Use and aim of report
The Nagoya Protocol (hereafter: Protocol) and the accompanying EU Regulation 511/2014 from the European Union (hereafter: EU Regulation or Regulation) are relatively recent treaties. Much is therefore not yet crystallized regarding the implementation and consequences of these treaties. Given the novelty and complexity of the Protocol, it is likely that a number of companies and other stakeholders are not quite aware of the (details of the) Nagoya Protocol and the obligations arising from it. The majority of countries recognized that they require more capacity to implement the Protocol. The need to raise awareness about the Protocol and access-and-benefit sharing (ABS) was also noted by many (Secretariat, 2018).
Raising awareness is essential as non-compliance can have far-reaching consequences. Penalties can even accumulate to the complete blockage of a developed product or result in a prison sentence for members of company management responsible for that product.
This report aims to clarify the content of the Protocol and to serve as a general advisory report for companies, outlining their obligations and when these arise. The report discusses firstly the contents of the Nagoya Protocol and the implementation in the European Union, focusing on the Netherlands, Belgium and Germany. Secondly, the aforementioned situation will be compared to India, a country holding roughly 8% of all biodiversity and with strict access-and-benefit sharing (ABS) legislation (Sen, Chakraborty, & De, 2011). Thirdly, some major remaining issues are discussed. This report provides an overview of the current debates but also gives examples of just how complicated the Protocol can become. The report was written based on literature studies, combined with interviews with several stakeholders to the Nagoya Protocol. Companies were asked if and how they prepared for implementing the Nagoya Protocol, while the policy actors were asked about the processes surrounding the negotiations of the Protocol and ongoing discussions.
The report was written from a mainly Dutch perspective. The opinions and views of the Dutch government are featured more than those of other nations. For specific opinions and views of other countries, it is advised to contact their National Focal Points (NFP).
The report is not intended to give a clear solution for specific cases, but rather aims to raise awareness of the topic by giving an introduction to the contents of the Protocol. Companies and other actors can use the report to get a first impression on the possible impact on their activities and to get acquainted with the steps to be undertaken to comply with the Protocol.
The beginning: Convention on Biological Diversity
This report gives an overview of the contents and obligations of the Nagoya Protocol. However, before the Nagoya Protocol can be discussed, it is important to explain the chain of events leading to the Protocol. It all started with the Convention on Biological Diversity (CBD). The United Nations (UN) recognized the importance of conservation of biological diversity and the threats it faces, like global warming and genetic erosion caused by human interference (Secretariat, 1992). The UN Members realized that action had to be taken to protect the global biodiversity. In order to achieve this goal, they convened to discuss an international regulation for protection of biodiversity. The Convention on Biological Diversity, that entered into force in 1993, was the result of years of negotiation. The CBD has three objectives: the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of benefits arising from utilization of genetic resources (Secretariat, 1992). To address the third objective, the Parties negotiated for another six years, resulting in the ‘Nagoya Protocol to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity’. The Convention on Biological Diversity adopted the Protocol on October 29th 2010, after which it had to be signed and ratified by the Parties. The Protocol entered into force worldwide on the twelfth of October, 2014. Parties to the Nagoya Protocol can be found on the ABS Clearing House website: https://absch.cbd.int/.
The Nagoya Protocol aims to provide a greater legal certainty and transparency for all parties involved regarding fair and equitable distribution of benefits arising from utilization of genetic resources (GR) (Protocol, 2011). The main message of the Protocol is that users of GR should share benefits arising from the respective research with the country providing the GR. The sharing of benefits could be monetary, but also non-monetary by e.g. providing research collaborations. The providing country in turn should invest those benefits in efforts to protect biodiversity in that country. The Protocol was set up to provide a framework within which ABS is to be arranged and regulated. The Protocol stipulates that users must comply with national legislation regarding ABS, if the country providing the genetic resources (hereinafter: providing country) has ABS legislation in place. Furthermore, it is the responsibility of the user to determine whether or not such legislation exists. The Protocol theorizes that this process creates incentives to conserve biological diversity, to sustainably use its components and to further enhance the contribution to biological diversity. However, not every use of genetic resources falls within the scope of the Protocol, as is further discussed herein below.
The Protocol also specifies obligations for the providing countries. Providing countries must provide legal certainty, clarity and transparency in their legislation. Furthermore, these countries must provide information regarding the procedures on how to access a GR from that country. If the country has ABS legislation in place, they must provide clear information on how the user can comply with the law. This information is to be provided by National Focal Points (NFP), where potential users can gain information on the national legislation and procedures (art. 13 of the Nagoya Protocol). Countries must also provide written, cost-effective and timely replies to applications by a potential user. Unfortunately, the Protocol provides no clarification on what cost-effective and timely means. Finally, countries must provide a certificate or something similar when access is granted, as evidence that the user has been granted permission to access and use the GR (Biotrade, 2018). This certificate is granted by the Competent National Authority (CNA) of that country, which each country has to install. The CNA can grant permission to access a GR, or decline access. Furthermore, CNAs have the authority to monitor use of GR within their own country. They are tasked with the inspection of companies to verify if they comply with the national legislation and the Nagoya Protocol (Art. 13 of the Nagoya Protocol). Thus far, 57 Parties (54%) have established one or more competent national authorities (Secretariat, 2018). Parties are required by the Nagoya Protocol (Art. 13 of the Nagoya Protocol) to provide all relevant information regarding national ABS legislation and relevant authorities to the ABS Clearing House (https://absch.cbd.int/). However, not every Party has complied with this obligation, there is still quite some information missing from the website. Some Parties have indicated that they struggle with the implementation of the various authorities and checkpoints (Secretariat, 2018).
It is unclear what happens when a providing country does not comply with these obligations. The Dutch government has stated in a memo that non-compliance by providing countries does not necessarily mean that the Protocol no longer applies (Dijksma, 2015). The Parties of the Protocol have installed a committee tasked with aiding Parties in the implementation of the Protocol. The committee can review cases that Parties submit, either about themselves or other countries. The committee and Parties to the Protocol can install various measures to improve compliance of a country with its obligations (Dijksma, 2015). It is, however, unclear what those measures could entail. There have been examples of apparent non-compliance by a providing country, as discussed by Myburgh, 2011. They found that only two permits have been granted out of 58 applications. Myburgh questions the certainty, transparency and clarity of the procedure in South-Africa, as is required by the Protocol. No consequences have yet been tied to non-compliance to the Protocol, but it is possible that this could happen in the future.
Notably, the United States of America (USA) have not ratified the Convention on Biological Diversity and are subsequently not a Party to the Nagoya Protocol. Since the Protocol only applies to its Parties, its obligations do not apply to R v D performed in the USA. An obvious but rash conclusion could be that all R v D in the USA is exempted from ABS obligations, but that conclusion would be incorrect. The USA has passed the Lacey Act in 1900, which was amended several times up to 2004, mandating compliance by a user of GR with all local, state, national and foreign laws regarding collection and transport of biological specimens (Myburgh, 2011). Therefore, legislation from providing countries that are Party to the Protocol is binding to users in the USA, even though the USA itself is not a Party to the Protocol.
The Protocol also covers traditional knowledge about genetic resources held by indigenous people. Previously, traditional knowledge was not taken into account in any of the treaties and legislation regarding utilization of genetic resources. This inclusion brings new opportunities for ABS but also new challenges regarding the interpretation of traditional knowledge, as no clear definition is provided in the Protocol. Given the complexity of this specific aspect of the Nagoya Protocol, traditional knowledge will not be further elaborated on in this report, with the aim to keep the report coherent and clear.
The Nagoya Protocol is scheduled to be evaluated in 2018 writing (Dijksma, 2015), but at the time of writing this evaluation has not yet taken place.
The Nagoya Protocol has been implemented in the EU through EU Regulation 511/2014, which outlines how member states should comply with the protocol. The EU Regulation 511/2014 (hereafter EU Regulation) entered into force on the same date as the Nagoya Protocol, the twelfth of October 2014. The Regulation states that all members should comply with the Nagoya Protocol. To ensure compliance by EU-based users, the Regulation, art. 4, instates in point 21 a due diligence obligation. This due diligence requires users to undertake every reasonable action to uncover the origin of a GR and to verify if the country of origin has ABS legislation. If that is the case, the user must adhere to that legislation. Details on the due diligence obligation is provided below.
The Regulation is troubled by the same difficulties as the Protocol, namely that its provisions are quite vague and multi-interpretable. The EU has therefore also written a general guideline on how the Regulation should be interpreted. This guideline, however, was still too general, so the EU has also provided several sector-specific guidance documents. These guidance documents were meant to clarify which sector-specific actions fell within the scope of the Protocol by providing some examples. These documents were used to outline which actions fall within the scope of the Protocol in this report.
The guidance documents have no legal status, but merely serve as a possible interpretation of the EU legislation. The absence of legally binding documents providing a clear interpretation of the EU documents results in possible differences in implementation between EU member states. This could mean that there are multiple interpretations regarding whether specific R v D is covered by the Protocol and how non-compliance with the Protocol should be treated. For example, the Protocol and EU documents themselves give no guidance on penalties, each country has the liberty to determine these. One example of such a difference is the difference in fines a company can receive in Netherlands and Germany. While Germany holds a maximum of EUR 50,000 per violation, the Netherlands could impose a fine of a maximum of EUR 810,000. This will be discussed further below.
The EU also intended to provide a guidance document for ‘upstream users’, like researchers and creators of collections. This document was intended to explain the Protocol and Regulation to users that mainly use GR without the intention of developing a product. The EU set the deadline for this document to mid-2017. However, so far this document has not been published.
The European Commission still hosts meetings discussing some unresolved issues stemming from the Nagoya Protocol and the EU Regulation. Issues that have recently been discussed are: large scale screening, laboratory strains, use of traditional knowledge and the intentionality of access (Expert Group, 2017). Unfortunately, these meetings are not open to the public and the minutes do not provide any argumentation raised during the meetings. It is therefore not easy for the general public to remain updated about the ongoing discussions within the EU regarding the Nagoya Protocol.
The EU Regulation is scheduled to be evaluated in 2024 (art. 16.3 of the EU Regulation).
The Nagoya Protocol is not the only treaty addressing fair and equitable benefit sharing. The International Treaty for Plant Genetic Resources for Food and Agriculture (ITPGRFA) regulates access to plant species essential for food and agriculture. It entered into force in 2004. Already clear from the title, the scope of this treaty is more narrow than the Nagoya Protocol, which also cover e.g. animal genetic resources. The Protocol contains a provision to avoid a double obligation for benefit-sharing. It states that the Protocol is not applicable to exchange of material covered by other ABS treaties, like the ITPGRFA (Brink, 2016). This means that ITPGRFA is leading when it comes to ABS obligations regarding use of the species that are specified in the IPTGRFA (Dijksma, 2015). If a crop is included in the Multilateral System (MLS) of the ITPGRFA, the Nagoya Protocol and the accompanying EU Regulation do not apply. The list of crops covered under the MLS can be found in appendix 4. If a country has ratified the Nagoya Protocol, but not signed and ratified the ITPGRFA, the national legislation is leading. If that country has ABS legislation in place, that legislation also covers the species listed in appendix 4. Currently, there are twelve countries (e.g. China and South-Africa) that have ratified the Protocol but not the IPTGRFA. The details of contents of the ITPGRFA will not be discussed in this report.
The ITPGRFA introduces the Standard Material Transfer Agreement (SMTA). The SMTA is a template format for an agreement between parties for transfer of (genetic) materials. There have been calls to also use the SMTA for the Protocol. It is argued that installing some form of international template for transfer agreements would make it easier for potential users to gain insight in their obligations to obtain Mutually Agreed Terms (MAT). Currently there is no international template under the Protocol, so each Party could have different procedures that potential users have to follow. For more information on the SMTA, please consult the ITPGRFA (http://www.fao.org/plant-treaty/en/).
Does the Protocol apply to your project?
Next to the exceptions formed by the ITPGRFA, the Nagoya Protocol does not apply to every use of genetic resources. The Protocol is limited to the use of GR during R v D, and even in that capacity there are some exceptions. It is important to determine if the Protocol applies before the start of a project (if possible). Further, one might be obliged to acquire special documentation before utilizing the GR. The Nagoya Protocol outlines several scenarios and specifies, to some extent, the conditions when utilization falls outside the scope.
The Nagoya Protocol applies to any biological specimen that contains units of heredity (DNA, RNA) or which is derived from a genetic resource through genetic processes like transcription of genes (derivatives). Human genetic resources are excluded. Furthermore, the Protocol is limited to resources gathered from nations that are Party to the Protocol. Countries providing the GR are commonly referred to as ‘providing countries’ or ‘countries of origin’. These countries do not necessarily have to be the countries where the resource historically originated, but can also be the country where that specific resource gained its unique and specific traits. An example is the Dutch potato variety Bintje. While potatoes are on the list of the IPTGRFA and therefore excluded from the Protocol, it is a good example on how to interpret ‘country of origin’. The Netherlands could be the country of origin for potato variety Bintje, but not Peru which is the historical region of origin for the potato. This is due to the fact that Bintje was developed in the Netherlands (Dijksma, 2015) and gained its characteristic features in the Netherlands.
The obligations listed in the Protocol do not apply if the genetic resource was collected from a country that is not party to the Protocol. However, as mentioned before, even if a nation (e.g. USA) is not party to the Protocol, it could still stipulate that users of a genetic resource in that country must comply with the Protocol.
The Protocol only applies to a GR over which a country has natural sovereign rights, so on every GR within its borders. This means that GR from international waters are excluded. The exact definition of sovereign rights is not provided in the Protocol. It is therefore unclear what happens when possible border disputes become a problem for complying to the Nagoya Protocol. However, in this report I will assume the current internationally accepted borders as correct and not dive further into the sovereign rights of a nation.
Furthermore, the Protocol (and thus the EU Regulation) only applies to a GR accessed after the 12th of October 2014, though this entry date is a subject of discussion. This aspect is further elaborated below. The Protocol (and thus the EU Regulation) apply to all types of users of GR, there is no distinction between large-scale multinational companies and hobby-breeders.
The first step is to determine if your project or activity falls within the scope of the Protocol. This is not as simple as one might assume. The Protocol specifies that utilization of a GR during R v D falls within the Protocol. The main questions, therefore, are ‘Do I utilize the GR in the sense of the Protocol?’ and ‘Does my activity count as R v D?’. The Protocol does not define these criteria accurately, leaving them quite vague and multi-interpretable. The EU advises in their sectoral guidance documents, as a form of litmus test, to answer the question ‘Does my project/activity add value to the GR?’. If the answer is yes, your project is very likely to fall within the scope of the Protocol. This does not necessarily solve the lack of clarity as you are now confronted with the question ‘What constitutes as adding value?’ but it shows how the EU interprets the Protocol. The problem of valuating genetic resources is further discussed below.
From the sectoral guidance documents from the EU, a list of ‘instances’ or actions can be defined that are considered to fall within the scope of the Protocol:
- Research or Development (R v D) on GR. The goal of the Protocol is to regulate benefit sharing resulting from research or development. It is therefore no surprise that the main action that triggers ABS obligations is performing research or development on a genetic resource. The exact definition of research or development is not provided, but for most projects it is expected that it is clear if either research or development is part of the project. This means that as soon as the GR itself is the subject of research, e.g. biochemical composition or genetic sequence, the project falls within the scope of the Protocol.
- Commodities. If a commodity is the subject of investigation in R v D, it is considered utilization and this activity therefore falls within the scope of Protocol. If the commodity is legally purchased from within the EU, e.g. on a market, ABS obligations as described in the Protocol and accompanying EU Regulation still apply. If the commodity is merely bought and traded, without an element of R v D, it is outside the scope of the Protocol.
- Obtaining material from collections. Collections are somewhat complicated. Collections generally fall within the scope of the Protocol and therefore the Regulation. The user has a due diligence obligation, and possibly ABS obligations, depending on the providing country. There are, however, some instances when ABS obligations are not triggered. Firstly, the date of access by the collection is leading, not the date of access by the user. So if you get the GR in 2016 (so after the Nagoya Protocol), but the collection acquired it in 1980, the GR is not covered by the Nagoya Protocol. Please note that this is based on the EU Regulation. It is possible that other (providing) countries disagree with this interpretation, given the debate that is currently held on the temporal scope of the Protocol. It is also possible that providing countries consider acquisition from a collection as a ‘new use’ of the GR, which would fall within the scope of the Protocol.
- Furthermore, if the collection is not situated in the country of origin of the GR of interest, and the country in which the collection is located has no ABS legislation, the GR is also not covered by the Nagoya Protocol. This shows that the legislation of the country in which the collection is situated is leading.
- Collections have the possibility to be officially registered by the EU Commission. If a collection is certified, the user can assume that the collection has taken care of the due diligence obligation. The user does not have to take care of any further due diligence. So far no collection has applied for certification in the EU.
- Derivatives. Derivatives are naturally occurring substances that are the product of genetic processes in a cell or organism. As soon as these derivatives are subject of R v D, for instance to improve their efficacy, it falls within the scope of the Protocol. Parties of the Protocol still debate the full extent of the coverage of the Protocol regarding derivatives. Current technologies can result in many synthetic derivatives. Some countries argue that such a synthetic compound is outside the scope of the Protocol, since no access to the physical genetic resource takes place. This aspect is further discussed below.
- Change of intent on already acquired resource. It can occur that you acquire a GR without an intent to utilize it in R v D. Mere acquisition of a GR falls outside the scope of the Protocol and Regulation. However, as soon as you do want to use the GR in R v D, this immediately triggers the due diligence obligation, and possible ABS obligations. This ruling may cause some difficulties. The difference between research and non-research is not always clear. Morgera and Geelhoed state that both the travaux préparatoires of the Protocol and the scientific literature are inconclusive as to what qualifies as ‘access’ and what qualifies as ‘research’ (Morgera & Geelhoed, 2016). This touches upon the vagueness of the term ‘research’ which is further discussed below.
- Within-company exchange with new R v D on GR (with changed intent). It is also possible that a company already acquired a GR for a project, but later also wants to use that GR for a completely new project of another department (but within the same legal entity). The exchange of that GR between departments, when there is a changed intent for utilization (a new, unrelated project) triggers due diligence obligation under the EU Regulation. As a consequence, it is possible that the process of acquiring permission for utilization of a GR from the providing country starts all over again.
- Nations can exercise their sovereign right over privately manufactured resources. This means that new genetic resources produced by companies, also count as resources over which nations have sovereign rights. So when you access that genetic resource with the intent to do R v D through the company that developed it, you still have to negotiate ABS with the CNA of that country, if the country has ABS legislation.
As mentioned above, not every activity involving a GR, falls within the scope of the Protocol. The Protocol aims to regulate ABS based on benefits arising from R v D on GR. Therefore, the use of GR when neither research nor development takes place, is outside the scope of the Protocol. Some use of genetic resources is also outside the scope of the Protocol, some examples of this are already listed above, but there are more instances when using a GR is not considered utilization in the sense of the Protocol. The list mentioned below is based on the sectoral guides written by the EU, as they give the most efficient overview. There are other lists of what does or does not constitute utilization and R v D, that may differ from the opinion of the EU. In this report, I took the interpretation of the EU as leading, but there are many interpretations regarding this subject. This is further discussed in ‘grey areas and disputes’.
The EU has listed the following actions in their sectoral guidance documents as outside the scope of the Protocol:
- Collecting and harvesting. These activities involve GR, but no R v D. No studies are conducted regarding the genetic make-up of the GR, therefore it is not considered to be utilized in the meaning of the Protocol. However, just because the Protocol does not apply, does not necessarily mean that a GR is free to acquire. National legislation could still require e.g. permits or other documentation in order to acquire a GR.
- Maintenance and management of collection for conservation purposes, including storage, quality checks and verification.
- Handling, storing and genotyping. These activities are not labelled as ‘adding value’. Genotyping just describes the DNA sequence of the GR, but is generally not counted as R v D due to the activity being only descriptive. However, the EESC, the European Economic and Social Committee stated that this activity does classify as ‘research’. This is further discussed below.
- GR used as reference tool or as indicator. While the GR is used in R v D, it is not the direct target of R v D, and accordingly it is not considered utilization. Example: Use of GR as attractants for (potential) plant pests in monitoring programs. GR are used as indicators to determine whether actions may be needed regarding controlling the pests. This does not constitute R v D on the GR itself, which is only used as testing/reference tools. Therefore it does not constitute utilization and is outside scope of the Protocol.
- GR as ingredient. The use of GR as ingredients is outside the scope of the Protocol, as there is no R v D involved. An example: if you perform a study to see which variety of a plant is genetically best suited as an ingredient, such research constitutes utilization and is within the scope of the Protocol. However, when the study is finished and one variety has proven to be the best, the use of that variety as an ingredient in the actual product is outside the scope of the Protocol as no further R v D is performed. This is of course only the case if future use of the variety is not mentioned in the Mutually Agreed Terms. It is possible that future use is also covered by ABS obligations if they are specifically mentioned in the agreements made with the provider.
- The Dutch government has stated that new Dutch plant varieties as a GR should be excluded as well. The argument for this is that the Protocol was not intended to monitor acquisition of genetic resources that are subject to the Breeder’s Exemption (Dijksma, 2015). This view is also advocated by Plantum, the Dutch association for the plant reproduction material sector (van Leth, 2017). Plantum joins forces with the European Seed Association (ESA) to exclude commercial varieties in the whole of the EU.
The Dutch National Focal Point has published a flow chart describing which activities/material is considered to fall within the scope of the Protocol according to the EU Regulation. They have also included which article of the Regulation treats the relevant step. This flow chart is provided in appendix 3 to this report. The flow chart is useful for getting a clear overview of the obligations of the Protocol and EU Regulation when your project is straightforward in the use of GR. However, research is prone to quickly becoming intricate and complicated, in which case the flow chart might not provide sufficient guidance. It is therefore advised to always contact the NFP of the country of origin to get updated on possible ABS legislation and relevant procedures. It is also possible to contact your own NFP to get more information on the Protocol, if the flow chart provides insufficient information.
Please be aware that even if it is believed that the intended use of the GR falls outside the scope of the Protocol, one can be asked to substantiate this to a relevant authority. For instance, some companies have chosen to deposit a copy of their entire GR database that existed before October 12th 2014 at a notary. This was done to prove that those resources fall outside the scope, based on the temporal scope of the Protocol. A deposit at a notary is not a demand by the authorities that companies should do so, but authorities may request proof that the GR was already in possession.
It is advised to always keep precise documentation of all activities with regards to the GR. This preferably includes:
- information on when, from which providing country and by which entity the GR was acquired and for which use it was acquired. This could provide legal proof that each of those resources was already in possession before the Protocol entered into force, and therefore the resource should fall outside the scope of the Protocol, at least according to the present EU Regulation.
- relevant documentation holding information describing which activities have been performed on the GR. These actions will enable the authorities to check if the project falls inside the scope of the Protocol, but also to check if one has complied with the due diligence obligation as described in the EU Regulation.
It can occur that a dispute arises between an entity and a providing country on whether or not the intended utilization of a GR falls within the scope of the Protocol. If alleged violation takes place outside the providing country, they can only register a complaint with the relevant CNA of the country where utilization takes place. That CNA will then inspect the entity and determine if indeed violation has taken place. If the CNA rules that no violation has taken place, the country filing the complaint has no authority to impose penalties outside their own country.
When it applies, what then?
When it is determined that the intended utilization of a GR is covered by the Protocol, several obligations arise. Hereinafter, the obligations arising from the Nagoya Protocol are firstly described. This is followed by additional obligations under the EU Regulation, though these of course solely apply to EU-based users.
The main obligation from the Protocol is that users have to comply with national legislation of the providing country. If the country has ABS legislation in place, the user is obliged to adhere to that legislation. It is the right of every individual country to determine if it wants to install ABS legislation. It also has the right to decide what obligations users must comply with, e.g. whether users must seek Prior Informed Consent (PIC) and reach Mutually Agreed Terms (MAT) with the providing country. Countries with ABS legislation in place can provide the applicant with an internationally-recognized certificate if the user has obtained PIC and MAT. This certificate must be accepted by a CNA as proof that the user has accessed the GR legally under the Nagoya Protocol. If the providing country does not use internationally-recognized certificates, a user could also refer to alternative documentation, as mentioned in art. 4 of the Protocol.
The additional obligation described in the EU Regulation is to perform due diligence, to ensure compliance to the Protocol. Due diligence requires users to undertake every reasonable action to uncover the origin of a GR and then to verify if the country of origin has ABS legislation. European CNAs are to accept internationally-recognized certificates as proof of fulfilment of the due diligence obligation by the user. However, even if no country of origin can be determined, the user must be able to show (with the use of e.g. documentation) that every possible lead has been exhausted. The Dutch National Focal Point has clarified that inexperience or lack of time are considered invalid reasons to explain lack of due diligence, but it is unclear what the opinion of the EU is on this subject.
Art. 4.6 of the EU Regulation also requires users to keep all documentation regarding the GR and their due diligence activities for twenty years after the end of utilization of the GR. Those documents must also be passed to any subsequent users of the GR.
The National Focal Point of the Netherlands provides a step-by-step description of a general strategy to follow when obtaining GR in accordance with the Nagoya Protocol and EU Regulation. This step-by-step description is repeated below. The first five steps show the actions a user must take to ensure compliance to the Protocol. The remaining steps show additional actions that EU-based users must take to ensure compliance with the EU Regulation.
- Identify the providing party from which you want to acquire the GR. Determine whether or not additional conditions apply before acquiring the GR. It is likely that standard conditions apply when GR is held in a collection, but this is not the case if you collect the GR in situ or directly from farmers, markets or local traders.
Negotiate MAT with the provider(s), including academics and/or local communities.
- Determine whether or not permission by the providing party is needed before utilization can take place. This is usually in the form of PIC. This information can be obtained on the ABS Clearing House website: https://absch.cbd.int/. For more information of a relevant country, the National Focal Point can be contacted for further information on legislation, rules and procedures. Contact information for the National Focal Points can also be found on the ABS Clearing House website.
- Identify the relevant CNA from the providing country. A country may have more than one CNA. Names and contact details are listed on the ABS Clearing House website. The CNA provides the PIC needed before a GR can be used.
Your research plan must be presented to the CNA, after which they may grant PIC. The CNA then approves or rejects the MAT you have negotiated with the provider(s). Such approval is often not required for access to public gene banks or public collections.
- After obtaining PIC and MAT, ask the CNA of the providing country to inform the ABS Clearing House that you have complied so they can provide an internationally-recognized certificate of compliance. This certificate is uploaded by the ABS Clearing House. Document these agreements carefully!
- Use the GR only in accordance with the conditions negotiated with the providing countries and carefully document the use you make of them.
- To show compliance with the due diligence obligation under the EU Regulation, submit a declaration, providing evidence of this due diligence. This declaration must be submitted when the first payment from a public or private grant is received for activities in which GR is utilized in the sense of the EU Regulation. If the project is fully funded by the entity itself (so no ‘external’ funding), this checkpoint is cancelled. A due diligence declaration must also be submitted prior to marketing of a product for which a GR has been utilized. A due diligence declaration therefore often has to be submitted twice! Due diligence declarations must be submitted through the EU-tool DECLARE .
- The situation concerning the acquisition and use of varieties that may be protected by plant breeder's rights remain to be clarified. Until then, it is important to treat varieties accessed from other countries that are protected by plant breeder's rights in the same way as other genetic resources, and check relevant obligations.
The European Seed Association has summarized the aforementioned process in a flow chart. This flow chart can be found in appendix 2. The chart visualizes steps a company can take to ensure compliance with the EU Regulation. It advises companies to set up a full track-and-trace system to comply with the documentation-obligation of the Regulation. It also covers what to do when there are no due diligence obligations. The chart is quite general but it provides a sense of direction on how companies should organize their administration according to the EU Regulation.
The ITPGRFA established the SMTA which is used as a template for any transfer agreement under the ITPGRFA. Plantum, the Dutch association for the plant reproduction material sector, has stated that they prefer the SMTA to also be used under the Protocol (Plantum, 2013). This would provide clarity surrounding the obligations for the user. While this view is held by more actors, so far there is no standard document format in which agreements between users and providers are to be described. This means that for every providing country a different format may be used, causing unnecessary difficulties and delays.
This difficulty is demonstrated by an early ABS legislation that the Philippines put in place in 1995. Although this legislation predates the Nagoya Protocol, many providing countries have followed the restrictive approach in their own legislation. In the Philippines, only one from eight commercial applications was granted in 2004, and only one from seventeen academic applications. It was reported that the procedure was long, exhaustive and costly (Kamau, Fedder, & Winter, 2010). This demonstrates the possibly long and difficult process for gaining access to genetic resources.
The Netherlands is quite advanced in its implementation of the Protocol. The Centre for Genetic Resources at the Wageningen University has been appointed as National Focal Point. More information can be found on www.absfocalpoint.nl regarding the implementation of the Nagoya Protocol in the Netherlands. The Competent National Authority of the Netherlands is the Ministry of Economic Affairs. The Netherlands Food and Consumer Product Safety Authority (Dutch: Nederlandse Voedsel- en Warenautoriteit, NVWA) is charged with monitoring compliance.
The Netherlands favor a pragmatic approach to the Protocol and the accompanying ABS obligations. They have not instated any access legislation for genetic resources occurring in situ in the Netherlands, but the SMTA usually applies for plant genetic resources for food and agriculture held in public ex situ collections. Furthermore, the Dutch government has stated that commercial varieties should not be considered to be within the scope of the Protocol. ABS obligations should therefore only exist for the user of an original genetic resource, not for subsequent users of the resulting commercial variety (Dijksma, 2015). Although this has not been fixed in a national law, the statement by the government likely means that the NVWA will not monitor the use of commercial varieties under the Nagoya Protocol. The EU has not taken over this point of view and it is therefore still possible for disputes to arise over the use of commercial varieties.
The NVWA inspects the administration of companies to see if these did fulfill their obligations. If they find non-compliance with these obligations, they have several options regarding penalties.
The NVWA may acknowledge that the Protocol is relatively new and that companies need some time to adapt their procedures and records. They may therefore give companies the opportunity to update their administration before they come for inspection.
The Dutch law ‘Wet Implementatie Nagoya Protocol’ has linked offences on the Protocol to the Law on Economic Offences. This law establishes different levels of penalties, depending on whether or not the crime was committed knowingly or accidentally (Ministry, 2018). When no investigative power (e.g. public prosecutor) is needed, it is considered an administrative offence and the penalty is considerably lower, compared to a criminal offence (Vanheusden & Van den Berghe, 2017).
- Criminal offence (Law on Economic Offences, art. 6)
- Prison sentence of a maximum of six years
- Community service order
- A fine of EUR 81.000 for persons and EUR 810.000 for legal entities
- Misdemeanor (Law on Economic Offences, art. 6)
- Prison sentence of a maximum of one year
- Community service order
- Fine of EUR 20.250 for persons and EUR 81.000 for legal entities.
- Lesser offence for which no investigative power is required
- Administrative penalty of maximum EUR 405 per offence, or EUR 4.050 if offender is legal entity.
Other penalties are possible, though they are case-specific. The minister of Economic Affairs also has the authority to impose several penalties. As stated in art. 6 of the ‘Nagoya Protocol Implementation Act’, the minister may:
- put genetic resources and derived products into custody;
- prohibit transporting, processing or bringing into circulation of genetic resources or derivatives;
- ban the further use of genetic resources or derivatives;
- oblige the temporary storage of genetic resources or derivatives;
- inform holders, or probable holders of genetic resources or derivatives promptly and effectively of the fact that these resources are not acquired legally;
- oblige the return of the genetic resources or derivatives to the country that supplied them;
- oblige the retrieval or central storage of genetic resources or derivatives that were released for circulation;
- oblige the identification and registration of the genetic resources or derivatives.
So far every transgression is to be individually assessed to determine the penalty. During the first inspections in 2016, the NVWA found no transgressions (NVWA, 2017). However, most inspections have been in the breeding industries thus far. Inspection of other sectors is due to start (NVWA, 2017).
The Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety has been appointed as National Focal Point. All contact information can be found on the ABS Clearing House website: www.absch.cbd.int.
On November 25th 2015, the Federal Agency for Nature Conservation (BfN) was assigned as National Competent Authority. Their inspectors can consult documents and make copies, perform their own tests, e.g. sampling, and have the right to enter and examine all premises and land during operational hours (Vanheusden & Van den Berghe, 2017). Inspectors must respect trade and business secrets, which must be treated confidentially. As far as we know there have not been any inspections.
Users are to assist the inspectors with their requests, including submission of all requested documents and samples. One may refuse to answer questions, if it would otherwise expose themselves or a member of their family to a violation of the law.
Germany passed law nr. 5321 on November 25th 2015, describing their implementation of the EU Regulation and thus the Nagoya Protocol. Art. 1 of that law lists acts that are considered offenses which the BfN must deal with. Whether or not the offense is committed as a result of negligence makes no difference, it is still considered a punishable offence. The following list describes actions that Germany considers offences:
- To not seek or keep required information from start of use
- To not transfer this information in a timely fashion to subsequent users
- To not keep relevant information regarding ABS for 20 years after the end of utilization
- To make an incomplete declaration of due diligence, not at all, or not within four weeks after end of utilization
- To not provide international certificate of compliance, or when there is a lack thereof the required related information as mentioned in the EU Regulation 511/2014
- To provide false, incomplete or late information or samples to the competent authorities, or fail to provide assistance to the competent authorities
- To act in violation of a seizure (of illegally used genetic resources) or an operating ban
Different levels of penalties have been set to these violations. For intentionally committed offenses, the administrative fine has a minimum of € 5 and can amount up to a maximum of € 50.000. Offenses resulting from negligence have a maximum fine of € 25.000. Furthermore, the BfN can issue orders, take illegally used GR into custody, take remedial measures and can prohibit certain actions or stop exploitation altogether. These restrictions are to be terminated when the user complies to the orders of the BfN. Costs of these restrictions are borne by the violator (Vanheusden & Van den Berghe, 2017).
In addition to the law of November 25th 2015, an amendment to the Patent Law was added. This amendment states that the German Patent and Trademark Office must inform the BfN as soon as a patent application mentions the geographical origin of a biological material (Schlacke, 2016). The competent authority therefore has a good overview of any use of GR as soon as an application for a patent has been filed.
The Federal Public Service for Health, Food Chain Security and Environment has been appointed as National Focal Point. All contact information can be found on the ABS Clearing House website: www.absch.cbd.int.
While the Netherlands and Germany have already instated CNAs to monitor compliance to the Nagoya Protocol, Belgium is not that far in the process of implementing the Protocol. Belgium has different levels of legal authorities, each with their own level of legal power (personal correspondence with Belgian National Focal Point):
- The Federal Government has the authority over e.g. the military, foreign affairs, the economy, pensions and health care. The Federal Parliament is the legislative body, while the federal government is the executive body.
- The Flemish and Walloon Provinces and Brussels form separate Provinces that have the authority over subjects like environmental planning, environment, agriculture and accommodation. Each Province has a parliament as legislative power and a government as executive power.
- The Dutch, French and German communities. The communities have authority over personal matter: cultural subjects, sports, education, language etc. Each community has a community board as legislative power and a community government as executive power.
So far, no CNA has been installed yet in Belgium (Vanheusden & Van den Berghe, 2017). However, there have been some developments in this process. The Belgian authorities have agreed that authority regarding implementation and compliance-monitoring of the Nagoya Protocol is determined mainly by territory (personal correspondence with Belgian National Focal Point):
- The authority to instate a PIC and MAT system for access and utilization of GR is divided over the principles of territoriality. So the authority that holds power over the location where the GR originates, is the relevant authority. The federal scientific institutions are exceptions, they fall under the authority of the federal government, irrespective of their location.
- The authority to verify collections so they can be registered as official collections is also divided according to territory with the same exception of federal scientific institutes.
- The authority to monitor compliance is divided according to territory: for instance, the Flemish Province can monitor compliance for all R v D activities that are completely or partially conducted in the Flemish Province, including the federal scientific institutes. This is regardless of the origin of the resources and the origin of the relevant PIC and MAT.
The different levels of authority can make it difficult to determine who to contact to negotiate PIC and MAT, or even if PIC and MAT are necessary. In practice, however, genetic resources are divided into the different authorities as follows (personal correspondence with Belgian National Focal Point):
- GR in situ on land: Flemish Province/Walloon Province/Brussels, according to where the GR is found.
- GR in situ in marine territories: Federal Government. Flemish territory is limited to the ebb-line, afterwards it is considered federal territory.
- GR from collections from federal scientific institutes: Federal Government.
- GR from other collections: Flemish Province/Walloon Province/Brussels according to where the collection is situated.
The described situations so far, are merely agreements between the legal authorities. They have not been officialised in the law, neither in the Provinces nor on federal level. The Flemish Province is in the process of legalizing these arrangements. A concept version of the agreement has been submitted. The law is expected to be implemented and published by the Flemish Government by the end of 2018. A concept version of a law has also been submitted to the Federal Government, but a timeline is not yet clear. A plan regarding compliance monitoring can only be devised after the concept laws have been instated as official laws (personal correspondence with Belgian National Focal Point).
India is considered to have a broad interpretation on the Nagoya Protocol in the sense that they consider all genetic resources that have ever touched Indian soil to be covered by their sovereign rights. This includes resources that are imported in India for multiplication and are subsequently exported. As soon as a plant is grown on Indian soil, India states it has sovereign rights over it. Furthermore, India considers information regarding a GR also a resource in itself. They also require authorization for access to derivatives and biological resources as a whole, not just genetic resources.
India has implemented their Biological Diversity Act of India 2002, regarding access to genetic resources as well as equitable benefit-sharing (Cabrera, Perron-Welch, & Rukundo, 2011). India has designated three government bodies to coordinate ABS.
First there is the National Biodiversity Authority (NBA) serving as the Competent National Authority. They are in charge of all decisions regarding ABS including handling foreign requests for access and/or transfer of GR. Indian law does not require prior consent of the NBA for purely ‘research’. Practice learns, however, that the NBA still demands prior approval, even if the law does not (Ramanujan, 2016). Second there is the State Biodiversity Board (SBB) in charge of regulating access of Indians to a GR for commercial purposes. Lastly there is the Biodiversity Management Committee (BMC). They are tasked with conservation, sustainable use and documentation of biodiversity. The SBB and BMC are aided by the NBA in their duties (Cabrera et al., 2011).
India has defined four procedures regarding ABS: i) access to GR, ii) transfer of research results internationally, iii) receiving prior approval for patent applications and iv) third party transfer. The procedure for access to genetic resources (i) can be summarized by the following steps (Cabrera et al., 2011):
- Application must be done with the use of a specific form, termed “Form 1 “
- The relevant authority reviews application after submission and payment of the fee
- If application is approved, the authority provides grant of access, signed by the authority. The grant establishes terms of access, benefit-sharing and compliance. The application is only approved if access is not detrimental to the resources. If the application is rejected, the authority will provide relevant reasoning and the applicant has the opportunity to appeal the decision. The state has to adhere to deadlines within which they have to process applications, but these deadlines are rarely met (Ramanujan, 2016). This means that applications can take a considerable amount of time, often several months.
- The relevant authority monitors compliance and has the power to revoke the grant when they have a reasonable belief that violation has occurred. The authority also has the power to recover damages.
For procedures ii – iv, specific forms termed “Form II – Form IV” are to be used , respectively. Other than that, the processes are the same as mentioned above.
In practice it has become clear that India commonly insists on monetary benefit sharing, even in the absence of a specific benefit claimer. Other conditions of benefit-sharing could also entail granting IP rights to benefit claimers, or to the NBA if benefit claimers cannot be identified. Furthermore, since India claims rights over every genetic resource that has touched Indian soil, it is in their interest to maintain a close eye on technological advances. This means that all import and export of genetic resources is closely monitored (Ramanujan, 2016).
To keep an accurate overview of the use of genetic resources from India, India has stated in the Indian Patent law (2002) that applicants are required to disclose the origin of any biological material used in the invention (Ramanujan, 2016). Consequently, if you want to apply for a patent in India, you need to disclose all biological resources and their origin, which India will cross-reference to their list of resources over which they claim sovereign rights. If they believe violation has occurred, it is highly likely that they will want to recover damages.
To comply with the obligations for providing countries, India has instated several biodiversity funds in which the benefits obtained through the Nagoya Protocol are deposited. The funds contribute to socio-economic development of the areas where resources were accessed (Cabrera et al., 2011).
Grey areas or disputes
There are many disputes that still need to be dealt with. It appears that the providing countries often find the Protocol too limited, while users feel like the Protocol is already too strict. Plantum has stated that they consider the Protocol to lead to ‘eternal patents’, which is highly undesirable in their view (van Leth, 2017).
The Protocol does not help in resolving disputes arising from interpretation, as it uses quite vague language like ‘as appropriate’, and ‘where applicable’. This opens the Protocol to many interpretations. The main disputes surrounding the Protocol and its interpretations are discussed below.
The Nagoya Protocol entered into force on October 12th, 2014. The current consensus is that material accessed before that date is outside the scope of the Protocol. However, some parties demanded inclusion of utilization of GR after 1993, the entry date of the CBD (Neumann et al., 2018). These parties still fuel discussions to change the temporal scope to start from 1993 onwards (Watanabe, 2015). There are several arguments in favor of this position.
First, those in favor state that the Protocol is a follow-up of the CBD. They refer to art 3 of the Nagoya Protocol, in which the scope of the Protocol is determined. There it is stated that the Protocol applies to all resources within the scope of art 15 of the CBD. This art. 15 requires, since 1993, PIC and MAT for access (with the purpose of utilisation) to genetic resources, as well as benefit-sharing (Secretariat, 1992; Vanheusden & Van den Berghe, 2017). So if art. 3 of the Nagoya Protocol is based on art. 15 of the CBD, one could say that 1993 should be the actual date from which date onwards ABS is required. This is demonstrated by the fact that the Philippines has already established ABS legislation back in 1995 (Kamau et al., 2010). This supports the argument that ABS was already mandated since 1993, so the protocol describing obligations for this ABS should also enter into force in 1993.
Second, those in favor of changing the date state that it is likely that resources accessed before 2014 are still used after 2014. One could argue that this is still utilization and should therefore be covered by the Protocol. They claim that generation of benefits after 2014 from already acquired GR is a new act (Kamau et al., 2010). Providing countries therefore generally prefer 1993 as entry date.
However, those in favour of maintaining 2014 as entry date refer to the Vienna Convention on the Law of Treaties (VCLT). Art. 28 of the VCLT states that provisions of an international treaty are not binding to any act that took place before said treaty entered into force. If the Nagoya Protocol is viewed as the relevant treaty in the matter, than there can be no retroactive applicability, according to the VCLT. Another (practical) objection to the date of 1993 was simply that compliance would require severe (bureaucratic) efforts. It is likely that not all necessary information was recorded for every GR. It would become complicated to retroactively find all the information required by the Nagoya Protocol (Jinnah & Jungcurt, 2009). This view is shared by Plantum. They declared that retroactive application of the Protocol would have detrimental effects on (scientific) progress in e.g. production quality (Plantum, 2013). They also raised the problem of plants from third parties grown in a country. India would claim any plant that has been grown on Indian soil as ‘theirs’, but what about the original country of origin? If the Protocol is applied retrospectively, how far back would you have to go? This would only add to the bureaucratic pressure on users, resulting in seemingly unending procedures (van Leth, 2017). Plantum favours a lenient approach to the use of genetic resources for plant breeding, without any additional obligations.
The issue regarding the relevant date of entry into force was never really settled. The current vision held by mostly user-based countries is that 2014 should apply. This discussion is still ongoing as mostly the providing countries with rich biodiversity, prefer 1993 to be the entry date and still push the debate. It is unclear what effect changing the entry date of the Protocol will have on its relation to the ITPGRFA, since the ITPGRFA entered into force in 2004.
Differences in interpretation
The Protocol is based several important terms, but does not define the used terminology clearly (Nijar, Louafi, & Welch, 2017). Vague or ambiguous language could lead to a high level of variation in national implementation (Kamau et al., 2010). It also complicates compliance as people have to rely on judicial interpretations (Neumann et al., 2018).
Vanheusden and Van den Berghe have highlighted some of the most vague definitions or statements from the Nagoya Protocol. He points out that while ‘traditional knowledge related to genetic resources’ is mentioned in almost every paragraph, the Protocol and the CBD never fully explain what is meant precisely with that term. The same goes for ‘sovereignty’, for which many interpretations exist (Vanheusden & Van den Berghe, 2017). This lack of clarity has also been identified in a presentation about the Indian implementations of the Protocol (Figure 1). They have produced a visual representation of just some of the problems surrounding the vagueness of the Protocol, which is shown below.
Figure 1 portrays some of the difficulties surrounding the term ‘genetic resources’. Though the term seems quite straightforward, upon closer inspection a clear definition is hard to give. The Protocol defines genetic resource as ‘functional units of heredity’, but this definition was created in 1992. Over the years, with the developments in sequencing and biotechnology, the term needed to become more flexible and inclusive (Tvedt & Schei, 2013). By adding the ‘functional’ connotation, a whole new debate arose over what ‘functional’ was supposed to entail. It can be interpreted as a molecular construct inside or outside the cell, but could also extend to the genetic information stored in the DNA, which can be digitally stored and thus assume a new functional form (Neumann et al., 2018).
Following the discussion regarding ‘functional’, there is also a discussion needed regarding what exactly qualifies as ‘material’. This could go further than physical biological resources, and could also include information generated from these resources (Morgera & Geelhoed, 2016). This could be interpreted in such a way that anything arising from a biological origin should be within the scope of the Nagoya Protocol. It is argued that this goes against the essence of scientific value and accumulation of scientific knowledge.
Due to the vagueness of these core principles, countries are free in their interpretation. Depending on ones viewpoints, the Protocol could include anything from physical biological resources to all scientific knowledge that has a biological origin. It could range from the tangible source to the (digital) DNA sequence. These many interpretations make it hard for a user to comply, as he/she is dependent on the national interpretation of both the country of the user as well as the providing country. The Parties should devise a legal definition that is flexible enough to provide clarity for future applications (Myburgh, 2011). This could be considered an impossible task as it virtually impossible to predict future developments in the rapidly-changing field of biotechnology.
R v D and utilization
The Nagoya Protocol defines utilization as “to conduct research or development (R v D) on the genetic and/or biochemical composition of genetic resources, including through the application of biotechnology” (Protocol, 2011). This has been interpreted to mean “all types of systematic work on genetic or biochemical composition of genetic resources” (Kamau & Winter, 2015). However, the terms ‘research’ and ‘development’ are already quite vague. The Franscati Manual, whose definition the Protocol follows, states that R v D comprises “the creative work undertaken on a systematic basis to increase the stock of knowledge, and the use of that to devise new application” (OECD, 2015). The Manual excludes activities like ‘collecting, coding, recording, classifying, analyzing and evaluating’ from R v D. They state that they can only be considered R v D if these activities support actual R v D, so if these activities are a vital part of later R v D. However, most of the time it is not clear in advance if these activities will later support R v D. This makes it difficult for users to comply with the Protocol, as the Protocol assumes full beforehand knowledge on the use of the genetic resource (Morgera & Geelhoed, 2016).
On the other hand, the European Economic and Social Committee (EESC) has explicitly included ‘encyclopedic research’ as falling within the scope of R v D. Encyclopedic research consists of e.g. taxonomic research and conservation of collections. So on the one hand, the EU has stated that in line with the Protocol, taxonomic research is outside the scope of the Protocol, but on the other hand, a separate EU committee has explicitly included these activities in R v D, meaning that they should fall within the scope of the Protocol. The only activities left outside the scope would be activities without any research component (Morgera & Geelhoed, 2016). An example would be mere production, using GR as ingredients. Production requires no R v D, since the recipe has (most likely) been optimized in previous steps.
What is more, is that Research and Development is almost always used as one term while in fact it exists of two separate activities. Morgera and Geelhoed investigated if, in the context of the Protocol, either research or development triggered ABS obligation, or if both activities within one project were needed. Morgera and Geelhoed determined that either Research or Development is needed to trigger ABS, making fundamental research from universities also subject to ABS obligations. Even research where there is not necessarily an intent to develop a product could be subject to the Protocol. If the latter applies, benefit-sharing is most likely to be non-monetary. This could be in the form of providing internships or holding workshops sharing the information gained from the GR. It is likely that the EU shares this interpretation of research and/or development, and thus the EU members, as the Dutch NVWA will also start inspecting universities and research institutes. These institutes are mainly involved in research, not development. This indicates that research itself, without development, also generally falls within the scope of the Protocol.
The Group of Legal and Technical experts on Concepts, Terms, Working Definitions and Sectoral Approaches (Group) serves as an advisory organ of the EU (Group of legal and technical experts, 2008; Kamau et al., 2010). This group has prepared a non-exhaustive list of typical uses of genetic resources in 2009. It should be noted that this list was devised before the Protocol was finalized. The Protocol-interpretation (and subsequent EU-interpretation) therefore differ somewhat from the Group’s interpretation. This list also holds no legal status but was merely meant as advice to the Convention of Biological Diversity. The list consists of these typical activities:
- Genetic modification
- Biosynthesis (use of genetic material as a ‘factory’ to produce organic compounds)
- Breeding and selection
- Propagation and cultivation of the genetic resource in the form received
- Characterization and evaluation
- Sequencing genes or genomes
- Production of compounds naturally occurring in genetic material (extraction of metabolites, synthesis of DNA segments and production of copies)
This list includes some activities, like selection and propagation, that the EU considers to be outside the scope of the Protocol. Members of the Group have suggested to make a definitive list of what constitutes utilization within the meaning of the CBD. This list would then be final for all Parties. However, they do not provide any further discussion or suggestions. Furthermore, the Group recommended a differentiation of the list into categories of utilization: non-commercial research, R v D and commercialization (Group of legal and technical experts, 2008). This suggests that the list provided is perhaps more general than just R v D, according to the Group. However, in line with the conclusion drawn by Morgera and Geelhoed, it may be concluded that non-commercial research could also fall within the scope of the Protocol.
All these different interpretations and lists, from the Group to the EU Regulation to the EESC, complicate interpretations of R v D and utilization immensely. The EU Regulation upholds a relatively narrow interpretation, while the EESC and the Group include more activities. This perfectly demonstrates the vagueness of what classifies as R v D, and shows how the Protocol gives almost no clarity regarding this subject.
Minimum threshold of genetic content from original source
It can happen that the product of R v D in itself is a new genetic resource. This is especially the case in biotechnology, plant breeding and animal breeding. If that newly developed product is used in new R v D, do you have to perform due diligence for just that product or also the components that product was originally made of? In other words: how far back in the R v D chain do you have to go to fulfil your due diligence obligation? Experts have proposed to set a threshold of minimum of DNA content of original source below which due diligence is not needed. They suggested a value of 6.25%. This would mean that if your product contains less than 6.25% of the (product of the) original genetic resource, it is outside the scope of the Nagoya protocol. Unfortunately, this suggestion never became official legislation. Therefore, the answer to how far back you have to go, can vary between countries.
The issue is still a trending topic in the discussions in the ABS group meetings from the EU. For the animal breeding industry, the minutes from the ABS group meeting stated that there was a minimal percentage agreed, which must be transferred into a working document (Expert Group, 2017). At a following meeting, the minutes state that it was agreed not to address this issue for the time being (Expert Group, 2018). Given the fact that there was still no clear consensus in 2018, it is likely that a decision regarding this subject could take a long time.
From correspondence with the Dutch National Focal Point we learned that the plant breeding sector also discussed this issue in the ABS group meetings, but the debate derailed and the subject was not revisited. There was no mention of plant breeding in the minutes from the ABS group.
Genetic information gained from database
Biotechnology has evolved immensely since the signing of the CBD in 1992. It was impossible for the CBD to predict the direction in which technology would evolve. The Nagoya Protocol was written much later than the CBD on which it was built, but the ideas about which materials should be covered, did not evolve with the technology. According to Wynberg and Laird, the Protocol has not taken the technological advances into account, but rather built on the scientific notions of the 1990’s (Wynberg & Laird, 2018). This poses a problem. The Protocol focusses on the physical transfer on genetic resources. If the resource itself is not physically utilized or transferred, it falls outside the scope of the Protocol. An expert speaking at an ABS expert meeting from the EU has stated that access to information should be considered to be outside the scope of the Protocol. It is not what was negotiated in Nagoya and he states that the rules developed under the Protocol ‘are not fit to address these issues’. He proposes that the Protocol should be revisited on an international level during evaluation if it is concluded that the Protocol did not provide its intended effect (Expert Group, 2015).
The aforementioned expert stated that the Nagoya Protocol focusses on the transfer of physical biological material. Current technology, however, shifts to projects based on digital transfer and genetic databases. Presently, databases are outside the scope of the Protocol, since the Protocol focusses on the utilization of a physical GR. So under the current situation, companies (that have extensive technological resources to reconstruct genetic sequences) can circumvent ABS simply by getting their information from a database. If databases remain outside the scope of the Nagoya Protocol, countries of origin remain uncompensated for the (indirect) use of their genetic resources.
It is possible that providing countries view the use of databases without benefit-sharing as digital biopiracy. Biopiracy has been defined as ‘unauthorized appropriation and theft of traditional knowledge or genetic resources’ (Bourdy, Aubertin, Jullian, & Deharo, 2017). There have been many cases of (alleged) biopiracy where countries of origin claim that companies have been negligent in their ABS duties or where they have stolen genetic resources or traditional knowledge altogether. Where biopiracy focusses on theft of physical genetic resources, digital biopiracy focusses on (alleged) theft of digital genetic information, from e.g. databases (Wynberg & Laird, 2018).
An argument in favor of inclusion of genetic databases is that the Nagoya Protocol intends countries to be compensated for using genetic resources, and the database is based on these genetic resources. Thus, the countries should be compensated, even if the resource itself is not accessed. This is generally a view held by countries rich in genetic resources. The difficulty with this argument is a practical one. It is near impossible to track which sequences are eventually used and profited upon (Servick, 2016).
An argument against inclusion of databases focusses on the misconception that genetic resources have an intrinsic value on which estimations can be made regarding appropriate benefit sharing. This is an argument against the whole Nagoya Protocol but it is even more relevant for genetic databases. It is nearly impossible to put a price-tag on individual genes, or to quantify their immediate market value. It is the combination of precompetitive research and the genetic information that leads to valuable information for downstream use (Neumann et al., 2018). However, the Nagoya Protocol in its current form obliges researchers to determine value beforehand, when there is possibly no intent for commercialization at all (Tvedt & Young, 2007). Tvedt and Young distinguish two methods: 1) by comparison of the values of similar resources in similar cases or 2) by extrapolating the value of the genetic resource by answering the question “What would the value of the product have been without the genetic resource?”. Both methods leave much to be desired.
The main problems regarding method 1 can be summarized thusly:
- Parties often have unrealistic expectations regarding the value of genetic resources.
- Parties that have limited experience in ABS negotiations are likely to accept inappropriate (either too high or too low) payment.
Problems with method 2 arise from the current trend that technology is highly appreciated and thus is rewarded a high valuation. There are generally accepted methods of valuing technology, whereas no such method exists for genetic resources. The value of genetic resources is dependent on social, environmental and equitable elements and therefore difficult to establish (Tvedt & Young, 2007).
It is likely even more difficult to quantify the value of information. Parties opposed to including genetic databases in the Protocol claim that inclusion would not be beneficial for any party, simply because the value of genetic information cannot be determined at the beginning of the user chain. Furthermore, they claim that inclusion would lead to a decrease in international research collaborations rather than an increase, as was originally envisioned by the CBD (Neumann et al., 2018). And what is to be done with scientific failures? Failure in research is almost just as likely as success. What if due to failure, it turns out there are no actual benefits to share? Or what about accidental discoveries, like the mould Penicillium notatum? It was impossible to determine beforehand the benefits arising from this discovery, simply because Alexander Fleming had no intention of discovering the antibacterial nature of the mould. Failure is rarely considered in negotiations for benefit-sharing (Watanabe, 2015).
It is clear that neither side of the discussion regarding databases is going to change its mind soon. On the one hand there is the argument that the Protocol intends for providing countries to be compensated for the use of their genetic resources, which according to some countries includes genetic information. On the other hand there is the argument that genetic information in itself has no value. It is the processing of the scientist that determines value. Raw genetic information would hold no value, so no direct benefits arise from its utilization. Therefore genetic databases should remain outside the scope of the Protocol.
One could also argue against inclusion of genetic databases from a practical point of view. It will be hard to monitor use of genetic databases as many databases are openly accessible. It is not likely that research is based on one sequence alone, sometimes hundreds of sequences are used for a single project. The origin of each of these sequences has to be uncovered, either by checking the database or through the researcher’s own efforts, and for each sequence individual PIC and MAT possible need to be acquired. The above is only possible if the origin of sequences can be tracked. And how could providing countries monitor the use of ‘their’ sequences, if there are hundreds of databases? This would all be an immense bureaucratic process that would not be easy to achieve. Those in favour of including digital sequence information (DSI) would say that this is a matter of principle that should not be blocked by practical difficulties. However, including DSI would definitely result in an even higher administrative burden for both users and providers.
In an effort to regulate access to and use of genetic databases, parties of the CBD agreed in Cancun in 2016 to study the effect of genetic databases and sequencing on the Nagoya Protocol (Wynberg & Laird, 2018). That study was inconclusive, since much of the debate focussed on a problem preceding the inclusion of digital sequence information, namely: what is digital sequence information exactly? Though the term seems clear at first, DSI potentially goes far beyond just the sequences found in databases. DSI could also include all information based on these sequences, e.g. synthetic genes manufactured based on a consensus sequence using multiple (sections of) genes. This would mean that not only the use of online sequences, but also all further research based (partly) on those sequences, could fall within the scope of the Protocol.
No consensus has been reached yet on the definition and range of DSI. It is likely that this topic will be addressed again at the Nagoya Party meeting in November 2018. As the Parties remain divided on the topic, it is unlikely that an agreement will then be reached.
Synthetic compounds as derivative?
The difficulties arising from the possible inclusion of synthetic compounds in the Protocol are comparable to the difficulties surrounding genetic databases. Current technology is capable of producing synthetic compounds from genetic information that is publicly available. Synthetic compounds are currently outside the scope of the Protocol. It is therefore possible for companies to acquire a compound synthetically and circumvent the ABS obligations. The need for the actual genetic resource to acquire a compound or derivative is reducing more and more. Currently, only naturally occurring derivatives are included in the scope of the Protocol. Providing countries are working to amend the Protocol on this part, they also want to include synthetic compounds. The argument for this desire is similar to that for including DSI: the synthetic compound is the result of knowledge on an original GR. Synthetic compounds should therefore be considered a result of utilization of a GR. India, for instance, has incorporated in its national law that it also considers genetic information itself as a genetic resource. Anything based that genetic information therefore falls within the scope of the Protocol, according to India. This view is not shared by e.g. the EU, so no penalties will be given if a company uses this information in the EU without ABS. However, it is possible that India fines that company if the resulting product is marketed in India.
It is likely that as technology develops, this discussion will become more and more relevant. For entities making much use of public databases, it is important to follow this discussion so they can prepare if new regulations or interpretations of definitions arise.
Viruses/microbes accidentally gained from human source
Human genetic resources are outside the scope of the Protocol. The human body in itself, however, is a biome rich in bacteria and viruses. Many of these organisms would not survive outside the human body, but are not considered part of the human genome. Therefore it is unclear if they should be counted as human genetic resource or not.
Another difficulty surrounding bacteria and viruses is that it might be difficult to establish a country of origin. If the virus is isolated from a human, without clear indication that the human contracted the virus in a certain country, how can one know for sure from which country it originates? Viruses and bacteria are not limited by country-borders, it is rare that a certain virus exists only in one country and not in one of its neighbouring countries. The Protocol gives no clear interpretation of this topic. The EU Regulation has stated that if the provenance of a GR cannot be established, it is the obligation of the company to show that they have done everything to uncover the origin.
This subject is especially relevant for the sectors developing e.g. vaccines against a disease. Research that focusses on combatting a (sudden) outbreak of disease in a nation is part of a special consideration in the Protocol. Art. 8b of the Protocol stresses that nations must pay due regard to sudden threats, and must take the need for expeditious access into account. This means that there is still an ABS obligation, but that providing countries must be lenient. ABS could take the form of access to affordable treatments. Art. 4.8 of the EU Regulation further specifies that users acquiring a GR that causes a threat to public health are allowed to fulfil their obligations one month after the threat is eliminated, or three months after commencement of utilization of the GR, whichever occurs earlier.
This section was inserted to make sure that such vital research is not hampered by time-consuming procedures often associated with ABS. Another argument to exclude this research from the Protocol is that ‘access’ to the disease was unintentional. It is after all not likely that a nation wilfully introduces a dangerous disease in its country. But this specification of ‘unintentional access’ leads to quite a big grey area. What happens when a virus is accidentally transported to your country but you want to perform commercial research on it after discovery? What about bacteria found on the human skin? Does that count as human DNA since some bacteria cannot exist separate from the human body? The Protocol stipulates that ‘human biomes and zoonotic diseases induced by human-originating viruses are not human DNA’. Thus, they fall within the scope of the Protocol. However, the ruling does not mention any provisions regarding the intentionality of access to the virus. It would not seem fair that ABS obligations arise if a virus is accidentally introduced through e.g. transportation. However, the Protocol does not specifically address this issue. Clarity is therefore still an issue when looking at viruses and microbes.
The way the Protocol is written does not easily enable users to comply. The language is vague and the Protocol leaves much room for interpretation by each Party to the Protocol. This could result in many different interpretations on what the actual scope of the Protocol is, and many different national ABS legislations. For each project, potential users have to get accustomed with completely new legislation, making it hard to set up best practices.
Furthermore, even though the EU has attempted to clarify its own Regulation, that too is still open for interpretation. Users must keep ‘all relevant documentation’ but this could be as broad as all e-mails or as narrow as only official documents. My advice for users is to keep all documentation and communication regarding the acquisition of GR, to be on the safe side.
If users want to access a genetic resource, it is advisable that they contact the relevant National Focal Point to get updated on the national regulations and legislations. The Focal Point can also advise users on who they should contact to gain access and what the procedure will look like. It is possible that National Focal Points are difficult to contact or that they do not reply. In this case, you can chose to either cancel the acquisition (and possibly the project) altogether, or to find another country with the same resource that does respond. Working around the Nagoya Protocol is possible, but it is not easy. There is a high risk of damaging future relations with the providing country if it finds out, even if the work-around is legal. Not to mention the risk of violating the Protocol due to the many interpretations that can be attributed to the terminology used.
The Nagoya Protocol has been in force for nearly four years, but remains a topic of much debate. This is shown by the many meetings the EU commission still has regarding the Protocol and the EU Regulation. The Nagoya Protocol clearly is not ideal. Governments and users are still not satisfied with the Protocol. Future discussions and alterations are therefore not inconceivable. As mentioned before, the most relevant debates, in my opinion, address the temporal scope of the EU Regulation and the Protocol, as well as the inclusion of genetic information from sequences and digital sources like databases. The outcome of these discussion could have a huge impact on both commercial research as well as fundamental research. These subjects are likely to be discussed at the Party meeting in November of 2018 in Egypt. Users are advised to remain updated on the outcome of this meeting, although it is envisaged that a final solution will not be found during that meeting.
The Nagoya Protocol leaves much room for philosophical discussions. This stems from the fact that many of the most important terms are not (adequately) defined. It is possible that this is done because the Parties could not agree on the definition, but it leaves much room for interpretation. This report aimed at explaining the practical side of the Nagoya Protocol and the accompanying obligations. The largely philosophical side of the Protocol, including defining and interpreting the terms, has been left undiscussed. My recommendation is to take a close look at the terms ‘Research and Development’, ‘Derivatives’, ‘Utilization’ and ‘Genetic Resources and Valuation thereof’. Based on the cases I found regarding disputes on the Nagoya Protocol, I suspect most of the disputes to center around interpretations of these terms. It could be worthwhile to get a complete overview of possible interpretations and attempt to predict a nation’s response to your project.
During my internship I have gotten to know more about the Nagoya Protocol and the underlying moral arguments. In theory I understand the need to share benefits with a country if you use their genetic resources. However, I do believe that the Nagoya Protocol is poorly drafted. By trying to please 196 countries, it has become so vague that it is almost impossible for users and providers to comply with all their obligations. Each country is free to set up their own set of rules, resulting in perhaps 200 different interpretations of the Protocol.
Furthermore, the Protocol no longer aligns with current technology. Much less use of GR as defined in the Protocol occurs than previously anticipated and I do not believe this will increase any time soon. In fact, I believe companies will become very cautious in importing any new resources. They will, most likely, first try to use resources they already own in their projects or de novo synthesize their own compounds. This could potentially hamper scientific progress, which is not the intention of the Protocol.
It is my opinion that while the Protocol has a good moral basis, it needs to be revised greatly before it tailors to the needs of both users and providers.
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Bourdy, G., Aubertin, C., Jullian, V., & Deharo, E. (2017). Quassia “biopiracy” case and the Nagoya Protocol: A researcher's perspective. Journal of ethnopharmacology, 206, 290-297.
Brink, M. (2016). The Nagoya Protocol, its implementation in the EU, and the consequences for users of genetic resources. Centre of Genetic Resources, the Netherlands. Centre for Genetic Resources, the Netherlands. Presentation
Cabrera, J., Perron-Welch, F., & Rukundo, O. (2011). Overview of national and regional measures on access to genetic resources and benefit-sharing: challenges and opportunities in implementing the Nagoya Protocol: Montreal: Centre for International Sustainable Development Law.
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List of interviews
Ministry of Economic Affairs:
Kim van Seeters
Dutch National Focal Point:
Erik de Vroom
ESA flow chart
NFP flow chart
List of plant species from ITPGRFA
ITPGRFA Annex 1 Priority crops
|Brassica complex||Brassica et al.||Genera included are: Brassica, Armoracia, Barbarea, Camelina, Crambe, Diplotaxis, Eruca, Isatis, Lepidium, Raphanobrassica, Raphanus, Rorippa, and Sinapis; this comprises oilseed and vegetable crops such as cabbage, rapeseed, mustard, cress, rocket, radish, and turnip; the species Lepidium meyenii (maca) is excluded|
|Citrus||Citrus||Genera Poncirus and Fortunella are included as root stock|
|Major aroids||Colocasia, Xanthosoma||Major aroids include taro, cocoyam, dasheen and tannia|
|Cassava||Manihot||Manihot esculenta only|
|Banana / Plantain||Musa||Except Musa textilis|
|Beans||Phaseolus||Except Phaseolus polyanthus|
|Potato||Solanum||Section tuberosa included, except Solanum phureja|
|Eggplant||Solanum||Section melongena included|
|Wheat||Triticum et al.||Including Agropyron, Elymus, and Secale|
|Faba Bean / Vetch||Vicia|
|Cowpea et alMaize||Vigna|
|Maize||Zea||Excluding Zea perennis, Zea diploperennis, and Zea luxurians|
|Astragalus||chinensis, cicer, arenarius|
|Lathyrus||cicera, ciliolatus, hirsutus, ochrus, odoratus, sativus|
|Lespedeza||cuneata, striata, stipulacea|
|Lotus||corniculatus, subbiflorus, uliginosus|
|Lupinus||albus, angustifolius, luteus|
|Medicago||arborea, falcata, sativa, scutellata, rigidula, truncatula|
|Prosopis||affinis, alba, chilensis, nigra, pallida|
|Trifolium||alexandrinum, alpestre, ambiguum, angustifolium, arvense, agrocicerum, hybridum, incarnatum, pratense, repens, resupinatum, rueppellianum, semipilosum, subterraneum, vesiculosum|
|Festuca||arundinacea, gigantea, heterophylla, ovina, pratensis, rubra|
|Lolium||hybridum, multiflorum, perenne, rigidum, temulentum|
|Poa||alpina, annua, pratensis|