11:50 AM Feb 13, 1997

UNCTAD PROMOTES 'BIOTRADE INITIATIVE'

Geneva 12 Feb (Chakravarthi Raghavan) -- The UN Conference on Trade and Development is hosting next week a workshop on its "Biotrade initiative", which aims at promoting international markets for biological resources, while stimulating biodiversity conservation, will be the subject of a workshop under the auspices of the UN Conference on Trade and Development.

The workshop will be held a day prior to the UNCTAD's Trade Commission which will be addressing trade and environment issues.

The UNCTAD secretariat launched the initiative and presented its study on this at the Third Conference of Parties of the UN Convention on Biodiversity, held at Buenos Aires on 13-14 November.

The UNCTAD initiative has been launched in collaboration with the CBD secretariat and the University of Charleston (USA), with the objective of promoting international markets for biological resources that will provide conservation incentives and sustainable development opportunities. The secretariat study has been prepared with the collaboration of Dr. Anthony Artuso, at the University of Charleston.

The secretariat paper says that through its initiative it hopes to catalyze investments by governments, the private sector, and local communities. The initiative's components are said to include economic and market research, training and capacity building, development of alternative contractual arrangements, evaluation of strategies for biological resource conservation and development, global information dissemination and networking, and private sector collaboration.

The UNCTAD paper anticipates funding requirements at about $1.25 million a year for a three-year initial start-up phase, and so far the governments of Spain and Netherlands have provided support.

The biodiversity convention's Conference of Parties, at Buenos Aires, in two decisions, has asked its secretariat to provide an initial background document on providing guidance to Parties on design and implementation of incentive measures, and separately to explore with the WTO and its Committee on Trade and Environment (CTE) the extent to which there may be linkages between the CBD's provisions (Art. 15) on access to genetic resources and the WTO's TRIPs accord. Both decisions have asked the CBD secretariat to coordinate its work, among others, with UNCTAD and FAO.

Since it was unveiled at Buenos Aires, the UNCTAD 'biotrade initiative' has attracted some flak from Environment and Development groups, in the North and the South, who complain that it promotes the interests of the transnational corporations, and will upset the delicate balance between access to natural resources, intellectual property rights and the TRIPs monopoly and right of countries to a share in the technology and products developed from their genetic resources, as well as the overarching commitments that the industrial countries undertook in the CBD about new and additional resources and technology transfer.

Despite the commitments in the CBD and the Rio Summit, there has been no new and additional financial resources forthcoming, and the major industrial nations have taken the position that the technology transfer was among private parties and could only be on commercial terms, and that this would be facilitated when countries provide greater IPR rights.

Since the CBD entered into force, with the United States which is not a Party but managing to influence the CBD as an observer, the major industrial nations, and the pharmaceutical TNCs have been trying to use the TRIPs, and the kind of patent monopolies that the pharmaceutical TNCs want, to weaken or reduce not only the scope of the CBD in this area, but even that of the TRIPs which enables sui generis protection systems.

The NGOs say the UNCTAD initiative benefits these TNCs.

The UNCTAD official coordinating the project on biodiversity, Mr. Juan de Castro, disclaims this and argues that in fact it tries to find ways to provide local communities an economic stake as an incentive for conservation and that on equity grounds the information provided by traditional healers, farmers etc which are used to identify potentially valuable biological materials be obtained through informed consent and results in appropriate compensation.

The UNCTAD paper says that the initiative would evaluate strength and limitations of a wide range of mechanisms proposed and among these it has specifically included "communal intellectual property rights over information concerning uses for components of biodiversity".

However, in other parts of the paper, it also suggests that guidelines for protection of IPRs must also be developed in relation to technology transfer arrangements and that, "though some developing countries and international NGOs have been reluctant to support strong IPR provisions in the biodiversity convention, it can be expected that those countries which affirmatively protect IPRs will become more attractive sites for private investments in biological R & D".

Mr. Martin Khor, Director of the Third World Network, however notes that the TRIPs accord in this particular area has provided some options for developing countries in respect of patents for plant varieties, life-forms and other biological material, in particular in providing a sui generis system instead of the patent system. This would allow countries to adopt a community intellectual property approach that could prevent knowledge available in communities to be patented and commercialised into global monopolies. The CBD strengthens the possibility of governments to take the sui generis option, and link access to their biological resources to satisfactory arrangements with the foreign companies on technology transfers and benefits of any biotechnology developed with their resource.

But the UNCTAD paper, Khor said, appears to be advocating the commercial patenting approach of the pharmaceutical TNCs, and its various mechanisms for capacity building and guidelines envisage governments coming together with the TNCs, and its advocacy of 'capacity building' for developing countries through the acceptance of the route preferred by the pharmaceutical TNCs, namely, stronger patent rights for commercial companies, would be pointing them in a direction that goes against their public interest.

The UNCTAD study says that international efforts for biodiversity convention may be fruitless if the link of the CBD with sustainable development is not appropriately addressed and countries made aware of the immense values biodiversity can bring them in economic terms.

The CBD, the UNCTAD secretariat argues, faces the critical issue of how to translate the uncertain future benefits of the convention into more immediate conservation incentives.

It notes that funds available for a global environmental issue such as biodiversity conservation are shrinking.

And, while many countries are conscious of the real and potential value of biological resource-based products from biotechnology, the biodiversity rich developing countries do not have sufficient information about the potential benefits they may derive from sustainable use of their biological resources.

This last, the paper suggests, is a promising "green gold" market. In most cases, developing countries lack the technical and entrepreneurial resources to exploit the full potential of their biological resources. The benefits from exploitation could in turn help promote conservation.

Conditions for an efficient and equitable biochemical prospecting market does not presently exist, property rights to these resources are not well-defined or easily protected, and information about resources is often insufficient to determine their current or potential future value. Also, the transaction costs are quite high and risk spreading mechanisms not well developed.

The UNCTAD paper says its initiative will include:

* economic and market research including annual market surveys of pharmaceutical companies, agribusiness firms, government research institutes, botanical gardens, academic research laboratories and private brokers of biological samples;

* analysis of strategies for development of biological resource based industries;

* enhancing conservation and sustainable development opportunities and evaluating the mechanisms proposed including national or local trust funds supported by compensation from biochemical prospecting activities, communal intellectual rights over information concerning uses of biodiversity components, debt for nature and debt for equity swaps;

* developing contractual guidelines for biochemical prospecting activities covering such areas as financial compensation, technical assistance, technology transfer, biosafety, IPRs and informed consent and benefit sharing arrangements.

The initiative proposes a private sector advisory committee with representatives from pharmaceutical, agro-chemical and biotechnolotgy firms to provide for private sector participation in all aspects of the initiative.

But there will also be a coordinating committee to provide oversight and direction for the initiative and this body would have representatives from participating organizations, major donors, developing countries, NGOs, private industry and academia. UNCTAD is to provide day-to-day program management and staff support, closely liascing with the University of Charleston in the US.