TWN Info Service on Biodiversity and Traditional Knowledge (Jan24/01)
8 January 2024
Third World Network

CBD: 2024 to kickstart “informal” work on digital sequence information

Kochi/London, 8 Jan (Nithin Ramakrishnan and Lim Li Ching) – Intersessional discussions on the elements of the proposed multilateral mechanism for benefit-sharing from the use of digital sequence information (DSI) on genetic resources will begin in earnest in January 2024.

The multilateral mechanism was established by Parties to the Convention on Biological Diversity (CBD) by its Decision 15/9, adopted in December 2022.

An open-ended Informal Advisory Group (IAG) will be constituted to carry out this work, alongside information-sharing activities and informal consultations. The IAG will be co-chaired by Ms. Mphatso Kalemba (Malawi) and Mr. William Lockhart (United Kingdom).

The Co-Chairs will submit a report of the outcomes of the intersessional work to the second meeting of the Working Group on Benefit-sharing from the Use of Digital Sequence Information on Genetic Resources (the Working Group), which is scheduled for August 2024.

The first meeting of the Working Group was held on 14 to 18 November 2023 in Geneva. It was the first intergovernmental negotiations on DSI under the CBD since the adoption of the DSI decision, and the Working Group established the IAG. The Committee of the Whole, set up during the first meeting of the Working Group to consider the substantive agenda item, was also co-chaired by Ms. Kalemba and Mr. Lockhart.

The Working Group adopted a document (CBD/WGDSI/1/L.2) containing possible elements of a multilateral mechanism for benefit-sharing from the use of DSI on genetic resources, including a global fund, as orally amended. The amended version was then annexed to the report of the meeting of the Working Group.

The document identifies two sets of elements: (i) elements on which there is potential convergence and (ii) elements on which there is a need for further discussion, across five different clusters of issues:

A. Contributions to the fund
B: Disbursement from the fund
C. Non-monetary benefit-sharing
D. Governance
E. Relation to other approaches and systems.

These clusters grouped together the 16 issues for further consideration that were identified in Decision 15/9, whereby CBD Parties decided to share, fairly and equitably, benefits arising from the use of DSI on genetic resources.

[Except for the United States, all States are Parties to the CBD.]

The first IAG meeting will be held online on 23 January 2024. It is expected to meet online on a monthly basis. The process for nominating members to the IAG is ongoing and the deadline for nominations was 5 January 2024.

Key questions for the IAG

According to a notification dated 1 December 2023, sent out by the CBD Secretariat, the IAG will work on the second set of elements, which require further discussion. The Working Group report also states that the IAG will focus on technical issues contained in the elements requiring further work. Below are short analyses of some of the key issues in these clusters, and the five key questions the IAG will have to address in order to resolve the divergences.

(a) How to create benefit sharing obligations that ensure contributions to the fund

Cluster A discusses the questions relating to contributions to the fund. The only element of potential convergence identified is that the global fund should contribute to the achievement of Target 19 and Goal D of the Kunming-Montreal Global Biodiversity Framework, which address financial resources and means of implementation respectively. This is acknowledged not to change existing international obligations of all Parties to the Convention, including under Article 20 (key to operationalizing the principle of common but differentiated responsibilities), and can contribute to mobilising new and additional means of implementation.

The rest of the elements require further consideration, and the most important question to be addressed is how to create obligations on the users to share the benefits from the use of DSI on genetic resources in the multilateral mechanism. Such a design should also facilitate a predictable level of contributions and fairness among potential contributors.

One of the major concerns is that if the multilateral mechanism is established through a decision of the Conference of the Parties (COP), often characterised as different from treaty-like instruments, whether it can create binding benefit-sharing obligations. If not, whether there is a need for amending the Convention or its Nagoya Protocol, or for that matter adopting a new protocol on DSI.

During the meeting, a few Parties, and observers like Third World Network, cited the example of the World Health Organization’s (WHO) Pandemic Influenza Preparedness (PIP) Framework, which is adopted through a so-called soft-law instrument that binds the users of genetic resources, including DSI, to pay monetary contributions to the WHO. The PIP Framework uses a Standard Material Transfer Agreement for sharing genetic resources and benefit sharing obligations are generated through the contractual obligations contained therein.

Other questions of interest in this cluster are (i) trigger points for paying monetary contributions to the fund, and (ii) determination of the scale of contributions to the fund. The African Group proposal for one per cent of the retail price of all commercial income net revenue from all products resulting from utilisation of DSI on genetic resources is also listed as a discussion point.

(b) How to distribute funds such that States are incentivized to choose the multilateral system over bilateral systems

Cluster B discusses disbursement from the fund and it has several elements of convergence, including: (i) strategic priorities and disbursement criteria to be determined by the COP, (ii) funding to be directed towards biodiversity related sustainable development goals, (iii) various factors to be taken into account for funding allocation, such as the self-identified needs of indigenous peoples and local communities, women and youth, biodiversity richness of a country, capacity needs of a country, particular needs of developing countries, regional balance, etc.

The major element for further discussion here would be how to disburse funds – whether it should be through country allocations or through competitive project financing or a combination thereof. There are also other questions that require further discussion, for example, (i) whether countries mandating benefit-sharing from the use of DSI from international public databases through their national legislation should be allowed to benefit from global funds, and (ii) whether the level of the development of a country should be a factor in determining funding allocation.

It must be noted that proposals like competitive project financing from benefit-sharing funds cannot do justice to countries that join the multilateral mechanism. Under such a design, provider countries, indigenous peoples and local communities are expected to make available access to genetic resources freely and openly to everyone. But when it comes to their fair share of benefits to which they are entitled by law, they are required to compete with one another and show the merits of their project proposals before receiving benefits.

A very controversial question under consideration in this cluster is whether funding allocations should be based, at least in part, on the geographical origin of the genetic resources from which the DSI is derived. Current studies indicate that there is only incomplete data available on geographical origin in databases.

This casts a shadow on the current practices of the databases that share DSI on genetic resources, because transmitting DSI without recognizing the country of origin of the genetic material from which DSI is generated effectively undermines the sovereign rights of Parties to regulate access to genetic resources as well as to receive a fair and equitable share of the benefits derived from the use of those resources. However, a lobby of scientists, database owners and managers, with the support of the developed countries, refuses to acknowledge the concern, and to address the same.

The scientific lobby often characterises access and benefit sharing (ABS) based on the country of origin of genetic resources as somewhat antithetical to the principles of “open science”. The developed countries who have jurisdiction over most of the major DSI databases, then cite these arguments while defending their position not to alter current DSI-sharing practices.

Unsurprisingly, the very same actors do not find monopolistic private rights such as intellectual property rights over the benefits arising from the utilisation of genetic resources as barriers to the realisation of the benefits of open science. They also do not find disentitlement to a fair share of benefits as a violation of the basic tenets of the CBD and Nagoya Protocol.

The entire controversy and certain other questions in Cluster B point towards the ingenuity with which the Global North and its scientific lobby are addressing the issue of access to DSI and benefit sharing under the proposed multilateral mechanism: They expect developing countries to give up their sovereign rights over genetic resources without any legal entitlement to the share of the benefits derived from using DSI.

The multilateral mechanism under the CBD is not a specialised ABS regime applicable to a specific sector or specific set of genetic resources. It applies to all genetic resources in general. It is quite different from specific ABS regimes, for example for public health, where countries agree to multilateral benefit sharing for global public good. As a result, countries with rich biodiversity can be expected to carefully consider the merits of joining the multilateral mechanism, especially whether it can provide them with better results and cover the opportunity costs they suffer by partially giving up sovereign rights over DSI.

The cluster B discussions, therefore, cannot lead to an effective solution, unless the multilateral mechanism is designed in such a way that Parties feel incentivized to use the mechanism rather than bilateral benefit sharing agreements. In short, how to design such a mechanism will be the key question to be addressed.

(c) How to develop a platform for sharing technologies and other non-monetary benefits

Cluster C discusses non-monetary benefit sharing. It has achieved some form of convergence on the need to “facilitate capacity-building and development, technical and scientific cooperation and technology transfer and development on digital sequence information on genetic resources for use in the conservation and sustainable use of biological diversity”. The self-identified needs of indigenous peoples and local communities, women and youth, as well as delivering national priorities, have been recognized as criteria and goals, respectively.

Although non-monetary benefit sharing appears less controversial, the problem with these discussions is that there has been very little imagination and narratives regarding how to share non-monetary benefits derived from the use of DSI. These benefits are multifold; they can include anything from simple enhanced knowledge about a component of biological diversity, to a complex application of biosynthetic processes, or the products derived therefrom, etc. Sharing modalities for these benefits vary on a case-by-case basis, and this could prove to be extremely complex under the multilateral mechanism.

It is important therefore to maintain close relationships and communication channels between users and providers of genetic resources, to take into account various developments in the research using DSI. Unaccountable databases providing unregulated and anonymous user access, however, exceedingly reduce such possibilities.

Developed countries, which advocate that there should not be any hindrance to research and innovation, however fail to reciprocate the same spirit in sharing the results of such research and innovation with all or at least with the people of the countries that provided the genetic resources. They insist on mutually agreed terms for sharing of technology and other non-monetary benefits, such as the share of products manufactured or extending of licences for manufacturing of the products to the manufacturers of provider countries.

The question is therefore when and how provider countries or beneficiaries of the multilateral mechanism can claim non-monetary benefits from the users of DSI. In all cases, however, the users of DSI must accept at the time of access or before accessing DSI, an obligation to share such benefits fairly and equitably, as and when they arise. Although precise details have to be worked out every time a specific benefit is derived, the obligation to share such benefits fairly and equitably must be recognised as pre-existing. Otherwise, free-riders of the public databases will continue not to share benefits.

Another important feature is when and how the provider of genetic resources comes to know whether someone has accessed the DSI that belongs to the genetic resource it shared and whether such a user has developed a benefit using DSI. Without the accountability of databases and reporting by users, this element is fairly complex to achieve.

The databases should keep a log of their users and oblige them to share benefits through data sharing agreements. They should provide adequate assistance to CBD bodies, national authorities and civil society watchdogs who track developments in biotechnology research and development, especially those involving genetic resources, in order to ensure there is fair and equitable benefit sharing. Users should also be reporting the benefits they derived to the multilateral mechanism.

 A final important element will be whether there is a need for a new platform or facility for sharing non-monetary benefits, such as technologies and capacities that are developed using DSI on genetic resources and what could be the potential modalities for such a platform. Unfortunately, several developed countries and scientific lobbies want to limit the discussions on non-monetary benefit sharing to capacity development in the use of DSI and use of technologies such as genetic sequencing technologies. However, countries like Brazil, India, Argentina and Indonesia and the African Group maintain that the issue of non-monetary benefit sharing is beyond capacity building in the use of DSI.

(d) How to develop a system of DSI sharing accountable to the CBD and its Parties

Cluster D discusses governance issues such as accountability, transparency and inclusive representation. There is significant convergence that the multilateral mechanism will be guided by strategic principles set out by the Parties to the Convention, including those in decision 15/9, in particular paragraphs 9 and 10. There is also an understanding to monitor and evaluate the operations of the mechanism, as well as to reduce administrative burden as much as required.

There are at least two categories of Parties when it comes to discussions on governance. Firstly, those who give prime importance to the governance of the global fund, and secondly, those who think of the governance question as a broader issue involving governance of the multilateral mechanism. Some of the countries in the second category also recognize the need for accountability of databases that share DSI under the multilateral mechanism.

Without cooperation of the databases, it will be difficult to oblige the users of DSI to share benefits fairly and equitably and also to enforce such obligations. Therefore, the major element of discussion in terms of governance is how to ensure accountability in DSI sharing. The question that needs to be addressed in this regard is “whether and, if so, how, a family of linked databases under the mechanism should be created and any potential implications of this, such as the possible fragmentation of databases” (See paragraph 53 of the Annex).

There has been significant opposition from the E.U. in addressing the issues associated with data governance. European countries are major funders of the largest DSI database collaboration, INSDC (International Nucleotide Sequence Database Collaboration), alongside Japan and the United States. Initially, they were opposed to any proposal that would require alteration to the current practices of the databases in sharing DSI. A compromise is now listed as paragraph 56 in the Annex: “Whether and, if so, how, the multilateral mechanism should operate in a way that does not affect the current operations or working practices of public databases”.

Other elements for further discussion relating to data sharing are also listed, such as: (i) whether the multilateral mechanism has implications for data governance; (ii) how the mechanism could operate in a way that is consistent with open access to data in public databases; (iii) whether the mechanism should agree to, and encourage the use of, data governance guidelines that encourage the application of the findability, accessibility, interoperability and reusability (FAIR) principles and the collective benefits, authority to control, responsibility, ethics (CARE) principles in an integrated and balanced way, and (iv) how the multilateral mechanism will operate in a way that respects the rights of indigenous peoples and local communities over their traditional knowledge, traditional knowledge associated with genetic resources and genetic resources.

It is interesting to note that countries have agreed that “the multilateral mechanism must respect the rights of indigenous peoples and local communities over their traditional knowledge, traditional knowledge associated with genetic resources, and genetic resources and data related to them”.  Belarus further insisted that the document should explicitly recognize the rights of indigenous peoples and local communities over the data, which includes DSI.

Another issue that generates much discussion is about the role and involvement of non-state actors in the governance of the global fund. Developed countries are fighting for seats for the private sector in the governing body of the global fund, while other countries are keen to have indigenous peoples and local communities well represented. Regardless of the final make up of any governing body, the participation of non-state actors in governance requires adequate avoidance or management of conflicts of interest.

(e) How to design the multilateral mechanism without undermining national sovereignty and other sector-specific multilateral ABS mechanisms

Cluster E discusses the relation of the multilateral mechanism to other approaches and systems of ABS. Parties are largely united when it comes to learning from other approaches and systems and to be mutually supportive. The need for making the multilateral mechanism supportive to other specialised ABS systems developed by other international organisations is reflected in Decision 15/9 as well.

The major point of contention is the situation in which the multilateral mechanism operates alongside bilateral arrangements for DSI. As Parties have sovereignty over genetic resources, they do not require a COP decision to implement benefit sharing norms on the use of DSI derived from the genetic resources accessed from their national jurisdiction. Article 15 clearly allows for this possibility and there are already Parties that seek benefit sharing from the use of DSI through national laws or policies.

In addition, States have exercised sovereignty and created certain multilateral mechanisms like the WHO’s PIP Framework that already apply some form of benefit sharing on the use of the DSI. International organisations like the WHO and FAO are currently planning to include benefit sharing from the use of DSI relating to the genetic resources covered under their specific mandate. For example, States are negotiating to include DSI from pandemic potential pathogens in an ABS regime as a part of the proposed pandemic instrument under the WHO.

The Working Group is cognizant about these various approaches and systems of ABS and has identified elements for further discussion such as: (a) how to avoid double payments, (b) how to avoid jurisdiction shopping (choosing to make access from a place where there is least benefit sharing obligation), (c) whether co-existence of the multilateral mechanism and other systems satisfy the criteria of the DSI solution identified in Decision 15/9, (d) advantages and disadvantages of using such models on a time-limited basis, etc.

There is also an important question of “whether it would be appropriate for Parties that do and those that do not operate national access and benefit-sharing measures on digital sequence information on genetic resources to benefit from the multilateral mechanism to the same extent.”

Developing countries like Brazil have stated categorically that the multilateral mechanism does not run counter to Articles 15.1 and 15.7 of the Convention, and developed countries also seem to agree with this point, albeit not all of them agree that Article 15 of the Convention also applies to DSI.

However, whether Article 15 applies to DSI is of little practical relevance for two reasons: Firstly, countries have agreed to share benefits, fairly and equitably, from the use of DSI. Secondly, even developed countries such as those from E.U. have argued that if the benefit sharing agreements between providers and users of genetic resources, or national legislation impose benefit sharing obligations on the use of the DSI, then the user has to comply accordingly. This means that when countries have established national or specialised international ABS regimes for specific genetic resources, the multilateral mechanism has to be also consistent with such national or specialised regimes and cannot undermine them.

Therefore, the question of “how” to design the multilateral mechanism without undermining national sovereignty and other sector-specific multilateral ABS mechanisms becomes more prominent in cluster E.

Informal process not a substitute for Party-led text-based negotiations

While the informal intersessional process may help bring together the still widely diverging positions before the next meeting of the Working Group, there are concerns that the IAG could supplant genuine Party-led negotiations. Although the IAG conducts only informal consultations and meetings, its outcomes could effectively shape the discussions of the formal meetings of the Working Group. In the experience with the previous DSI IAG, delegations found it difficult to question its outcomes, even when they have had concerns.

On the other hand, discussions at the IAG are not text-based; most of the time, the discussions are thematic with presentations and workshop exercises, generally led by the Secretariat or invited experts/consultants. The outcomes of such exercises, though informal, set the tone for the outcome report, which will be drafted by the Co-Chairs.

Worryingly, there is high potential for vested interests to be influential in the IAG. It will be important for the IAG to exercise appropriate caution when taking into account the inputs provided by scientist groups, database owners, and the private sector, etc., whose interests do not necessarily match with the interests/requirements of a successful ABS regime. The same applies to invited experts, if any.

As such, consideration should be given to using the procedure for avoiding or managing conflicts of interest as set out in Decision 14/33. While the decision is focused on expert groups, the spirit and intent of the decision should require that similar considerations also apply to the IAG. This is important because outcomes of the IAG are not only agenda setting, but may also be conclusive in nature, in the sense that it could shape future discussions at the Working Group or COP.

While the IAG will likely convene over the whole intersessional period for informal thematic discussions, there is very little time alloted to text-based negotiations intersessionally. There has been no call for textual proposals from the Parties with respect to the development or design of the multilateral mechanism.

As the decision on DSI could potentially undermine ABS regimes based on the sovereign regulation of appropriate access to genetic resources, by facilitating open access to genetic resources through digital means, Parties should be extremely careful about the language they use in the decision setting up operational elements of the multilateral mechanism. It would be preferable if they propose and compile texts and then design the mechanism through text-based negotiations, so as to fully safeguard their positions.

Given the vexed issue of DSI and the importance of the outcomes of the CBD negotiations on the issue, also to other multilateral fora, the informal process that will occur in 2024 can only go so far. Ultimately, it will be up to Parties in the Working Group and COP to work out a solution that genuinely and effectively ensures fair and equitable benefit sharing from the use of DSI. +