Nagoya Protocol in the spotlight with CBD meet ahead

30 September 2014

The next Conference of the Parties to the Convention on Biological Diversity is just around the corner. This article outlines some of the key issues on the agenda, as well as potential interactions with trade policy. 

The planet is threatened with a serious biodiversity challenge. Up against rapid and continuing biodiversity decline, highlighted by UN reports for well over a decade, the Convention on Biological Diversity (CBD) may be facing a crisis of confidence from many scientists and commentators. According to the last Global Biodiversity Outlook report, a 2002 pledge by world leaders to significantly stem biodiversity loss by 2010 was not definitively met for any of the 21 sub-targets, with key indicators among others including increased species extinction threats, natural habitat decline, ecosystem damage, and waning crop genetic diversity.

Governments and stakeholders will once again gather to confront these concerns at the twelfth meeting of the Conference of the Parties (COP) to the CBD, scheduled from 6-17 October in Pyeongchang, South Korea. Following news in July of the deposit of the 50th instrument of ratification of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS) – the required threshold for the international instrument to enter into force – the first Meeting of the Parties (MOP) to the Protocol is now a much-anticipated feature of the October biennial meet. Word ahead of the meeting is that a “Pyeongchang Roadmap” to help scale up biodiversity conservation, if successfully agreed, could prove an important win in the fight to preserve the world’s biodiversity.

Stemming the loss

The CBD – one of the three Rio Conventions – has only two “hard” instruments in the form of protocols, the Cartagena Protocol on Biosafety, and now the Nagoya Protocol on ABS. Although both were secured after protracted wrangling, some see these protocols as focusing on lesser areas of importance when compared to the need for specific protections and targets for biodiversity conservation and sustainable use, and for the prevention of further species extinctions. The targets and action inspired by the CBD agenda are arguably not backed up by specific obligations and enforcement mechanisms leading to ongoing criticisms and concern around safeguarding the world’s biodiversity [Ref 1]. Indeed, a draft of the pending fourth Global Biodiversity Outlook (GBO-4), discussed at a CBD intersessional meet in July and set to be finalised in Pyeongchang, finds that only one of the 20 Aichi Targets is truly on track. The draft report further suggested that elements of five targets are in fact moving in the wrong direction. Performance on a tenth target on minimising human-induced damage to coral reefs, marked down for realisation by 2015, is deemed particularly poor.

As a result, a good part of COP12 is set to be devoted to mid-term review on the implementation of the Strategic Plan for Biodiversity (2011-2020), and on progress towards meeting the related Aichi Biodiversity Targets. One working group at the COP will seek to shore up a roadmap for implementing the objectives of the Strategic Plan, which will build on analysis of the GBO-4, and updated national biodiversity strategies and action plans (NBSAPS). The provisional agenda indicates that discussion around assisting strategic implementation will also focus on capacity-building, enhancement of technical and scientific cooperation. An ad-hoc working group is set to be established on indicators for assessing progress on the Strategic Plan. This language, however, suggests the likely continuation of a soft, non-binding approach that leaves little opportunity for the working group to incorporate some teeth behind the targets.

On the docket

 Several other items are up for discussion from individual programmes of work and crosscutting issues addressed by the CBD. Under an item on biodiversity and climate change, delegates will consider a draft decision with elements enhancing collaboration between the UN Framework Convention on Climate Change (UNFCCC) and other relevant organisations to ensure that UN Reducing Emissions from Deforestation and Forest Degradation (REDD+) activities and CBD objectives are mutually supportive. In theory, REDD+ projects should mean the setting aside of additional forest areas or avoiding deforestation, for the purposes of using it as a carbon sink. Some concerns remain, however, that plantations – often low in biodiversity –rather than natural forests might be allowed within the scope of REDD+.

Among the emerging issues, CBD participants will for the first time consider components, organisms, and products from synthetic biology, and their relevance for the CBD and its two protocols. Questions arising in this area include, for example, whether specific biosafety issues need to be considered in relation to synthetic biology? Furthermore, is there an implicit or explicit obligation to share benefits relating to a genetic resource where it has been reproduced as a synthetic natural product? The CBD Secretariat has compiled submissions and information to help the Parties and experts explore these questions. Furthermore, COP-MOP7 of the Cartagena Protocol – ongoing this week – continues its work on biosafety relating to trade in living modified organisms, including through a special session on implementation.

The Secretariat of the CBD has also invited final comments with the intent of adopting a “Gangwon Declaration on Biodiversity for Sustainable Development” at the high-level segment of the CBD COP. The Declaration and high-level segment discussions are likely to focus on integrating biodiversity into the UN sustainable development goals (SDGs) and post-2015 development agenda.

The COP is also due to continue work on tackling the challenge posed by invasive alien species (IAS). Stowed away in shipments, packaging or introduced for a variety of other reasons, fauna and flora are increasingly crossing borders and often pose a threat to local ecosystems. Some estimates pin the cost of these to the global economy at US$1.4 trillion.

With respect to invasive species, at COP11 some CBD Parties drew attention to the need for further information on the application of Articles 9.2 and 10 of the Agreement on the Application of Sanitary and Phytosanitary Measures of the WTO, with reference to technical assistance and special and differential treatment for developing countries and LDCs in meeting the SPS standards of importing countries. The final decision, however, focused on encouraging governments to address the challenge and requested the CBD Secretariat to help countries tackle the issue on a global scale. Although this area focuses heavily on monitoring and enforcement aspects as well as best practice, following instructions from Parties, CBD Secretariat has also sought observer status in the Committee on Sanitary and Phytosanitary Measures of the WTO and has been encouraging collaboration between the two bodies to remedy a perceived gap in international standards on the issue.

Discussions in Pyeongchang are set to focus mainly on gaps in standards relating to the introductions of alien species as pets, aquarium and terrarium species, as well as live bait and food. A set of voluntary guidelines is up for adoption and these are expected to provide significant assistance in developing regulations or codes of conduct. Meanwhile the question of addressing e-commerce standards related to invasive alien species proved controversial in the preparations for the October meeting, particularly as to whether to address this under the WTO.

Nagoya Protocol kicks off

Clinched in 2010 in the Japanese city after which the instrument was baptised, the Nagoya Protocol seeks to flesh out further the legally binding framework for determining how users, providers, and stakeholders’ access genetic resources, together with how the benefits derived from the use of these are subsequently shared. Access and benefit sharing (ABS) is the third pillar of the CBD and analysts have long held that legal certainty on this often-ambiguous principle is critical in relation to regulating bio-prospecting activities and other research and development (R&D) on genetic resources. It is important to note that the Nagoya Protocol reaffirms the CBD principle regarding the sovereign rights of states over their genetic resources. Nagoya extends this to include “utilisation” of the biochemical derivatives of these resources.

The fair and equitable sharing of benefits arising from the utilisation of genetic resources has been framed as a potential mechanism to contribute both monetary and nonmonetary benefits towards the conservation and sustainable use of biodiversity. Genetic resources and their biochemical derivatives are now being commercially traded and used in many industries ranging from pharmaceuticals, biotechnology, agriculture, cosmetics, hair and skin care, as well as waste management. Assuming proper implementation, ABS legislation spurred by Nagoya could be used to promote fairness and equity in bioprospecting – in other words, discovering novel products from nature – as well as for preventing biopiracy and misappropriation of genetic resources from national territories.

Although critics have highlighted a number of ambiguities and shortcomings in the final text, overall, the Nagoya Protocol represents a significant development in terms of legal certainty around ABS. It clarifies terminology around the utilisation of genetic resources defined as means to conduct R&D on the genetic and/or biochemical composition of genetic resources, including through the application of biotechnology, which may include biochemical compound derivatives. It expands upon existing descriptions of access including measures to ensure that prior informed consent (PIC) or approval and involvement of indigenous and local communities is obtained for access to genetic resources where they have the established right to grant access to such resources. It extends access rules to traditional knowledge associated with genetic resources. Article 12 also asks Parties to consider the customary laws and community protocols of communities, with respect to traditional knowledge associated with genetic resources.

Critical implementation

Although the successful conclusion of Nagoya at COP10 after years of negotiations was broadly welcomed, exhausted negotiators at the time cautioned that national implementation of the regime would be critical. Beyond administrative matters establishing the MOP, the October meet will subsequently include an exchange of information on the status of Parties’ ratification and implementation of the Protocol. A likely discussion will be on varying interpretations of access, utilisation, and the instrument’s temporal scope. Some countries with existing ABS systems or newly developed systems have rules that emphasise that utilisation of genetic resources is a “trigger” for benefit sharing, including for research and development (R&D) towards new uses for genetic resources that might have been accessed prior to entry into force of the Nagoya Protocol, or even possibly before the CBD. The EU Commission regulations implementing the Protocol within the trade bloc passed in April, however, take a different approach to access. The scope of the EU regulations applies to genetic resources and associated traditional knowledge “that are accessed after the entry into force of the Nagoya Protocol for the Union” (Article 2.1). This essentially means that EU members, subject to their national legislation, may not need to consider the need for prior informed consent and benefit sharing for new R&D on millions of previously accessed and collected genetic resources – and traditional knowledge associated with it – that already exists in genebanks, botanic gardens, herbariums, university and private collections. The EU move raises important questions around the potential effectiveness of the Protocol, suggesting it all could come down to the specifics of national implementation. Furthermore, the implications of having inconsistent approaches to access and utilisation in different countries and regions could fuel concerns among biodiverse developing countries and indigenous and local communities around the instrument’s ability to ensure meaningful benefit sharing. [Ref 2]

Monitoring and reporting

The question of monitoring therefore comes into play since genetic resources are commonly traded for a variety of uses. If a user of the biological resource changes intent and conducts new R&D on the genetic or biochemical composition, then they may be obliged to share benefits to those provider countries that have an ABS regulation that specifies benefit sharing for utilisation, although due consideration is required as to how this should be enforced in practice. The Nagoya Protocol includes measures to facilitate the monitoring of utilisation of genetic resources through checkpoints and the upcoming MOP will feature some discussion in this area.

During the Nagoya negotiations some Parties wanted to include patent offices as a monitoring checkpoint. This was ultimately not retained in the final text. Several developed countries that are mainly “users” of genetic resources suggested that the mandate of the WIPO Intergovernmental Committee on Intellectual Property & Genetic Resources, Traditional Knowledge and Folklore (IGC) was the appropriate forum to discuss legal instruments relating to intellectual property and the protection of genetic resources. At the IGC, several countries have been pushing for a “disclosure of origin” requirement in patent applications, with some differences in opinion over the legal implications of non-disclosure. The topic has often proved controversial as it is opposed by the developed countries in “Group B” who argue that databases and codes of conduct would be more effective in preventing the grant of erroneous patents. In February, WIPO negotiators narrowed down a bracketed draft text with a range of options and measures including a proposal calling for patent applications to disclose the country and origin of the genetic resource and associated traditional knowledge.

The WTO Doha Ministerial Declaration (2001), which governs the current round of talks at the global trade body, instructs the Trade Related Aspects of Intellectual Property Rights (TRIPS) Council to address the relationship between the CBD and the WTO TRIPS Agreement. Movement forward in this area over the years has also not proved easy. A disclosure of origin requirement was put forward in the TRIPS Council by an unprecedented coalition of developed and developing countries in July 2008. After the adoption of the Nagoya Protocol in 2010, a group of developing countries put forward a new proposal for a disclosure requirement that incorporates elements and language of the Nagoya Protocol. A handful of developed countries – namely the US and Japan – have argued, as they also do at the IGC, that including a disclosure requirement would introduce uncertainty in the patent system and could undermine its role in promoting innovation.

Whilst a patent disclosure requirement is one important potential checkpoint there are several other suggestions that could be deployed including declarations required of researchers by publishing houses, research grant-making bodies, and prior to marketing permission of new products – for example for foods, cosmetics, and drugs.

The MOP is also scheduled to discuss a related issue in the form of the extension of a pilot of the ABS Clearing House Mechanism (CHM) and its effectiveness so far. The Nagoya Protocol established the CHM where permits and evidence of legal access can be deposited and checked as a transparency measure. The information about permissions and compliance of individual researchers and companies would have to be transmitted to the CHM by competent national authorities. The CHM would serve as another international monitoring and transparency mechanism receiving relatively uniform “certificates of compliance” – a legally recognised document designed to smooth monitoring hurdles created by ABS arrangements in different jurisdictions – from party countries.

Trade rules

Another monitoring possibility Parties could eventually consider – at this stage hypothetical – would be to add an export checkpoint. In this scenario customs authorities in provider countries could require an indication of the intent of the export of a genetic resource and whether ABS arrangements had been followed. This would, however, raise interesting questions around whether Nagoya implementation to this effect might result in trade-restrictive and/or trade-discriminatory effects under WTO rules. If a provider country refuses an ABS permit in relation to export of certain quantities of a specific genetic resource, say a medicinal plant, to a company for R&D towards a potential pharmaceutical but then allows commodity trade of the same medicinal plant to other companies in other countries, is this export country in breach of the WTO most favoured nation (MFN) principle? MFN is concerned with exportations for “like products” and so conceivably discrimination based on “intended use” could be construed as a breach of this principle.

Another relevant question regarding the manner in which Parties choose to implement the instrument, is whether national genetic resource access rules might be construed as de facto trade restrictions if hypothetically some countries sought to strictly limit access, arguing their sovereign rights for ABS reasons. [Ref 3] Parties may equally decide to limit genetic resource access and export for environmental reasons related to rarity/ critical shortage, or for natural resource conservation. The China raw materials and recent China rare earths disputes at the WTO, regarding export restrictions on different natural resources, perhaps provides interesting food for thought in this regard although the cases also presented unique questions vis-.-vis China’s WTO accession and the organisation’s body of law. On one hand the potential replicability of valuable genetic resources through breeding or modern techniques – for example plant tissue cultures, synthetic biology – may render their “exhaustibility” or “critical shortage” an unlikely scenario to justify. On the other hand, as global failure to make progress on the Aichi targets attests, we may be losing many useful genetic resources faster than they can be isolated and conserved.

Cooperation and coherence

The MOP is scheduled to include an item on cooperation with other international organisations, conventions, and initiatives, wherein Nagoya implementation and its relationship with relevant negotiations, mandates, and legal instruments in the WTO and WIPO may feature. A focus on the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), which has its own multilateral system for benefit sharing, will mostly likely also come up in this context. The experiences of the ITPGRFA will also be relevant for an agenda item on the need for and modalities of a global multilateral benefit sharing mechanism, which parties are requested to consider under Article 10 of the Nagoya Protocol. This tool would provide a way to deal with trans-boundary genetic resources – and associated traditional knowledge – as well as situations where it is not possible to grant or obtain prior informed consent. These include, for example, widely held genetic resources, resources accessed prior to the CBD, or resources with no discernible origin. Other relevant discussions may be in relation to relevant instruments and considerations of ABS in areas beyond national jurisdiction such as the high seas or Antarctica, and also streamlined access to genetic resources for public health emergencies and relevant WHO frameworks such as the Pandemic Influenza Preparedness Framework. [Ref 4] [Editor’s note, see related article in this BioRes edition]

As alarm bells sound louder around the state of the world’s biodiversity, and the international community gears up to hammer out a post-2015 development framework, it is clear that delegates heading to South Korea later this month have some work cut out for them carrying forward multilateral work on biodiversity governance.

Daniel Robinson, Visiting Research Fellow at the International Centre for Trade and Sustainable Development (ICTSD). Senior Lecturer at the Institute of Environmental Studies at the University of New South Wales. 

[Ref 1] Harrop, S. R., & Pritchard, D. J. (2011), “A hard instrument goes soft: The implications of the Convention on Biological Diversity's current trajectory,” Global Environmental Change, 21(2). 

[Ref 2] Tobin, B. (2014), “Biopiracy by law: European Union draft law threatens indigenous peoples rights over their traditional knowledge and genetic resources,” European Intellectual Property Review, 36(2).

[Ref 3] Pavoni, R. (2013), “The Nagoya Protocol and WTO Law” in Morgera, E., Buck, M., and Tsioumani, E. (eds), The 2010 Nagoya Protocol on Access and Benefit-sharing in Perspective Implications for International Law and Implementation Challenges, Martinus Nijhoff Publishers, Leiden.

[Ref 4] Wilke, M. (2013), “A Healthy Look at the Nagoya Protocol – Implications for Global Health Governance,” in Morgera, E., Buck, M., and Tsioumani, E. (eds), The 2010 Nagoya Protocol on Access and Benefit-sharing in Perspective Implications for International Law and Implementation Challenges, Martinus Nijhoff Publishers, Leiden.

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30 September 2014
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