Article 13 – Benefit-sharing in the Multilateral System

The implementation of fair and equitable sharing of benefits arising out of the utilization of genetic resources is central to both the CBD and the Treaty. The third objective of the CBD calls for the fair and equitable sharing of benefits arising from the use of genetic resources, “including by appropriate access, transfer of relevant technologies [...] and by appropriate funding” (Article 1). This objective is partially implemented by Article 15.7 which specifies that the results of research and development should be shared as well as the benefits arising from the commercial and other utilization of genetic resources. The Treaty, on the other hand, provides for a multilateral system of benefit-sharing, as a necessary complement to the multilateral system of facilitated access. In this connection, the Treaty views “benefits” to include the important notion that facilitated access is itself a major benefit that is shared by Contracting Parties to the Treaty. Other benefits arising from the use, including commercial use, of PGRFA under the multilateral system are to be shared fairly and equitably through:

Additionally, the Contracting Parties are to consider modalities of a strategy of voluntary benefit-sharing contributions from foodprocessing industries. It is through this approach that the fair and equitable sharing of the benefits arising from the use of PGRFA is fundamental to the Multilateral System, to the entire Treaty, and indeed to the long-term conservation and sustainable use of PGRFA.

Article 13.1 recognizes that facilitated access itself is a major benefit of the multilateral system. Without the possibility for countries to easily access the plant genetic resources they need to improve their crops, agriculture and food security will suffer not only at the global level, but also at the level of each country. In Article 13.1 the Contracting Parties also agree that benefits arising from the use of PGRFA under the Multilateral System must be shared fairly and equitably in accordance with the mechanisms set out in the rest of the Article. Some of these mechanisms are voluntary in nature and some of them are mandatory. The paragraph uses the phrase “fairly and equitably” in relation to benefit-sharing, which reflect the wording of the CBD. In the case of the Treaty, many mechanisms are multilateral. In other cases, the decision as to what is fair and equitable will lie with the Contracting Parties themselves in implementing the Treaty, although these national decisions may be open to review in the Governing Body. In setting the level of payments to be made under the standard MTA, the decision as to what is equitable will be made directly by the Governing Body.

This provision lists the Treaty's mechanisms for benefit-sharing (exchange of information, access to and transfer of technology, capacity building, and sharing of commercial benefits) and serves as a chapeau for the sub-paragraphs on each item. Three points can be made in respect of this chapeau:

  1. The benefits arising from the use of PGRFA cover all uses, not just commercial use, but including commercial use;

  2. In considering the fair and equitable sharing of benefits, the GPA should be taken into account, and in effect used as a guide to implementation (see Box 15);

  3. The whole process of implementation of this, as well as other provisions of the Treaty, will be under the guidance of the Governing Body.

    Indeed there are a number of issues of implementation, particularly in this Article, that will require firm and creative guidance from the Governing Body. Not all issues could be fully negotiated before the adoption of the Treaty, and a number of issues, including the wording of the standard MTA and details of its commercial benefit sharing provisions and enforcement procedures remain to be settled by the Governing Body. In this sense the Treaty is a dynamic instrument, which will depend for its success on the future work of its Contracting Parties, meeting as the Governing Body of the Treaty.

Due to the inherent importance of this concept, a provision on information exchange has become a standard provision in many international agreements. Global problems require common action by States, and the experience of one country can be invaluable to others facing similar problems. A general provision relating to the exchange of appropriate information and technology is set out in Article 7.2(b) in the general context of international cooperation. The particular provision on information exchange in the present paragraph, however, must be seen more in its context of benefit sharing, and in particular in connection with the utilization of PGRFA.

The Contracting Parties agree to make available information which shall, inter alia, encompass catalogues and inventories, information on technologies, results of technical, scientific and socio-economic research, including characterization, evaluation and utilization, regarding those plant genetic resources for food and agriculture under the Multilateral System. Such information shall be made available, where non-confidential, subject to applicable law and in accordance with national capabilities. Such information shall be made available to all Contracting Parties to this Treaty through the information system, provided for in Article 17.

The information that the Contracting Parties agree to share in this paragraph is information about PGRFA in the Multilateral System, and it is mainly information which will be useful for the utilization of those resources, in using them to improve crops and hence agriculture. The different types of information referred to are more extensively described in the comments concerning Article 5.2(e). Much of the information, including information on technologies, lies in the hands of the holders of ex situ collections, in particular developed countries and international institutions. Unlike the benefit sharing provisions of the CBD, the information is to be exchanged on a multilateral basis, through the Global Information System provided for in Article 17. Information linked to specific transfers of genetic resources is addressed in Article 12.3(c).

Article 13.2(a) requires Contracting Parties, and Centres that have signed agreements with the Governing Body, to make available information about the PGRFA under the Multilateral System, which is to include:

The conditions under which information is to be made available are three:

  1. A Contracting Party is only required to make information available where that information is non-confidential. Confidential information can, of course, be made available, but only at the discretion of the Contracting Party concerned;

  2. The information is to be made available subject to applicable national law, which includes intellectual property law, including copyright and patents;

  3. The information shall be made available “in accordance with national capabilities”.

The meaning of this third condition is not entirely clear, but would appear to recognise that certain countries do not possess high levels of information collection, analysis and sharing capacity, or the personnel and funds that are sometimes required; and to recognise as a consequence, that compliance with this obligation cannot be judged on a purely comparative basis, but only as adjusted by these considerations. Thus countries would not be expected to meet standards that are beyond their national capacity, in their efforts to make information available.

The wording of this paragraph closely follows that of similar provisions in Article 16 of the CBD.

According to the United Nations Conference on Trade and Development (UNCTAD), technology transfer is the “transfer of systematic knowledge for the manufacture of a new product, for the application of a process or for the rendering of a service”.114 Technology flows between a supplier and a recipient, whether within a country or between States. Technology can take many different forms, but generally falls into two general categories:

Article 13.2(b)(i) provides that Contracting Parties shall provide and/or facilitate access to technology for certain specified purposes. The subparagraph uses wording drawn from Article 16.1 of the CBD, particularly in specifying the obligations of the Contracting Parties “to provide and/or facilitate”. It is not clear what the term “provide” refers to. For instance, does it mean “provide technologies” themselves, or more indirectly “provide access to technologies”? It would seem that the latter interpretation is more in line with the title of the paragraph “Access to and transfer of technology”. It is also more in line with the structure of Article 16.1 of the CBD. In this sense, then, the obligation of the Contracting Parties is to provide access to, or facilitate access to, technologies. Each Contracting Party then has a choice as to whether it provides such access or merely facilitates it. Presumably it will in general be more appropriate for Contracting Parties to provide access to technologies that are publicly owned or are otherwise within the purview of the Contracting Party itself, and to facilitate access to technologies that are subject to private ownership. In any case, the minimum obligation of the Contracting Party will be to facilitate access.

There are many different ways in which Contracting Parties may facilitate access to technologies. As a first step, a Contracting Party may wish to review existing policies and practices to determine which are the most effective, then implement such additional measures as may be appropriate. Measures to facilitate access could include:

Access is to be provided and/or facilitated for the following purposes:

Each of these categories is important, and together the categories cover pretty well the whole scope of PGRFA. “Conservation” technologies would cover technologies relating to the storage of germplasm, including in vitro techniques, regeneration, testing for plant health and treating diseases in stored material as well as technologies relating to in situ conservation, e.g. those relating to monitoring the existing genetic diversity. “Characterization” technologies would include those relating to the categorization of morphological data and data on heritable characteristics, such as colour of flowers, which are constant in any environment, and technologies, including molecular technologies, to determine the nature and extent of genetic diversity. “Evaluation” technologies, on the other hand would include technologies, including molecular technologies, relating to determining the potential value for use of the PGRFA, including valuable agronomic traits of the material, and any disease or drought resistance. “Use” technologies would cover both traditional plant breeding techniques and biotechnological technologies, such as molecular markers and recombinant DNA technology. While the emphasis is obviously on the transfer of technology from technologically rich countries, it is to be noted that this paragraph, as well as the preceding paragraph on information exchange, is not limited to modern technologies, and would include, for example, also access to traditional knowledge and technologies.

It is also important to note that the obligations of Contracting Parties in the area of access to and transfer of technology under this whole paragraph are limited to PGRFA that are within the Multilateral System (i.e. PGRFA of those crops that are listed in Annex I to the Treaty).

The second sentence recognizes that the utilization of certain technologies has been incorporated into new genetic resources. Contracting Parties are required to provide and/or facilitate access to such technologies through providing or facilitating access to the relevant genetic materials, including improved varieties, which were developed through the use of PGRFA under the Multilateral System, as well as to the technology itself. Even if access to products incorporating material accessed under the Multilateral System may be restricted, Contracting Parties are to provide or facilitate access to the technologies contained in such products, and indeed to the genetic material itself, under the terms and conditions of Article 12. Such access fully respects applicable property rights and access laws. Presumably, the reference to access laws, in this instance, is meant to refer primarily to national legal requirements for obtaining the consent of the owner, or intellectual property holder, as referred to in Article 12.3(f) of the Treaty.

The reference to such access being subject to “national capabilities” is more problematic. It cannot mean that Contracting Parties do not have to provide access to technologies if they do not have them: that would be a useless statement of the obvious. It must then have a similar meaning to that in the previous paragraph, i.e. that countries should provide access to the technologies in a way that does not overburden their capabilities. In other words, it would not, for example, be required that a developing Contracting Party spend millions of dollars on researching traditional conservation techniques in order to meet a request from another Contracting Party, or that it provide unreasonable quantities of photocopies of documents. On the other hand, richer countries would be expected to be more forthcoming in their transfer of technology.

This subparagraph introduces measures that can be taken by Contracting Parties to provide access to, and transfer of, technologies, particularly to developing countries and countries with economies in transition.

The promotion of crop-based thematic groups and networks is viewed as an important platform for scientific exchange, information sharing, technology transfer and research collaboration in the GPA (Priority Activity Area 16). Thematic groups and networks are also seen as important for sharing responsibilities for collecting, conservation, distribution, evaluation and genetic enhancement. Indeed, the encouragement of international plant genetic resources networks is provided for in Article 16 of the Treaty as one of its essential supporting components. This paragraph focuses on their importance as a vehicle for technology transfer.

The establishment of partnerships in research and development, including commercial joint ventures, is also seen as a suitable vehicle for technology transfer. In this connection, it is to be noted that these partnerships relate to “the material received”. Although it is not specifically stated, the implied reference is presumably to partnerships and commercial joint ventures with the country, or entity in the country, supplying the PGRFA.

The reference to “effective access to research facilities” mirrors Article 15.6 of the CBD, which encourages Contracting Parties to carry out scientific research on material provided by other Contracting Parties, with the full participation of Contracting Parties providing the materials and where possible in such countries.

The first part of Article 13.2(b)(iii) states that access to and transfer of technology, including that protected by intellectual property rights, must be provided to developing countries under “fair and most favourable terms”. This is particularly the case with:

The second part of this paragraph identifies the manner in which this is to be achieved. It states that “fair and most favourable terms” includes “concessional and preferential terms”, where mutually agreed. These, in turn, can be achieved through mechanisms such as partnerships in research and development under the multilateral system.

The terms “fair and most favourable terms” and “concessional and preferential terms” are not defined in the Treaty. The same terms are used in Article 16(2) of the CBD as well as the UN Framework Convention on Climate Change, the Protocol on Substances that Deplete the Ozone Layer, and Agenda 21. In none of these documents is the term defined. The same wording is also used in Priority Activity Area 15 of the GPA. In general “fair and most favourable terms” would seem to imply terms that are equitable and which are the best terms offered to other countries, i.e. a reference to the notion of “most favoured nation”. “Concessional and preferential” seem to imply terms that are more favourable than those normally offered on the open market: the obligation to offer such terms is limited to situations where such terms are mutually agreed.

Finally, as in the Article 16.2 of the CBD, and indeed in Article 13.2(b)(i) of the Treaty, the paragraph reiterates that access to and transfer of technology must respect intellectual property rights. The phrase “adequate and effective protection” again reflects similar wording in the Article 16.2 of the CBD, and establishes a link with the TRIPS Agreement. The first paragraph of the preamble of the TRIPS Agreement refers to “the need to promote effective and adequate protection of intellectual property rights”, while Article 17.3(b) provides that Members of the WTO “shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof”.

Article 13.2(c) focuses on three primary areas of capacity-building, reflecting the provisions of Priority Activity Areas 15 and 19 of the GPA:

National capacity building is essential to allow countries, particularly those that are developing countries or countries with economies in transition, to conserve their PGRFA and to make the best use of them in a sustainable way. It is also essential to allow them to make the best use of transferred technologies. Financial and technical assistance in upgrading and maintaining ex situ collections of PGRFA, including national capacity building, is one of the objectives of the new Global Crop Diversity Trust (see Box 20).

The phrase “taking into account the needs of developing countries ... as expressed through the priority they accord to building capacity in plant genetic resources for food and agriculture in their plans and programmes” was added to reflect the fact that overseas development aid is intended to be recipient country driven and not donor driven, and should thus reflect the priorities expressed by the developing countries themselves. If the countries themselves do not recognize such capacity building as being a priority, then it is difficult for donor countries to insist on providing the support that may in fact be required.

The provisions of the Treaty that deal with sharing the monetary benefits from the commercial use of genetic resources represent a real conceptual break-through, particularly those requiring, in certain circumstances, the payment of an equitable share of commercial benefits to a multilateral mechanism.

This subparagraph looks back to the other provisions of the Article, and in particular paragraph 2 of the Article, as well as forward to the specific commercial monetary benefit-sharing provisions of the next subparagraph.

Article 13.2(d)(ii) is arguably the most interesting and controversial provision related to benefit- sharing. This paragraph establishes a mandatory benefit-sharing scheme connected to the commercialization of PGRFA incorporating materials from the Multilateral System, in harmony with Article 15.7 of the CBD. The standard MTA provided for in Article 12.4 is to contain the benefit-sharing requirement that will bind the recipient, and all future recipients, of germplasm from the Multilateral System to pay a share of the monetary benefits arising from commercialization of products incorporating material accessed from the System, in certain circumstances.

The first part of Article 13.2(d)(ii) sets out those circumstances. When a recipient receives material from the Multilateral System and uses that material to produce a product that “is a PGRFA,” and then commercializes that product, then the recipient will be obliged to pay “an equitable share of the benefits arising from its commercialization”. This requirement, it should be understood, will not apply to the commercialization of a product that is not itself a plant genetic resource for food and agriculture. (Some of those products must be addressed in relation to Article 15 of the CBD.) It would also not apply to the trading of a normal commercial product, or commodity, such as a breakfast cereal containing wheat produced by a new variety produced by incorporating material obtained from the Multilateral System. This was already made clear in the chapeau to Article 13.2. It will, however, apply to the commercialization of the seed or other propagating material of a new plant variety – to the plant genetic resource itself – provided that that new variety incorporates material that has been accessed from the Multilateral System.

The obligation to pay, however, does not apply where the developer has enabled all users, without restriction, to utilize the new product for further research and breeding.115 In those cases, then there is no obligation on the recipient to make such a payment, although he or she is to be encouraged to make such a payment.

Where the recipient is obliged to make a payment, the obligation is triggered by the act of commercialization and not by the act of applying for intellectual property rights that would restrict further access to the product.

While the provisions of Article 13.2(d)(ii) are innovative and important, there are still a number of issues that will need to be resolved by the Governing Body.

The first of these issues is specifically provided for in the second part of Article 13.2(d)(ii). The Governing Body is to determine the level, form and manner of payment to be made at its first meeting, in line with commercial practice. One of the first decisions that the Governing Body will have to take will be the form of the payments. In particular it will have to decide whether these should take the form of royalties, a percentage of profits, or a lump sum payment or graduated payments according to the type of product or circumstances. It will also have to determine the level of payment. The relatively low profitability of the seed sector would suggest an upper limit on the level. But if the level is set too low, the result could undermine the implementation of the Treaty. The reference to commercial practice may assist the Governing Body in making its determinations, or at least in defining the limits. However, the Governing Body is likely to have a great deal on its hands, given that there may be different views as to what constitutes relevant commercial practice.

The Governing Body may also review the levels of payment from time to time, in order to achieve a fair and equitable sharing of benefits. It may also assess, within a period of five years from the entry into force of the Treaty, whether the mandatory payment requirement should also be extended to cases where no restrictions have been placed on the further availability of the product. The latter provision is strangely worded, but it is unlikely that the intention was to limit the opportunity to review to the first five years. The Treaty is silent as to whether or not a review might be carried out after this five-year period. Given that plant breeders may take up to a decade after the entry in force of the Treaty to create new products using PGRFA obtained from the Multilateral System, the time frame of five years may be much too early to assess the impact of this benefit-sharing mechanism.

There are also a number of other issues or ambiguities that remain unclarified in the text. One of these is the precise meaning of the clause “whenever such a product is available without restriction to others for further research and breeding”. Criteria for determining whether or not “a product is available without restriction to others for further research and breeding” are not given in the Treaty. However, the understanding underlying the negotiations was that mandatory monetary benefit-sharing would apply to commercialized products, protected in a way that would limit the further availability of the product for research or breeding, or where practical, legal or physical conditions restrict the availability of the product. It may also apply where patents or other intellectual property rights are taken out over any genetic parts or components of the new product, where this would have the effect of similarly restricting the availability of the product.

Varieties incorporating material from the Multilateral System that are protected by UPOVstyled Plant Breeders Rights, would not be subject to mandatory monetary benefit-sharing assuming that such varieties are freely available for further research and breeding. In jurisdictions, patents rights do not exclude the use of plant genetic material for further research purposes including breeding. In other jurisdictions, they do exclude such uses. It is not clear whether a patent holder in such jurisdictions could renounce those and thus escape the mandatory benefit-sharing provision. Would so-called “protective patenting” ever qualify for exclusion from Article 13's monetary benefit-sharing requirement? For example, could one patent a variety or line and then undertake to grant any and everyone a license to use the material freely for research and breeding, and not have to make the mandatory payment? One advantage for governments of the contractual approach is that individual recipients and users of PGRFA obtained from the Multilateral System will need to make their own legal determination of their contractual obligations, in particular whether a payment is optional in any given circumstance. This may need clarification by the Governing Body.

A second potential issue lies in the meaning of the term “commercialization”. Monetary benefit sharing is triggered by any commercialization, but what exactly does this term mean? At what point in the continuum of trading of a product would the obligation arise? Would it arise when the product is offered for sale, or when the offer is accepted, or when profits arise? In principle, it would seem that the term commercialization should actually refer to when a sale has been concluded. Whether one would need to wait until profits have actually arisen, will depend on the form of payments determined by the Governing Body.

A third potential issue is what constitutes “incorporation” of material accessed from the Multilateral System. There will of course be different methods of incorporation, including both conventional breeding and biotechnological methods. However, the wording of the provision would suggest that material accessed from the Multilateral System has been “incorporated” in a product when there is presence of the genetic information of the accessed material in that product. But technical questions may still arise as to the extent of the incorporation required. For example, would any incorporation of the material be sufficient to satisfy the requirement? Or would the incorporation of an essential part of the material necessary for the desirable traits be required? Or would different levels of incorporation be used to guide the determination of different levels of payment?

All of the above issues will require consideration by the Governing Body.

Article 13.2.(d)(ii) applies to all material accessed from the Multilateral System. It would thus cover all Annex I material accessed from Contracting Parties, IARCs, and other international institutions. Because CGIAR Centres have their own independent legal status and will sign separate agreements with the Governing Body, access of materials by one centre from another centre (like access by a Contracting Party from a centre) would be considered as access from the multilateral system. An MTA would thus be required for such a transfer. Transfers within a centre (e.g., from the genebank to a breeder or researcher) may or may not be considered an act of access from the multilateral system. In effect, this would be a transfer from one “legal person” to the same “legal person.” IARCs, however, are in a rather different situation than Contracting Parties. CGIAR Centres claim no ownership over the materials, and they are holding the materials in trust. It will be interesting to see if centres agree to employ the benefit-sharing provisions of the Treaty, were they to commercialize PGRFA developed on the basis of materials in their own genebank and protect these in such a way as to limit further access and use for research and breeding.

As in other articles in this Treaty, the role of farmers is specifically acknowledged, and rewarded, in this paragraph. The benefit-sharing, as in the definition of Farmers' Rights in the Agreed Interpretations to the International Undertaking, is designed not only to recognize past contributions, but also to encourage present and future contributions. Thus, Article 13.3 states that the benefits arising from the use of PGRFA shared under the multilateral system should flow primarily to farmers who conserve and sustainably use PGRFA, particularly in developing countries and countries with economies in transition. The benefits may flow directly to those farmers, e.g. through direct assistance in on-farm management and conservation of PGRFA, or indirectly, e.g. through the financing of programmes that will indirectly benefit them, such as broadening the genetic base of crops. While farmers in developing countries and countries with economies in transition will obviously be the main focus, the wording does not exclude benefit sharing with farmers who conserve and sustainably use PGRFA in developed countries, particularly where the benefits are indirect.

Articles 13.4 and 13.5 explicitly link benefit sharing and the funding strategy. While Article 18 will be discussed in more detail below, the Treaty establishes a funding strategy that will mobilize funding for priority activities, plans, and programs, in particular in developing countries and transition economies. Contracting Parties explicitly agree to take the necessary and appropriate measures within the governing bodies of relevant international agreements, funds, and bodies to ensure that due priority and attention are given to effectively allocating predictable and agreed resources, taking into account the priorities established in the rolling GPA.

Decisions as to how the proceeds of the funding strategy will be used will be taken by the Governing Body. Article 13.5 also recognizes that the ability of developing countries and countries with economies in transition to fully implement the GPA will depend largely upon effective implementation of benefit sharing and of the funding strategy. The provision of financial resources to assist developing countries in implementing the GPA was a contentious issue at the Leipzig Conference that adopted the Plan.

In spite of the fact that the Commission agreed to discuss funding issues in the context of the negotiations to revise the International Undertaking, many developing countries had sought commitments from developed countries to provide new resources for this purpose, over and above those committed under the CBD. In the end the Leipzig Conference reaffirmed the commitments for new and additional funds, as stated in Agenda 21 and the CBD, and specified that funds should be made available under those commitments to finance the implementation of the GPA by developing countries and countries with economies in transition. The Treaty's funding strategy is one way of implementing these commitments.

There are distinct differences between this provision and similar provisions in the CBD and the UN Framework Convention on Climate Change116 (UNFCCC). Both of these Conventions limit financing provisions based on the ability of the Contracting Parties to implement their commitments. In the International Treaty, however, the limitation applies only to the Contracting Parties' ability to implement the GPA and not their Treaty obligations. A broader provision that tracks the wording of the CBD and the UNFCCC provisions is found in Article 18.4(b) of the Treaty.

Contracting Parties have agreed in Article 13.6 to consider, at some point in the future, “modalities of a strategy of voluntary benefitsharing contributions” from food processing industries. This is in addition to the voluntary benefit-sharing arrangements under Article 13.2(d)(ii). The rationale is that the food processing industry benefits most directly from the utilization of PGRFA. As such, this is strongly linked to Article 18.4(f).

114This definition was considered, but not adopted, by the CBD in its work on technology transfer.

115This is applicable to a product that incorporates material accessed from the Multilateral System. According to Article 12.3(d), recipients cannot claim intellectual property rights that limit access to the PGRFA in the form received.

116United Nations Framework Convention on Climate Change, 9 May 1992, 31 I.L.M. 849 (1992).

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