Opinion | Thinking Outside the Box: Innovative Options for an Operational Regime on Access and Benefit Sharing

9 July 2010

Negotiations on access to genetic resources and the fair and equitable benefit sharing under the Convention on Biological Diversity (CBD) have gained political momentum recently. Countries are working to strike a deal on Access and Benefit Sharing (ABS) at the CBD's Tenth Conference of the Parties (COP 10) - which is being held in October 2010 in Nagoya, Japan.

The ABS working group recently met in Cali, Columbia to negotiate the international regime on ABS and made movement toward finalising a text. However, this yet-to-be-finalised ABS protocol still reflects contentious areas regarding issues such as compliance with ABS measures, protection of traditional knowledge (TK), and the recognition of disclosure and certificates of origin. Because several issues remain unresolved, countries will be meeting in Montreal, Canada from 10-16 July to attempt to bridge some of these gaps before COP 10.

While there is a sense of urgency to resolve contentious issues before Nagoya, this abridged version of a paper by Manuel Ruiz Muller provides a different perspective on the issue and questions the underlying assumptions upon which the current negotiations are based.

What are genetic resources?

One of the most dramatically overlooked issues in the debate on ABS relates to the actual nature of genetic resources. Genetic resources are codified information: this is where their value and importance lies. This aspect of genetic resources has been grossly overlooked in ABS policy and legal discussions and especially in laws and regulations, both nationally and internationally. As a result, the legal and institutional frameworks are inadequate and ineffective at capturing the benefits derived from access to and use of genetic information.

ABS debates have centred their attention on regulating access to and use of the tangible, visible biological materials and samples. But as soon as information is integrated into the discussions, the foundations for regulatory frameworks shift or must be reformulated altogether. As they stand at present, they have focused on genetic resources as if these were material resources such as oil, gas, water, timber, fisheries, or others. Consequently, they are inapplicable to genetic information, even though it is this information with which new innovations and technologies can be created and developed.

One of the reasons the natural information aspect has been overlooked lies in the CBD itself. The excessive emphasis on recognising and stressing that "... States have sovereign rights over their own biological resources", and focusing on the concept of "countries of origin" as the key elements to determine who benefits from accessing and using genetic resources, have for considerable time, prevented a more scientifically and economically sound look at ABS. Negotiators and policy makers have missed critically important factors which condition the construction of a viable regime on ABS.

An innovative option for an operational regime on ABS

So what can be done or proposed at this point in time even if negotiations of the protocol are well under way? To begin with, the process needs to "step on the brakes" and reconsider its conceptual foundations in consideration to the informational nature of genetic resources. There must be an explicit recognition within ABS processes, that what is being discussed is, in essence, a regulatory framework applicable to natural information. If this is the case, economics offer abundant literature regarding protection of artificial information, which is applicable to natural, genetically derived information as well. This is critical, albeit unlikely given the dynamics and pressures on the international negotiation process that is characterized by issues that impede the progress, such as asymmetric information, representation, incentives, etc.

Secondly, if it is acknowledged that genetic resources on the informational level are shared among countries and that they are not, in fact,  distinct, unique units found in only one jurisdiction, then the notions of sovereignty and country of origin require reconsideration. Not doing so will result in a "price war"  and excessive competition between countries offering the same resources, seeking to gain the bilateral agreement or contract, pushing prices down and making it impossible to extract economic rents from these resources. In this case, the price of a sample equals the insignificant cost of collecting samples even though a future biotechnological or other products or processes may generate a considerable economic rent when IP (patents) are applied.

Thirdly, policy and decision makers, including those drafting ABS laws and regulations, need to carefully review the abundant literature which explains the relation between information, protection and the economic and legal tools which exist already and are applicable to information. When it is accepted that genetic resources are information, the idea of creating walls, barriers or frameworks suited for tangibles, becomes obsolete and useless. Rather, looking at cartel theory and intellectual property principles may provide with some suitable options to develop appropriate and viable ABS frameworks.

Key elements needed in a revised protocol on ABS

There is a need for the development of a "new" protocol on ABS that would effectively manage genetic resources and enhance conservation efforts. This protocol would include an internationally recognised database, or information system, with specific data regarding spatial distribution of families, genus, or species.

In addition, the protocol would establish an international financial mechanism that would receive monies from the financial benefits derived from the utilisation of genetic resources.

National ABS frameworks would be simple, flexible, and open in order to stimulate research. They may also include model standard material transfer agreements which set mainly non-monetary benefits to be shared plus a specific and express obligation in regards to potential and future monetary benefits.

The new protocol would design an internationally recognised certificate of origin which simply indicates the species (family and/or genus) from which the specimen, sample or biodiversity component was obtained regardless of the actual country of origin or source. The certificate "travels" along the research and development route.

Another element included in the protocol should be an international agreement to ensure that the certificate of origin is disclosed during patent application reviews. If commercial benefits are generated by the patent, there exists an obligation to share the benefits. Countries which conserve the specie in situ share in the benefits according to spatial distribution.

Lastly, the protocol would mandate that 13 percent of the sales of the patented product be directed to the international financial mechanism, which would, in turn, distribute these benefits according to the spatial distribution of species indicated in the certificate. Spatial distribution refers to ecosystems where species are conserved in in situ conditions.

The advantages of this overhauled mechanism for regulating ABS of genetic resources are many. For example, access is truly facilitated and research is promoted because there are no complex administrative ABS procedures. There exists true equity in sharing benefits according to concrete conservation efforts by countries. Establishing an international financial mechanism can eliminate price wars and competitiveness among countries.

Furthermore, a system that rewards countries for in situ ecosystem conservation creates incentives to further the aim of the CBD to halt the rate of species extinction. The proposed protocol is a simple and cost-effective system whereby rents are extracted from access to and use of biodiversity. Even though there is a low probability of monetary benefits, there are high returns when they do occur. Finally, countries do not have to renounce sovereignty as some critics claim; in fact, they reaffirm it by committing to the new protocol.

What has been done to restructure the debate?

Over the past few years, a reduced number of institutions and individuals have been pondering the implications of accepting that genetic resources are, in fact, natural information. Some proposals and ideas have also emerged in this regard. It has been suggested that what is required is a global pool of resources made available by those countries concentrating the world's biodiversity in in situ conditions. This has been called the "Biodiversity Cartel". To make the Cartel operational, a system of certificates of origin (of the specie from which genetic information is extracted) is to be created, associated to the patent system. When a patent application (regarding a biodiversity related invention) is presented, the certificate will be added to the documentation. If and when a commercial product is generated in any technological field, a percentage of the monetary benefits will be channelled to an international global fund. Benefits will then be shared equitably according to the spatial distribution of the specie (indicated in the certificate) using available data and information regarding distribution of species.

It is obvious that there is a sense of urgency to conclude negotiations as soon as possible, hopefully in time for COP 10. In this context, it is not surprising that policymakers and negotiators base their activities on prevailing positions and ideas, with no chance for reviewing alternative options. These may imply considerable re-thinking outside the box, but as a Turkish proverb says "No matter how long you have gone down the wrong road, turn back".

Manuel Ruiz Muller is the Director and Principal Researcher at the Peruvian Society for Environmental Law (SPDA) in Lima, Peru.

The full-length version of this paper can be accessed here. ICTSD has also recently published two other issue papers and two policy briefs that address other important aspects of the current ABS negotiations. These publications can be accessed here.

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