Brussels, 4 October 2012
Questions and answers on access and benefit-sharing
What is ABS?
Biodiversity is protected by an international convention known as the CBD, or Convention on Biological Diversity. The EU and its Member States are Parties to this Convention. One of the basic principles of this Convention is that it recognizes that states have sovereign rights over the genetic resources found within their jurisdiction, and that they can set conditions for access to such resources, hence "access and benefit sharing", or ABS. Signatories must facilitate access to their genetic resources, and they must ensure that any benefits that arise from the commercial use of those resources are shared fairly and equitably with the Party providing these resources. In practice, most agreements are between biodiversity-rich developing countries, and developed countries where more genetic research is done.
How does this relate to the draft Regulation proposed today?
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", a legally binding treaty agreed under the auspices of the CBD in Nagoya, Japan in 2010 further details the ABS provisions of the Convention. It establishes a framework regulating how users of genetic resources and traditional knowledge associated with genetic resources may obtain access to such resources and traditional knowledge. It also provides for a general benefit sharing obligation. The Protocol obliges the Parties to ensure that users operating under their jurisdiction respect the legislative or regulatory requirements of Parties that provide genetic resources and traditional knowledge.
Today's proposal, once agreed by Council and Parliament, will bring EU law into line with the international obligations agreed at Nagoya.
What concrete examples can be given?
There are many examples of genetic biodiversity being used in research:
Future breeding programmes: Conserving and documenting wild relatives of plant and animal species for future breeding programmes is widely considered as an insurance against the impacts of climate change on food production systems.
Identifying active compounds for medicine development: In April 2012, the Danish company LEO obtained FDA-approval for a topical gel against a precursor to skin cancer. The main active ingredient of this gel is derived from the Euphorbia peplus plant found in Australia, after an extraction, purification and crystallization process of about five months. LEO will now seek market approval in other major markets.
Genetic resources also play a major role in developing nature-based renewable energy to face the energy challenges of a growing word population while ensuring biodiversity and environmental protection and make the transition to a post-petroleum economy.
Helping in waste treatment/waste consuming:
Polyurethane-eating fungi discovered in Amazonian rainforest. Researchers have identified plant fungi in the Ecuadorian rainforest that can digest plastic. The discovery hints that there may be a wide range of effective waste-consuming microbes in existence, according to the study, which found that several different fungi, including one called Pestalotiopsis microspora, can break down the widely used plastic, polyurethane.
Why has ABS been problematic in the past?
Access and benefit sharing has always been controversial because it involves the sovereign rights of states on their resources, relations with indigenous and local communities, and economic and technological development in provider countries. The convention includes a provision to obtain the prior informed consent of, and to share benefits with, provider countries when their genetic resources are used.
Historically, there has been no appropriate legal framework for benefit-sharing established in user countries. Companies and scientists often developed commercial products based on genetic resources from the South and, in many cases, filed patents using that material. Although the CBD is legally binding, it requires countries to develop national legislation to implement it, and while many developing countries have established access legislation, this is not the case in numerous industrialised countries. This has meant that users of genetic resources in industrialised countries have had no legal obligation to share any benefits, particularly as they gain access to genetic resources via intermediaries and are generally not involved in collecting genetic resources from developing countries.
How will the Protocol help achieve broader conservation goals?
The Protocol encourages Parties to direct benefits arising from the access to and utilization of genetic resources towards the conservation of biological diversity and the sustainable use of its components. It is also hoped that these benefits may help vulnerable populations that depend on genetic resources to use them sustainably. It could also help to enhance the management and establishment of protected areas that are important to conserve biodiversity.
Is there an obligation for provider countries to adopt access rules?
No. Parties may decide to give free access to their genetic resources.
What happens if countries do not comply with the Protocol?
The Protocol foresees the adoption of compliance procedures and mechanisms that will help Parties to comply and that will address cases of non-compliance. These will be agreed at a later date.
Does the Protocol apply to genetic resources collected before it enters into force?
No, the Protocol only applies to genetic resources collected after it enters into force. But Parties to the Protocol have agreed to discuss a mechanism that could address the issue of genetic resources acquired before the entry into force of the Protocol at a later date.
Are any genetic resources excluded from the scope of the Protocol?
Human genetic resources are excluded.
To what extent does the Nagoya Protocol address indigenous communities’ needs?
The Nagoya Protocol recognises the capacity of indigenous communities to grant prior informed consent with respect to their genetic resources and associated traditional knowledge.
Does the Nagoya Protocol create business opportunities?
Yes, by creating a transparent and clear legal framework for access and by obliging user countries to provide for user measures that ensure the provider countries that their genetic resources will not be used illegally, the Protocol will open the way for more access deals. Improved access to quality samples of genetic resources with high legal certainty and at the lowest possible transactions costs will maximise research and development opportunities on genetic resources.
How did the Commission prepare this draft proposal?
The Commission started preparations for implementation shortly after the Nagoya Protocol was agreed in Nagoya in 2010. An impact study was commissioned from an external contractor, a public consultation of interested stakeholders was organised, as were meetings with stakeholders. The Commission also discussed the issue with other CBD Parties. An impact assessment was then drawn up using this data and information, which informed the implementing package that has now been released.
Does the Commission proposal cover all the obligations arising from the Nagoya Protocol?
Yes, the Commission's proposal contains detailed rules that are sufficient to ensure conformity with the Protocol's provisions in the Union. As the Commission does not see at this stage the need to intervene on access, Member States are free to establish their own rules on access to their genetic resources.
What will it mean in practice for EU users?
All users will have to exercise "due diligence" to ascertain that the genetic resources and the associated traditional knowledge they use have been accessed in accordance with applicable legal requirements and to ensure that, where relevant, benefits are shared.
Users will also be obliged to declare at specific check points that the correct procedure has been followed.
The due diligence obligation should ensure that minimum information relevant to ABS is available all throughout the genetic resources value chain in the Union. This will enable all users to know of and respect related rights and obligations. At the same time, the due diligence approach does not prescribe the same type of measures to all users, but leaves users some flexibility to take measures that work best for their respective context, and also to develop sectoral best practices.
How will this work?
Users need to seek, keep and transfer to subsequent users information on:
the date and place of access of genetic resources and traditional knowledge associated with such resources;
the description of genetic resources or traditional knowledge associated with such resources used;
the source from which the resources or the knowledge were directly obtained as well as subsequent users of genetic resources or traditional knowledge associated with such resources;
the presence or absence of rights and obligations related to access and benefit-sharing;
access decisions and mutually agreed terms, where applicable.
In addition, a user needs to analyse the information in his possession and be convinced that it complies with applicable legal requirements in the provider country. Users who have doubts must either obtain the missing information or discontinue use.
Users will be obliged to retain any information relevant for access and benefit-sharing for a 20 year period after the end of the period of use.
The Draft regulation foresees that specific choices taken by users on the tools and measures applied for exercising due diligence should be supported through the recognition of best practices as well as complementary measures in support of sectoral codes of conduct, model contractual clauses, and guidelines with a view to increasing legal certainty and reducing costs.
Are there additional costs and burdens for users?
Professional associations (and users) will be best placed to identify the most cost-effective ways of implementing the due diligence obligation. The flexibility of the due diligence concept should allow users to tailor due diligence measures to existing best practices, thereby lowering costs. Monitoring costs for users are limited, and declarations will only be made at points where users are already obliged to summarise and evaluate relevant information. Costs should be minimal, as:
Declarations in the context of public research funding are already standard practice;
Users already prepare a dossier describing the product for which a permit is sought for product approval or commercialisation.
Real costs may of course arise in cases where users have not been diligent, and have failed to seek relevant information on ABS when acquiring a genetic resource.
Will there be additional costs for national administrations?
Administrative costs will fall primarily on the Member States and the competent authorities designated for receiving due diligence declarations by users and for checking compliance. However, the due diligence declarations could be made to authorities that already exist in the Member States, or to the national competent authority(ies) that each Party to the Nagoya Protocol must establish. Competent authorities of different Member States could cooperate also amongst each other and with the Commission, as the synergies are clear.
Costs will be higher in Member States where more utilisation activities occur, and where more genetic resource based products are commercialised. This suggests that public costs for monitoring will tend to correlate with benefits related to the successful marketing of products based on genetic resources (e.g., additional tax revenues).
To lower costs and enhance effectiveness, the legislative proposal foresees complementary awareness and training activities, work on contractual model clauses, work on technical tools for monitoring and tracking genetic resources flow, through bilateral cooperation with other countries or regions where appropriate.
What is the advantage of acquiring samples of genetic resources via a trusted collection?
Users who acquire a genetic resource from a collection included in the Union register will be considered to have exercised "due diligence" as regards the seeking of all necessary information. This system of trusted sources should substantially lower the risk that illegally acquired genetic resources are used in the Union. This should be particularly advantageous to academic researchers and SMEs.
Could a collection located outside the Union become a trusted collection?
Yes, provided that it is supported by a bilateral agreement between the Union and the country of origin of the collection.
What are the benefits for users in having their best practices recognised?
Associations of users may ask the Commission to recognise a specific combination of procedures, tools or mechanisms overseen by an association as best practice. Competent authorities of the Member States should consider that the implementation of a recognised best practice by a user reduces that user's risk of non-compliance and justifies a reduction in compliance checks. The same should apply to best practices adopted by the collective of the Parties to the Nagoya Protocol (art. 20 of the Protocol).
Does this draft legislation offer the possibility of closer (bilateral) collaboration between the Union and third counties?
The proposed legislation creates room for closer collaboration between the Union and other countries or regions, in particular biodiversity-reach countries. Such collaboration may for instance address the issue of accepting foreign collections as trusted collections in the EU, easy the access for EU researchers and companies to genetic resources for the other Party, deal with the issue of genetic resources collected before the entry into force of the Protocol, support the development of best practices tracking and monitoring tools as well as awareness raising and training activities.
When will the EU will be able to ratify the Nagoya Protocol?
Parties to the CBD are committed to have the Nagoya Protocol in force and operational by 2015. The EU and its Member States expect to become full Parties to the Protocol by the time of its entry into force. Not all of the Nagoya Protocol’s legally binding obligations on states are currently implemented in EU law or in the national laws of EU Member States. Some new laws are necessary, particularly on the Protocol’s provisions that relate to government measures for overseeing compliance of their researchers and companies using genetic resources.