Legal rules and procedures supporting compliance with the Treaty

What rules and procedures support the functioning of the Treaty? What can be done when there is a situation of non-compliance? By whom? What happens in case of a dispute regarding the SMTA or a Treaty obligation? What happens when contracting parties want to change or adapt a Treaty provision? Various rules and procedures are established by the Governing Body to answer these questions and allow for an efficient implementation of the Treaty.

These rules and procedures intervene at two levels: 1) at the level of the MLS and its SMTA, where PGRFA users and the Third Party Beneficiary are involved; and 2) at the level of the Treaty, where contracting parties (i.e. states) are the major stakeholders at play. These procedures will each be described and assessed in four sub-sections: the Third Party Beneficiary; procedures and operational mechanisms to promote compliance; dispute settlement; and amendment to the Treaty.

The Third Party Beneficiary

The Third Party Beneficiary (3PB) was created to address some issues related to the multilateral character of the system and the enforcement of the SMTA (Moore 2013: 164-176). This innovative concept bridges the gap between the private contractual law relationship between parties to the SMTA and the public international law setting where contracting parties (i.e. states) to the Treaty and its MLS are anchored.

Defining the third party beneficiary

The 3PB is the virtual entity representing the MLS, designed to assert its rights and to allow for the enforcement of the SMTAs. As a matter of fact, the SMTA creates a triangular relationship between the provider, the recipient and the MLS. Unlike in a classical MTA, benefits flow back to the MLS (and in particular the BSF) rather than to the provider of the material. Therefore, the provider has no incentive to ensure that the terms of the SMTA are respected by the recipient.

the MLS is the real beneficiary of the benefit-sharing provisions of the SMTA [...]. The SMTA recognizes this fact by providing for the appoint­ment of a third party beneficiary to represent the rights of the MLS and by giv­ing this third party beneficiary the power to initiate dispute settlement action, including arbitration, in the event of a breach of the terms and conditions of the SMTA affecting those rights.

(emphasis added, Moore, 2013: 164)

While the concept of 3PB will be found nowhere in the Treaty text, I agree with Moore when he says that it is implicitly provided for in the Treaty, in particular in its Article 12.4, which establishes the triangular relationship between the provider, the recipient and the MLS. Moore (ibid: 168) further analyses the concept of 3PB rights in national law and concludes that

the possibility for a contract to provide for enforceable third party benefi­ciary rights is expressly and unambiguously recognized in the Principles of the International Commercial Contracts, which were adopted by the Inter­national Institute for the Unification of Private Law (UNIDROIT) in 2004.

(ibid: 167)

For this reason, the SMTA refers explicitly to the UNIDROIT principles when dealing with the choice of applicable law (SMTA Article 7). In the SMTA, explicit mention of the 3PB is made in Articles 4.3, 4.4 and 8. Article 4.3 requests parties to the SMTA to recognize the 3PB as acting on behalf of the Governing Body and its MLS. Article 4.4 provides the 3PB with the right to request information as required by SMTA Articles 5e, 6.5c, 8.3 and annex 2 § 3, in particular where the provider or the recipient failed to provide this information to the Governing Body. Article 8 states that dispute settlement may be initiated by the provider, the recipient or the 3PB. Mechanisms for dispute settlement include amicable negotiation, mediation and arbitration (3PB Proce­dures Articles 5, 6 and 7).

Another difficulty was to be resolved with the concept of 3PB: the fact that, in representing the Governing Body and its MLS, it does not have the legal personality necessary to act under international or national laws.

Implementation of the Third Party Beneficiary

The ‘Procedures for the Operation of the Third Party Beneficiary’ were adopted by Resolution 5/2009 (Annex I), and further developed with the ‘Rules for Mediation of a Dispute in Relation to a Standard Material Transfer Agreement’ (Resolution 5/2011). A list of experts to serve as mediators and arbitrators can be found on the Treaty website.

At GB5 (IT/GB-5/13/Report: points 42-43; Resolution 11/2013), a poten­tial case of non-compliance related to two agreements signed by two CGIAR centres (CYMMIT and ICARDA) with private sector entities was reported (IT/ GB-5/13/19; IT/GB-5/13/19 Add.1). These agreements ‘may have resulted in the transfer of barley germplasm without the required SMTA, and/or in viola­tion of other Treaty provisions concerning the availability of germplasm’ (IT/ GB-5/13/19, point 6). The case was spotted by the Action Group on Erosion, Technology and Concentration (ETC Group, 2012: 6-7) in a Communique, then through a letter to the Treaty Secretary (IT/GB-5/13/19: point 5). For the first time, FAO acting as the 3PB initiated the alternative dispute resolution process (Procedure for the Operation of the Third Party Beneficiary, Article 5; SMTA Article 8) and requested clarifying information to both centres during 2012-2013. Upon subsequent informal consultations, a number of clarifying and corrective actions have been initiated to comply with the Treaty obligations, particularly Article 15, including that new SMTAs covering retroactively all the transfers to the recipients were to be signed (IT/GB-6/15/10: point 6).

Compliance

Compliance procedures are distinct from dispute settlement (Article 22) and from the possibility to seek recourse under Article 12.5 regarding contractual disputes under the SMTA. They deal with general issues of compliance or non-compliance, are non-adversarial and can be raised by any contracting party and the Governing Body (‘Procedures and operational mechanisms to promote compliance and address issues of non-compliance’ Rule VI. 1).

Although Treaty Article 21 requires the Governing Body to approve compli­ance mechanisms at its first meeting, negotiations were long and difficult, and the GB only adopted the ‘Procedures and Operational Mechanisms to Pro­mote Compliance and Address Issues of Non-compliance’ at GB4 (Resolution 2/2011). At the same meeting, the Compliance Committee was requested to develop further rules of procedure relevant to its work and submit them to the next GB Session and to develop a succinct standard reporting format to allow contracting parties assessing where they stand with the implementation of the Treaty Both elements were approved at GB5 (Resolution 9/2013: Annex 1 and 2). Thereafter, contracting parties were requested to submit their standard reports in a timely manner, so that the Compliance Committee could consider them before the Seventh Session of the Governing Body. An Online Reporting System (ORS) to streamline the process through electronic means was set up to support contracting parties in fulfilling their reporting commitments under Article 5 of the Compliance Procedures.

The adopted procedures and operational mechanisms consist of ten sections covering respectively: objectives; principles; institutional mechanisms; committee functions; monitoring and reporting; procedures regarding submissions relat­ing to issues of non-compliance; measures to promote compliance and address issues of non-compliance; information; other procedures regarding the promo­tion of compliance and review of the procedures and mechanisms. Compliance mechanisms may potentially play a key role in the Treaty implementation. However, countries have difficulties complying with all Treaty obligations and it is too early to provide an assessment of their implementation of the compli­ance procedures. The above procedures could significantly contribute to a better implementation of the Treaty but it remains to be seen if and how contracting parties will use this tool as a complement to other initiatives taken by the GB to enhance the Treaty’s implementation.

Settlement of disputes

Article 33 of the UN Charter obliges states to settle disputes in a peaceful man­ner; it provides a list of potential procedures: i.e. negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, etc.

Article 22 of the Treaty spells out almost word by word the settlement of dis­pute Article 27 of the CBD. It provides for gradually more intrusive and formal procedures to settle disputes regarding the interpretation or application of the Treaty between two or more contracting parties. When a country becomes party to the Treaty, or any time thereafter, it may declare in writing to the depositary of the Treaty that a dispute which was not resolved under Article 22.1 (negotiation) or 22.2 (mediation) is to be compulsorily settled either by arbitration (Article 22.3(a)), or by submission to the International Court of Justice (Article 22.3(b)). Alternatively, conciliation (Article 22.4) is made available to contracting parties who have not accepted the 22.3 procedure.

All EU countries as well as Myanmar have accepted the Article 22.3(a) (arbi­tration) procedure. None of the 145 contracting parties have accepted the ICJ as a means of compulsory dispute settlement under Article 22.3(b) (even countries that have accepted ICJ resolution under the CBD). The time-consuming and

The Treaty on Plant Genetic Resources 121 costly procedure probably explains this situation. Since the entry into force of the Treaty no dispute has arisen between contracting parties.

Amendments to the Treaty

Modifying Treaty provisions is sometimes necessary when contracting parties agree that the existing obligations no longer serve the purposes of the Treaty, or that they are not implementable. Amendment (Article 23) is the classic way of reviewing or adapting a Treaty. Other procedures, such as adding a Protocol to the Treaty, will also be addressed below.

Defining amendment procedures

Contracting parties mandated the Ad Hoc Open-ended Working Group on the Multilateral System (WG-MLS) to explore what legal procedures would allow a review of the MLS and Funding Strategy (Resolution 4/2011: Appendix, point 6). The FAO legal office and the WG-MLS identified three main options: 1) minimal changes to the SMTA; 2) the adoption of amendments to the Treaty; 3) the development of a possible protocol, supplementing and/or improving the existing legal framework of the Treaty (IT/OWG-EFMLS/14/Inf. 5; IT/OWG- EFMLS-3/15/Inf.4 Rev.1).

Amendments to the Treaty can be proposed by any Contracting Party (Article 23.1), and Switzerland has done so at GB7 by proposing to enlarge Annex 1 to all PGRFA (Resolution 2/2017: point 3). Amendments shall be adopted by consensus at a Session of the Governing Body, which equates to a right of veto for any Contracting Party. The potential right of veto makes it very difficult to amend part of the Treaty text, including a potential expansion of the Annex I list of crops and forages. As a comparison, within the CBD amendments may be adopted, as a last resort, upon a two-third majority (CBD Article 29(3)). According to Moore and Tymowski (2005 : 161), this ‘provision was viewed as essential by some countries during the negotiations as a way of ensuring that their essential interests would be taken into account in all aspects of the function­ing of the Treaty, including its amendments’. Amendments shall come into force ninety days upon the deposit of the ratification/acceptance/approval instrument by a contracting party (Article 23.4). This means that they may enter into force at different dates for different states.

Contracting parties may decide to enhance the functioning of the MLS by adopting a Protocol to the Treaty, in accordance with Article XIV, paragraph 2(b), of the FAO Constitution. In international law, two types of Protocols are identified by the Working Group (IT/OWG-EFMLS-3/15/Inf.4 Rev.1): amending Protocols (which alter the wording of provisions of an existing Treaty) and supplementary Protocols (which complement an earlier conven­tion with additional provisions and obligations). A supplementary Protocol is a stand-alone instrument, often designed to implement an earlier Convention and occasionally to broaden substantive provisions of the Treaty it supplements.

Implementing the amendment procedure

At its Sixth Session, the Governing Body requested the Working Group to ‘elaborate a full draft revised SMTA focusing especially on the development of a Subscription System and aiming to avoid the necessity of any other legal instru­ment primarily through a revision of Article 6.11 of the SMTA’ for the next GB Session (Resolution 1/2015: point 3). The Resolution adds that

[i]f a legal instrument would nevertheless be deemed necessary to develop an effective subscription system, [the Working Group is requested] to elabo­rate a complete proposal for an appropriate legal instrument (including an amendment of or a Protocol to the Treaty).

(ibid)

Contracting parties therefore seemed to prefer avoiding going through a formal amendment process, without shutting that door completely. Rightly so, as by GB7, the GB had received the Swiss proposal to amend the Treaty and decided to ‘consider it in conjunction with the agenda item on Enhancement of the Func­tioning of the Multilateral System of Access and Benefit-sharing, for which it adopted Resolution 2/2017’ (IT/GB-7/17/Report: § 27). Contracting parties therefore seem to openly decide to consider the MLS and Funding Strategy review process as an amendment to the Treaty. The same report states that the ‘Governing Body will approve a new and revised SMTA, providing the option to subscribe to a Subscription System’ (Resolution 2/2017: Annex 1, point 1), and that it should decide, at the same time on

amending Annex I of the Treaty, including a new list of crops. The amended Annex I would (1) delegate the power of future expansion of the Multilat­eral System to the Governing Body, and (2) include a list with a first set of specific crops.

(Resolution 2/2017: Annex 1, point 2)

The GB justifies this choice by arguing that the

declaration of companies and other users of their willingness to sign on to the Subscription System, following the decision of the Govern­ing Body to adopt a new and revised SMTA, would create confidence on the part of contracting parties that more user-based income will eventually accrue to the Benefit-Sharing Fund. The decision of the Governing Body to adopt a process for the amendment of Annex I would generate confidence on the part of prospective subscribers of the clear intention of contracting parties to increase the coverage of the Multilateral System.

(Resolution 2/2017: Annex 1, point 3)

Finally, the GB limits the breadth of the amendment procedure by stating that ‘all new provisions would be added in Annex I, whereas no other provisions of the Treaty would need to be revised, and the amendment would follow the procedures foreseen in Articles 23 and 24 of the Treaty’ (Resolution 2/2017: Annex 1, point 6). It remains to be seen how this will develop by GB8, in 2019.