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1 Global governance of genetic resources
Background and analytical framework
Sebastian Oberthür and G. Kristin Rosendal
Introduction
The international governance of access to and benefit sharing from genetic resources (ABS) in essence constitutes an attempt to redistribute the benefits of the utilization of biological resources in order to create incentives for biodiversity conservation. Due primarily to land use change but also climate change, pollution and invasive alien species, the loss of biodiversity is estimated to proceed at 100–1,000 times the natural rate; that is, without human activity (Heywood 1995; Millennium Ecosystem Assessment 2005a). The resulting loss of ecosystem services is estimated at an annual US$250 billion (Millennium Ecosystem Assessment 2005b). In response, the world has been seeking ways to create incentives for biodiversity conservation. There is often a mismatch between regions in which benefits are enjoyed and in which the conservation costs are borne (EC 2008). Thus, many tropical developing countries are particularly rich in terrestrial species and related genetic resources (GR) and associated traditional knowledge, whereas the technological capacity to exploit GR is concentrated in developed countries. The users and beneficiaries of GR need access to both wild and improved genetic material in order to carry out innovations and improvements in, for example, chemical industries and for food and medicine. Equitable sharing of benefits between providers and users of GR is held to address the existing imbalance and thereby create incentives for biodiversity conservation in developing provider countries. Politically, it involves a trade-off between access to GR (in which GR users are interested) and benefit sharing (in which GR providers are interested) and, given the distribution of GR and relevant biotechnological capacity, a strong North-South conflict (Brand et al. 2008).
The Convention on Biological Diversity (CBD) adopted in 1992 constitutes the centre of international ABS governance that has been fleshed out in the 2010 Nagoya Protocol. Against the backdrop of the rise of biotechnology, the CBD in 1992 first established a framework of global ABS governance. This framework was integrated into the broader framework for the governance of biological diversity established by the CBD. Concretely, the CBD instituted ‘the fair and equitable sharing of the benefits arising out of the utilization of genetic resources’ as one of its three overall objectives next to the ‘conservation of biological diversity’ and ‘the sustainable use of its components’ (Art. 1 CBD). However, ABS remained a contested issue in international politics not least due to failure of effective implementation of the CBD framework. Consequently, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from Their Utilization to the Convention on Biological Diversity was adopted at the tenth Conference of the Parties (COP) to the CBD in October 2010, aiming to improve and enhance the existing framework. The Nagoya Protocol has been considered a major achievement of global environmental governance, but it has also been coined a ‘masterpiece of ambiguity’ (ENB 2010).
The Protocol forms the occasion for this book that aims to take stock of the status of and the prospects for global ABS governance after the Nagoya Protocol in an accessible manner. In so doing, we are trying to provide a useful resource and reference for those interested in broader debates about global environmental governance by linking to core analytical themes of the Earth System Governance Project (Biermann et al. 2009a). ABS has been in the centre of attention of neither international environmental politics nor the community of scholars analysing global environmental governance. Much of the existing literature on ABS governance is indeed specialised and technical. We are intent on enabling a broader uptake of the theme of ABS governance and the relevant lessons and inputs it can provide for general debates about global environmental governance. To this end, we especially relate to three of the core analytical problems identified in the science plan of the Earth System Governance Project (Biermann et al. 2009a). Under the auspices of the International Human Dimensions Programme on Global Environmental Change (IHDP), the Earth System Governance Project assembles the largest social science research network in the area of governance and global environmental change. As regards the analytical problems identified in this context, ABS governance itself is, first, about ‘allocation and access’, fairness and equity and their relationship to and importance for environmental protection. Second, we explore this field of governance through the lens of ‘agency’ by exploring the role of various actors in the elaboration of the Nagoya Protocol. Third, we explore different elements of the ‘architecture’ of international ABS governance. We elaborate on the themes of agency and architecture as they relate to ABS governance in general and the Nagoya Protocol in particular further in this introductory chapter. Finally, it is worth noting that the book combines different disciplinary perspectives, especially including legal and political science analysis.
In this first chapter, we set the scene for our endeavour in three main steps. First, we briefly present the background and cornerstones of international ABS governance from the CBD to the 2010 Nagoya Protocol. This discussion provides a baseline for the elaboration of key elements of ABS governance after the Nagoya Protocol in later chapters. Second, we introduce the conceptual framework of the book by elaborating on the analytical concepts of ‘architecture’ and ‘agency’ in relation to ABS as an issue of ‘allocation and access’. As mentioned, this discussion attempts to embed the volume in the broader debates of global environmental governance. Third, the chapter provides a brief overview of the structure of the volume and the content of the individual contributions. Overall, the book analyses the role of a variety of actors in the emergence of the Nagoya Protocol and provides an up-to-date assessment of core features of the architecture of global ABS governance after the Nagoya Protocol.
Background: international ABS governance towards Nagoya
To understand international ABS governance, it is important to understand the key terms ‘biological diversity’ and ‘genetic resources’ as well as their relationship. Biological diversity is a broad concept that has been used to embody the variability among living organisms from all sources, including diversity within species, among species and of ecosystems (Art. 2 CBD). Genetic resources are the hereditary material (genes) in all animals, plants and mircoorganisms; the concept refers to genetic material of actual or potential value for humanity (ibid.). Genetic diversity or variability is necessary to sustain vitality in both wild and domesticated plants and animals and can also be central for the development of new and improved products, especially within the chemical and pharmaceutical sectors. Genetic diversity and GR are a function of both species and ecosystem diversity: Either way, high levels of biological diversity bring with them richness of GR.
In many cases, especially within the medicinal sector, traditional knowledge about the characteristics, effects and possible uses of particular plants (and other species) that is held by indigenous and local communities (ILCs) is crucial for efforts to utilize and exploit related GR in biotechnology and the life sciences. At the same time, the relevant communities contribute to the conservation and sustainable use of biological diversity, including GR. However, the traditional knowledge of ILCs has frequently been subject to exploitation in the process of utilization of GR without appropriate acknowledgement and benefit sharing (CBD 2009; von Lewinski 2008). As such, ABS often refers to GR as well as the associated traditional knowledge, with the protection of the latter facing particular hurdles. For ease of reference, any reference to GR in the following is meant to include a reference to traditional knowledge (unless indicated otherwise).
Economic interest in and value of GR has grown with the development of modern biotechnology since the 1970s. User countries and corporations tend to argue that there is little money to be shared from bioprospecting while simultaneously criticizing ABS legislation in provider countries for undermining access and innovation efforts (Grajal 1999). Somewhat paradoxically, if the latter were the case, there would also seem to be some potential for reaping and sharing benefits. Still, the commercial value of GR is in itself greatly disputed (McGraw 2001; Rosendal 2006). The value of products derived from GR worldwide has been estimated between US$500 and 800 billion (ten Kate and Laird 1999). Indirectly assessing the value in the pharmaceutical sector, traditional medicinal knowledge has been found to increase the success ratio of bioprospecting by 400 per cent (Gehl Sampath 2005; Swanson 1995: 59).
The development of modern biotechnology1 coincided with increased privatization of agricultural and pharmaceutical research in the 1970s. This brought about an economic incentive to introduce patent protection at the same time as technological capability grew to apply patents in the field. Modern biotechnology made it possible to fulfil the legal patent criteria for inventions involving biological material (Crespi 1988). Since patenting is a very costly affair, it has been largely dominated by multinational corporations (Gleckman 1995). At the onset of the CBD negotiations, developing countries held only about 1 per cent of all patents in biotechnology, and by 2005, that figure had increased to 4 per cent (UNDP 2005: 135; WCED 1987).
Inherent in this development was an imbalance of the appropriation of the benefits of the utilization of GR between the providers (mainly developing countries) and the users (mainly industrialized countries) of these resources. Whereas the bulk of the world’s remaining terrestrial species diversity is found in tropical developing countries, it is the developed countries that largely possess the (bio)technology to reap economic benefits from the genetic variability of these resources on a large scale. This imbalance is foundational for the North-South conflict that has structured international ABS politics from its beginning (Brand et al. 2008; Rosendal 2000).
This imbalance was further accentuated by changes in the governance of property rights to GR in the years preceding the CBD, moving from the nonexclusiveness for all genetic material to exclusive rights to parts of the genetic material. These changes, which were another essential ingredient of the aforementioned North-South conflict, took place in particular within the Food and Agriculture Organization of the UN (FAO) and the emerging World Trade Organization (WTO). During what has been coined the ‘seed wars’ in the FAO, it was seen as a victory of developing countries when the FAO Undertaking on Plant Genetic Resources for Food and Agriculture of 1983 established that all categories of relevant plant GR should be considered ‘common heritage of mankind’ and should thus be subject to free exchange for exploration, preservation, plant breeding and scientific research (Andersen 2008; Pistorius and van Wijk 1999; Raustiala and Victor 2004). Responding to the emerging application of intellectual property rights (IPRs) within the life sciences, however, an Agreed Interpretation of the Undertaking adopted in 1989 signified an acceptance of the principle of payment for legally protected varieties, hence making IPRs compatible with the Undertaking. At the same time, developed countries succeeded in strengthening and harmonising IPRs in the WTO through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This was accompanied by an expansion of the patent system into the area of biotechnology, which led to the problematic relationship between the CBD and TRIPS (Tolba 1998: 144).
Overall, these developments gave rise to asymmetries between actor interests along two dimensions. First, the increased technological and economical ability to exploit GR and the mentioned changes of the property rights framework gave developed countries the major benefits from use, with little or no benefits accruing to the developing countries. Second, the global distribution of terrestrial species diversity gave the South the major burden of biodiversity conservation, with few costs directly falling on the North. As a particular feature distinguishing biodiversity from other international environmental and resource management issues, the (primary) owners/stewards of biodiversity were asked to change their behaviour—to conduct resource conservation and submit to stricter IPR regulations (Rosendal 2000)—for the benefit of the (primary) users.
In response, developing countries successfully argued for national sovereignty over GR in the CBD negotiations between 1989 and 1992 (Rosendal 2000). Their call for compensation gathered widespread acceptance and culminated in the three-fold objectives of the CBD (conservation, sustainable use and benefit sharing), of which fair and equitable sharing of benefits arising from utilization of GR was the most controversial. Article 15 of the Convention recognises the sovereign rights of countries over their natural resources, and as a result, they may determine access to GR under their jurisdiction. Access to GR is to be subject to ‘prior informed consent’ (PIC) of the provider country and is to be granted on the basis of ‘mutually agreed terms’ (MAT). The system thus entails a multilateral framework for how domestic legal systems can be set up to guide the conclusion of a contract between the provider and the user of GR. Generally, countries should share in a fair and equitable way the benefits arising from the commercial and other utilization of GR with the party providing such resources. In essence, the CBD creates an ABS system that aims to facilitate commercial transactions (largely between a provider state and a private user) based on contracts. Contracts between GR users and providers should indicate their reciprocal rights and obligations, including appropriate arrangements for the sharing of the benefits (in various forms), and thus support transparency. In this way, the commercialisation of GR could become mutually advantageous and the resulting revenues support conservation and sustainable use of GR/bio-diversity (Brand et al. 2008; Tvedt and Young 2007).
Overall, the inclusion of ABS in the CBD was not only the result of a strategy by developing countries in the battle over property rights over GR, but it also possesses an environmental rationale. In particular, it is construed to provide an (indirect) incentive for biodiversity conservation. Estimates of the number of existing species in the world vary from about 5 to 100 million (Wilson 1992), of which only some 1.9 million have been described scientifically. The current rate of species extinction is extremely high (Heywood 1995; Wilson 1992). While the percentage of protected areas has doubled from 6 to 12 per cent since 1990, the quality of the protection is still contested (Millennium Ecosystem Assessment 2005b: 11). The UN Millennium Ecosystem Assessment (2005b) concludes that biodiversity loss leads to an annual human deprivation of US$250 billion in various kinds of ecosystem services. Under the circumstances, ABS can be seen as a means to channel some of the (economic) benefits arising from the use of biological diversity back to its (primary) owners so as to incentivize them to conserve this diversity (for future income) (Koester 1997; Rosendal 2000; see also Wolff, this volume). As the value of GR increases with the advances of biotechnology, so could, in this conceptualisation, the incentives for biodiversity conservation.
The lack of effective implementation of ABS provisions of the CBD resulted in requests for a strengthening of the system by developing countries and the launch of negotiations on what became the Nagoya Protocol (Le Prestre 2002; Rosendal 2000; see also Wallbott et al., this volume, for further details). While implementation of access procedures in developing countries remained weak as well, deficiencies in implementation of benefit-sharing obligations in developed countries remained the main barrier to effective ABS governance. User countries failed to effectively implement benefit-sharing requirements into their national legal systems, and to the extent they did, actual implementation and enforcement remained deficient (CBD 2007; Tvedt and Young 2007). As a result, cases of ‘biopiracy’ (i.e. the illegal access to and utilization of GR in circumvention or neglect of ABS requirements) proliferated (see Mgbeoji 2006; Robinson 2010) and requests by developing countries for enhancing the international ABS regime intensified.
The Nagoya Protocol adopted as a result in October 2010 reconfirms and elaborates the basic ABS approach of the CBD. It was signed by 91 countries and the European Union (EU) and will enter into force once 50 states have ratified it (count as of April 2013: 16). As an instrument of international law, the Protocol does constitute a legally binding treaty, as demanded by developing countries (and resisted by many developed countries). In the following, we provide a snapshot of its main contents, the various elements of which are further elaborated in other contributions to this volume (especially, Wallbott et al., this volume; Tvedt, this volume; on the Nagoya Protocol, see also for the following, Buck and Hamilton 2011; Morgera and Tsioumani 2011; Nijar 2011).
Core elements of the Protocol include the elaboration of international access standards (demanded by developed countries) and of user measures (a demand of developing countries). As regards access to GR, the Protocol obliges provider countries that decide to require PIC to provide for legal certainty, clarity and transparency of their domestic ABS legislation and for clear rules and procedures f...
