Biodiversity Negotiations Need To Allow For Flexibility In Business, Industry Says

Aspects of a legally-binding international agreement on access and benefit-sharing under the UN Convention on Biological Diversity may harm business interests and also fail to reach its objectives of protecting and preserving biodiversity, said members of a panel of industry representatives in Geneva yesterday. Some also expressed doubt about the likelihood of the access and benefit sharing regime meeting its deadline of having full agreement by its October meeting next year in Nagoya, Japan.

Certain legal certainties are necessary for business, said Brendan Barnes, director of multilateral issues and health policy at the European Federation of Pharmaceutical Industries and Associations (EFPIA), but said it is hard to see how an international regime could dictate the level of local communities how exchanges will function.

Part of the difficulty in negotiation of the regime is that there is “no common agreement on what the problem is,” said Alan Oxley, chairman of the Asia-Pacific Economic Cooperation (APEC) Centre at the Royal Melbourne Institute of Technology University in Australia.

There is “no legally-instructive definition of the key terms,” nor an agreement on the “means by which commitments are to be delivered,” Oxley said.

The negotiating process does not look promising, Barnes indicated. A document with thousands of square brackets “looks like a challenge” at this stage, he said, referring to the large sections of not yet agreed, or “bracketed” text.

“The chapter headings are agreed but the text isn’t,” he said. Fundamental agreements are not in place on the agreement’s scope or its legal nature, or its objectives “with not so long to go until Nagoya.”

The event, held on 24 November, was hosted by the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA).

Will Government Control Protect Biodiversity?

Those advocating for a binding instrument argue that it is necessary to prevent misappropriation of genetic resources and associated traditional knowledge. Some developing countries also argue that an access and benefit-sharing regime is critical to ensuring that sharing their diverse genetic resources generates benefits for the place of origin as well as for the place of destination.

One member of the audience raised the point during a question and answer session at the event. “Developed countries and industry are mortally afraid of the term “legally binding,” but … all the international laws are in your interest,” he said. “We have genetic resources that you want. If you come and benefit from them, what do we have left?”

The panel had a different view. “The aim of the ABS elements in the CBD is to secure economic gain for the state, to secure ownership over genetic resources,” said Oxley. “This is why progress is difficult, it has nothing to do with the core purpose of the CBD,” in protecting biodiversity; it is “for the state to control economic benefits of biodiversity.” Unless this is addressed it will not be possible to reach agreement, he added.

The ABS regime “creates rights for the nationalisation of genetic resources, dictates terms of exploitation, extracts rent from use and development, and limits application of norms of protection of invention” such as the right to patent, he said. It is a “dramatic economic control instrument.”

But parties need space to reach agreement on terms, and this has to happen “by putting as few restrictions as possible as to what can be agreed between partners,” said Barnes. “More often than not, agreements are not being struck because people can’t get legal certainty over who they should deal with.”

Disclosure of origin requirements for example, which are being discussed under the CBD, could prove a problematic distraction, he said. “Disclosure might discourage business venture if it incurs risk of legal and commercial uncertainties,” such as losing patents or being subject to penalties outside the patent system, said Barnes. The “main objective here is to stop bad patents, but there’s no evidence that that will happen,” he added.

Oxley said the APEC Centre examined cases of biopiracy and determined that good IP law was never at fault. In some cases, the law had been misapplied, or rights granted where they should not have been, he said, but argued there is “no systemic flaw or weakness in the IP system.”

The concern of industry, Barnes said, is that the regime might involve “staggering cost and little yield in terms of concrete benefit.” The CBD confirms the objective “to encourage sustainable use” of genetic resources “which we interpret as promote economic activity,” he said. “Unless you encourage economic activity, there’s going to be no benefits to share.”

This means the regime “shouldn’t be too prescriptive,” said Barnes. It should be “open to different business models.” Flexibility and user-friendliness must be done right because “business will not be done if they are not right.”

Fair and equitable benefits under the CBD, for example, are defined by the local partner, where there may be “significant differences” in scientific excellence or knowledge base, said Esther Schmitt, unit head of natural products at Swiss biotechnology company Novartis. Agreements often include education, capacity building, and clear arrangements on how to register intellectual property rights.

Successful collaboration between local communities and biotechnology companies requires legal certainty, exclusivity and transparency and prior informed consent, said Schmitt. The industry partner should be able to transfer the biological material to its labs, and have exclusive access, she said.

The knowledge of being able to recoup investment costs is important to industry. Research in general takes time and involves “high risk” and involves “more failure than success,” said Klaus Müller, former head of science and technology relations at Swiss pharmaceutical company Roche.

For every ten ideas, perhaps one will make it into a project that is taken seriously enough to be pursued; for every 60 such projects, perhaps one makes it to market, said Müller. Therefore, he said, success on the market for that one product is needed to keep the business model sustainable.

Natural products research, where a lot of debate about biopiracy happens, is “laborious, takes long and is uncertain,” said Carlevaro.first reference? So bio-prospecting does not happen that much.

Novartis, which does bioprospecting, said it started a microbial sourcing project with Hubei Biopesticide in Wuhan, China in 1999. Ten years later, there is one compound in late pre-clinical research from the partnership, Schmitt said.

“We believe that most of the info in the CBD will reflect the need for contracts on access and benefit-sharing,” said Patrizia Carlevaro, head of the international aid unit at Eli Lilly in Geneva. These can provide legal certainty for both the user and provider of genetic resources under “mutually agreed terms,” she added, citing past Lilly projects, including a successful venture in Costa Rica.

Several panellists mentioned the Bonn Guidelines, a set of voluntary provisions for access and benefit sharing set out by the CBD as a good example of how to negotiate the issue.