Science and Research
John Voumard, Inquiry Chair
© Commonwealth of Australia, 2000
ISBN 0642547157
The following descriptions of access and benefit-sharing arrangements are summarised from case studies in the Columbia University School of International and Pacific Affairs, Environmental Policy Studies Working Paper No 4, Access to Genetic Resources: an Evaluation of the Development and Implementation of Recent Regulation and Access Agreements, prepared for the Biodiversity Action Network by Environmental Policy Studies Workshop, 1999.
INBio is a Costa Rican non-government, non-profit, scientific research institute. Merck is a United States multinational pharmaceutical products and services company. Their agreement was signed in 1991 and renewed in 1994 and 1996.
The INBio-Merck agreement does not explicitly address sustainability.
However, INBio has a cooperation agreement with the Ministry of Environment and Energy which states that 'INBio's gathering of specimens will cause no harm or alteration that may imply or become a threat to the biodiversity of the site where the specimen was removed'.
This agreement allows INBio to collect biological samples for the purpose of bioprospecting, states that the equivalent of at least 10 per cent of each bioprospecting venture's budget is to support the management and protection of conservation areas, and establishes that 50 per cent of any economic and material benefits INBio receives through bioprospecting are to be transferred to MINAE (and used for conservation purposes). To date, MINAE has received $100,000 for these purposes.
Under the agreement, Merck provided $1 million during the first two years to purchase laboratory equipment and materials to operate INBio's processing laboratory; the original agreement provides that Merck is to provide additional funding in an agreed amount for the extension period. The agreement applies to the sharing of a predetermined (confidential) number of plant, insect and environmental (micro-organism) samples. Samples are initially extracted and processed by INBio, and their properties are explored at Merck facilities in Spain and the United States.
The division of royalties between INBio and Merck is not known, being confidential to the agreement. However, INBio stipulates that 50 per cent of any royalties it receives are destined for MINAE, in accordance with their agreement. No royalties have yet been derived from INBio samples.
The agreement includes a confidentiality article which prevents either party from disclosing any confidential information to third parties for seven years from the expiration of the agreement.
Although the standard INBio agreement specifies the non-exclusivity of the arrangement, the contract with Merck prevents INBio from supplying other organisations interested in human and animal health or agriculture with the samples it provided Merck for a two-year initial evaluation period. After this period, Merck may extend the exclusive evaluation period indefinitely for up to 1 per cent of the total number of samples provided to them. INBio is free to offer all other samples to other parties and may enter into agreements with other parties.
Although prior informed consent is not referred to explicitly in the INBio-Merck agreement, the agreement requires that virtually all developments be reported to the other party.
Law 7788 addresses prior informed consent in several ways. For example, if access to Indigenous lands is sought, prior informed consent must be obtained from the authority of the Indigenous community and the Director of the Conservation Area. The law recognises local and Indigenous communities' right to oppose the access to resources and associated knowledge for cultural, spiritual, social, economic or any other reason.
The INBio-Merck agreement stipulates that samples will be collected from the conservation areas of Costa Rica and other areas of the private domain. INBio, and subsequently Merck, appears to have access to all biological resources found in Costa Rican territory. However, no mention is made of the 'owner' of the physical resources in either Costa Rica's legislation or the INBio-Merck agreement.
The INBio-Merck agreement authorises each party to independently prepare, submit, follow-up and maintain all patents, provided they consult the other party on all plans and developments.
Law 7788 deals with intellectual and industrial property rights. The mechanisms of protection include patents, commercial secrets, plant improvement rights, sui generis community intellectual property rights, and agricultural rights.
A significant exception is inventions derived from knowledge associated with traditional or cultural biological practices in the public domain. This exception juxtaposes with the article on sui generis community intellectual property rights which stipulates that the State expressly recognises and protects the practices and innovations of Indigenous peoples and local communities. The purpose of the article is to prevent any form of protection of intellectual or industrial property rights from affecting historical practices; it does not constitute a recognition of any property rights per se or mandate compensation.
Other articles call for examination, determination, and registration of sui generis community intellectual property rights via a participatory process. Another article calls for determination of how sui generis community property rights will be used and who will hold their title, and will identify the recipients of any benefit derived therefrom.
However, no specific measures have yet been taken to ensure that local and Indigenous property rights are enforced and communities compensated.
Section 1 states that it is state policy 'to regulate the prospecting of biological and genetic resources so that these resources are protected and conserved, are developed and put to the sustainable use and benefit in the national interest'.
Bioprospecting is permitted 'within the ancestral lands and domains of Indigenous cultural communities' only with their prior informed consent, 'obtained in accordance with the customary laws of the community' (Section 2).
Section 3 provides for research agreements, ie Academic Research Agreements (ARAs) and for commercial agreements, ie Commercial Research Agreements (CRAs) where collection is intended, directly or indirectly, for commercial purposes.
Applicants for these agreements are required to submit an application to the Inter-Agency Committee on Biological and Genetic Resources through the Protected Areas and Wildlife Bureau (an agency of the Department of the Environment and Natural Resources). A copy of the proposal must be submitted to the recognised head of the local or Indigenous cultural community or communities that may be affected (Section 4).
Section 5 provides for the following minimum terms for research agreements:
Section 6 sets out the composition and functions of the Inter Agency Committee on Biological and Genetic Resources.
The Inter Agency Committee on Biological and Genetic Resources is attached to the Department of Environment and Natural Resources. Its membership is as follows:
Membership terms are for three years, renewable for a further three. A technical secretariat, headed by the Protected Areas and Wildlife Bureau, supports the work of the Inter Agency Committee.
Section 7 sets out the powers and functions of the Inter Agency Committee. These include meeting at least quarterly, process applications and recommend for approval to the relevant department head; ensure the conditions of research agreements are strictly observed; and ensure the rights of Indigenous and local communities are protected.
Section 8 provides that the Protected Areas and Wildlife Bureau will be the lead agency in monitoring the implementation of research agreements. Section 9 provides for decisions of the Secretary of the relevant government department to be appealed to the President.
The Executive Order is supplemented by the Department of Environment and Natural Resources' Department Administrative Order (DAO) which was issued in 1996. DAO 96-20 sets out the rules and regulations governing implementation of EO 247, provides details about the application and review process for parties seeking access to genetic resources and established the Inter Agency Committee on Biological and Genetic Resources.
The Philippines government has approved only two of 37 applications to date. They are a commercial research agreement between the Marine Science Institute of the University of the Philippines, (the co-collector) the Department of Agriculture and the University of Utah (the collector) signed in 1998 (CRA 98); and an academic research agreement between the University of the Philippines and the Philippines Government signed in 1999.
The CRA 98 allows parties to collect marine organisms as a source of extracts and compounds with potential anti-cancer activity which are exported to the United States for evaluation.
Under the CRA 98, the potential impact of the proposed activities on the environment is considered to be minimal. Only the kind and quantity of materials listed in the attachments to the agreement can be collected, and collection carried out only in designated areas.
The ownership of all the materials remains with the Republic of the Philippines and a complete set of all specimens is to be deposited at the University of the Philippines/Marine Science Institute. When materials collected under the agreement are transferred to third parties, ownership is defined explicitly by CRA 98 and must be accompanied by a standard Material Transfer Agreement. Data documents and other materials are required by law to remain confidential for purposes of acquiring intellectual property rights, and cannot be disclosed until after the rights of the inventions become vested and are protected.
Section 7 of the DAO 96-20 provides detailed procedures for obtaining prior informed consent for both ARAs and CRAs. Chapter VI of The Indigenous People's Rights Act 1997 states that 'access to Indigenous knowledge related to the conservation, utilization and enhancement of biological and genetic resources shall be allowed in ancestral lands and domains only with a free and prior informed consent of the communities, obtained in accordance with customary laws of the community'.
CRA 98 sets out requirements and time lines for obtaining prior informed consent from Indigenous communities in each year of the agreement. For Material Transfer Agreement under the agreement, third parties must obtain written consent from the University of Utah/ University of the Philippines/Marine Science Institute for the intellectual property rights to inventions developed from the materials and before attempting to licence or otherwise develop the intellectual property.
Under the agreement, co-collectors must pay a bioprospecting fee, in the amount of ten thousand pesos, to the Inter Agency Committee on Biological and Genetic Resources for the duration of the agreement. A minimal performance bond is payable, to be returned at the end of the agreement, providing there has been no violation of the agreement (this reflects the expectation that there will not be a significant impact on the environment). All product discoveries (improvements and use) must be made available to the Government and local communities concerned.
Either the co-collectors or the third party can obtain intellectual property rights and/or commercialise materials and/or technology derived from them. Where such rights exist, a separate agreement must be made among the co-collectors and the third party for sharing the royalties, other benefits and technology derived from the collected materials.
With any invention, license, royalty or commercialisation of any material occurs, 5 per cent of the net revenue will be paid to the Department of Agriculture (the Integrated Protected Areas Fund if the materials come from a protected area; the concerned Indigenous people or local community who gave the prior informed consent; or persons who provided such materials from private property).
In the United States, access to biological resources in public lands is regulated under pre-existing legal instruments which were not specifically designed to comply with the Convention on Biological Diversity. Although the practice of bioprospecting on public land is well established in the United States, the Yellowstone-Diversa agreement is the first bioprospecting contract. The agreement relies primarily on the National Park Service Organic Act and the Federal Technology Transfer Act.
The National Environmental Protection Act requires that any federal action 'significantly affecting the quality of the human environment' be subject to a prior environmental impact assessment or environmental assessment. However, exclusion from this requirement is possible and in order to claim this exclusion, Yellowstone defines Diversa's bioprospecting activities as resource management.
It would appear that sampling of bacterial organisms is not an ecologically detrimental activity. From the Park's perspective, the sampling process does not affect conservation efforts.
Yellowstone is administered by the National Park Service under the authority of the federal government's Department of the Interior. The National Park Service Organic Act governs the collection of research specimens on national park land. Issue of permits (by park superintendents) is subject to the submission of a Statement of Work which describes in detail the objectives and methods of collection activities. Permits do not transfer ownership of specimens to the collector. In the case of the Yellowstone-Diversa agreement, ownership of the physical material collected remains park property.
In the Yellowstone-Diversa agreement, prior informed consent between the parties may not be a major issue as it was the park service that initiated the process with the intention of discovering applications for products derived through research on thermophilic organisms.
The contract provides for annual payments from Diversa to Yellowstone of US$100,000 for five years for sample collecting and collaborative research with the Yellowstone research facility as well as in-kind services and resources valued at US$375,000. The exact terms regarding the sharing of royalties earned by Diversa through eventual commercialisation remain confidential, but the corporation and the park have referred to figures of á5 per cent to 10 per cent from proceeds. All proceeds are to go to the park for the purposes of conservation and enhancement of research facilities.
The Federal Technology Transfer Act 1986 was enacted in response to concern that research funded by federal agencies did not result in the return of commercial benefits from the laboratories of origin. Application of the Act to Yellowstone relies on the interpretation of the term 'laboratory' to include national parks and possibly all federal lands.
In the Yellowstone-Diversa agreement, the Federal Technology Transfer Act was invoked to allow the results of research to be used for commercial purposes.
National Bill No 306 was introduced in 1995. This bill addresses:
Bill No 306 would ensure that access and benefit sharing would be controlled by a single national agency which would have the power to grant authorisation for access; monitor requests for and activities of access; grant authorisation for and monitor the export of samples; and maintain a database of information and requests for access and remittance.
A second bill was introduced in 1998 to address some concerns about Bill No 306. This bill (the Wagner bill) affords stronger rights to Indigenous peoples and communities by referring to laws which enable other entities to act in defence of these groups' rights.
A third bill was prepared by the Interministry Group on Access to Genetic Resources. This group was established to review and analyse Bill No 306. A major difference between the Interministry Group on Access to Genetic Resources bill and first two bills is that the Group's proposal leaves the specific details of regulation to be developed and implemented through regulatory mechanisms to be established.
The three federal bills establish that the regulations are relevant to the conservation and sustainable use of the nation's genetic resources. The protocol for access requests in Bill No 306 requires applicants to provide information on the environmental sustainability of collection and the risks that may arise from access. The competent authority may also require an environmental impact study and report on the activities being carried out. The No 306 and Wagner bills call for the government to 'adopt measures to prevent serious and irreparable damage deriving from activities carried out under the terms of the Act', citing eight potential threats similar to those in the Sao Paolo bill (see below).
Bill No 306 states that 'genetic resources and derived products are considered public property for special use of the Brazilian nation' and recognises national sovereignty over genetic resources.
The Interministry Group on Access to Genetic Resources bill recognises the different land property types, including Indigenous lands, protected areas, private property and areas indispensable for national security, each of which has an organising body which must be a party to the contract for access.
Bill No 306 recognises traditional knowledge held by Indigenous people and communities as a protected right of these groups. Holders of 'possible intellectual property rights' are required to be determined in the access contract. It is also stipulated that 'depositors of intellectual creations subject to protection by copyright, industrial property, crops, or any other mode of intellectual property' based on any genetic resource of traditional knowledge must present a certificate of approval by the groups of origin before requesting legal protection of the property.
The Interministry Group on Access to Genetic Resources bill does not specifically mention intellectual property rights but recognises the special status of traditional knowledge.
In the No 306 and Wagner bills prior informed consent is required for any request of access to genetic resources or traditional knowledge. The Interministry Group on Access to Genetic Resources bill does not address prior informed consent, leaving this to regulations.
The 306 and Wagner bills refer to benefit sharing as the 'distribution of outcomes, whether economic or not, of research, development, commercialisation or licensing derived from the access to genetic resources'. In addition, 'a fair compensation [must be] ensured to the State, in the form of money or commercialisation rights' and shall be used for conservation, research and inventory of genetic resources, and project support, as decided by the competent authority.
Sao Paulo State drafted a bill in 1999. It is currently under public discussion and a final draft has not yet been presented to the State government.
Under the bill, research permits are issued primarily for non-commercial collection of material. Any potential for commercial development must be addressed in a further agreement with the State. The bill also establishes that authorisation for access to genetic resources, derived products and traditional knowledge will only be granted to a Brazilian institution, public or private, conducting biological research. Foreign researchers will be authorised to conduct research only in conjunction with an authorised supervising Brazilian institution.
Guaranteeing the sustainability of native genetic resources and the preservation of the environment are the explicit goals of the Bill. The bioprospector will be solely responsible for any damage inflicted on the environment and traditional communities.
The Bill specifically authorises the State Environmental Secretariat to require an environment impact assessment together with a given access request, and to deny access based on any of the following circumstances:
According to the State bill, regulation of resources on private property are to be dealt with under federal provisions on property rights, and the regulation of access to lands owned by Indigenous populations is deferred to specific legislation and is explicitly excluded from the state law provisions. It further states that it does not intend to interfere with the rights of the owners of that land where the resources are found. Under its premises, private owners are free to negotiate payments (compensatory or royalty-derived) directly with the users, federal procedures and fees notwithstanding.
Permission to patent any product or process obtained from the access to resources in State Conservation Units is to be regulated by the State; in private areas, however, intellectual property rights are to be regulated by specific federal patent legislation.
Several articles of the Bill state that prior informed consent is required for any request of access to genetic resources or traditional knowledge.
The bill establishes that state authorisation for the commercial use of products or processes resulting from access will be formulated as a 'Contract on the Use and Sharing of Benefits'. Some of the major elements that must be included in a contract are the mechanisms by which the equitable sharing of the benefits will be achieved; the pertinent intellectual property rights, and the sanctions and mechanisms for solving conflicts among the parties. The parties to this contract must consist of the state government, the owner of the land (public or private) or representative of traditional or Indigenous community; the institution requesting access, and when applicable, the institution receiving the samples.
The National Cancer Institute is the primary agency for cancer research and training for the United States government. In 1997 the National Cancer Institute and the Universidade Paulista (a private educational institution in the state of Sao Paulo, Brazil) signed an agreement following the standard format of the National Cancer Institute's Memorandum of Understanding. Universidade Paulista has also submitted a request for access to genetic resources to the Environment Secretariat of Sao Paulo State in association with two other public associations. If this goes ahead, the group will obtain collecting permits for the State Park.
The Memorandum of Understanding establishes that the National Cancer Institute wishes to 'promote the conservation of biological diversity' and 'that it recognises the need to compensate source country organisations and peoples in the event of commercialisation of a drug developed from an organism collected within their borders'. Clause 13 specifies that if the source country cannot provide the desired product to a licensee in adequate quantity or price, the licensee is to pay the source country a negotiated amount that is to be spent in cultivation of endangered medicinal plant species.
Provisions regarding property rights of the land or biota where the genetic resources are to be collected are not provided for in the Memorandum of Understanding. Instead, property rights are addressed in the agreement between the Universidade Paulista and the Environment Secretariat of Sao Paulo State. Universidade Paulista has requested access only for random collection of plants; thus property rights pertaining to state land apply, according to the proposed state law.
The Memorandum of Understanding provides for joint patent protection for all inventions developed collaboratively by the National Cancer Institute and source country employees. If a compound isolated in the source country merits advancement to pre-clinical development, the source country can elect to apply for patent protection as the sole owner of the invention. The Memorandum of Understanding seems to rely on the source country's internal arrangements for regulation of traditional knowledge.
Prior informed consent of the source country organisation is required for transferring materials collected to their parties and for publication of results. The Memorandum of Understanding does not directly acknowledge the intellectual property rights of traditional communities.
The main benefit-sharing provisions of the Memorandum of Understanding include:
The following is a summary of key provisions of the Andean Pact Decision 391. A copy of the decision was included as an attachment to ATSIC's submission to the Inquiry.
The Andean Pact decision is an agreement between Bolivia, Columbia, Ecuador, Peru and Venezuela.
The objective of the decision is to regulate access to the genetic resources of the Member Countries in order to (among other things):
The agreement sets out various principles which include Member Countries' sovereignty over their genetic resources, recognition of traditional practices, knowledge and innovations, and support for training, research, development and transfer of technology.
All access procedures must include the presentation, admission, publication and approval of an application, signature of a contract, issue and publication of the corresponding resolution and a declaratory record of actions linked with such access.
Applications for and contracts of access must include conditions such as:
Documents relating to the access procedure must be included on a public record file kept by the Competent National Authority.
The Competent National Authority will keep a public record of, among other things, the resolution dismissing the application, dates of signature, modification, suspension and termination of the access contract; date and number of the resolution delivering or cancelling the contract, date and number of the decision leading to the annulment or imposing conditions, etc.
Delivery of access is determined by the legally correct, complete and trustworthy information provided by the applicant. The applicant must therefore present the Competent National Authority with all the information concerning the genetic resource with which he is familiar or in a position to know at the time of presenting the application.
The application should contain the following:
The Competent National Authority will give a date for its presentation or establishment and register it in the official record.
Within five working days of its inscription in the public record an extract of the application shall be published so that any person may submit information to the Competent National Authority.
The Competent National Authority shall evaluate the application within 30 working days of its registration (extension to 60 days on its discretion).
The Competent National Authority shall then either accept or reject the application.
Once the application and project proposal have been accepted, the applicant will be notified within five working days and may proceed to the negotiation and drafting of the access contract.
The applicant should comply with the applicable environmental regulations in cases where this is required under the legislation of the Member Country of if the Competent National Authority deems it necessary to do so.
The Access Contract is covered as follows:
Parties: the State represented by the Competent National Authority and the applicant are the parties to the contract.
The access contract shall include an annex providing for the fair and equitable distribution of the benefits.
Once the contract has been signed, the corresponding resolution shall be published in the official journal or gazette or in a daily newspaper.
The Member Countries may establish limitations on access in the following cases:
Other provisions cover infractions and penalties, notifications among Member countries, the Competent National Authority and the Andean Committee on Genetic Resources.
