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So it is now official. The European Union has finally let the cat out of the bag. It has tabled a shocking plan before WTO that formalises the unbridled exploitation of biodiversity (from the developing countries) and in turn the industrialised countries will make available the 'benefits' of biotechnology inventions. What a brilliant proposal! Isn't it like killing two geese with one stone??
We have been repeatedly warning of the real motive behind the developed countries (through its NGOs, donor agencies and foundations) interest in documenting traditional knowledge and at the same time ensuring that the biodiversity legislations of the developing countries are not as tough as the Philippine directive that was formulated some years ago. The reason: the biodiversity resources as well as the traditional knowledge linked to its uses are required for sustaining the biotechnology industry. For the multi-billion dollar biotechnology industry, biodiversity is the basic raw material and traditional knowledge provides the methodology for its commercial use.
Terming it as a 'green gold', the EU wants developing countries to reap benefits from its use. What we fail to understand is that why has the EU suddenly become so benevolent towards us?
Devinder Sharma's article "Biopiracy by another name: Traditional Knowledge", which we are reproducing, tells us the reasons why the developed countries are keen to pass on the 'benefits' to us. We also present another interesting study on the application of portfolio management to biodiversity so as to know the real value of the bioresources that we have. After all, if it is 'green gold', we must know what it is worth and then do what exactly the oil-rich countries do with 'black gold'.
But first, we bring you the press release from the European Union.
Contents:
The European Union has tabled a plan to the WTO to help developing countries rich in biological resources to reap benefits from biotech inventions that make use of their bio-resources. The plan is set out in a concept paper to the Council for Trade-related aspects of Intellectual Property Rights (TRIPS), which meets at the World Trade Organisation in Geneva on 17-18 September. The Council's work is part of the Doha Development Agenda. The EU's new plan stresses the compatibility between the TRIPS agreement and the Convention on Biological Diversity, thus addressing a major concern for developing countries -- the commercial exploitation of bio-resources. Welcoming the initiative, Trade Commissioner Pascal Lamy said: 'Many complex eco-systems could be mines of 'green gold' -- medicines, new crop varieties and other benefits for the entire world. It's only fair that the countries with such resources benefit from their exploitation. With today's move the EU reaffirms its commitment to put development at the heart of the on-going WTO negotiations' As well as new drugs from plants known locally through traditional knowledge, disease-resistant or hardy crops are examples of the kind of resources that might be made available through patented applications.
The EU's concept paper explores the relationship between the TRIPS agreement, which enables biotech inventions to be patented, and the Convention on Biological Diversity (CBD), which is concerned with conserving biodiversity and its sustainable use. The CBD also recognises' the states' sovereign rights over their biological resources and a right to equitably share the benefits from utilisation of these resources.
Developing countries are concerned that the TRIPS agreement does not encourage those seeking patents over biotech inventions to respect the basis principles of the CBD, i.e. obtain a permission from the source countries of bio-material used in inventions and share the benefits with the country of origin. They argue that the absence of information on the geographical origin of bio-material used in inventions makes it difficult for them to keep track of the commercial use of these resources or to check whether bio-prospectors have respected the principles of the CBD.
The EU's paper argues that TRIPS and the CBD, far from being in conflict, are compatible and can mutually reinforce each other. The key proposal in the paper is a means of obliging applicants for patents who have used the fruits of bio-prospecting for new products, to disclose the geographical origin of any biological material used in biotech inventions. At present, there is no such obligation.
The EU has little direct interest in the issue, as the raw material concerned is mostly concentrated in rain forests and other habitats still being explored for potent genetic resources. However, it has taken up the question with the aim of brokering a fair deal in the Doha Development Agenda for countries which want an interface between the TRIPs Agreement and the CBD.
The EC Communication also addresses other related issues. It subscribes to the need to provide better protection to traditional knowledge and recognises the right of subsistence farmers in developing countries to re-use and exchange seeds, even if these seeds are covered by intellectual property rights.
[EC Communication to the TRIPS Council on the review of Article 27.3(b) of the TRIPS Agreement; the relationship between the TRIPS Agreement and the Convention on Biological Diversity and the protection of traditional knowledge and folklore, September 2002].
Thirty years after the developing countries were made to believe that their economic interests were perfectly safe in collecting and conserving the massive plant germplasm that was getting lost, the world is at it again. And this time, it is the traditional knowledge that the international community is suddenly so concerned and worried about.
Once again, the same emotional rhetoric. Traditional knowledge, which has been passed on from generations to generations by local and tribal communities in the developing world, is getting lost. These would soon be lost to posterity and the humanity would be paying a heavy price for not conserving and keeping the same alive for future generations. The answer, therefore, is to document the traditional knowledge. After all, it too is mankind's heritage.
It was in the mid-60s and early '70s that the same language and expression was used to seek monopoly control over the plant germplasm resources of the developing countries. At the height of the green revolution, with the land grant system borrowed from the United States well in place, we were told that plants were a mankind's heritage but were being lost in the process of development. Letting the plant germplasm disappear would be at the world's own peril. So what needs to be done is to collect whatever is available and keep these safely in gene banks.
We did it. We made plant expeditions and picked up, classified and put the germplasm resources in the gene banks. It was then that we were told that the society would gain if, for instance, all the rice-growing countries were to keep their rice collections at an international centre, which in turn would act as a custodian of the invaluable genetic wealth. We did it again in good faith. India provided a copy of its rice collections for a common custody at the International Rice Research Institute, Manila, in the Philippines. The wheat collections were kept at the International Research Centre for Maize and Wheat (CIMMYT) at Mexico City. The other collections went to the 14 other international agricultural centres under the Consultative Group for International Agricultural Research (CGIAR).
We were than told that these collections are not safe at Manila or Mexico city. After all, there is a distinct probability that a terrorist group can blow the gene banks with the result that these resources would be lost forever. So what do you do? You keep a copy of these collections in safe custody. And where is this safe custody? At Fort Knox and Fort Collins in the United States. We did it again and of course in good faith.
The world's largest collection of plant germplasm, some 6,00,000 plant accessions, are in a safe custody under the control of the US Department of Agriculture. The thinking on genetic resources meanwhile has undergone a paradigm shift in the sense that these are now classified as a national property and not a mankind's heritage under the Convention on Biological Diversity signed at Rio in 1992. But the genetic resources with the USDA are outside the purview of CBD. The countries from where these were collected have no control or say over these resources. In fact, efforts are now being made to draw intellectual property rights over these resources, with the countries of origin having no benefit or control.
Ever since the early 1980s, when Anand Chakravorty got the first life patent on a bug that he had created by genetic engineering, seed and life sciences companies have realised the importance of these genetic resources. The US has these resources, has the finances for research and has the mastery over genetic engineering. But what is coming in the way is as to what to do with these genetic resources. After all, you cannot work out the chemical composition and find out the pharmaceutical properties of each and every plant stored at Fort Collins. The best way is to revert back to the countries, which originally had these plant resources. To find out from the local communities as to how and what uses they were putting these plants to. And that would give the companies the chemical route to decipher the knowledge, draw industrial uses, seek patents and market the product back to those countries where it has been traditionally been used for centuries.
At a time when there exists so much of anger over biopiracy, sending a bio-prospecting team from a western university or a company would invite the wrath of the civil society in the developing world. The best way to legitimise biopiracy, therefore, is to encourage researchers, NGOs, and the public sector institutes to document the traditional knowledge. Give them a little research grant and you will have the civil society documenting the traditional knowledge virtually free for you. The mice, they say, cannot resist even a little cheese!
The UNDP, UNCTAD, the DFID, SIDA, CIDA, GTZ and almost all other donors are pumping in grants for documentation of the traditional knowledge. The Indian Council of Agricultural Research (ICAR) and the Council for Scientific & Industrial Research (CSIR) is also promoting such documentation. No one knows what this documentation is for. No one wants to know why have we become suddenly so conscious of the fast eroding traditional knowledge. And who is using the documentation that is being done so speedily?
The answer is that we all are facilitating the process of biopiracy. And we are doing it legally and with the backing of the international donors. Once again, such documentation are safely going into the hands of the companies who need them desperately. But unlike the genetic resources, it will not take 30 years for these companies to draw IPR over traditional knowledge. International effort has already begun on how to draw a sui generis system over traditional knowledge. It is a matter of few years. The documented traditional knowledge will then be out of the control of the communities, which nurtured them. The tragedy is that unlike biopiracy in the past - neem, turmeric and the likes - the scientific community and the civil society is a willing partner this time. After all, didn't we hear it time and again that there are 'challenges and opportunities' in the intellectual property system that is being forced down the throat of the developing countries?
While the 'challenge' is for the society to fight these monopolistic controls, it provides ample 'opportunities' for the policy makers and administrators to switch over to international jobs.
Devinder Sharma is a New Delhi-based food and trade policy analyst. dsharma@ndf.vsnl.net.in
New report proves: Financial Securities are managed more professionally than natural diversity (Biodiversity)
Cologne and Lueneburg, August 2002. "Human activities are causing between 10,000 and 40,000 species to become extinct each year" according to Richard Leakey a world-renowned conservationist. "At that rate we are probably approaching a point similar to mass extinction... Such rapid catastrophic losses to biodiversity have happened before, and these catastrophes have always had far reaching consequences for the surviving species."
Although the loss of biodiversity is considered a key environmental problem it is managed based on theories and methods that have been considered outdated in the financial markets for more than 50 years. The results are flawed decisions and misevaluations. This is one of the findings of the report "Managing Biodiversity Correctly" published by Gerling Group (Cologne) and the Center for Sustainability Management (CSM) e.V. (Lueneburg). If the practical skills and tools of financial services and insurances were considered more biodiversity could be saved.
Application of portfolio management to biodiversity
As the report shows, the findings of portfolio theory are ignored today. This is somewhat surprising, since portfolio theory has not only been awarded the Nobel Prize but has also had a fundamental impact on everyday business of banks and insurances during the last 50 years. The fact that portfolio theory is not applied to biodiversity up to this point comes as a surprise according to Stefan Volk, CFO of Gerling Group. "The value of diversity can only be detected with portfolio thinking. For equity portfolios this is generally accepted today. It is quite surprising from the point of view of a financial practitioner that portfolio theory is not used for the valuation and management of biodiversity."
World's biggest asset
Aiko Bode, project manager and head of the Cologne office of Gerling Sustainable Development Project GmbH, points out the importance of the associated challenge. "Biodiversity, without any doubt, is the world's biggest asset. The value exceeds the market capitalization of all stock exchanges worldwide many times over. It is alarming to see that the tools and concepts of modern finance are not used to manage this asset. We expect the use of portfolio theory to provide additional incentives to conserve biodiversity."
Portfolio theory was developed in the early fifties by the American economist Markowitz. Portfolio theory suggests e.g. that stock portfolios that consist only of a few low-risk stocks have a high rather than a low-risk profile. Portfolio managers who want to reduce portfolio risk must therefore invest in many different stocks even if the individual stocks are very risky. Only portfolio theory is able to detect the value of diversity. This method is used today for the management of securities and insurance risks in the first place. The new Gerling-CSM report applies portfolio theory to biodiversity for the first time and arrives at some interesting conclusions.
Agriculture mismanaged
"Portfolio theory is not used for the management of biodiversity and this is a major reason for its current mismanagement. This becomes particularly evident in the agricultural context", according to Dr. Frank Figge the author of the study, "The one-sided interest in the yield of crop plants has led to mis-balanced crop plant portfolios. Professional investment advisers would never advise their clients to invest in a stock portfolio that is as mis-balanced."
As the report shows mistakes are also made in the assessment of biodiversity for a future pharmaceutical use. Plants are often the basis for new pharmaceutical substances. The probability of a specific plant resulting in a new pharmaceutical substance is however small. The value of a specific plant appears therefore to be uncertain. This has an adverse impact on its value. A fallacy as the report shows. There are a number of reliable estimates on how many pharmaceutical substances can be derived from the total number of plants, i.e. from the entire plant portfolio. The pharmaceutical value of a well-diversified plant portfolio can therefore be reliably assessed.
The report sketches out the basics of a portfolio theory of biodiversity and demonstrates the consequences of a portfolio view on biodiversity. It introduces 9 rules that are considered self-evident in the management of securities today. "These rules are generally accepted in banks and insurances" according to Aiko Bode "It is disheartening to see that they are not applied in the management of biodiversity.
Today stocks and other securities are managed more professionally than biodiversity, the biggest asset of all".
[The report has been prepared by Dr. Frank Figge of the Center for Sustainability Management (CSM) e.V. and is published by Gerling Group. For a copy of the report and additional information, you can write to Figge@sustainablevalue.com]
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