Abstract
I. Background
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For decades, the Convention on Biological Diversity (CBD) 3 has provided guidance and a basis for national-level legislation and administrative mechanisms for ABS. The CBD is an international agreement with the stated objectives of conservation and sustainable use of biological diversity, as well as fair and equitable sharing of benefits arising out of the utilization of GRs defined as “genetic material of actual or potential value” (CBD Art. 2). The CBD recognizes that states have sovereign rights over their natural resources, including GRs; declares that the authority to determine access to GRs rests with the national governments; requires access to GRs on mutually agreed terms (MATs) and subject to prior informed consent (PIC) of the provider; and directs parties to take measures to establish ABS on mutually agreed terms (CBD Art. 15). Since the CBD entered into force on December 29, 1993, many—but not all—of the 196 CBD contracting parties have enacted biodiversity legislation and established administrative mechanisms aimed at management, conservation, and sustainable use of natural resources, and some CBD contracting parties have implemented specific ABS measures.
More recently, a supplementary agreement to the CBD, with additional provisions addressing the legal framework for ABS and compliance, was adopted and entered into force. The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity (NP) was adopted on October 29, 2010, and entered into force on October 12, 2014, ninety days after the date of deposit of the fiftieth instrument of ratification. 4 At one year after entry into force, the NP has 62 contracting parties, 68 ratifications, and 92 signatures. 5 The NP applies to GRs and traditional knowledge associated with GRs, and to the benefits arising from utilization of such GRs and traditional knowledge (NP Art. 3), but does not apply to GRs that are covered by another international ABS agreement 6 when the GRs are used for the purpose of that agreement (NP Art. 4).
According to the CBD Secretariat, the NP provides “a transparent legal framework for the effective implementation of one of the three objectives of the CBD: the fair and equitable sharing of benefits arising out of the utilization of genetic resources.” 7 The NP sets out core obligations for contracting parties to take measures to implement the provisions of the NP, and provides new tools and mechanisms to assist with effective implementation at the national level. The core obligations are: (1) taking national-level measures in relation to access to GRs to create “legal certainty, clarity and transparency,” to provide “fair and non-arbitrary rules and procedures,” to establish “clear rules and procedures” for PIC and MATs, and to provide for “issuance of a permit or equivalent when access is granted”; (2) taking national-level measures in relation to benefit-sharing for the fair and equitable sharing of benefits arising from the utilization of GRs with the contracting party providing GRs, where “[u]tilization includes research and development on the genetic or biochemical composition of genetic resources, as well as subsequent applications and commercialization” and sharing is subject to MATs, and “[b]enefits may be monetary or non-monetary such as royalties and the sharing of research results”; and (3) taking measures to support compliance with the national-level legislation or regulatory requirements of the contracting party providing GRs, and any contractual obligations reflected in the MATs (of an agreement), which includes taking measures to monitor the utilization of GRs after they leave a country, which can include designating effective checkpoints at any stage of the value-chain from research through commercialization, and can also include ensuring that GRs utilized within the contracting party have been accessed with PIC under MATs as may be required by another contracting party. 8 Assistive tools include a clearing-house for sharing information; appointing authorities to provide information, grant access, issue permits, and enforce checkpoints; capacity-building, technology transfer, and targeted financial support. 9
Because the R&D sector continues to access and utilize GRs, and must enter into agreements to do so, there is great interest in the effects of NP implementation on national-level legal frameworks that would apply to these activities in any country of interest. This article will provide a brief snapshot of national-level implementation of some of the NP's new provisions, tools, and mechanisms at one year after entry into force, reporting progress and gaps in implementation, and identifying unresolved NP-related issues, from the point of view of what the R&D sector would want to know about the evolving legal framework for ABS under the NP.
II. The Nagoya Protocol at One Year after Entry into Force: Implementation
The R&D sector seeking reasonable certainty about legal frameworks that apply to accessing and utilizing GRs in R&D, and possible impacts of the NP, will seek guidance about NP impacts on national-level legal frameworks from publicly available information about NP implementation activities. Such information should indicate whether significant changes to existing laws, regulations, and administrative procedures have been made (or, are planned) in order to implement the NP, and should identify the authorities that are responsible for providing information and applying the mechanisms and tools of the NP. This information should be timely and complete enough to provide an updated understanding of the legal framework for ABS in any country of interest. Thus, it is important to consider what information is available concerning NP implementation at one year after entry into force.
Sources of information about the NP: Access and Benefit-Sharing Clearing-House
The NP establishes an Access and Benefit-Sharing Clearing-House (ABSCH) as part of the CBD clearinghouse mechanism (CBD Art. 18.3), as a means for sharing information related to ABS, and in particular, to “provide access to information made available by each Party relevant to the implementation of this Protocol” (NP Art. 14). The NP lists a variety of categories of information that contracting parties are legally obligated to provide through the ABSCH (NP Art. 14). Currently, the ABSCH 10 is a searchable online platform where information can be submitted by countries (including contracting parties and non-parties 11 ). Submitted information is reviewed, classified, converted to compatible format, and linked for searching, and a record containing the submitted information is published on the ABSCH. An ABSCH record may also contain brief summary comments, especially for legislative measures such as acts, decrees, regulations, or guidelines. The home page of the ABSCH incudes a hyperlinked “dashboard” that lists the numbers and types of records that are currently available. The ABSCH is expected to enhance legal certainty and transparency regarding ABS procedures by posting copies of relevant legislation and regulations, as well as copies of NP-compliant documents, such as the Internationally Recognized Certificate of Compliance (IRCC) and Checkpoint Communique (CC). Enhanced certainty and transparency are also expected from listing addresses for national websites and databases, and contact information for relevant authorities, such as ABS national focal points (ABS NFPs), competent national authorities (CNAs), and checkpoints. In addition, the ABSCH publishes copies of model ABS agreements, community protocols, relevant legislation (such as existing biodiversity measures), 12 and other submitted information deemed appropriate, such as speeches or ABS-related news items. The ABSCH is expected to allow monitoring of the utilization of GRs by posting copies of access and compliance documents.
At the time of this writing, the amount of information hosted on the ABSCH is substantial and growing rapidly. This information does not appear to include the results of any additional information gathering or analysis beyond reviewing, formatting, and publishing submitted information. That is, ABSCH records may include brief summary comments (e.g., for legislative measures), but may not include detailed comments that identify NP-specific implementing measures, or distinguish between NP-related measures and other pre-existing biodiversity measures, or indicate how the NP is applied in view of pre-existing biodiversity measures. ABSCH records do not show evidence that incomplete country records were pro-actively populated with additional relevant information, such as copies of NP-related measures or NP-compliant documents published elsewhere but not yet submitted to the ABSCH. Thus, while the ABSCH has proved to be a valuable source of information about ABS, and its value continues to increase as more information is submitted and published, the ABSCH should not yet be considered a comprehensive or authoritative source of information about ABS.
Guidance for users or providers: NP-compliant documents available on the ABSCH
The ABSCH allows monitoring of the utilization of GRs along the value chain by posting copies of IRCCs verifying NP-compliant access to GRs, and CCs verifying compliance during or after utilization of GRs. No example of an IRCC or CC was available to the public on the ABSCH until October 1, 2015, when an IRCC issued by India was published. 13 The IRCC was issued in March of 2015, granting permission to researchers in the United Kingdom to access “ethno-medicinal knowledge” of a certain community. Because there is no single form document for IRCCs, this published document is useful to demonstrate acceptable format and content for an IRCC. 14 The IRCC is redacted to protect confidential information as provided in NP Art. 14.2, so the MATs of the agreement are not available; this redaction protects the parties' interests but reduces the instructional value of the agreement as a public document. In the year after the NP entered into force, no CC was published on the ABSCH.
Implementation of the NP at the national level: Legislative, administrative, or policy measures
To provide a “transparent legal framework” for ABS, the NP requires each party to take appropriate national-level legislative, administrative, or policy measures to implement fair and equitable benefit-sharing on MATs (NP Art. 5.3), but the NP text provides almost no guidance for such measures. Each party is therefore free to develop their own NP implementation measures, which can result in a variety of different laws and mechanisms for access, benefit-sharing, and compliance. Where pre-existing biodiversity legislation and mechanisms are already in place, NP implementation can be complicated by the need to harmonize NP-specific provisions with existing laws and coordinate with existing administrative mechanisms. Implementation may be further complicated by the fact that NP provisions are likely to have effects in diverse areas, such as natural resource management, intellectual property, and the rights of indigenous communities. At present, the ABSCH has published substantial information about NP implementation measures in some countries, but additional searching is also required to find other key publications and comments about national-level NP implementation in various nations, whose information is not presently available on the ABSCH.
Some NP contracting parties have made progress toward implementation, and some non-parties (including both signatories and non-signatories) have also taken steps toward ratification and implementation. To date, approaches to implementing the NP include:
• Amending or modifying existing legislation to implement specific provisions of the Nagoya Protocol, e.g., Switzerland
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• Issuing new guidelines pursuant to the NP, for use with existing biodiversity legislation and mechanisms, e.g., India
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• Addressing ABS and compliance in separate legislation, e.g., member states of the European Union
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• Enacting or proposing new legislation implementing the CBD in accordance with the NP, and repealing prior ABS measures, e.g., Brazil
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• Enacting the NP by decree, while NP-implementing legislation is still under review, such that any previously existing biodiversity measures still apply, e.g., Mexico
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• Enacting measures with detailed ABS and compliance terms, e.g., India
Some non-parties have reported progress toward developing NP-implementing legislation and mechanisms, in preparation for eventual ratification. For example, Brazil signed the NP on February 2, 2011, and is in the process of enacting new biodiversity legislation, scheduled to enter into force on November 17, 2015, which has been characterized as an important step leading to ratification of the Nagoya Protocol. 20 Australia signed the Protocol on January 20, 2012, and reports that it has undertaken a consultation process with stakeholders. 21 China, which is a party to the CBD but has not signed the NP yet, filed a report with the CBD Secretariat stating that work is currently underway on development of ABS regulations and ratification of the NP. 22
At the time of this writing, slightly more than one year after the NP entered into force, the landscape of NP implementation is still fragmentary and incomplete. A review of known NP implementation measures to date shows a variety of national-level approaches to ABS and compliance. It is not clear whether all, or even a majority, of the contracting parties have passed NP-implementing measures yet. In regards to some contracting parties, it is not clear how new provisions of the NP are being applied in view of pre-existing laws and administrative mechanisms. More examples of implementation measures will be needed to understand the full scope of approaches to ABS and compliance under the NP. This means that the R&D sector may have difficulty finding guidance about new NP-related measures that could impact ABS agreements and/or compliance obligations. Therefore, it will be important to continue to monitor national-level NP implementation in order to be informed of the measures that construct the legal frameworks that apply to access and utilization of GRs for R&D.
Information providers, gatekeepers, and monitors appointed by national-level NP-implementing measures
Each party to the NP is required to designate entities having specific duties, including at least one national focal point for providing information about ABS (ABS NFP), at least one competent national authority (CNA) responsible for granting access to GRs and issuing IRCCs, and at least one checkpoint with authority to monitor, receive information, verify compliance, and issue CCs. On October 12, 2015, one year after the NP entered into force, the ABSCH showed:
• 170 countries, including contracting parties and non-parties, have submitted 180 ABS NFPs. Most countries identify one or more authorized individuals as the ABS NFP, with their title, affiliation, and contact information for official communications. Some ABSCH country records also list CBD NFPs, which may be the same or different from ABS NFPs. • Seventeen countries, including contracting parties and signatories, have submitted 24 CNAs. A country may have more than one CNA. Many CNAs are the national equivalent of the department/ministry of natural resources or environmental affairs. CNAs can be dedicated biodiversity agencies (India, Belarus, Brazil) or existing agencies, and may represent stakeholders, such as indigenous communities (Mexico) or resource bases, such as agriculture, forestry, soils, or fisheries (Mexico, Peru), and may include the national intellectual property (IP) office (Peru). • Four countries have submitted six checkpoints. A country may have more than one checkpoint. Checkpoint authority and CNA authority can be located in the same, or different, agency or agencies. So far, Peru and Switzerland each list two checkpoints, one of which is the national IP office.
To date, the ABSCH publishes contact information for the ABS NFPs in most countries, and the addresses of national websites or databases when they have been submitted, which should provide a starting point for anyone seeking information about the NP in their own country or in another country of interest. It is not, however, clear that the ABS NFP has the authority to conclusively identify all parties from whom PIC must be obtained, or the authority to guarantee that a user has received all required permissions; likewise, it is not clear that the issuance of an IRCC from a CNA will insulate a user from claims by other stakeholders—for example, indigenous groups that may assert rights in accessed GRs (or associated traditional knowledge). Although a relatively small number of CNAs and checkpoints were submitted to the ABSCH during the first year that the NP was in force, the list is useful to illustrate different approaches to assigning the gatekeeper authority of the CNA and the monitor authority of the checkpoint.
ABS: Monetary benefit-sharing terms in national-level NP-implementing measures
The NP states that benefits that may be shared include monetary benefits and non-monetary benefits (NP Art. 5(3)), with the Annex listing examples of monetary benefits, e.g., access fees, fees per sample, up-front or milestone payments, royalties, license fees, research funding, joint ventures, and joint ownership of “relevant” intellectual property rights (IPRs). In the NP-implementing measures that are known at one year after entry into force, most parties have not included specific requirements for monetary benefits, which indicates that monetary benefits appropriate for each ABS agreement will be addressed in negotiations to reach MATs.
However, NP implementation guidelines in India set specific monetary benefit-sharing terms relating to accessed GRs, referred to as “biological resources,” that are triggered by certain actions during R&D as well as by commercialization of a product of R&D. During or after R&D, if research results are transferred for monetary consideration, or a license or assignment results, then 3%–5% of any fee and 2%–5% of any annual royalties must be paid to the National Biodiversity Authority (NBA). After R&D, if access to biological resources leads to “commercial utilization,” then a royalty of between 0.1% to 0.5% of “annual gross ex-factory sales” must be paid to the NBA (Guidelines 2014).
If the currently published terms of Brazil's new Biodiversity Law No. 13, 123/15 are maintained after ratification and implementation of the NP, then Brazil is also expected to implement a benefit-sharing program under the NP for “products created from matter obtained from Brazilian biodiversity,” in which a company is required to pay 0.1% to 1.0% of the “net revenue obtained as a result of the economic exploitation of the product.”
ABS: Terms relating to intellectual property rights in national-level NP-implementing measures
It is a fiercely debated question whether the NP can or will be cited for authority to implement national-level measures that link IPRs with ABS. Although the NP Annex lists joint ownership of “relevant” IPRs as both a potential monetary benefit and a potential non-monetary benefit, implementing legislation so far does not require joint ownership. Some countries include the national IP office as a CNA involved in granting access and/or as a checkpoint involved in monitoring and verifying compliance. However, known NP-implementing legislation so far does not invoke the NP for authority to revoke or invalidate IPRs if it is determined that ABS and compliance terms were not obeyed, and it is not known whether IPR provisions in pre-existing biodiversity legislation may be applied.
However, India imposes a prior notice and approval requirement for IPRs: when “[a]ny person who intends to obtain any intellectual property right by whatever name called, in or outside India, for any invention based on any research or information on any biological resources obtained from India, shall make an application to the NBA” (except if applying for plant variety rights; 2014 Guidelines; emphasis added). If the currently published terms of Brazil's new Biodiversity Law No. 13, 123/15 are maintained after ratification and implementation, then Brazil is also expected to impose a prior notice and approval requirement for IPRs.
III. The Nagoya Protocol at One Year after Entry into Force: Unresolved Issues Not Addressed in National-Level Np-Implementing Measures
The R&D sector that utilizes GRs has to consider NP-related issues that are still unresolved at one year after entry into force, as they may be critical to strategic planning and/or negotiations with another party to reach MATs. NP-related issues, such as the problem of linking access to GRs with the outcomes of R&D, and the meaning and potential scope of a variety of NP terms, have been extensively discussed in print and online, with contributions from many different stakeholders and points of view, beginning from the earliest negotiations through the adoption of the NP text on October 29, 2010, and entry into force on October 12, 2014, and continuing into the foreseeable future. Because these issues would have to be addressed on a case-by-case basis in view of the actual GRs and R&D activities involved, the present discussion merely alerts potential users and providers to issues that may arise during negotiations.
How can access, R&D, and benefits be linked under the NP?
A core issue for the R&D sector is the question of how the elements of access to GRs, R&D activities utilizing these GRs, and results of R&D could be linked under the NP mandate that “benefits arising from the utilization of genetic resources as well as subsequent applications and commercialization shall be shared in a fair and equitable way with the Party providing such resources” (NP Art. 5). The original CBD definition of GRs as “genetic material of actual or potential value” (CBD Art. 2) illustrates the mutual dependence of providers and users of GRs, because without access to GRs, R&D could not be undertaken, and without R&D, the “actual or potential value” of GRs could not be realized. This mutual dependence is a strong foundation for ABS agreements that could advance the shared objectives of “conservation of biological diversity and the sustainable use of its components” by fair and equitable benefit-sharing.
It is less clear how access to GRs could be linked to the full scope of benefits that could arise from utilization of GRs in R&D. The CBD Secretariat states that, for purposes of the NP, “[u]tilization includes research and development on the genetic or biochemical composition of genetic resources, as well as subsequent applications and commercialization”
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and appears to impose an unbreakable link between any access to GRs, and sharing in any subsequent value that is created. However, the reality of R&D is often that:
• R&D creates downstream value using techniques independent of the accessed GRs; • A direct link between accessed GRs and post-R&D value is difficult or impossible to establish; • R&D creates completely new materials, methods, and information that never existed before; • R&D creates new GRs, and the R&D user becomes a provider of GRs to other users; and • R&D generates subject matter that is protectable by IPRs that do not require the accessed GRs as an essential feature.
The situations discussed above raise two questions regarding how to define and quantify “benefits arising from” R&D utilizing GRs: what are “benefits” when there is no longer a nexus between the accessed GRs and the final innovation generated by R&D; and what are “benefits” when a significant amount of the value is unrelated to the accessed GRs?
These questions make it difficult to calculate proportional values, for purposes of negotiating benefit-sharing terms. For example, after GRs are accessed and R&D activities are conducted that yield a useful result, what is the proportional value due to the GRs and what is the proportional value due to the R&D, both in terms of monetary and non-monetary benefits? What are the proportional values when multiple distinct GRs from different providers are utilized in R&D, as in plant or animal breeding involving extensive crossing, or in organismal mixtures or fusions with novel properties? What is the proportional value due to the GRs when they were used only for test, or control, or information purposes and were not used to “make or modify products for specific use” (NP Art. 2(d)) or for “genetic expression or metabolism” (NP Art. 2(e)), as in use “in silico” for informatic purposes, such as mapping, quantitative trait locus (QTL) analysis, or creating databases, or use “in virtuo” for modeling or rational design? What is the proportional value due to the GRs when R&D yields a completely new product, e.g., as a result of engineering for novel substrate specificity to yield novel products, or various processes in synthetic biology? What is the proportional value due to the GRs when the accessed GRs are no longer present, e.g., due to genetic erosion or divergence over multiple generations? What is the proportional value due to the GRs when significant downstream value is added during R&D using techniques that do not involve the accessed GR?
Undefined or unclear NP terms
The NP uses terms that have not been defined, or whose scope is unclear. The meaning or scope of these terms may be essential for determining whether national-level NP measures would apply to an ABS agreement concerning specific GRs, or whether a different legal framework would apply. Therefore, the R&D sector should be aware that interpretations of NP terms may have significant effects on which national-level legislative and administrative measures, and what ABS and compliance obligations, may apply to an agreement allowing access to GRs for use in R&D.
For example, it has been noted that the CBD definitions of GRs as “genetic material of actual or potential value” (CBD Art. 2) where “‘[g]enetic material’ means any material of plant, animal, microbial or other origin containing functional units of heredity” (CBD Art. 2) do not define “functional units of heredity,” so it is not clear whether the NP applies to some common inputs used in R&D, such as small pieces of DNA or genetic sequences, 24 or by extension, to nucleic acids that are not involved in “genetic expression” (NP Art. 2(d)), such as DNA primers, or non-coding binding sites for various factors, or RNA types other than mRNA. Would the ABS terms of a country apply to accessing sequence information over which that country claims sovereign rights, and would they require sharing in the value (monetary or non-monetary) of an informatic product in which the sequence was a single component?
Furthermore, the potential scope of the term “derivative” in the NP appears to reach beyond GRs to encompass chemical entities produced as a result of an unspecified degree of interaction with the expression product (e.g., an enzyme) of accessed GRs. The NP defines “utilization of genetic resources” to mean “to conduct research and development on the genetic and/or biochemical composition of genetic resources,” including through the application of biotechnology as defined in Article 2 of the Convention (NP Art. 2(c)), where “biotechnology” means “any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use” (NP Art. 2(d)), and “derivative” means “a naturally occurring biochemical compound resulting from the genetic expression or metabolism of biological or genetic resources, even if it does not contain functional units of heredity” (NP Art. 2 (e)). Would the ABS terms of a country providing access to GRs require sharing the value of a novel chemical entity if that entity never existed before and resulted from extensive modification of the original GRs?
IV. Conclusions
The R&D sector that utilizes GRs seeks reasonable certainty about the legal framework that will apply to accessing and utilizing GRs in R&D, including frameworks for ABS and compliance, as well as certainty about the legal framework that will apply to activities such as accessing GRs in any country in which the GRs are available, or carrying out R&D utilizing these GRs in any country in which R&D activities could take place. The R&D sector needs to know the rules and procedures for obtaining PIC from all necessary parties and receiving verification that NP-compliant access to GRs was granted, and also needs to know what authority can guarantee that all necessary parties were involved. The R&D sector needs to know the details of any requirements for notice and approval for activities such as sharing research results, changing research focus, or seeking IPRs, which may include activities both in- or outside a provider country. The R&D sector needs to know any fixed terms for benefit-sharing, as well as where to seek guidance on what kinds of benefit-sharing may be addressed during negotiations for MATs, and also what activities may trigger additional benefit-sharing terms, whether of monetary or non-monetary benefits. In addition, the R&D sector needs to know what actions must be taken early in the R&D process, in order to be able to satisfy compliance terms that may be imposed at a later time in other countries, e.g., in connection with seeking marketing approval. Finally, the R&D sector wants information about how complex questions, such as the link between access to GRs, and benefits arising from R&D, or the scope of undefined terms, might be treated during negotiations to reach MATs.
Given the promise that the NP provides a “transparent legal framework” by imposing new obligations for clarity and certainty, as well as by providing new tools and mechanisms to implement those obligations, the R&D sector seeks guidance about how the NP has affected national-level legal frameworks in the period since it was adopted in 2010—and especially since it entered into force on October 10, 2014. In particular, the R&D sector seeks guidance as to the functioning legal framework in place in each contracting party after they have completed NP implementation. Such knowledge is important to allow the R&D sector to make strategic decisions concerning where to access GRs, where to conduct R&D activities, how to structure R&D activities, what voluntary compliance measures to assume, and how to negotiate fair and equitable ABS agreements that advance the shared objectives of “conservation of biological diversity and the sustainable use of its components” for the benefit of all.
At the time of this writing, slightly more than one year after the NP entered into force, information concerning national-level effects of the NP is fragmentary and incomplete. Despite a substantial number of contracting parties and signatories, 25 publicly available information indicates that only a minority have undertaken national-level legislative, administrative, or policy measures to implement fair and equitable benefit-sharing on MATs in accordance with NP Art. 5. Some of these measures satisfy formalities but do not provide useful information about specific changes that have been made due to NP implementation, and do not provide useful information about the relevant legal framework after NP implementation. Only a few of these measures have detailed ABS and compliance terms. Finally, there is little public information about how any contracting parties to the NP have addressed such questions as the link between access to GRs and benefits arising from R&D, or the scope of undefined terms in the NP.
In conclusion, R&D utilizing GRs continues to generate innovation, as the R&D sector continues to enter into agreements to access GRs. It is crucial for the R&D sector to monitor advances in NP implementation as more contracting parties implement national-level legislative, administrative, or policy measures to implement fair and equitable benefit-sharing on MATs, and other countries make preparations to do so, in order to gather information to use for strategic R&D planning and negotiating fair and equitable ABS agreements.