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Info Service on Biodiversity and Traditional Knowledge (Sept24/03) Kochi/London, 9 September 2024 (Nithin Ramakrishnan and Lim Li Ching) – Negotiations under the Convention on Biological Diversity (CBD) on the modalities for operationalizing the multilateral mechanism for the fair and equitable sharing of benefits arising from the use of digital sequence information (DSI) on genetic resources, including a global fund, are reaching the final stage. However, following a key meeting in August, critical issues remain unresolved, and will be forwarded to the 16th Conference of the Parties (COP16) of the CBD. [The 2nd meeting of the Ad Hoc Open-ended Working Group on Benefit-sharing from the Use of Digital Sequence Information on Genetic Resources (WGDSI-2) met from 12-16 August in Montreal, Canada. COP16 will be held in Cali, Colombia from 21 October-1 November 2024.] The draft recommendation from WGDSI-2 includes a draft decision for COP16, containing one preambular and eight operative paragraphs. The Annex to the draft decision outlines the “modalities for operationalizing” the multilateral mechanism. Its 29 paragraphs detail the elements of the multilateral mechanism, its scope and operational modalities. The draft decision, except for one operative paragraph, and much of the Annex (26 of the 29 paragraphs) contain many square brackets, indicating disagreements and no consensus. The most crucial undecided issues concern the following:
Obligatory or voluntary benefit-sharing provisions? The most crucial question that needs to be addressed at COP16 is the very nature of the benefit-sharing provisions, i.e., whether they should obligate users of DSI to share benefits fairly and equitably. Developed country Parties, in particular, Japan and Switzerland, vociferously advocated for making benefit-sharing a voluntary choice. On the other hand, developing country Parties, including those from the African Group and GRULAC, as well as India, called for the multilateral mechanism to have legally-binding obligations on the users to share benefits. Even the verbs to be used were heavily contested. Developing country Parties wanted to use the verb “shall” to indicate hard law obligations on the user of DSI to share benefits, while developed country Parties preferred “should” and “will”, which in legal parlance are considered non-binding. The former referred to CBD decisions and the WHO Pandemic Influenza Preparedness Framework that use the verb “shall” and other hard obligatory verbs to ensure that the relevant actors deliver on their functions and obligations. The latter, including Japan, and European countries that sponsor the International Nucleotide Sequence Database Collaboration (INSDC) – a major collaboration of sequence databases – further opposed all calls for accountability, transparency and legitimacy in the sharing of DSI. Such shenanigans in the sharing of DSI will render any obligations stillborn, even if Parties decide to finally strengthen the multilateral mechanism with mandatory benefit sharing obligations at COP16. Scope of the multilateral mechanism Both providers and users of DSI had serious concerns relating to the scope of the multilateral mechanism. The provider countries, especially those who are not part of the INSDC, were not happy with the model proposed by the E.U. and reflected in the Co-Chairs’ proposal, which suggested that users of DSI “from public databases” could share benefits through the multilateral mechanism, and Parties should refrain from placing national ABS measures on the use of such DSI. This proposal clearly failed to generate even minimal convergence – as it is highly ambiguous about the scope and potentially creates legal problems in implementation. The Co-Chairs, as well as the E.U., explained that their intention was to avoid potential overlaps and double payments. Yet, there is no clarity on how to avoid the multilateral mechanism encroaching into national sovereignty and ABS systems. Firstly, the term “public databases” is undefined and this could possibly include Party-run national databases open to the public under their national ABS systems. Secondly, developed countries opposed calls for accountability, transparency and legitimacy in the activities of existing sequence databases. This also creates potential overlap between ABS regimes, as currently databases do not verify whether the DSI uploaders have the requisite permission to make that DSI publicly available, from the provider of genetic material from which DSI is derived. Neither do they verify compliance with national laws. They also share DSI anonymously, making remedies against any violations by DSI uploaders difficult. Thus, even if a Party asserts that the DSI from its endemic species will be shared only under its national ABS system, public databases could be sharing the DSI of such species with millions of researchers and commercial users, inconsistent with those national laws. This will create potential overlap, because the multilateral mechanism could carve out benefits that should have been actually shared with providers under national ABS systems. Thirdly, industry and commercial users expressed doubts regarding how products and services developed using DSI will be distinguishable from their other products. They also questioned how to share benefits across multiple ABS regimes. Japan even wanted users to have an opportunity to declare that they have not utilised DSI in any of their products, although that sector might access DSI regularly. In short, the meeting witnessed the whittling down of the “decoupling” narrative, which seeks to unlink access and benefit-sharing by avoiding questions on legal scope and accountability of databases and other actors. This is because it became evident that avoiding such questions neither reduces administrative costs nor guarantees benefit-sharing as claimed by proponents of the “decoupling” agenda. Relationship with national ABS systems Another question of importance is the stance that will be taken on national ABS systems. There are three important contentions, competing with each other: Firstly, the Co-Chairs proposed that Parties are free to adopt and implement national ABS measures on the use of DSI, if the DSI is not made available through a public database. However, this has problems of scope as discussed above. It treats countries with national genomic sequencing and bioinformatic capacities and countries without such capacities equally, compromising the internationally recognized rights of the latter group. This model could perpetuate inequities between such Parties, because Parties with national capacities could keep DSI on their genetic resources out of public databases and share them bilaterally to seek benefits nationally, while Parties without national capacities would keep waiting for the multilateral mechanism to collect and share benefits from the users of DSI. Secondly, the African Group, aiming to address the gap in the Co-Chair’s model, called for establishing a “CBD sequence database”. The proposal is that this database, in addition to improving legitimacy in sharing DSI, could also assist countries who lack bioinformatic capacities such as national databases, to operationalize their own national ABS systems by providing additional facilities. “Without this proposal to establish a CBD sequence database, the decision will be highly inequitable. However, I am not confident that the merits of the African proposal will be understood by all, as we have been constantly fed misinformation by certain scientific lobbies and subjected to industry scaremongering”, a developing country official told the Third World Network. Thirdly, countries like Japan have taken an aggressive stance to bring Parties into the multilateral mechanism and seek to prevent Parties that apply national ABS measures on the use of DSI from claiming benefits from the global fund. At the same time, it wants to establish the weakest possible multilateral mechanism, avoiding any positive change in the practices relating to the sharing of DSI. Such a system is conducive for Japan to maintain its hegemonic position of sequence data aggregator and to subsequently control policies around the use of DSI and benefit-sharing. According to a developing country negotiator, it is important that the CBD decision takes steps to empower Parties that lack capacities, and fully respects national ABS systems at par with multilateral ABS systems, thus allowing Parties to maximise their benefit-sharing opportunities strategically: “Eventually, Parties may, or at the least can, fully multilateralize benefit sharing, if it is more beneficial in practice. But for now, the COP should not stand with those countries who are flexing their muscles with their bioinformatics capacities to force countries like ours to compromise our national sovereign rights on genetic resources. The current modalities support countries with capacities to do whatever they like with DSI, design national ABS systems, or maintain control over DSI, while forcing countries like ours to go for a voluntary multilateral mechanism, sacrificing our national ABS systems”. “A voluntary system will not only compromise benefit-sharing from the use of DSI, but will also severely diminish the possibilities of a national ABS system to benefit from the utilisation of the physical genetic resources”, the negotiator added. Non-monetary benefits It has become clear that non-monetary benefit-sharing is one of challenges that the proposed multilateral mechanism cannot easily resolve. Unlike the multilateral ABS systems in the WHO and FAO, the CBD mechanism is not one designed for specific purposes or specific sectors. Therefore, there is difficulty in standardising non-monetary benefit sharing across multiple sectors as the non-monetary needs and requirements of each sector vary significantly. Moreover, several delegations, from both developed and developing countries, were of the opinion that the activities that build capacity to sequence genetic materials, transfer of instruments or reagents used in biotechnology-related works, or to train personnel and students for sequencing genetic materials, are non-monetary benefits that could be supported by the CBD decision. For some of them, these activities sufficed to constitute non-monetary benefits, and no further such benefits were envisaged. The E.U., however, maintained a clear position identifying that there are two categories of non-monetary benefits discussed in the DSI context – first, cooperation in general capacity building, technology transfer and like activities, and second, sharing of benefits arising from the use of the DSI such as products and technologies developed using DSI. Nevertheless, the E.U. said that there are practical difficulties in seeking non-monetary benefits through the multilateral mechanism and therefore the mechanism cannot adopt non-monetary benefit-sharing obligations. However, developing country Parties, such as South Africa and Egypt, made clear arguments that non-monetary benefits arising from the use of DSI are critical to the success of the multilateral mechanism. Products like medicines and climate-resistant technologies that could be developed using biological resources should be shared fairly and equitably, in addition to the monetary benefits. India also proposed that non-monetary benefit-sharing should be over and above monetary benefit-sharing. Egypt, on behalf of the African Group, called for sector-specific frameworks to be developed for non-monetary benefit-sharing, for each of the sectors identified in Enclosure A of the Annex of the draft decision. However, questions were asked on how these benefits will be shared, by whom and through whom. Further, who decides upon what is fair and equitable in non-monetary benefit-sharing? Some delegations were of the view that non-monetary benefits could be perhaps sought nationally or bilaterally and there is no need for multilateralizing such non-monetary benefit-sharing. Questions on administration, distribution and utilisation of the DSI global fund While there is no guarantee that funds will be generated by the multilateral mechanism if obligations for benefit-sharing are not made mandatory, the issue of the DSI global fund, its administration and potential host generated much debate. There is also no clarity yet on how the funds collected will be further shared between Parties, and for what purposes. Two options are laid out in the draft recommendation, either through a project-based approach (Option A) or by direct allocations to countries (Option B). The major debate is about whether the fund should be hosted by the Global Environment Facility (GEF) or the CBD Secretariat. The developed countries are keen to argue that the CBD Secretariat lacks capacity, and that the funds should be administered by the GEF – an entity which has its own governing body (the GEF Council), dominated by donors and by rules that are donor-driven, and which operates on a project-based approach. This argument is tantamount to developed countries treating benefits shared with the multilateral mechanism as “charity” and “donations”, rather than entitlements of provider countries and communities. The developed countries also aim to retain control over how such benefits are further redistributed to countries, indigenous peoples and local communities, and how such funds are utilised. Japan further wanted Parties to undertake annual reporting of the utilisation of funds, and to evaluate the projects that are funded. The draft recommendation adopted by WGDSI-2 has a placeholder for which entity will administer the fund, based on, inter alia, recommendations from the Advisory Committee on Resource Mobilization. The Advisory Committee held its 3rd meeting the week after WGDSI-2 to discuss the specific issue of its mandate dealing with the adequate entity to act as the global fund under the multilateral mechanism. It recognized that the funds generated from DSI use are of a different nature than official development assistance. At that meeting, the GEF Secretariat clarified that it operates under a project modality and stated that, while it could not prejudge any future GEF Council decision if asked to implement a disbursement modality that did not involve project submissions, it did not consider itself a viable option to implement the direct allocation modality as currently drafted in option B. The CBD Secretariat, on the other hand, has sufficient fund management capacities, to the extent that direct allocations to countries becomes the mode of disbursement. Importantly, a fund administered by the CBD Secretariat would be under the authority and guidance of, and accountable to, the COP – a key demand of developing country Parties that is one of the few agreed elements in the draft recommendation. There is, however, a remaining hurdle for the direct allocation approach, if it is to be adopted at COP16 – there is no formula in the draft recommendation that would help calculate the funds to be shared with Parties. The draft recommendation only lists, in Enclosure B of the Annex, criteria that should be considered in the development of the formula. There is also no consensus yet on the criteria proposed. A Group on Allocation Methodology is proposed to provide technical advice and guidance on remaining and unresolved issues relating to the disbursement of funds in COP16. There is a push by developed country Parties to postpone adoption of the direct allocation modality by assigning the task of developing the methodology to this Group, while COP16 can start operationalizing the multilateral mechanism by entrusting funds with the GEF for project financing. A developing country official explained to the Third World Network why the fund-related proposals of the developed countries are inequitable: “The multilateral mechanism is for mobilising financial resources for nature conservation, they [developed countries and the international community] say, and request us [developing countries] to waive national benefits-sharing laws. But under common but differentiated responsibilities and in view of the ecological debt owed, it’s actually the duty of the developed country governments to fund biodiversity conservation across the world. Now, they want us to forgo our genetic resources to help them find funds for biodiversity conservation across the world – that too for a mechanism that does not obligate users to share benefits fairly and equitably. Then they want us to wait at the doors of donor-driven facilities to get access to the very same funds which we are actually entitled to.” Call for a CBD sequence database The African Group called for a CBD sequence database to be established as a part of the ABS Clearing House Mechanism established under the Convention. which would deliver these functions: “(a) Enable a safe, secure, accountable and legitimate method of making digital sequence information on genetic resources and associated traditional knowledge publicly available in accordance with applicable national law, and with the prior and informed consent of the provider of the genetic material from which such information is generated, and to secure benefits in line with this decision; (b) Provide to developing country Parties that lack capacities facilities to generate, store, share and use digital sequence information on genetic resources, and to receive benefits from such use in accordance with their national access and benefit-sharing systems; (c) Support non-monetary benefit-sharing by enabling capacity-building, technology transfer, training opportunities and information-sharing among all Parties, in particular developing country Parties;” The proposal is to ensure that there is at least one safe, secure and transparent database platform that can be relied upon by Parties to share DSI accountably in accordance with the CBD decision and their respective national laws. The database would share DSI only with the prior informed consent of the provider of the genetic material to make the DSI publicly available. The database could also employ numerous easy technical tools to screen DSI submitted and verify whether it was submitted with permission from the relevant authorities. The database could also keep logs of DSI uploaders and other users, and make it available to the CBD or its Parties, in cases of any disputes or other concerns. In these ways, such a database could support the implementation of the multilateral mechanism with full respect to the sovereign rights of the country of origin. Additionally, the database could provide clear indications to the user whether the multilateral mechanism or national ABS systems apply to the DSI from particular species in accordance with notifications made by national authorities. It could also indicate if the DSI is shared as a part of any other specialised ABS regimes, such as those existing under the WHO or FAO. All these will help countries who want to implement national ABS measures on DSI without overlapping with the multilateral mechanism and also avoids unnecessary double payments. Finally, it can support non-monetary benefit-sharing by bringing information on the products and services developed using DSI or the knowledge outcomes from research and development on DSI into one portal. Parties can then make informed decisions as to what non-monetary benefits are available and how they could be shared fairly and equitably. This call for a CBD sequence database was discussed at length, with developed countries like Japan, Switzerland, Korea, Canada, Australia and Norway opposing. A few others like the E.U. and U.K. said that they were willing to explore the need for such an additional database and whether there is added value in having such a database. Countries like Norway tried to rely on a particular scientific lobby, supported by E.U. research funds, to demonstrate the futility and technical non-feasibility of such a database. However, the CBD Secretariat explained that the Biosafety Clearing House database already contains sequence information relating to a limited number of genetic resources. Developing country negotiators pointed out that this shows that the CBD Secretariat does have capacities in handling DSI and these could be enhanced to provide support to developing countries that lack national capacities and ensure respect for their rights recognized under the CBD. The proposal from the African Group also received some support, in principle, from other developing countries, both inside and outside the WGDSI-2 meeting. However, it remains bracketed and counter proposals might be made during COP16. The E.U. insisted on adding comment to the report of the meeting, that the text in brackets was not discussed properly and other Parties might want to submit additional text proposals in the draft decision that might be considered during COP16. COP16 will thus have many difficult issues to resolve, in order to ensure that the operationalization of the multilateral mechanism, including the DSI global fund, is fair and equitable. +
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