction costs, slowing the ABS process and negatively affecting the user's ability to obtain clearly enunciated legal certain rights in the genetic resources he obtains.
One possibility is that, where the ABS system becomes international, it will also become more rational and even streamlined. If countries adopt legislation governing the users under their jurisdiction and ensuring reasonable levels of benefit sharing, this may provide assurance to source countries, enabling them finally to rely on shared definitions, processes, and requirements. In building a provider-side system that integrates with user-side measures in the countries most active in bio-prospecting and access, each country may contribute to rationalizing the entire concept internationally.
Most tellingly, in the authors' opinion, the greatest impediments to a functional ABS system arise out of the expectation that such a system can become functional through a regime consisting of mandatory measures – that is, laws requiring ABS compliance. As discussed in other publications, there are many nearly insoluble problems with these mandatory approaches. By contrast, the concept of an incentive-based or motivation approach offers many possibilities, particularly when incentive measures are combined with mandatory and oversight measures. One positive impact of this kind of approach would be that it could operate to reward ABS compliance, giving benefits or other competitive advantages to those who obtain ABS contracts and/or who share benefits with source countries. This would eliminate the “perverse incentive” of current ABS – that is, the incentive of most commercial entities and researchers to avoid the need for ABS compliance wherever possible.
Regardless of the ultimate impact of the regime negotiations, there is a need for guidance for individual negotiations and drafters who create new contracts between now and the completion and implementation of the international ABS regime. In Chapter 2, the legal issues and elements which make ABS contracts different from other contracts are discussed. Chapter 3 provides some examples of issues and specific clauses from the contracts that have been made accessible. It is hoped that the negotiators in the ABS regime discussions, as well as the parties to individual contracts, might benefit from this discussion, obtaining a better understanding of how contract law impacts on ABS and why contract law alone is not sufficient to make the ABS process functional.
* The specific statements and contents of this chapter do not necessarily reflect the opinions of the World Intellectual Property Organisation, its Secretariat or Member States, nor the IUCN, with which he was affiliated during the writing of this chapter, nor those of the Governing Body of the International Treaty on Plant Genetic Resources for Food and Agriculture, its Secretariat or its Contracting Parties, with which he has become closely affiliated in the interim between writing and publication of this book.
** Tomme Rosanne Young is an independent consultant on environmental law and policy, currently based in Bonn, Germany.
1 Glowka, et al., 1994, at 76.
4 ‘User measures’ is the common way to refer to the obligations under CBD Art. 15.7. Most relevantly, it requires that ‘each Contracting Party shall take legislative, administrative or policy 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 ....’ A few countries have adopted laws calling for the disclosure in patent applications of the origin or source of genetic resources used in the invention/innovation. However, as a study by the Spanish patent office indicated, until recently most disclosures have been voluntary – offered by patent applicants. Such disclosure has usually been contained within the description of the invention (in the patent application). Even in those countries with mandatory disclosure requirements, those requirements could theoretically be a basis for refusal to grant a patent. Once the patent is granted, they rarely affect the validity of the patent, and do not create any obligation (or incentive) to share benefits with the provider of the genetic resources.
5 There are many possible reasons for Parties' poor Article 15 performance to date. National legislative draftsmen generally find it very difficult to create legislation that implements ABS due to the ambiguities and uncertainties regarding the practical meaning of Article 15. Standard examples of ambiguity include the impenetrability of the terms ‘genetic resources’ and ‘utilization of genetic resources,’ as well as the uncertainty regarding the meaning of ‘access’ and its relationship to the obligation to share benefits. These points are considered in more detail in Cabrera and Lopez, 2007 at 1.2 and 2.1.3, and Tvedt and Young, 2007 at Chapter 2.
6 At least one country, Australia, has legislated in a way that indicates that any person that owns or possesses as specimen of biological origin also owns the rights to genetic resources it contains. See AUSTRALIA, Environment Protection and Conservation Regulations, 2000, Statutory Rules 2000 N° 181, as amended (taking into account amendments up to SLI 2006 N° 131, Parts 8A, 9, 10, and 17). And see, Queensland Biodiscovery Act, Act N° 19, 24 Aug 2004; and other documents available on the CBD's ABS Measures database. http://www.cbd.int/abs/measures.shtml. This provision, however, appears to be inconsistent with the Australian law on patents, which apparently recognizes the right to patent naturally occurring genes without getting permission from the owners of rights in that material. Consequently, although having espoused this approach to ownership of genetic resources, it cannot be said that Australia has integrated that approach into its property/commercial law.
7 Even if all future movement of biological material from the source country can be controlled, this may not enable any actual control of the ‘utilization’ of genetic resources from that material. Various aspects of the proposals for control or tracking of access and utilization of genetic resources are discussed in detail in Ruiz and Lapeña, 2007, Book 3 in this Series. This separation between benefit-sharing and control is equally true for traditional knowledge, where widespread dispersion of such knowledge among communities and often among community members makes it difficult to condition benefit-sharing on control of even the most sacred or secret species-related knowledge.
8 At the time of writing of this book, the CBD Working Group on Access and Benefit-sharing had just begun to consider proposals for developing a formal definition of the meaning of the term ‘misappropriation’ in respect of genetic resources. The above-mentioned view is most apparent when reviewing the claims of ‘misappropriation’ and biopiracy that have been leveled up to now. See Young, 2005>.
9 See Holm-Müller et al., 2005; Latorre, 2005; Frison and Dedeurwaerdare, 2006. At minimum, results of recent ‘user surveys’ indicate that most users do not know or particularly care what the ABS provisions require, assuming that they are exempt, so long as they acquire genetic resources through secondary sources (collections, collectors and middlemen) outside the source country.
10 A representative of the pharmaceutical industry specifically stated that in future, to avoid ABS complications he would always acquire his genetic material from other collectors, both those who have recently collected the materials and botanic gardens whose collections include foreign-collected materials and their progeny. Presentation of T. Henkel, ‘A Perspective from Pharmaceutical Industry,’ Presentation to High-level Experts Meeting – Addressing the Access and Benefit-Sharing (ABS) Challenges in the Context of the Convention on Biological Diversity (Tokyo, 8–9 February 2007) and other remarks in that meeting
11 The sovereign right of countries over their natural resources has been generally recognized for many decades. Mgbeoji, 2001.2006a. Prior to 1992, however, no legal instrument suggested that there was any kind of commercial right of any person or country to exert dominion, ownership, or other legal rights in the genetic information or other characteristics of any naturally occurring species or variety of plant, animal, or other element the biota.
12 There are many different views, with some analysts likening genetic resources to intellectual property, and other commentators assuming that they are governed by each country's existing ‘real property’ (land and buildings) law. Neither claim is generally supported by current practices. In late 2007, the SCBD began to examine this question, with an initial study that appears to have focused on the latter view, assuming that national land law would be the basis for ownership of genetic resources. ‘Report on the Legal Status of Genetic Resources in National Law, Including Property Law, Where Applicable, in a Selection of Countries’ UNEP/CBD/WG-ABS/5/5, 30 August 2007. Although it did not consider national law governing, for example, crops, movable property, intellectual property, common property, intangible property or national patrimony (the types of property law that appear more directly relevant to genetic resources), it provides a first step towards understanding the property question. Further inquiry seems essential on these points.
13 This issue is at this writing still in need of comprehensive analysis. Unfortunately, The ABS Series was not able to include this type of study within the current list of five books.
14 This primary deficiency connects to a second critical element preventing ABS implementation – the fact that ABS is a multi-country process. Every ABS transaction under Article 15 involves at least two different countries – the ‘country providing the resources’ (herein the ‘source country’) and the country with jurisdiction over the user. There may be more countries involved, since a particular transaction may involve resources from multiple source counties, users operating in more than one country and/or a variety of ‘middlemen.’ Given that all countries are specifically obligated in the CBD to adopt measures relevant to users in their country, ABS implementation might create a legislative nightmare in which at least two (and possibly several) countries' national law must be applied. The multi-national character of ABS creates a problem for implementation because it prevents any country from unilaterally regulating ABS implementation in a way that will apply after the user has left the source country's jurisdiction. This may create a perverse incentive, encouraging users to try to evade source-country ABS requirements. Tvedt and Young at 3.5.3 and 6.2.
15 See Young, 2006a. The international regime negotiations are currently considering the possibility of developing an international definition of ‘misappropriation of genetic resources’ – further evidence that these questions are not entirely answered at present. These factors have been canvassed extensively in other publications, including other books in the current Series, and will not be detailed here.
16 Nearly all countries use all of these mechanisms and many others besides. A partial case-study of the effectiveness of such systems can be found in Cotrell, et al., 2008.
17 This similarity may not be a source of comfort to developers of environmental legislation who recall the intensity of opposition to EIA when it was introduced.
18 The term ‘genetic resources’ was used to refer to the importance which each country should place on the diversity of different species, subspecies, and varieties within its borders and in the world. This definition of the concept is still reflected in the ITPGRFA (Arts. 2, 5–8 et passim).), see Tvedt and Young 2007 at 184.108.40.206 and elsewhere.
19 The strong implication of Article 15 and the discussions and analysis at the time of the CBD's adoption was that ABS would be implemented through private and public/private contracts and other private commercial and noncommercial actions. This is not stated in the text of Article 15.
20 In general, it appears that research into plants and microbial species focuses on the genetic characteristics shared by all members of the variety or subspecies, while some (but not all) work on species in the animal kingdom is focused on individual variations. This is comparable to agricultural commodities where the year-to-year consistency of plant/crop varieties is much sought-after, where the unique qualities of one prize animal or herd allow the owner to command a higher price from those seeking breeding stock, as compared with persons selling other members of the species.
21 Efforts are ongoing to unify substantive patent law globally, at present. See Tvedt, 2007.
22 CBD, Arts 1, 2, 9(b), 15 and 16.
23 Among the dozens of inquiries into this question are the books in this Series, including especially Cabrera and Lopez 2007 at 1.2, and Tvedt and Young, 2007, at 2.7, 4.1 et passim.
24 This issue is detailed in Young, 2002, as well as in Tvedt and Young, 2007, at 4.1.
25 In some cases, the introduction of species by human means has been documented as occurring more than 13,000 years ago. In others, it has occurred through non-intentional transfers, such as the introduction of invasive species through international watercourses, sometimes within recent memory, sometimes longer ago. (Young, 2005b).
26 The legal issues surrounding animal genetic resources and human genetic material may be an exception to this, given that they are more often focused on the qualities of a specific individual that make him/it different – i.e., why one human is resistant to a persistent virus, for example, or the genetic qualities that determine that one racehorse will be a consistent champion and another a future plowhorse.
27 Although the technology needed to isolate natural genes is generally available (i.e., there was no innovation in the isolation process), and no other ‘inventive step’ is involved, these patents have been upheld in at least two countries (Australia and the US).
28 One commonly used example is the US patent of the enola bean [sometimes called the ‘yellow bean case’ or ‘Mexican bean case’], discussed in Young 2006, but later rescinded.
29 In theory, it also defeats the purpose of IPR protections, which are intended to enable innovation, rather than to prevent access to raw materials and natural examples, as noted below.
30 Consider the possibility that one user could patent coltan, charging a royalty to all industries using it in telephone or developing new uses for it in computer and other technologies. The result would be an impediment to future technological innovation, and would also negatively impact the markets and prices for copper and coltan, affecting the value of those resources.
31 Discussed in 220.127.116.11.
32 Benavidez, 2004.
33 It is sometimes claimed that opposition at the local level (in PIC and MAT processes and claims of biopiracy) arises out of the fact that benefits are not shared with indigenous groups and communities, but are distributed in other ways (to protected area agencies, etc.) While some local activists take this position, others oppose ABS on environmental or other social grounds. This ties into the earlier point that the providers often view ABS as a social-welfare or environmental conservation program, rather than as a basis for commercial negotiations.
34 National ABS legislation is provided through the CBD's Database of ABS Measures at http://www.cbd.int/abs/measures.shtml. The lack of national legislation governing the matters where legislation is required under Article 15 is discussed in Tvedt and Young 2007, at chapter 3, et passim.
35 Norway has suggested that it might take this approach. See Tvedt and Young, 2007 at Chap 3.
36 In Glowka, 1998, the number of countries said to be in process of adopting ABS legislation was researched and fifty countries were listed as either having such laws currently engaged in the process of adopting them. Over the ensuing years, this figure has been cited by many other authors. A number of countries not listed in the original count have indicated that they are seeking to adopt ABS laws, while many of those on the original list have given up the effort, pending some better legal understanding of the process.
37 In the Bonn Guidelines, for example, discussion of the creation of legal systems for the provision of access to genetic resources is more than seven times as long as the discussion of matters relating to the user-side law and ensuring the payment of benefit-sharing.
38 In some developed countries, ABS NFPs are increasingly focusing on efforts to compile information on access-related laws in developing countries, as assistance to users. Personal communication with Seizo Sumida (Japan), Sezannah M Seymour (United States), Geoff Burton (Australia) in 2007.
39 Given that this is a decision to ‘sell’ its resources, the country will have broad leeway to make choices, including to make separate rules for foreign users. See 2.5.2, below. It is only fair, however, that such criteria should be known to all.
40 For a more extensive discussion of the issue of legal certainty, see Young, 2005.
41 See Young, 2006; Tvedt and Young, 2007.
42 See Young, 2006.
43 Such proposals were forwarded by both Australia and the EU in early meetings of the AHWG-ABS.
44 Proposed by the EU as part of their presentation in AHWG-ABS-6, January 2008.
45 The key to this approach will be ensuring that it includes all possible options, and that it considers the interlinkage among the various provisions and options.
46 See Tvedt and Young, 2007 at chap. 3.
47 One frequent oral commenter from the US interprets ‘as appropriate’ to mean that Article 15.7 is not required – that the phrase ‘as appropriate’ indicates that countries are not required to have or adopt user measures. A legal analysis of the many uses of that phrase throughout the CBD, as well as the rules set forth in the Vienna conventions for interpreting international agreements suggests that it indicates a choice by the legislating country, among the three options, and/or underscores the fact that the particular measures adopted by a country will be unique to its own needs and system. It does not constitute a loophole in the Parties' obligation to implement each provision in good faith.
48 The complexities that have prevented the adoption of ‘user measures’ up to now are discussed in another book in this Series: Tvedt and Young, 2007.
49 Personal communications, Seizo Sumida, November 2007.
50 CBD Article 16.3: ‘Each Contracting Party shall take legislative, administrative or policy measures, as appropriate, with the aim that Contracting Parties, in particular those that are developing countries, which provide genetic resources are provided access to and transfer of technology which makes use of those resources, on mutually agreed terms, including technology protected by patents and other intellectual property rights, where necessary, through the provisions of Articles 20 and 21 and in accordance with international law and consistent with paragraphs 4 and 5 below.’
51 CBD Article 19.1: ‘Each Contracting Party shall take legislative, administrative or policy measures, as appropriate, to provide for the effective participation in biotechnological research activities by those Contracting Parties, especially developing countries, which provide the genetic resources for such research, and where feasible in such Contracting Parties.’
52 CBD Article 19.2, which provides in full that ‘Each Contracting Party shall take all practicable measures to promote and advance priority access on a fair and equitable basis by Contracting Parties, especially developing countries, to the results and benefits arising from biotechnologies based upon genetic resources provided by those Contracting Parties. Such access shall be on mutually agreed terms.’
53 CBD COP Decision UNEP/CBD/COP/6/24 Annex (2002).
54 This was not the original intent, and the initial draft was phrased in much stricter terms (speaking of ‘requirements’ and what the users and providers ‘shall do.’) Given that they would have been adopted by COP decision, rather than plenipotentiary process, this would not have been particularly ‘binding’ in any legal sense, even if adopted with that language. The negotiations were lengthened by multiple requests to eliminate any ‘mandatory’ language (changing ‘shall’ or ‘must’ to ‘should’ or ‘could,’ or ‘may consider’, or eliminating any reference to ‘requirement.’) Eventually, to cut this short, it was decided to simply state in general that the Guidelines are entirely voluntary, reflecting options and ideas, rather than recommendations. As a consequence, the phrasing within the document is quite inconsistent – stronger language was retained as to any provision that had not yet been discussed, but eliminated in others. Since all provisions are ‘voluntary,’ this difference is generally meaningless, but remains confusing.
55 Bonn Guidelines, Art. 14 c and d.
56 Bonn Guidelines, Art. 59.
57 This is expressed in many different ways. In Guideline 16.c, for example, the responsibilities of users include the requirement that users should not to commit fraud (clause 16.c.i: ‘only supply genetic resources... when they are entitled to do so’) while providers must ‘strive to avoid imposition of arbitrary restrictions on access to genetic resources.’ (clause 16.c.ii)
58 Bonn Guidelines, 16.b.vii.
59 Bonn Guidelines at §§ 22–44.
60 CBD, Article 15 includes the phrase ‘full participation of the country providing resources’. In addition, Article 15.6, which calls on countries to ensure that users of genetic resources should carry out research and development activities in the provider country and with that country's involvement, where possible.
61 See, e.g., Tobin and Swiderska, 2001
62 The Philippines and Costa Rica are generally in this category. See Carrizosa, et al. 2004.
63 The US appears to take this approach, given that the only specific legal discussions of genetic resources in US administrative documents imply that no public participation has been required where the genetic resources are collected from government lands. A proposal has been aired which would require public participation where the resources are taken from national parks, however, based on the fact that these resources are ‘public property’ in which the citizens have an interest. Discussed in Tvedt and Young at chapter 3.
64 Some provisions of the Bonn Guidelines appear to recognize the variability of ownership interests, such as § 17, which notes (in discussing the PIC process) that ‘due to the diversity of stakeholders and their diverging interests, their appropriate involvement can only be determined on a case-by-case basis. Similarly, § 26.d, states that ‘[t]he consent of relevant stakeholders, such as indigenous and local communities, as appropriate to the circumstances and subject to domestic law, should also be obtained.’ This suggests the assumption that each ownership situation will be different. Other provisions to this effect call for public consultation ‘in each step of the process, including ... [w]hen determining access, negotiating and implementing mutually agreed terms, and in the sharing of benefits.’ (section 17 and 18.) These assumptions are contradicted to some extent by § 19, which calls for ‘appropriate consultative arrangements’ that could involve the creation of standing ‘national consultative committees, comprising relevant stakeholder representatives,’ and expect that each country can create one such committee to address all public participation. This suggests that many participation choices are expected to be generic, rather than case by case.
65 A detailed discussion of the difference between the form of payment of a benefit-share and the identification of the benefits that must be shared is found in Tvedt and Young, 2007, at 4.1.3.
66 Bonn Guidelines, Art. 48.
67 An initial discussion of the unaddressed challenges presented by the sharing of data and research results is found in Tvedt and Young, 2007, at 6.4.
68 Bonn Guidelines §§ 38–40.
69 See Tvedt and Young at 6.4.3.
70 Young, 2007.
71 Hence, if ABS is to operate as a mandatory (rather than incentive) system, it cannot rely on contracts as its only legal basis. Tvedt and Young, supra.
72 Cabrera and López, 2007 at 4.3; Tvedt and Young, 2007, at 3.5 and 6.3.
73 The particular decisions and history are summarized in Tvedt and Young at Chapter 1.
74 An overall understanding of the entire scope and provisions of the ITPGRFA can be obtained from Moore and Tymowsky, 2005.
75 ITPGRFA, Part IV, Articles 10–13.
76 Based on the records and data of the Consultative Group on International Agricultural Resources (CGIAR), every country has been involved in the use of germplasm from one or more of the IARCs – a primary resource base providing germplasm from all countries for the development of new plant varieties in other countries. Fowler et al., 2001
77 A Material Transfer Agreement had been adopted by the CGIAR-coordinated IARCs a few years before the ITPGRFA was in force. Moore and Tymowsky, 2005, at 99.
78 Many non-IARC collections and researchers have objectives and desires that are nearly identical to those expressed by the ITPGRFA. As time passes, the implementation and understanding of the Treaty are expected to encompass the needs of nearly all collections and germplasm conservation activities.
79 ITPGRFA § 11.2.
80 ITPGRFA § 11.2. In § 11.3 the Contracting Parties expressly commit to encouraging these entities (both natural and legal persons) to avail themselves of this option. In 11.4, the Contracting Parties agreed that by June 2006 (‘within two years of the entry into force of the Treaty’) they would decide ‘whether access shall continue to be facilitated to those natural and legal persons ... that have not included these plant genetic resources for food and agriculture in the Multilateral System.’ In other words, to close the system to all those who do not open their own collections to users under the MLS.
81 ITPGRFA § 11.5.
82 ITPGRFA § 11.5.
83 ITPGRFA § 12.2.
84 These provisions clearly demonstrate that laboratory procedures using modern biochemical technologies to create new varieties (GMOs or LMOs) are clearly within the scope of the ABS components of the ITPGRFA, where the new varieties are created as food or feed.
85 ITPGRFA § 12.3(a).
86 ITPGRFA § 12.5.
87 For example, the Treaty provides both that ‘the recipient of the plant genetic resources for food and agriculture shall require that the conditions of the MTA shall apply to the transfer of plant genetic resources for food and agriculture to another person or entity, as well as to any subsequent transfers of those plant genetic resources for food and agriculture’ (§ 12.4) but also provides that ‘[a]ccess shall be accorded ... without the need to track individual accessions’ (§ 12.3(b).) The manner in which the former provision can be required, without any type of tracking, is still being determined.
88 ITPGRFA § 9.2.
89 As the Parties integrate these points into their national law and practice, they may provide important lessons for other elements of national ABS implementation.
90 ITPGRFA § 12.3(h) ‘Without prejudice to the other provisions under this Article, the Contracting Parties agree that access to plant genetic resources for food and agriculture found in in-situ conditions will be provided according to national legislation or, in the absence of such legislation, in accordance with such standards as may be set by the Governing Body.’
91 Discussed above, Art. 15.5 provides that ‘access to genetic resources shall be subject to prior informed consent of the Contracting Party providing such resources, unless otherwise determined by that Party.’ This means that, if the country does not specifically make a determination releasing or limiting its PIC rights, then the general law of that country will determine whether the country has given consent and what the terms of that consent are. By contrast, if a country is a Party to the ITPGRFA and has not adopted specific ITPGRFA-implementing national legislation which specifically addresses access to its PGRFA, the Treaty may adopt standards that will govern in that country.
92 ITPGRFA § 12.6.
93 The CBD's 19th preambular paragraph states that the Parties are ‘Aware that conservation and sustainable use of biological diversity is of critical importance for meeting the food, health and other needs of the growing world population, for which purpose access to and sharing of both genetic resources and technologies are essential.’
94 The use of form contracts is discussed below in Chapter 3.
95 ITPGRFA § 12.3(d). In full that section provides that ‘Recipients [of germplasm provided through the MLS] shall not claim any intellectual property or other rights that limit the facilitated access to the plant genetic resources for food and agriculture, or their genetic parts or components, in the form received from the Multilateral System.’ This provision responds to the problem of patenting of natural genes, as set forth in the previous section. It does not, however, include any commitment under which Treaty Parties agree not to issue, recognize, or give legal effect to patents issued in violation of this term.
96 ITPGRFA § 12.3(f ). Although not clear, this provision is usually assumed to refer to international laws governing ‘intellectual and other property rights.’ It must be noted, however, that all countries are already obligated to act in a manner consistent with the international laws they have ratified or accepted, and that this provision cannot operate to bind any country to international laws that they have not ratified or accepted.
97 See, e.g., A de facto certificate of source – The Standard Material Transfer Agreement under the International Treaty, (Bioversity International Policy Brief, January 2007).
98 This protects the user by ensuring that his rights to trade secrets (data, resources or technologies) are not in doubt, even if those secrets arose out of the germplasm obtained from the MLS. Since the country does not own that data, resources, or technologies, it cannot be forced to transfer them.
99 ITPGRFA § 13.1.
100 Per ITPGRFA § 13.2 (a), all countries under an obligation to ‘make available information ... [including] catalogues and inventories, information on technologies, results of technical, scientific and socio-economic research, ... characterization, evaluation and utilization, regarding’ species within the crop categories listed in Annex I to the Treaty.
101 ITPGRFA § 13.2 (b). Like 13.1, this benefit is shared among all Treaty Parties. In this case, the Treaty specifically states that, with regard to developing countries and transitional economies, such sharing shall be ‘under fair and most favourable terms, in particular in the case of technologies for use in conservation as well as technologies for the benefit of farmers... including on concessional and preferential terms where mutually agreed.’ (Id., clause (iii).) In addition to requiring the recognition of ‘adequate and effective protection of intellectual property rights,’ it calls for this sharing to occur ‘through partnerships in research and development under the Multilateral System.’ This obligation specifically includes the transfer of technology ‘through genetic material.’ Id. at clause (i). Some elements of this obligation are also placed on the user, as described below. The Treaty defines ‘genetic material’ in Art. 2 as ‘any material of plant origin, including reproductive and vegetative propagating material, containing functional units of heredity.’ Thus, it shares in the more general ABS problem of trying to create a recognizable distinction between ‘genetic material’ and other material of plant origin.
102 ITPGRFA § 13.2 (c). This provision generally requires the Treaty Parties to ‘give priority to’ programmes and facilities for (i) scientific and technical education and training in conservation and sustainable use of PGRFA, (ii) conservation and sustainable use of PGRFA, and (iii) carrying out scientific research. Most important, these programs are to be conducted ‘where possible, in developing countries and countries with economies in transition, in cooperation with institutions of such countries.
103 ITPGRFA §13.2(d)(i), which provides in full that ‘The Contracting Parties agree, under the Multilateral System, to take measures in order to achieve commercial benefit-sharing, through the involvement of the private and public sectors in activities identified under this Article, through partnerships and collaboration, including with the private sector in developing countries and countries with economies in transition, in research and technology development.’
104 Presumably, a user is ‘conserving the material’ when he holds it in a genebank, herbarium, or other collection for future use.
105 SMTA Article 6.3.
106 ITPGRFA Art. 13.2(a), and (d)(ii); SMTA Article 6.9.
107 ITPGRFA Art. 19.3f and see Art. 13.2(d)(ii).
108 In ABS discussions, agricultural specialists frequently note that a large number of different subspecies or varieties may be combined in the creation of any new variety, and that each of those parent varieties might themselves be the product of a suite of species or varieties.
109 SMTA Annex 2, and see Art. 6.7. For this purpose, the term ‘sales’ appears to refer to gross sales of the product.
110 Note that this clause does not mention a 30% holdback – the 5% figure is the final percentage.
111 SMTA Annex 3, and see Art. 6.11.
112 ITPGRFA §§ 13.3–13.5, 18, 19 and especially the Global Plan of Action, adopted at the 1996 the Leipzig International Technical Conference on Plant Genetic Resources.
113 ITPGRFA § 13.6.
114 Section 13.2(d)(ii) states in part that ‘The Governing Body may, from time to time, review the levels of payment with a view to achieving fair and equitable sharing of benefits, and it may also assess, within a period of five years from the entry into force of this Treaty, whether the mandatory payment requirement in the MTA shall apply also in cases where such commercialized products are available without restriction to others for further research and breeding.’ The five-year period mentioned in this clause extended until 28 June 2009.
115 ITPGRFA §13.2(d)(ii).
116 Depending on which definition of ‘derivative’ is used, this provision might be seen as essentially eliminating derivatives from the coverage of the ITPGRFA.
117 Currently, the AHWG-ABS has been ordered to complete its work by 2010, if possible. Even if it meets this deadline, it is not clear whether the final product of the Group's work will be adopted in 2010, or whether additional formal negotiations will be needed. In addition, when the outputs of the regime negotiations (whatever they are) are finally adopted, a period of years may be required before they have been implemented in national law, administration, and practices. A good example of the time scale involved is the Cartagena Protocol to the CBD, which began discussions before the CBD was adopted. The Protocol was finally adopted in 2000, entered into force in 2002, and as of this writing (2008) still has not been legislatively implemented in most developing countries that are or would like to become party to the Protocol.
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