Biodiversity Act : Draft ABS Guidelines Helps Businesses By Diluting Sharing Of Benefits With Local Communities

Biodiversity Act : Draft ABS Guidelines Helps Businesses By Diluting Sharing Of Benefits With Local Communities

At the outset, the draft ABS guidelines seem to be solely aimed at easing compliance for industries and other users of biological resources.

The National Biodiversity Authority (NBA) is in the process of revising the Guidelines on Access to Biological Resources and Knowledge and Benefit Sharing Regulation, 2014 (2014 ABS Guidelines). It has recently introduced a Draft (revised)Guidelines on Access and Benefit Sharing Regulation 2019 (2019 Draft ABS Guidelines) and invited public comments on the same.

The ABS Guidelines are notified under the Biological Diversity Act, 2002 to primarily elaborate the mode of benefit sharing for accessing biological resources and knowledge for various purposes. It specifies different modes of benefit sharing when biological resources or knowledge are accessed for commercial utilization, for applying for intellectual property rights, for transferring research results and for other regulated activities under Biological Diversity Act, 2002 (BD Act).

The Guidelines are also meant to meet India's obligation under the Nagoya Protocol which is a supplementary agreement to the Convention on Biological Diversity(CBD). The Nagoya Protocol elaborates a legal framework for the implementation of the third objective of the CBD- fair and equitable sharing of benefits derived from the utilisation of biological resources with nations and local and indigenous communities that are conservers of biodiversity and creators and holders of associated traditional ecological knowledge.

Main proposed changes

At the outset, the draft ABS guidelines seem to be solely aimed at easing compliance for industries and other users of biological resources. There is some clarity for the users of their obligations to share benefits as different options for sharing benefits with the NBA and relevant State Biodiversity Boards are prescribed.

We discuss below certain problems with the 2019 Draft ABS Guidelines:-

  • Drastic reduction of benefit sharing fee for certain small scale companies- One of the modes of benefit sharing offered for the companies in case of commercial utilization such as manufacturing a herbal drug or a herbal cosmetic product is based on annual ex-factory sale price of such products. In this case, the companies are categorized according to their annual turnover. The Draft proposes that a company with an annual turnover below 1 crore can discharge its benefit sharing obligation by paying just Rs.500 as an annual fee. Imagine, that a company has an annual turnover of 90 lakh rupees with an annual ex-factory sale price of 50 lakh rupee for products derived from biological resources. Under the proposed 2019 Draft Guidelines, this company is required to pay only an annual fee of Rs.500. By contrast, the 2014 Guidelines, imposed an obligation to pay 0.1% of the ex-factory sale price, which would be- Rs. 5000. In this case there would be a drastic reduction of benefit sharing obligations from Rs.5000 to Rs. 500 only. The Draft further states that this obligation is exempted if the companies pay a collection fee to Biodiversity Management Committees (BMCs). But under 2014 Guidelines, collection fee prescribed by BMCs were in addition to benefit sharing fees. In case of a company with an annual turnover of Rs. 5 crore which is manufacturing a similar product which also has an annual ex factory sale of 50 lakh, it will be required to pay Rs.25,000 as benefit sharing fee (0.5% of 50 lakh) and a registration fee of Rs. 25,000 for three years. The rationale for this differential treatment solely based on the size is not stated anywhere in the draft or any accompanying documents.
  • Blanket exemption from NBA's approval for commercial utilisation of several biological resources- Another important aspect is that the Draft Revised Guidelines seeks to give blanket exemption to bamboo, cane, finfish, shellfish, poultry, livestock, cultivated biological resources and cultivated medicinal plants/trees if they are used for any kind of commercial utilization such as manufacturing drug, cosmetics, food flavor and so on (Sub regulation (g) of Regulation 12 of the Draft ABS Guidelines). This may ease the burden of regulation, but giving such a blanket exemption may have several implications. Let us assume that a specific community has knowledge of a medicinal plant and its use. If this plant can be cultivated, then the industry users may always argue that they are not required to share benefits with the local community holding the traditional knowledge, since it is a cultivated medical plant which is exempted from the purview of benefit sharing. This defeats the aim of the BD Act, which is to protect the knowledge of local communities regarding not just access to resources, but also the use of such biological resources.
  • No mechanism for identification of the benefit claimers – Section 21 of the BD Act mandates that the NBA shall ensure that terms and conditions subject to which approval is granted for accessing bio-resources. This is aimed at securing equitable sharing of benefits in accordance with mutually agreed terms and conditions among users/persons applying for approval, and local bodies and benefit claimers. Neither the Biological Diversity Rules 2004 nor the Biological Diversity Guidelines 2014 on ABS Regulation elaborates on the mechanism that NBA has to follow to discharge this mandate. Being signatory to the CBD and the Nagoya Protocol, India has the obligation of ensuring Prior Informed Consent (PIC) and Mutually Agreed Terms (MAT) which are cardinal to the ABS scheme. The Draft Guidelines are also silent on the process of identification of benefit claimers. The special obligation to conservers and traditional ecological knowledge bearing indigenous peoples and local communities under the BDA was also only recently recognised and relied upon by the Uttarakhand High Court in its judgment in Divya Pharmacy v. Union of India. Considering this, it is obligatory to work out a process for the identification of benefit claimers and negotiations for conditions for access and determination of benefit sharing.
Share Profits With Local Communities Under Biodiversity Act: Uttarakhand HC to Baba Ramdev's Divya Pharmacy [Read Judgment]

  • No user country obligations- Even though, both the 2014 ABS Guidelines and the 2019 Draft ABS Guidelines specifically mention that the regulatory Guidelines are in pursuance to Nagoya Protocol, they only deal with provider country obligation and does not sufficiently provide for user country obligations. Meaning, Indian legal framework on access and benefit sharing is framed around the notion that India acts only as a provider of biological resources and knowledge. It does not regulate access and use of foreign biological resources that occur in India by Indians or others. Biological resources from other countries can occur in India in germplasm collections or they could be imported etc. There is an absence of regulation on use of these foreign resources or knowledge which is not addressed in the 2019 Draft. The only mention is the Draft Regulation 13 which is with respect to receiving an 'no objection certificate' for patenting an invention based on a foreign biological resource that belongs to a country which is party to Nagoya Protocol. This is far from satisfactory compliance to our obligations under Nagoya Protocol.,

The 2019 Draft, therefore has only aided in the ease of doing business for companies with little attention to the fall outs from relaxation and oversight on local communities and biological diversity. The NBA should look at several of these aspects before finalizing the revised guidelines. As of now, the 2019 Draft ABS Guidelines, has only eased doing business for companies. The comments tothe Draft ABS Guidelines can be made till 23rd June 2019.

(Authors are associated with Dakshin Foundation. Views are personal)