TWN Info Service on Biodiversity and Traditional Knowledge (Aug24/03)
11 August 2024
Third World Network

CBD: DSI Working Group set to focus on utilisation of benefits received, rather than securing benefits

Kochi, 10 Aug (Nithin Ramakrishnan) - The upcoming meeting of the Convention on Biological Diversity’s Ad Hoc Open-Ended Working Group on Benefit-sharing from the Use of Digital Sequence Information on Genetic Resources appears set to focus more on allocation and utilization of benefits, rather than addressing how to secure benefits in the first place.

This is akin to “putting the cart before the horse”, a developing country diplomat told Third World Network, commenting upon the proposed elements for the further development and operationalization of the multilateral mechanism envisaged for benefit sharing from the use of digital sequence information (DSI).

The Working Group meeting in Montreal on 12 to 16 August 2024 will consider these proposed elements contained in the Annex of the document CBD/WGDSI/2/2.

The proposed elements have around 16 paragraphs and 5 enclosures, of which 7 paragraphs and 2 enclosures are dedicated to the issues that are to be addressed after receiving benefits, such as the allocation and utilisation of the monetary benefits received or to be received by the global fund of the multilateral mechanism. This allocation and utilization is only an issue of material interest if there are monetary benefits accrued and realised in the first place.

Interestingly, there are hardly any paragraphs devoted to ensuring that there are obligations on the users of DSI to share monetary benefits to the global fund. Two paragraphs seek to inform and enable users of DSI to make monetary contributions to a multilateral mechanism while another two paragraphs expect users to pay some monetary contributions to the fund. The proposed elements also contain an Enclosure A listing a few commercial sectors that are considered to be highly dependent on DSI, and as an option the companies belonging to these sectors could be required to make contributions to the global fund.

However, there are no measures suggested to identify the actual users of DSI and to obligate them to share both monetary and non-monetary benefits. On the other hand, there are proposals which regulate, restrain and limit the use of funds from the global fund, which are in fact legal entitlements of the Parties.

No database accountability equals no effective obligations to share benefits

Paragraphs 4 and 5 of the proposed elements state:

“4. Entities operating public databases on DSI are encouraged to make information about the multilateral mechanism available to those accessing the databases, including the requirements for users of DSI related to the fair and equitable sharing of benefits arising from the use of DSI.

5. Parties are to take administrative, policy or legislative measures to encourage and enable businesses to contribute to the global fund in line with the provisions of the multilateral mechanism set out in the present decision, and, in the case of large and transnational companies, to facilitate or ensure such contributions.”

These paragraphs unfortunately cannot ensure obligations on the users of DSI to share benefits. Firstly, Paragraph 4 places no obligation on the entities operating public databases to identify their users and keep records of their access to DSI that could then be shared with the multilateral mechanism or to participating governments, for monitoring and ensuring all users of DSI share benefits. Such entities that currently operate public databases even allow anonymous access to and use of DSI, which has been frustrating benefit sharing, even in the countries which have legislation providing for benefit sharing from the use of DSI.

Paragraph 5 will also not make any difference to the current status quo, because several Parties already have laws or administrative policies to actively seek benefit sharing from the use of DSI. However, they have been unable to secure benefits, since much of the use of the DSI happens anonymously and outside their jurisdictional reach. Even the recently concluded treaty on intellectual property, genetic resources and associated traditional knowledge at the World Intellectual Property Organization does not have an explicit provision on the disclosure of the source of DSI used in the research.  

 

Thus, national laws and policies alone will not suffice in the absence of accountable databases that could identify the users with verified accounts, and subject them to benefit sharing obligations. This is because most of the users of DSI would still remain at large, away from the reach of the multilateral mechanism or national access and benefit sharing (ABS) laws. 

It must be noted that several Parties like Japan and European countries fund these databases such as European Nucleotide Archive (ENA) or and DNA Data Bank of Japan (DDBJ). However, there are no obligations suggested for such Parties to transform the DSI sharing practices of these databases to be respectful of the rights of the other Parties to the CBD. Neither are there obligations placed on them to ensure that they do not frustrate the implementation of the decision relating to benefit sharing from the use of the DSI.

Above all, Paragraph 5 does not require Parties to obligate users to share benefits, but only to “encourage”, “enable” or “facilitate” such action. The word “ensure” appears only once and that too as an optional policy choice in the case of benefit sharing by large transnational companies.

Paragraph 5 gives Parties full freedom to develop their own policy measures, likely creating numerous variations in policies across the Parties. There is no guidance or details about what these legal, administrative or policy measures should be and the manner in which they should be developed. This will create complexity, and reduce legal certainty for the users about their compliance with ABS laws.

Interestingly, Paragraph 6 also stipulates that monetary contributions could be directly paid to the global fund or through national authorities. This adds an additional layer of fragmentation and complexity, allowing users to pay to their home authorities, even though they have been accessing DSI from other countries.

[The payment of monetary contributions is not expected to be made at the time of access, making the home countries the usual choice of the users.]

It is also clear that users in the non-Parties, i.e., the United States, will not be under an obligation to share benefits. The United States on the other hand is a leading economy in the case of biotechnology, fully utilising DSI for those products and services.

Finally, it must be noted that when it comes to non-monetary benefits, there is literally nothing in the proposed elements to ensure they are shared fairly and equitably. On the contrary, the suggestion is to make non-monetary benefit sharing completely voluntary. Paragraph 3 of the proposed elements states thus: “All users of DSI, subject to their individual circumstances, should share non-monetary benefits arising from the use of DSI through the multilateral mechanism.”

No Party-driven allocation and utilisation of benefits

Although ideally Parties are fully entitled to decide on the expenditure and utilisation of the benefits they receive from the utilisation of their genetic resources, under the multilateral mechanism, there is no such entitlement over the use of funds received by the Parties.

Apart from directing the use of the funds as a part of the strategy to support the realisation of the objectives of the Convention and the achievement of the goals and targets of the Kunming-Montreal Global Biodiversity Framework (KMGBF), the Parties are asked to operate “according to internationally accepted fiduciary standards and provide annual reports through national focal points on the activities supported by the funds.”

The global fund is proposed to be administered by an international entity such as the Secretariat of the Convention, any other United Nations body or the Global Environment Facility (GEF). The GEF has however come under criticism from developing country Parties for the inequitable nature of its governance and the difficulties faced in accessing GEF funds.

The allocation formula for sharing funds between Parties is proposed to be included in Enclosure C. But Enclosure C states: “To be elaborated on the basis of paragraphs 35 and 36 of document CBD/WGDSI/2/2/Add.1.”

In turn, paragraphs 35 and 36 of document CBD/WGDSI/2/2/Add.1 contain nothing concrete about arriving at a formula, other than referring to the Conference of Parties or Technical Body operating under the Conference of Parties to determine a formula based on certain factors such as biodiversity richness or level of the development.

An alternative suggested is to use the Human Development Index and Biodiversity Index, such as those maintained by the UNDP and UNEP respectively, and to arrive at a formula based on them. Here again, how to arrive at a formula is left unexplained.

Thus, the proposed elements are indirectly suggesting that the setting of the allocation formula should be referred to a technical expert group. Enclosure D is suggested for setting up the terms and reference of such an expert group.

There are also other paragraphs which set forth the manner in which funds should be allocated and utilised.

Taken together, the implication of these paragraphs is that the global fund will not be a Party-driven financial resource.

Ultimately, if the Working Group accepts these proposed elements at the meeting next week, there will be no guarantee or legal certainty that developing country Parties will receive benefits or funds from the multilateral mechanism.

A developing country delegate commented to Third World Network, “We are discussing how to share or utilise the funds that will be received. But how to secure those funds in the first place?” The proposed elements regrettably do not provide any answers in this regard.

Furthermore, “the proposed elements make no effort to ensure good governance to safeguard our rights, but instead propose provisions that limit our policy space and legal entitlements”, the delegate continued. “We are told to avoid administrative burdens and costs of governing ABS systems for DSI, but we are asked to undertake administrative burdens to follow international standards and submit annual reports about the utilisation of funds”.

Even in these inequitable situations, he lamented that “Parties are not even given a chance to choose to become participants of the multilateral system or not”.

A course correction is urgently needed to ensure that benefits from the use of DSI are first fully secured and then shared with the countries, indigenous peoples and local communities who have provided these resources.+