International Environmental Law Part 7 potx

P1: JZP

0521868122c07 Printer: Sheridan CUFX037/Louka 0 521 86812 2 August 16, 2006 7:19

International Instruments 307

With the 1991 amendment of the Undertaking, plant genetic resources ceased to

be public domain resources and developing states asserted property rights over them.

Bioprospecting played a catalyst role in the enclosure of plant genetic resources based

on a widespread belief that plant resources, as found in the wild, could be extremely

valuable.

After the adoption of the CBD – which subjected the transfers of germplasm to

bilateral controls – the need to clarify the status of agricultural and food resources that

were freely exchanged for years became obvious. At issue here were the resources kept

in gene banks and the IARCs. These resources were collected before the adoption of

the Biodiversity Convention and were considered to be de facto free access resources.

Because they were accumulated before the adoption of the Biodiversity Convention,

they were not subject to the prior informed consent and other restrictive access

requirements included in the convention. This is because the CBD does not have

retroactive effects. Thus, after the Biodiversity Convention was adopted two systems

applied for access to plant genetic resources:

• the post-1992 system, which controls access to biodiversity based on the consent

of the country of origin; and

• the pre-1992 system, in which unprocessed genetic resources were in essence

open-access resources.

Resources kept in international gene banks and the IARCs were subject to separate

access requirements: one for the resources acceded before 1992 (open access) and

another for resources acceded after 1992 (restricted access). This segregation between

pre-1992 and post-1992 resources in the IARCs increased transaction costs and was

institutionally foreign because the prevailing culture at the IARCs is free access.

The IARCs could not ignore the provisions of the CBD based on a rationale that

the convention was a separate institutional arrangement. Ignoring the CBD would

have enraged developing countries that sought to capture some of the rents from

plant genetic resources and to curb biopiracy.145 Biopiracy – that is, the unauthorized

access to plant genetic resources – was reported to be rife in the developing world.146

In 1993, the FAO adopted a nonbinding Code of Conduct for Plant Germplasm

Collecting and Transfer.147 The code recognizes state sovereignty over plant genetic

resources. The code provides that states have the sovereign right to establish a system

for the issuance of permits to germplasm collectors.148 For that purpose, governments

are to set an authority competent for issuing permits and must inform collectors

about the government’s rules and regulations and the permit approval process.149

The Code of Conduct provides for the information that collectors should include

in the permit application and the procedure for granting permits. The permits

granted, must include, inter alia, “any special arrangement or restriction placed on

the distribution or use of the germplasm, or improved materials derived from it.”150

145 Raustiala, supra note 141, at 40.

146 See Chapter 9, Section 4.3. 147 International Code of Conduct for Plant Germplasm Collecting and Transfer, adopted by the FAO

Conference, Nov. 1993.

148 Art. 6.1, id.

149 Art. 6.2, id.

150 Art. 8(e), id.

P1: JZP

0521868122c07 Printer: Sheridan CUFX037/Louka 0 521 86812 2 August 16, 2006 7:19

308 Biodiversity

In 1996, the FAO adopted the Leipzig Declaration and the Global Action Plan

for the Protection of Biodiversity.151 Both of these instruments are influenced by the

rhetoric of the Biodiversity Convention. However, the Global Action Plan, instead

of emphasizing national in situ conservation, promotes more of an international

outlook on global biodiversity management. The Global Action Plan provides for

international cooperation in disaster situations and encourages the safeguarding of

biodiversity resources in international gene banks. The plan clearly recognizes that

the evaluation, regeneration, and characterization of plant collections contained in

gene banks cannot happen without international cooperation and the economies of

scale put together by international efforts.

A new version of the Undertaking was put forward on July 1, 2001,152 but many

important provisions were still bracketed. The issues contested included the list of

crops that would be free access. Some developing countries wanted to keep crops off

the list in the hope of making money by charging fees bilaterally for access to these

crops.153 Other contested provisions included patents on derived material154 and the

relationship between the amended Undertaking and the World Trade Organization,

and, especially, the Trade-Related Intellectual Property Rights (TRIPs) Agreement

adopted under its auspices.155

The negotiations on a new mandate for the International Undertaking progressed

slowly because of lack of interest and lack of clarity about the value of plant genetic

resources:

• Developing countries wish to keep tight control over biodiversity resources

because they believe that such resources are or could become valuable.

• The North assumes that the best germplasm is already duplicated in its national

gene banks. The South may still provide valuable material, but the interest of

the North in such material is low. Many companies espouse that more is to be

accomplished by rearranging already collected genetic material than by renewing

efforts in bioprospecting.

Eventually an agreement was reached on November 2001, and the Treaty on

Plant Genetic Resources for Food and Agriculture was adopted.156 The treaty aims

to establish “an efficient, effective and transparent” multilateral system to facilitate

access to germplasm for the purposes of food and agriculture,157 and to share “in

a fair and equitable way” the benefits from the utilization of resources.158 The

facilitated access provided for by the agreement will be accomplished through a

151 Leipzig Declaration on Conservation and Sustainable Utilization of Plant Genetic Resources for Food

and Agriculture, June 17–23, 1996, adopted by International Technical Conference on Plant Genetic

Resources, available online at http://www.fao.org/ag/AGP.

152 See Report of the Commission on Genetic Resources for Food and Agriculture, Sixth Extraordinary

Session, CGRFA-Ex 6/01/REP, June 25–30, 2001.

153 Id.

154 Art. 13(d), id.

155 Art. 4, id.

156 See supra note 138.

157 Art. 12.3(a), id. The treaty does not address “chemical, pharmaceutical and/or other nonfood/feed

industrial uses.” Id.

158 Art. 10.2, id.

P1: JZP

0521868122c07 Printer: Sheridan CUFX037/Louka 0 521 86812 2 August 16, 2006 7:19

International Instruments 309

standard Material Transfer Agreement (MTA), the provisions of which are to be

adopted by the governing body.159 It also is stated that:

• access shall be granted expeditiously and free of charge;160

• recipients must not claim intellectual property rights on the plant genetic

resources or their components “in the form received from the Multilateral

System”161 (implying possibly that modification, isolation, or purification could

be subject to intellectual property rights);

• access to genetic resources protected by intellectual property rights will be subject

to national regulation consistent with the relevant international agreements;162

and

• access to resources found in situ should be subject to national legislation and, in

the absence of such legislation, to standards set by the governing body established

under the treaty.

The treaty clearly covers the resources held in the ex situ collections of the IARCs

and other international institutions163 and invites all other holders of plant genetic

resources to include their resources in the multilateral system.164 The governing

body reserves the right to take action – in terms of continuing to allow access to

the system resources – against the legal and natural persons that fail to include their

resources within the system.165

Facilitated access is preconditioned on the equitable sharing benefits. Such benefits

may include exchange of information,166 access to and transfer of technology,167 and

capacity building.168 The most contentious issue during the negotiations was that of

sharing the benefits from the commercialization of germplasm resources. The treaty

provides that the Multilateral Material Transfer Agreement must provide that the

recipient of a product must pay to a Trust Account169 an equitable share of the benefits

arising from the commercialization of the product. This is so if the commercialization

of the product incorporates the material transferred by the multilateral system.170

Sharing of benefits is only voluntary in the case the product is still available without

restriction to others for further research and breeding.171 The governing body must

decide, in its first meeting, the “level, form and manner of payment” in accordance

159 Art. 12.4 (the Governing Body of the treaty is composed of all Contracting Parties), id. See arts. 19.1

and 19.2 (all decisions of the Governing Body shall be taken by consensus unless, by consensus, another

method of arriving at a decision on certain measures is reached), id.

160 Art. 12.3(b), id.

161 Art. 12.3(d), id.

162 Art. 12.3(f ), id.

163 Art. 11.5, id.

164 Arts. 11.2 and 11.3, id.

165 Art. 11.4, id.

166 Art. 13.2(a), id.

167 Art. 13.2(b), id.

168 Art. 13.2(c), id.

169 Art. 13.3(f ), id.

170 Art. 13.2(d)(ii), id.

171 Art. 13.2(d)(ii) (however, the governing body may decide to make such contributions mandatory, even

when the product is still available to others for research and breeding), id.

P1: JZP

0521868122c07 Printer: Sheridan CUFX037/Louka 0 521 86812 2 August 16, 2006 7:19

310 Biodiversity

with commercial practice.172 The benefits from these payments must flow to the

farmers of all countries, including the farmers of developing countries and countries

with economies in transition.173

The treaty covers farmers’ rights, leaving their protection up to national law.174

The treaty emphasizes the importance of the Global Plan of Action175 and the ex

situ collections of the IARCs.176 In this respect, the treaty calls for the development

of international plant genetic resources networks177 and for a global information

system on plant genetic resources for food and agriculture.178

An issue that remained contentious until the final round of negotiations involved

the annex to the convention, which covers the list of crops that are subject to the

multilateral system. Developing countries, assuming that bilateral contracts would be

more financially rewarding, succeeded in keeping many important crops and forages

off the annex. The convention covers thirty-five crops and twenty-nine forages

out of one hundred food crops and eighteen thousand forages important for food

security. Food crops, such as soya, sugar cane, oil palm, and groundnut, are missing

from the annex.179 This omission is bound to create uncertainty about the proper

means of accessing those resources given that such resources are already located in

the IARCs and national gene banks.

Another issue that caused heated debate was that of a potential assertion of intellec￾tual property rights over germplasm resources. The compromise provision provides

that intellectual property rights cannot be declared on plant genetic resources for

food and agriculture and their genetic parts or components “in the form received by

the Multilateral System.”180 This should mean that modified resources, by bioengi￾neering and breeding, could be patented shifting the burden of proof to the patent

system to determine whether a modification is innovative enough to qualify for

protection. The provision, however, still does not clarify whether derived material,

such as varieties, genes, and gene sequences, can be patented. A related proposal that

subordinated the treaty to the TRIPs agreement181 – as a means for guaranteeing the

protection of intellectual property rights – was not adopted. It was decided, instead,

to include in the Preamble a provision that recited that all international agreements

should be mutually supportive and that there must not be “a hierarchy between this

treaty and other international agreements.”

The treaty was adopted with 116 votes in favor, no votes against, and two

abstentions, by the United States and Japan. Both countries cited concerns about

the breadth of the protection of intellectual property rights under the treaty. The

treaty entered into force in June 2004. The EU ratified the convention but entered

reservations with regard to article 12.3(d). Article 12.3(d), as mentioned earlier,

172 The governing body may decide to exempt from such payments small farmers in developing countries

and in countries with economies in transition. Id.

173 Art. 13.3, id.

174 Art. 9, id.

175 Art. 14, id.

176 Art. 15, id.

177 Art. 16, id.

178 Art. 17, id.

179 P. Mulvany, Global Seed Treaty Hangs in the Balance, 46 Biotechnology and Development Monitor 20

(2001).

180 Art. 12.3(d), International Treaty on Plant Genetic Resources, supra note 138.

181 For the TRIPs Agreement, see Chapter 9, Section 4.1.

P1: JZP

0521868122c07a Printer: Sheridan CUFX037/Louka 0 521 86812 2 August 16, 2006 7:10

International Instruments 311

provides that private companies cannot obtain intellectual property rights over plant

genetic resources for food and agriculture “or their genetic parts or components

in the form received from the multilateral system.” According to the interpretative

statement of the EU, article 12.3(d) must be interpreted as recognizing that

plant genetic resources for food and agriculture or their genetic parts and compo￾nents which have undergone innovation may be subject of intellectual property rights

provided that the criteria relating to such rights are met.

Some commentators have characterized the treaty as a multilateral system of

“communal seed treasury”182 composed of twenty-five food and twenty-nine feed

crops held by states and IARCs. To gain access to the common gene pool, private

parties that produce commercial applications that incorporate plant genetic resources

received from the multilateral system must pay a portion of their profits to the fund

established under the treaty. The fund money is to be used, inter alia, to benefit the

farmers of the developing world.

The First Meeting of the Commission on Plant Genetic Resources for Food and

Agriculture, acting as the Interim Committee of the International Treaty on Plant

Genetic Resources, took place in 2002.183 During that meeting, the commission

developed the terms of reference for the expert group that is to devise the provi￾sions to be included in the Standard Material Transfer Agreement. The commission

asked the expert group to establish the level, form, and manner of payments to

be made to the multilateral system and the definition of commercialization under

article 13.2d(ii).

Article 13.2d(ii) provides that the Standard Material Transfer Agreement must

include a requirement for the recipient, who commercializes a product that incor￾porates the material accessed from the multilateral system, to pay to the trust fund

an equitable share of the benefits arising from commercialization. Contributions to

the fund are not required if the product is available to others, without restriction,

for research and breeding. In that case, the recipient should be encouraged merely

to make a contribution to the trust fund. The circumstances under which a product

is considered available to others without restrictions for research and breeding is also

an issue that has been assigned to the expert group to explore.

Furthermore, the expert group has to define how the Material Transfer Agree￾ment is to incorporate all the terms provided for in article 12.3. Of course, the

thorny issue here would be article 12.3(d) – that recipients shall not claim intel￾lectual property rights on plant genetic resources for food and agriculture or their

genetic parts and components “in the form” received by the multilateral system.

It is possible that the interpretation of this provision by the expert group would

follow closely the declaration made by the European Union on the ratification of

the international treaty.

Overall, the multilateral system, if it functions as envisioned and provided that the

ambiguities are resolved, could help curb the administrative costs of the bilateralism

182 Lawrence R. Helfer, Regime Shifting: The TRIPs Agreement and New Dynamics of International

Intellectual Property Lawmaking, 29 Yale Journal of International Law (2004), available online at

http://ssrn.com/abstract=459740.

183 Report of the Commission on Genetic Resources for Food and Agriculture Acting as the Interim

Committee for the International Treaty on Plant Genetic Resources for Food and Agriculture, First

Meeting, CGRFA/MIC-1/02/REP, Oct. 9–11, 2002.