Access and benefit sharing - ABS: Understanding international and national laws

Access and benefit sharing - ABS: Understanding international and national laws With the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits arising from their utilisation soon coming into force, there is growing momentum for putting in practice ABS. Many countries already have in place ABS policies, laws or regulations. These rules implement the ABS principles set out in the Convention on Biological Diversity (CBD) and establish the requirements and procedures for companies seeking access to genetic or biological resources for research and development. This note provides an overview of selected ABS laws and regulations in Brazil, India and South Africa, biodiversity-rich countries that have pioneered ABS requirements and are actively engaging with companies on ABS implementation. The focus is on explaining what activities are covered by ABS in these countries, who is responsible for compliance and how ABS actually works in specific cases. Several countries are also developing or revising their ABS requirements in line with the Nagoya Protocol. In March 2014, the European Parliament approved a regulation implementing the Nagoya Protocol. As a result, companies engaged in research and development on genetic material or biochemical compounds in the European Union must now ascertain that genetic resources and associated traditional knowledge used comply with any ABS rules in the provider country. An overview of the regulation is also included in this note. Finally, this note also includes a list of frequently asked questions on the Nagoya Protocol, which will be the basis of national laws and best practices on ABS. These questions focus on how the Nagoya Protocol will operate; what are the activities it covers, particularly with regards to natural ingredients and the food, beverages and cosmetics sectors and what are the key considerations for companies moving forth. UEBT and ABS The fair and equitable sharing of benefits derived from the use of biodiversity is at the core of Ethical BioTrade, and constitutes one of the key elements of the work of UEBT. ABS principles are included in the Ethical BioTrade Standard, both expressly and in the context of broader benefit sharing requirements. The UEBT third-party verification system assesses company policies and their implementation, and determines any necessary changes that need to be gradually implemented to comply with Ethical BioTrade practices, including on ABS. In addition, UEBT provides technical advice and support on ABS issues through practical tools and workshops. By addressing ABS in its outreach activities, UEBT is also helping to raise awareness of ABS within the industry. UEBT resources on ABS These resources, available on the UEBT website: www.uebt.org, provide additional information on ABS: Ethical BioTrade Standard Introductory Video on ABS ABS Basic Information Sheet Technical Brief on the Nagoya Protocol on ABS Introductory Video on Patents and Biodiversity Priniciples on Patents and Biodiversity Notes on Trends in Patents, Cosmetics and Biodiversity

Frequently Asked Questions on the Nagoya Protocol on ABS What is the Nagoya Protocol? The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits arising from their utilisation (ABS) is an international agreement adopted in 2010. It is a supplementary agreement to the Convention on Biological Diversity (CBD), aiming to implement one of its central objectives: fair and equitable benefit sharing. By helping to ensure benefit-sharing, the Nagoya Protocol aims to create incentives to conserve and sustainably use genetic resources, and therefore enhance the contribution of biodiversity to development and human well-being. It sets out core obligations for countries to take measures in relation to how persons or organizations access genetic resources for their utilisation, share the resulting benefits and support compliance with ABS requirements and contracts. When and how will the Nagoya Protocol begin to operate? The Nagoya Protocol is expected to enter into force in late 2014, once 50 countries have ratified it. Countries that have signed and ratified it will implement its provisions through national laws and regulations. It is these national rules that will specifically establish the ABS requirements and procedures that persons, companies and other organisations will need to follow. For example, in March 2014, the European Parliament approved regulations implementing the Nagoya Protocol and requiring research and development activities in Europe to comply with ABS requirements in other countries. In other regions it may take months or years for countries to adopt and operationalise their national rules on ABS. How will national laws and regulations implement the Nagoya Protocol? The Nagoya Protocol will be implemented through national laws and regulations. These national rules must address the minimum standards established in the Nagoya Protocol, but may also provide more extensive protection. For instance, countries may choose to require access authorization for a broader range of activities or define more specifically how benefits should be shared. In other words, ABS requirements and procedures will vary from country to country, depending on their objectives and approach, as well as broader legal and policy systems. What happens until countries have implemented laws and regulations on ABS? Many countries already have ABS laws and regulations in place, on the basis of the CBD provisions. A list of countries with ABS measures in place is available on http://www.cbd.int/abs/measures/default.shtml though not all of these rules are necessarily being put into practice. More information may be obtained from national focal points on ABS, which are listed on https://www.cbd.int/doc/lists/nfp-abs-icnp.pdf. Even when there are no laws or regulations on ABS in place, however, the CBD and Nagoya Protocol are widely considered to outline best practices in biodiversity-based research and development. Companies and organisations committed to ethical practices should reflect ABS principles in their innovation, community engagement, product development, sourcing and marketing activities. For example, guidance on implementing ethical practices on ABS is available in the Ethical BioTrade Standard and related tools. What are the kinds of activities covered by the Nagoya Protocol? ABS requirements in the Nagoya Protocol are triggered by the utilisation of genetic resources. This term is defined as conducting research and development on the genetic and/or biochemical composition of genetic resources. There is no further clarification in the Nagoya Protocol on the type of activities covered. Nevertheless, the focus of ABS and the utilisation of genetic resources, specifically, is on the process of researching the beneficial properties of genetic material or biochemical compounds and using these properties to develop new products. For example, companies can use genetic resources to develop special enzymes, enhanced genes, or small molecules. These can be used in crop protection, new plant varieties, drug development and the production of specialised chemicals. How is work with natural ingredients in the cosmetics sector covered by the Nagoya Protocol? In the cosmetics sector, research into the beneficial properties of biochemical compounds for new ingredients and products would be considered to fit within the definition of utilisation of genetic resources in the Nagoya Protocol. For example, research on plant extracts, oils and molecules to develop new ingredients with moisturizing, firming, anti-ageing or other properties would fall within the realm of ABS. Similarly, ABS would be relevant for companies analysing plant samples to inspire new molecules and synthetic material to include in fragrances. Other research and development activities in the cosmetics sector including environment and toxicity studies for natural ingredients, improvements in plant extraction processes or new product formulations with known ingredients would not fall under ABS as defined in the Nagoya Protocol. Neither would the ongoing sourcing of natural ingredients for cosmetics products. However, it is important to consider that national laws and regulations implementing the Nagoya Protocol may extend ABS requirements to a broader range of activities than the utilisation of genetic resources.

Frequently Asked Questions on the Nagoya Protocol on ABS Are there any activities in the food and beverage sector included in the Nagoya Protocol? In the food and beverage industry, research into the beneficial properties of micro-organisms, molecules or active compounds for new ingredients and products would be considered to fit within the definition of utilisation of genetic resources in the Nagoya Protocol. For example, the development of a new natural colorant derived from fruit pulp for use in food products. Similarly, ABS would be relevant for companies looking to scientifically prove the antioxidants in a traditional medicinal plant and developing a health beverage boasting these properties. Other research and development activities in the food sector including environment and toxicity studies for natural ingredients or new product formulations with known ingredients would not fall under ABS as defined in the Nagoya Protocol. Neither would the ongoing sourcing of natural ingredients for food products. However, it is important to consider that national laws and regulations implementing the Nagoya Protocol may extend ABS requirements to a broader range of activities than the utilisation of genetic resources. What about commodities? Are they covered or impacted by the Nagoya Protocol? In principle, buying and selling commodities and other plants, crops or biological material that is already traded does not fall under the Nagoya Protocol. However, this is only as long as the aim is only production or consumption and no research and development activities are undertaken. For example, buying seeds in a market to produce breakfast cereals is not considered utilisation of genetic resources. However, if the seeds were analysed for their genetic or nutritional properties, in order to develop an extract or conduct plant breeding, such activities would be considered within the realm of ABS. It is important to note that a specialised ABS system exists for the utilisation of plant genetic resources for food and agriculture. The 2001 International Treaty on Plant Genetic Resources for Food and Agriculture establishes a multilateral system on ABS for 64 of the world s most important crops, including barley, rice and wheat. However, the utilisation of these plant genetic resources for uses other than research and breeding for food and agriculture, as well as the utilisation of crops not included in this multilateral system (e.g. soy, coffee, etc) still falls within the scope of the Nagoya Protocol. What kind of use of traditional knowledge triggers ABS under the Nagoya Protocol? The Nagoya Protocol also applies to traditional knowledge and to the benefits arising from the utilisation of such knowledge. The term traditional knowledge refers to the knowledge, innovations and practices associated with genetic resources and held or owned by indigenous and local communities. There is no definition of how traditional knowledge may be accessed or utilised in order to trigger ABS requirements. Nevertheless, given the definition of the utilisation of genetic resources, the focus would be on gathering and using traditional knowledge in the process of researching the beneficial properties of genetic material or biochemical compounds and using these properties to develop new products. Will the Nagoya Protocol apply retroactively to prior research and development activities? In line with international law, the Nagoya Protocol does not apply to activities that took place before its entry into force. Access and utilisation of genetic resources that have already taken place and benefits that have already been accrued would not be covered. For example, the cultivation of vanilla outside Central America, which took place in the nineteenth century, past research activities leading to the development of related fragrances and flavours, and ongoing trade in vanilla as a spice would not be included in the Nagoya Protocol. However, it is still unclear how national laws and regulations will deal with the issue of new utilisation of previously accessed genetic resources. This would be the case, for example, of a company launching new research into the properties of a plant sample acquired prior to the Nagoya Protocol or reaching the development stages of a new product on which research and development had been taking place for several years. What are initial steps that companies should take on ABS? As a first step, given the relevance of ABS to companies working with natural ingredients, it is fundamental for companies to take measures to increase their understanding of evolving international and national laws and best practices. Organisations like UEBT provide introductory material and capacity-building courses specifically designed for companies, both members and non-members. As a second step, companies should consider the specific applicability of ABS requirements to their activities. This requires looking at existing laws and regulations, as well as considering risk factors that may require voluntary measures on ABS, even in absence of legal requirements. Finally, it is important for companies to begin mainstreaming ABS into their operations, ensuring relevant issues are taken into account in the purchasing, sustainability, research and innovation, product development, legal and marketing departments.

ABS Rules BRAZIL What ABS rules are in place? What activities do ABS rules cover? Who is responsible for complying with ABS requirements? How do ABS requirements work? What are practical experiences on ABS? What are latest developments or trends? The basic set of rules on ABS in Brazil is a provisory measure issued in 2001 (Medida Provisória 2.186-16), which has the force of a law. This provisory measure has been complemented by decrees, including defining the role of the National Genetic Heritage Council (CGEN). In turn, CGEN has issued numerous resolutions, orientation notes and procedural decisions. Regulation focuses on access to components of genetic heritage and to associated traditional knowledge, for the purposes of scientific research, technological development or bioprospecting. "Access" of genetic origin or molecules and substances deriving from the metabolism of living beings and extracts obtained from such organisms. The scope of access activities has been further defined by various decisions and resolutions. For example, the production of fixed oils, essential oils or extracts is exempt from ABS requirements, as long as their characteristics in the final product are substantially equivalent as in the raw material. Authorisation to access components of genetic heritage or associated traditional knowledge is required for Brazilian, public or private, institutions collecting samples or information for research and development. Foreign institutions are required to enter an association with a Brazilian institution, who will be responsible for submitting the application and will assume full legal responsibility. To authorise access or transfer of samples, CGEN or other accredited authorising body requires information on the institutions and the research project; and proof of the prior informed consent of the owner of the area where genetic resources are to be collected. Prior informed consent requirements differ if there is potential for commercial use and/or an indigenous or local community involved. When access activities include bioprospecting or technological activities, the CGEN must also approve a contract for the use of genetic patrimony (CURB). Depending on the area of collection, the CURB may be signed between private parties, with an indigenous or local community or with the State. The terms of benefit sharing are negotiated among parties, except for parameters provided for cases in which the State is a party or in which benefits cannot be shared with the provider. In 2002-2013, CGEN and other accredited institutions issued 527 authorisations for access. These authorisations cover primarily scientific research, with only slightly more than 20% covering bioprospecting activities. Up to March 2013, 103 CURB were presented for CGEN approval. Of these contracts, 89 focus exclusively on components of genetic patrimony (rather than traditional knowledge). In terms of the economic sectors involved, 79 of the contracts fall in the cosmetics sector and 14 in the pharmaceutical sector. Starting in 2010, there have been compliance measures linked to ABS requirements. These measures included fines issued to 80 institutions in 2010 and, in 2012, additional fines issues to 70 companies and 30 research institutes. There is broad agreement on the need for a new legal framework in Brazil that avoids bureaucratic requirements and includes clear procedures for regularisation of prior access. A draft ABS law has been sent to the Casa Civil, an entity responsible for introducing bills to Congress. Changes to existing procedures are currently expected to include: An online registry system would replace access authorisations and proof of prior consent would be required only in cases of access to associated traditional knowledge; Foreign institutions will be able to apply directly for access authorisation without the need for association with a Brazilian partner institution; and Calculation of benefits would be based on a fixed percentage to be paid into a benefit sharing fund.

ABS Rules INDIA What ABS rules are in place? What activities do ABS rules cover? Who is responsible for complying with ABS requirements? In 2002, India enacted the Biological Diversity Act (BDA), which became operational once the Biological Diversity Rules (BDR) were adopted in 2004. These instruments establish a three-tiered structure on ABS at the national, state and local levels. These bodies are required to coordinate in ABS decision-making processes. ABS rules cover access to biological resources or associated knowledge for research or commercial utilisation or for bio-survey and bio-utilisation. "Commercial utilisation" means using biological resources for products including drugs, industrial enzymes, food flavors, fragrance, cosmetics, colors and extracts. The definition of biological resources excludes "value added products," which means that access to products that may contain portions or extracts of plants and animals in unrecognisable and physically inseparable form is not subject to ABS requirements. Similarly, ABS requirements do not apply to biological resources normally traded as commodities. The BDA regulates activities of foreign and Indian persons and institutions. Foreign institutions require prior approval for access from the National Biodiversity Authority (NBA). Indians and Indian institutions do not require the approval of the NBA for engagement in research activities. However, they need to inform biodiversity boards established at the state level, prior to undertaking such activities. Any commercial application related to use of biological resources and the transfer of samples to foreign institutions must be approved by the NBA. How do ABS requirements work? Access authorisations are granted upon completing an application form and paying a fee. The NBA may also impose terms and conditions for ensuring equitable sharing of the benefits arising out of the use of accessed biological material and associated knowledge. Benefit sharing agreements are mostly negotiated and signed directly with the NBA, but it may consult entities at other levels. Benefit sharing is determined on a case by case basis. In cases in which biological resources or associated knowledge is accessed from a specific group of individuals, the NBA may take steps to ensure that the agreed amount is paid directly to them through the district administration. What are practical experiences on ABS? According to the NBA, a total of 844 applications have been received to date. Of these applications, 477 have been processed with 117 ABS agreements concluded. Of the 117 ABS agreements, 63 involve permission to apply for intellectual property rights related to biological resources, all granted to Indian institutions, primarily the Council of Scientific and Industrial Research (CSIR), a government body. In most cases, ABS Agreements are for non-commercial utilisation of biological resources. In terms of compliance measures, one case has been brought to court under the BDA. The case refers to alleged violations of the BDA by Monsanto, through its Indian subsidiary Mahyco, in obtaining native eggplant varieties. There are ongoing discussions with other companies that may also lead to further formal compliance measures. What are latest developments or trends? The BDA is seen as a well-crafted legislation, but lack of awareness has created significant difficulties in implementing ABS. For example, at the state level, biodiversity boards often define the scope of ABS requirements in an extremely broad manner. On the other hand, users have insufficient guidance on obligations and good practices. These challenges are being addressed through capacity-building, projects and guidelines. Though no changes to legislation are foreseen, steps may be taken to enhance ABS procedures, including: Establishing mechanisms for multi-stage negotiations on ABS; Establishing a help-desk on ABS; and Develop market-based tools, including certification schemes, to ensure compliance.

ABS Rules SOUTH AFRICA What ABS rules are in place? The National Biodiversity management: Biodiversity Act (NEMBA), adopted in 2004, establishes rules for ABS in South Africa. The Bioprospecting, Access and Benefit Sharing Regulations (BABS regulations), which came into force in 2008, regulate the bioprospecting permit system. What activities do ABS rules cover? Who is responsible for complying with ABS requirements? ABS rules in South Africa focus on bioprospecting. Bioprospecting is widely defined to include any research on, or development or application of, indigenous biological resources for commercial or industrial exploitation. In turn, the NEMBA defines indigenous biological resources as including any organisms of an indigenous species or related genetic material, chemical compounds and products obtained through technological applications. Additionally, ABS rules are understood to cover the entire value chain that is, from the collection or harvest of raw material to the point where the resulting product is ready to be sold to consumers as long as there are bioprospecting intentions or activities somewhere along the line. In terms of research, no bioprospecting permit is necessary in the discovery phase, but a notification procedure must be followed. Nevertheless, the export of indigenous biological resources for research requires a permit. Research for commercial or industrial exploitation also requires a bioprospecting permit. In terms of other activities, bioprospecting permits are required for the collection or cultivation of indigenous biological resources, basic processing, extraction and manufacturing, and exporting material. How do ABS requirements work? A bioprospecting permit is only issued if prior informed consent has been obtained from stakeholders giving access to the indigenous biological resources (e.g. a land owner) and/or the indigenous communities whose knowledge or traditional use of indigenous biological resources may contribute to bioprospecting activities. Benefit-sharing agreements must be entered into with both categories of stakeholders and, in addition, a material transfer agreement must be entered into with stakeholders who give access to the indigenous biological resources. Templates for these agreements are included in the BABS Regulations. The NEMBA also establishes a Bioprospecting Trust Fund, into which all money arising from benefit-sharing agreements must be paid. What are practical experiences on ABS? Until 2013, 78 notifications of discovery activities have been received by the Department of Environmental Affairs (DEA), as well as 73 bioprospecting permit applications. Fifteen permit applications have been granted, seven of which are for trade and processing activities. Of the 58 permit applications currently under review - 30 are linked to pharmaceuticals, 14 to trade and processing activities, and 12 to cosmetics. In total, 69 material transfer agreements and 19 benefit sharing agreements have been approved. What are latest developments or trends? Putting in practice of ABS requirements in South Africa has been slow, due to constraints linked to the identification of stakeholders, insufficient information provided in permit applications and the complexity of regulating a wide range of very different types of activities related to biological resources. In February 2014, proposed amendments to the BABS regulations were published. The proposed regulations would explicitly include biotrade, defined as buying and selling of indigenous biological resources for the purpose of bioprospecting, product development, or product manufacturing. Biotrade permits would be required for such activities, with the possibility of seeking and obtaining integrated biotrade and bioprospecting permits.

ABS Rules EUROPEAN UNION What ABS rules are in place? In March 2014, the European Parliament approved the Regulation on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation. What activities do ABS rules cover? The EU regulation applies to genetic resources and to associated traditional knowledge over which countries exercise sovereign rights and that are accessed after the entry into force of the Nagoya Protocol for the European Union. The utilisation of these genetic resources, defined as conducting research and development on the genetic and/or biochemical composition of genetic resources, in the European Union is now subject to the obligations set out in this regulation. Traditional knowledge is only considered as described in any mutually agreed terms applying to the utilisation of genetic resources. Who is responsible for complying with ABS requirements? The EU regulation applies to users of genetic resources," defined as the persons or entities conducting research and development on the genetic and/or biochemical composition of genetic resources. In the proposal for the regulation, the European Commission noted that a broad range of entities in the European Union, including companies from sectors such as plant and animal breeding, biocontrol, cosmetics, food and beverage, horticulture, industrial biotechnology and pharmaceutical, use genetic resources for research and development purposes. How do ABS requirements work? The EU regulation establishes due diligence requirements for the users of genetic resources. They must ascertain that genetic resources and associated traditional knowledge with genetic resources they utilise comply with applicable ABS rules in the provider country. For this purpose, users must seek, keep and transfer information such as the date and place of access of genetic resources, their source and any subsequent users and the relevance and compliance with any ABS requirements. When there are uncertainties around ABS compliance, users must obtain relevant permits or discontinue utilisation. EU Member States will establish different checkpoints, including during final stages of product development, to request users to declare compliance with their due diligence requirements. They will also carry out checks to verify whether users comply with these obligations. What are practical experiences on ABS? In the impact assessment for the proposed regulation, the due diligence obligation was expected to establish an EU-level playing field for the utilisation of genetic resources. The due diligence approach was also deemed to be flexible enough to accommodate differences between sectors utilising genetic resources and associated traditional knowledge. Users would be able to identify for themselves a suitable and cost-effective way of meeting their obligation and rely on codes of conducts or best practices in their sector. What are latest developments or trends? The regulation will enter into force with the entry of the Nagoya Protocol, expected in October 2014. With the approval of the regulation, the European Commission and the Member States of the European Union are enabled and obliged to take appropriate measures for its implementation. For example, the European Commission will need to issue implementing legislation on registered collections, best practices and monitoring user compliance. At the national level, EU member states will need to establish competent authorities and establish checks and penalties for non-compliance.

Illustration of 'prior informed consent' in the Ethical BioTrade Learning Set, a UEBT capacity development kit for local communities. Contact UEBT Union for Ethical BioTrade www.uebt.org or www.ethicalbiotrade.org Secretariat De Ruyterkade 6 1013 AA, Amsterdam, Netherlands Phone: + 31 20 22 34 567 info@uebt.org Financial Administration p/a CR Gestion et Fiduciaire SA Rte des Jeunes 9 1227 Carouge, Switzerland Phone : + 41 22 5661585 info@uebt.org Brazilian Representation Sao Paulo, Brazil Phone: + 55 11 99431 1880 brazil@uebt.org Union for Ethical BioTrade registered Trademark owner Union for Ethical BioTrade (2014): reproduction prohibited without prior written agreement of the Union for Ethical BioTrade Photo Credit and Copyrights: UEBT