The CBDs contractual approach to access genetic resources: the rise of States' sovereign rights

Genetic resources as common heritage was further weakened by the CBD,⁵⁴ which granted states sovereignty over the genetic resources found within their borders (CBD Articles 3 and 15(1)).⁵⁵ The CBD, which aimed at becoming the first legally binding international agreement covering all biological diversity, was negotiated from 1988 to 1992 by the UNEP (Johnston, 1997).

In 1993, the American National Research Council (1993: 14) had forecast that with the CBD, ‘the era of free and open exchange of agricultural germplasm will soon be over’. Indeed, the CBD, which also covers agricultural biodiversity,⁵⁶ did not sufficiently take into account the latter uniqueness and the specific needs of the agricultural sector, partly because the CBD was negotiated primarily by ministries of environment and agricultural experts were barely present during

History of the seed regulatory setting 37 the negotiation process (Frison et al., 2011a: 8).⁵⁷ Negotiators adopted the CBD to take effective steps to stem the loss and degradation of biodiversity. The major breakthrough of this agreement was the legally binding recognition of states’ sovereign rights over their biological resources,⁵⁸ which allowed developing countries to nationally control and regulate the access to the resources situated in their territories.

The rationale behind placing genetic resources within national jurisdiction can be further explained by reading the third objective of the Convention (Article 1). This objective is

the fair and equitable sharing of the benefits arising out of the utilization of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding.

The CBD was thus based on both a premise that developing countries have a right over their own genetic resources and a promise that these can be used to engender funding for development and conservation objectives (Garforth and Frison, 2007: 17-18).

However, regarding PGRFA, Wilkes (1987: 216) poses an interesting question when he notes that ‘[n]ational sovereignty over resources is a recognized right, but can germplasm that left a region long ago still be claimed by the current government? Very few landraces of our modern crops evolved under current gov­ernments’. Rosell (1997 : 280) or Glowka (1997) point out that states’ sovereign right over their genetic resources does not grant states property rights over these resources preserved ex situ (i.e. under this interpretation, property rights regimes are left to national legislation). Stoll (2009: 5) asserts that it ‘is the very essence of State sovereignty over genetic resources that States can freely dispose upon such resources for their own uses and to provide them to third parties upon terms and conditions they may deem appropriate’.⁵⁹ Brahy goes further by saying that

[n]ational sovereignty is a way for those countries to negotiate access to their genetic resources, and in so doing, appropriate some of the benefits of their conservation efforts. It is, therefore, an attempt to solve a public goods problem through the creation of property rights.

(Brahy, 2008: 192)

Indeed, under Articles 3 and 15 of the CBD, countries may now set the terms for access to their resources, thus allowing them to profit from their biodiver­sity, further encouraging conservation. Article 15 of the Convention is entitled ‘Access to Genetic Resources’. It reiterates the sovereign right of states over their natural resources and declares national governments to have the authority to determine access to genetic resources. Access to these resources is premised on the negotiation of access contracts. Although there was no obligation within the CBD to limit these relationships to a bilateral approach, most countries

which implemented the CBD have developed an administrative procedure where access contracts are negotiated on a bilateral basis (IUCN, 2004; Garforth et al., 2005).

Article 15 states the general principles on which access is to be granted, namely ‘mutually agreed terms’ and ‘prior informed consent’, but the specific bargain between access to the resources and the sharing of benefits was left open for negotiation by the parties concerned, thereby leading to a market-based bargaining approach. The article also requires the Parties to the Convention to take measures for sharing the benefits from the use of genetic resources with the Party providing such resources.

However, 12 years after the entry into force, not much progress has been made in implementing the CBD by its 193 contracting parties. Stoll notes that

[i]n the case of ABS, the environmental objective would clearly be the con­servation of biological diversity. If the ABS system were to be judged upon this criterion, the result would be disappointing. There is no indication that, in the 15 years since the adoption of the Convention, the ABS system has had any significant impact on conservation, be that benefits being used to undertake certain conservation measures or halting of the human degrada­tion of biodiversity.

(Stoll, 2009: 4)

Some developing countries created national systems⁶⁰ for controlling access to genetic resources and requiring benefit-sharing. Most of these regulatory mech­anisms have clearly opted for a purely commercial approach whereby access to national genetic resources is exchanged for benefit-sharing (whether financial or non-monetary, or both) on a bilateral basis. This approach follows a ‘coasian- type’ of reasoning (Coase, 1960; Merges, 1994), where it is believed that the free market is the best mechanism for valuing and exchanging resources, which are treated as pure commodities (Bertacchini, 2008). The international regulation of contractual access to genetic resources was aimed at promoting such market­based exchanges, especially in the pharmaceutical and cosmetic industries, by generating legal certainty, which in turn is supposed to lower transaction costs.

However, these national systems and the contractual negotiations they require appeared to be expensive to operate and called for highly skilled human resources from a number of disciplines (Dutfield, 2002). Moreover, the link between conservation of genetic resources and the financial arrangement made for their access was not necessarily obvious, and the valuation of the resource was highly controversial (e.g. how can one be sure that a resource with little economic value today would not have a very high economic, social or environ­mental value in 50 years?) (Aoki, 2008: 92).

Furthermore, developing countries felt that the national implementation of access and benefit-sharing (ABS) was being hindered by a lack of coopera­tion from developed countries where most of the users of genetic resources are located (Dutfield, 2002). After more than ten years, there was no sign that access to genetic resources had been facilitated through the CBD, or that the conservation of these resources had made any progress (IUCN, 2004: 275). On the contrary, in the field of biological control, van Lenteren et al. (2011) argue that recent applications of access and benefit-sharing principles have made it difficult or impossible to collect and export natural enemies for biological control research in several countries. If such an approach is widely applied, it would impede this very successful and environmentally safe pest management method based on the use of biological diversity. Some experts warned that exchanges through bilateral contracts might limit the access to (and therefore the conservation of) genetic resources (Stoll, 2009: 4; Fowler, 1994: 119-122), in particular within the field of food and agriculture, by rendering the whole system extremely complex, costly and with heavy administrative burdens.⁶¹ Furthermore, a high-level international Panel of Experts on ABS recognized that ‘there is a risk that access legislation under consideration in a number of countries might foreclose or restrict the option of multilateral approaches that those same countries may be pursuing in international forums’.⁶²

In 2001, an international study (FAO, 2001) prepared at the request of the Global Forum on Agricultural Research (GFAR)⁶³ showed that access through bilateral agreements resulted in a significant increase in global transaction costs (i.e.

In an attempt to elaborate the ABS requirements of the CBD and help coun­tries develop measures to implement these requirements, the Parties agreed to the Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization at the sixth meeting of the Conference of the Parties (COP) to the CBD in 2002. However, the Bonn Guidelines are voluntary and therefore do not place obligations on users or user countries. This led developing countries, and a group of mega-diverse countries in particular, to call for the negotiation of an ‘international regime’ on ABS. Lan­guage to this effect was included in the Johannesburg Plan of Implementation adopted at the 2002 World Summit on Sustainable Development and translated into an agreement to launch such negotiations at the seventh COP in 2004. At COP-8, in 2006, two permanent co-chairs of the Ad Hoc Open-Ended Work­ing Group on ABS were named to lead the negotiations. The Working Group completed its work in 2010 when 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 (hereafter the Nagoya Protocol) was adopted.⁶⁵ Under both agreements, access to genetic resources is subject to prior informed consent from the Contracting Party providing the resources (CBD, Article 15 § 5) and when appropriate, to the consent of indig­enous and local communities (Nagoya Protocol, Article 6 § 2; Morgera et al., 2014: 145).

Box 2.5 The rise of States' sovereign rights through the Convention on Biological Diversity

• 1992: Adoption of the Convention on Biological Diversity

• 1993: The CGRFA agrees to renegotiate the IU

• 2002: The CBD COP adopts the Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization

• 2004: The CBD COP opens new negotiations for an international regime on access and benefit-sharing

• 2010: The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Uti­lization to the CBD is adopted (entered into force in 2014)