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There is a complex relationship between the advancing global bioeconomy and the regulatory frameworks covering access to genetic resources, says Diana Jungmann of Di Blasi Parente & Associados.
In recent years the bioeconomy has emerged as a knowledge-driven concept aimed at meeting many of today’s challenges. The concept offers to the world a new paradigm for long-term sustainable development and growth. The challenges to this concept are related to population increase and aging, to rises of income per capita, to demand and supply expansion for food, healthcare, energy and drinking water, and to matters of climate change.
The vision of establishing this new economic paradigm became possible as the result of a rapid increase in the opportunities offered by the innovative revolution in the field of biological sciences. The core of the bioeconomy’s successful delivery is directly connected to research, development (R&D) and innovations of biological processes in many industrial sectors.
This article focuses on the relationship of advances in global bioeconomy and the multilateral regulatory framework connected to genetic resources (GRs) access. The subject matter of traditional knowledge is not covered and the article does not intend to present opinion on policy or related political questions and aims solely to contribute to the discussion by adding a different angle to the complexity of the challenges that lies ahead.
The development of a sustainable bioeconomy requires a joint multistakeholder effort and international partnership. Meeting the challenge on a global scale demands shared knowhow and strategic planning, and most important of all, the engagement of governments, the business sector, academia and civil society. With positive attitudes, an appropriate regulatory framework, continuous and adequate investment in R&D and in talented people, innovation finds its way towards delivering critical and substantial results.
The establishment of a strong and coherent political agenda for bioscience should foster good governance practices and international cooperation, so that biotechnological innovations can be translated in new and better services and products, benefiting various aspects of human existence.
According to BioSTEP, an EU-funded project to promote a public dialogue, several countries have taken a step further and developed bioeconomy strategies. A total of 50 different official documents are listed embracing transnational, regional and national approaches. As one can expect, the strategies differ, sometimes considerably, in priorities, range, content and implementation, monitoring and evaluation mechanisms, showing common weaknesses and gaps.
However, they also share issues regarding the commitment to make the bioeconomy stronger worldwide, signalling a positive way forward.
Language for the 21st century
If the bioeconomy points toward a new and more sustainable paradigm for global development and growth, one can consider that life science has become the main language for the 21st century. According to Juan Enriquez (2013): “The basis of the bioeconomy depends on an advanced understanding of genes and of complex cellular processes, the use of renewable biomass and the multi-sectorial integration of applied biotechnology.”
As information and communication technologies (ITC) were the game-changer for the 20th century, the world again has entered a massive revolution, this time having life sciences playing the leading role. According to Enriquez: “We are living in an era of rapid change where humans already understand not just how life is coded (genomes), but also how to copy this life code (cloning) and most recently, how to edit the code. Because we can clone, and we are developing standardised editing and assembly techniques, the world fundamentally changes.”
Now humans can begin to programme cells, and once the right formula is found it can be reproduced time and again making a broad range of products. The wealth of innovative products already available or being developed by life sciences impacts sectors from cosmetics to textiles, from food and animal feed to fuels, from pharma to construction. Such advances mean the life code is beginning to permeate, to alter, to drive ever more economic fields. This is reality and not science fiction.
Intricate regulatory system
If the bioeconomy is directly connected to the ability to access and engineer genetic material (life codes), the link can be established with the regulatory framework that requires compliance and enforcement in life sciences. Thus, it is worth casting a beacon of light in these particularly interconnected multilateral systems that play a key role in promoting or preventing the fast pace of innovation in the bioeconomy:
- Convention on Biological Diversity (CBD) and the Nagoya Protocol (NP)
- International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA)
- TRIPS Agreement with special focus on patent rights
- International Union for the Protection of New Varieties of Plants (UPOV)
These international regulatory treaties share a common and important issue: each has a different number of party members. According to their official websites, the CDB has 196 parties (noting that the US is not a member), NP: 104, ITPGRFA: 139, TRIPS: 164 and UPOV: 75.
On top of these international layers the issues get even more intricate when it comes to considering the national jurisdictions’ regulatory layers and the multitude of official languages of relevant documents. The ability one must have to understand and comply with these complex regulatory systems aiming to mitigate legal uncertainty and risks of operation requires a high degree of skill, effort and time.
In the case of CBD and ITPGRFA it is also important to highlight they also have in common access benefit-sharing (ABS) mechanisms. However, according to Tvedt (2014): “One key grey zone is that ABS in the Plant Treaty differs from the ABS regime of the CBD and NP in being voluntary, basically non-monetary, without a link to benefit-sharing and return to specific providers.”
Apart from these unresolved questions, also under discussion is the ITPGRFA expansion list of crops that are covered by this multilateral system. Expanding the scope of the ITPGRFA necessarily leads to a narrower scope for the NP, as is stated in its article 4: “The Nagoya Protocol does not apply for the party or parties to the specialised instrument in respect of the specific genetic resource (GR) covered by and for the specialised instrument.” So, the scope of the other existing regimes will therefore be crucial to defining which GRs are covered by the NP.
As explained by Tvedt in 2015 for the Plant Treaty, a core perspective on the functionality of ABS schemes is their interrelation with the systems for securing IP rights (in this case mostly patents and plant breeders’ rights under the UPOV). This is particularly important since it is the IP rights systems that allow innovators to secure rights, for a limited time, to exclusive uses of inventions based on a certain plant GR. In cases of patent applications of the genetic material, disclosure of origin has been receiving more attention in discussions.
Challenges of the CBD and NP
The very noble objectives of the CBD are related to the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilisation of GRs. Its provisions apply, in relation to each contracting party as: (a) in the case of components of biological diversity, in areas within the limits of its national jurisdiction; and (b) in the case of processes and activities, regardless of where their effects occur, carried out under its jurisdiction or control, within the area of its national jurisdiction or beyond the limits of national jurisdiction.
CBD and the geographic boundaries for life code access
One can argue the life codes do not obey geographic and political boundaries; on the contrary, GRs are in constant and dynamic flux on the planet being transferred by (a) natural causes, like air and water currents, seasonal migration, pollination; and (b) by unnatural causes such as market globalisation, digitisation of life codes and internationalisation of the R&D and innovation activities.
In cases of complex global supply chains (where products can be researched, developed and produced in different stages in different jurisdictions), and due to the advance of gene editing and cloning biotechnologies (including the use of publicly available genetic digital information in data banks), it could be very difficult to identify the origin of a GR.
“There is a need for a clearer and higher degree of legal certainty and incentives for user-entities to enter into access benefit-sharing systems.”
Tvedt (2014) emphasised that the CDB-NP access and benefit-sharing mechanism has long been a priority on both the conservation and development agendas. These interests come from the fact that most of the world’s megadiverse regions are in developing countries, called “providers” of biodiversity, while “users” are considered developed countries. Fair and equitable ABS should—in theory—be a gatekeeper against misappropriation of GRs and ensure that providers’ jurisdictions benefit from profits derived from their biodiversity heritage.
Balancing this complex equation of a social-economic-political dimension at an international and national level, ensuring a fair and functional mechanism, and yet keeping in mind the rapid advances of life sciences technology and market globalisation, has not proven to be an easy task.
Up to now, limited monetary benefits are currently shared back to the provider countries. It seems there is a need for a clearer and higher degree of legal certainty and incentives for user-entities to enter into ABS systems and meet fair and equitable terms to share benefits from products derived from their R&D based on GRs.
Nagoya Protocol pending issues
To achieve the three pillars set by CBD in 1992, paramount is a provision of a clear and transparent legal framework for ABS arising from the utilisation of GRs. Since the NP does not propose a uniform system for standardised user-country legislation, critical and complex legal questions must be resolved, such as:
- Inclusion of digital sequence information (DSI), which is under debate for not being considered within the scope of the CBD or the Protocol.
- GRs in the Area Beyond National Jurisdiction (ABNJ), under negotiations on the agenda of the UN Convention on the Law of the Sea (UNCLOS) and the Antarctic Treaty aiming at a consensus on a special regime for this category of GRs.
- Whether genebanks collections of foreign genetic material are or are not outside the scope of the CBD and ABS given they were collected prior to NP’s entry into force.
- The Global Multilateral Benefit-Sharing Mechanism (GMBSM), outlined in article 10 of NP as a mechanism where it is unclear who should benefit from a GR access in cases of multiple beneficiaries as in transboundary regions.
Snapshot of the new Brazilian biodiversity ABS regime
Brazil is not yet a party of the NP. Having one of the largest biodiversity pools on the planet, Brazil’s national ABS regime is of great interest to many CBD Parties. The law 13.123/2015 came into force on November 17, 2015, stating the basis for the new Brazilian ABS mechanism, revoking the Provisional Act no. 2,186-16, from August 23, 2001. The law was detailed by Decree No. 8,772/2016 (not yet available in English).
Drafting the new legislation was a complex and controversial process. However, it is being recognised by many as innovative and it is expected to be efficient in terms of time and bureaucracy when compared to the Provisional Act of 2001. Important issues remain unclear raising legal uncertainty over how users will comply, given that some data required that is related to information traceability in the supply chain is not always available.
The Brazilian Law defines life codes as “genetic heritage” instead of GRs used by CBD-NP, and its meaning is the “genetic information” from plants, animals, and microbial species, or any other species, including substances originating from the metabolism of these living organisms, meaning that the DSI definition was incorporated in the concept.
It establishes the web-based National System for Genetic Heritage—SisGen—that became operational on November 6, 2017 with a one-year window for users to fully comply. SisGen requires that the origin of the accessed genetic heritage be informed for in situ conditions, even if obtained from ex situ or in silico (genebank) sources.
The law brings new writing for research and technological development concepts and creates new concepts, such as intermediate product; finished product; reproductive material and key elements of value adding to the product. The latter three are possible triggers for new benefit-sharing rules. The law also states as mandatory that “access to Brazilian genetic heritage be registered at SisGen prior to shipment, or the application of any IP rights, or the commercialisation of the intermediate product, or publication of results, partial or final, in scientific or communication media, or the notification of a finished product or reproductive material developed as a result of the access”. Granting of IP rights by the Brazilian Patent and Trademark Office (INPI), however, depends on the completion of the registration or authorisation processes provided by the Biodiversity Law.
The new law establishes that benefit-sharing can be monetary and non-monetary. The monetary should represent 1% of the annual net revenue obtained from economic exploitation of finished products or reproductive material arising from access to genetic heritage. The law also creates the National Fund for Benefit-Sharing (FNRB) to promote sustainable uses of national genetic heritage and the associated traditional knowledge. In the case of agricultural activities involving production, processing and commercialisation of food, beverages, fibres, planted forests and biofuels the benefit-sharing will be due over the reproductive material and not over the finished product.
Micro-businesses, small businesses, individual microentrepreneurs and traditional farmers and their cooperatives are exempt from benefit-sharing obligations. However, they must register at SisGen for the activities mentioned. This can be a heavy regulatory burden on them. Licensing, transferring or permitting any use of IP rights related to a finished product, process, or reproductive material arising from access to genetic heritage by third parties are also exempted from benefit-sharing obligations.
However, according to the new law, where “the finished product or reproductive material has not been produced in Brazil, the importer, subsidiary, associate, affiliate, partner, or commercial representative of a foreign producer in national territory or in the territory of a country that Brazil has an agreement with for this purpose, will be jointly liable with the manufacturer of the finished product or the reproductive material for benefit-sharing”.
Administrative infractions against the law 13.123/2015 will be punished by penalties ranging from a warning to possible fines and seizure. Fines will vary from R$1,000 ($309) to R$100,000, if committed by a natural person; and from R$10,000 to R$10,000,000 if the offence is committed by a legal person, or with its aid.
Considering all the possibilities brought by the bioeconomy to contribute towards solving many global challenges while promoting sustainable development, and considering the complex and intricate regulatory frameworks required to legally access GRs, it is fair to say the ABS system is in a checkmate position.
If the system does not end up providing funds for conservation and sustainable use of biological diversity, the core of CBD is under threat. The implementation of the NP and national laws, as with the Brazilian example, urgently need to be proved functional. Moreover, the ultimate goal should also guarantee the promotion of rapid advances in biotechnology innovation.
Diana Jungmann is a senior consultant at Di Blasi Parente & Associados. She holds a PhD in molecular biology (UK) and MSc in biophysics (Brazil) with executive education in IP and business strategy from Harvard, business and innovation management from IMD, Wharton and Duke-LSE. She has broad experience on IP, bioeconomy and innovation and is engaged in high-level discussions with industry, R&D institutions and government leaders on industrial and innovation policies. She can be contacted at: email@example.com
Di Blasi Parente & Associados, Diana Jungmann, bioeconomy, genetics, genetic resources, BioSTEP, Juan Enriquez