HALL, K._bioprospecting Background Paper. What is Bioprospecting

8/12/2019 HALL, K._bioprospecting Background Paper. What is Bioprospecting

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BIOPROSPECTINGBACKGROUNDPAPER:

WHAT IS BIOPROSPECTING ANDWHAT ARE OUR INTERNATIONAL COMMITMENTS?

KRISTY HALLThe University of Auckland

Masters StudentSchool of Geography and Environmental Science

April 2003


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EXECUTIVE SUMMARY

Biodiversity prospecting or bioprospecting is the examination of biologicalresources for features that may be of value for commercial development. Historically

this is an ancient process dating from the 15thcentury, however the growing consumerdemand for naturally sourced products, combined with advances in the

pharmaceutical and agricultural industries has fueled bioprospecting activitiesworldwide.

Traditionally, bioprospecting has included selective plant and animal breeding,fermentation processes, and the utilisation of plant and animal products for traditionalmedicines. In the last twenty-five years however, scientific and technologicaladvances have pushed bioprospecting to the fore of research and development, and itis frequently utilised in activities such as genetic modification, biological control, andthe development of pharmaceutical products, agrochemicals and cosmetics.Significantly, bioprospecting inherently involves thesearch for novel productsin or

produced by living organisms. This is separate from the downstream testing,commercialisation and marketing of such products which is encompassed in the

broader field of biotechnology. By definition, bioprospecting excludes researchconducted for non-commercial purposes, however it is cautioned that the division

between academic and commercial research is becoming increasingly blurred.

New Zealand has an array of international commitments of relevance to themanagement of bioprospecting. The Convention on Biological Diversity and theUnited Nations Convention on the Law of the Sea are the two international treaties

which specify New Zealands jurisdiction and rights over the utilisation andmanagement of our biological resources. The World Intellectual PropertyOrganization, the World Trade Organization and the International Union for theProtection of New Varieties of Plants specify the conditions under which intellectual

property rights can be granted, and to some extent inhibit the creation of internationalaccess and benefit sharing regimes. The FAO International Treaty on Plant GeneticResources for Food and Agriculture provides an example of a treaty to which NewZealand is not a Member but which attempts to promote the conservation andsustainable use of plant genetic resources in keeping with the requirements of theConvention on Biological Diversity. The Treaty includes the provision for theestablishment of a Multilateral System of Access and Benefit Sharing, however the

effectiveness of this regime remains to be seen as the Treaty has not yet entered intoforce.


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TABLE OF CONTENTS

Executive Summary 2Table of Contents 3

1.0 Background 4

2.0 What is Bioprospecting? 52.1 Definition 52.2 Bioprospecting, Biotechnology and Biodiversity Research 5

3.0 Who Conducts Bioprospecting? 73.1 The New Zealand Situation 73.2 The International Situation 8

4.0

An Issue of Concern to New Zealand 95.0 International Commitments 10

5.1 Introduction 105.2 The Convention on Biological Diversity 10

5.2.1 Introduction 115.2.2 Key Articles 125.2.3 The Working Group on Access and Benefit Sharing 165.2.4 The Working Group on Article 8(j) 195.2.5 The Cartegena Protocol on Biosafety 20

5.3 Convention on the Law of the Sea 215.3.1 Introduction 215.3.2 Key Articles 23

5.4 World Intellectual Property Organisation andWorld Trade Organization 275.4.1 Introduction 275.4.2 World Intellectual Property Organisation 295.4.3 World Trade Organisation 31

5.5 International Union for the Protection of New Varieties of Plants 365.6 Food and Agriculture Organization of the United Nations 38

5.6.1 Introduction 385.6.2 International Treaty on Plant Genetic Resources for Food

and Agriculture 386.0 Discussion and Conclusion 43

References 45


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1.0 BACKGROUND

This is a position paper written as part of the Bioprospecting Review currently beingundertaken by the Natural Resources Policy Group of the Ministry of Economic

Development. The document aims to provide a precise definition of bioprospectingand to discuss some of the issues inherent with the management of this industry for

New Zealand.

The paper does not necessarily reflect the official view of the Ministry of EconomicDevelopment, but is intended to promote discussion on this issue. It complementsother position papers as well as the public Bioprospecting Discussion Document1

which have been written on the subject of bioprospecting.

1

Bioprospecting Discission Document and Discussion Document refers to the publicationBioprospecting in New Zealand discussing the optionsreleased by the Ministry of EconomicDevelopment, November 2002.


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2.0 WHAT IS BIOPROSPECTING?

2.1 DEFINITION

The term biodiversity prospecting, otherwise known as bioprospecting, was firstdefined in 1993 as the exploration of biodiversity for commercially valuable geneticresources and biochemicals.2 During the last ten years this definition has beenrevised and is generally considered to be the examination of biological resources for

features that may be of value for commercial development.3 These features mayinclude morphological, physiological, genetic or biochemical characteristics of

potential commercial applicability which have been sourced from or produced bybiological organisms.

Under the Convention on Biological Diversity (1992), biological resources aredefined to include genetic resources, organisms or parts thereof, populations, or anyother biotic component of ecosystems with actual or potential use or value forhumanity.4 This equates to plants, animals, fungi, microorganisms, and viruses, the

parts and products thereof which may be of value to humans. For reasons ofconvention and ethics, biological resources do not include humans or human tissues.5

Significantly, the definitions of both bioprospecting and biological resources make nodistinction between the examination of endemic, native, or exotic species;6commonor private property resources; or in situ or ex situ populations and collections. 7 Thistherefore considers domestic and wild plants and animals, native and introducedspecies, genetically modified organisms, and organisms both within and outside areas

of national sovereignty or jurisdiction.

8

2.2 BIOPROSPECTING, BIOTECHNOLOGY AND BIODIVERSITY

RESEARCH

Utilizing the above definitions, bioprospecting equates to the search formorphological, physiological, genetic or biochemical characteristics of plants,animals, fungi, microorganisms, and viruses, and their products, which may havecommercial application.

Inherent in this definition is the concept ofsearch, or the examination of biologicalorganisms, parts and products, for as yet undiscovered characteristics andapplications. This delineates bioprospecting from the related term biotechnologywhich is an umbrella term for innovations which are based on the application of

2Reid et al., 1993.3MED, 2002, p3.

4CBD, 1992, Article 2.

5Refer Decision 11/11(2) of the Second Conference of the Parties of the Convention on BiologicalDiversity.6Endemic: only found in one country/area. Native: may occur in more than one country/area, but

which has not been anthropogenically introduced. Exotic: introduced by humans.7Kiss, A.C. and Shelton, D., 2000.

8Kiss, A.C. and Shelton, D., 2000.


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biological resources or their products to the production of useful goods and services.9

Biotechnology industries include genetic technology; waste management andbioremediation; the development of many health products, medicines andagrochemicals; as well as plant and animal breeding.10 As illustrated in Fig 2.1,

bioprospecting is frequently involved in the initial stages of a biotechnology project,

and can include the identification of a substance for potential use in a new medicine;the isolation of a gene to be used in genetic modification; the search for a biologicalcontrol agent for a pest; the identification of an enzyme or microorganism for anindustrial process; or simply the selective breeding of a plant or animal to produce adesired characteristic. Note however that bioprospectingstops once the desiredcompound or characteristic has been found and the project moves towards furtherdevelopment and commercialization.

FIG 2.1: The development of a commercial product in the biotechnology industry, illustrating thedifference between bioprospecting, biotechnology, and biodiversity research. Note that not all

processes illustrated are conducted for every development.

Bioprospecting also only includes the search for products which may be of potentialcommercialuse. This excludes non-commercial biodiversity research, namely

studies conducted by universities and independent research institutions. Asemphasized by Laird and ten Kate (2002), although academic research may involvethe study of biological resources, their components and characteristics, research only

becomes bioprospecting once the researcher identifies the commercial potential of thestudy and conducts investigations with this goal in mind.11 It is noted however thatthis distinction is not always clear, for example as much academic research is (at least

partially) privately funded, and because the results of concluded studies may beutilized by companies in subsequent bioprospecting activities, sourced either from

published journals, conference proceedings, or through directly hiring or contractingthe researcher. This has significant implications for management of this process.

9

Definition adapted from MORST, 2002.10www.accessexcellence.com

11Laird and ten Kate, 2002.

Literaturesearchesand/orconsultationwith locallandownersand resourceusers

Initial collectionof biologicalmaterial

Screening,purification,initial testing

In-depthtesting anddevelopmentof the product

PatentingFurtherharvesting

Commercialsale

CONTINUUM OF PRODUCT DEVELOPMENT

DEVELOPMENT & COMMERCIALISATIONBIOPROSPECTING= SEARCH STAGE

BIODIVERSITY RESEARCH= NON-COMMERCIAL

BIOTECHNOLOGY= SEARCH, DEVELOPMENT & COMMERCIALISATION


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3.0 WHO CONDUCTS BIOPROSPECTING?

3.1 THE NEW ZEALAND SITUATION

Currently there is very little data on the extent of bioprospecting activities in NewZealand, as no formal research has been conducted into the scale of the industry.Evidence suggests however that bioprospecting of some kind has been conductedsince the first settlement of New Zealand, with recent increasing interest associatedwith rapid growth of the modern biotechnology sector.

Early Polynesian migrants conducted the first bioprospecting activities in NewZealand, although it is unclear whether these were conscious experiments or long-term trial-and-error procedures. In addition to adapting a number of exotic foodcrops for New Zealand conditions such as the kumara, early settlers developed rongoa(traditional medicines), food additives, teas, and dyes from a wide range of leaves,shoots, roots, and the fruit from native plant species.

The arrival of European settlement however accelerated bioprospecting, as adependence on commercial agriculture prompted the need for plant and animalspecies bred specifically for New Zealand conditions. Initial research was devoted toimproving sheep, beef, and dairy production, as provided by the Merino sheep (prizedfor long staple wool in cold climes) and the Perendale (providing both good qualitywool and meat for more northern areas). The removal of farm subsidies in the 1980sfueled greater research and development in this area as farms agglomerated andfarmers demanded greater production efficiencies. In the last fifteen years, much

bioprospecting and biotechnology has been based on maximizing agriculturalproduction, achieved by selective breeding and artificial insemination technologies,soil and pasture development, as well the development and refinement ofagrochemicals and commercial crops. In recent years, increasing interest has been

paid to genetically modified organisms to increase agricultural efficiencies.

Today, biotechnology continues to play a significant role in agriculture, butincreasingly is being applied in other sectors, specifically for industrial processes,food research, ornamental plant development, health products, and medicines. In

particular, greater emphasis is being placed on the properties of native and indigenousbiota, in addition to research on the traditionally targeted introduced species.

Universities, crown research institutes and some private companies conduct themajority of biotechnology research in New Zealand, with a significant proportion

being performed in collaboration with international institutions and organizations.12

By international standards however, biotechnology in New Zealand remains small. In1999 the industry was estimated to be worth $475 million to the economy,13with asignificant proportion of this likely to be the direct result of bioprospecting. In 2002the government released the Biotechnology Strategy and the Growth and InnovationFramework which identified biotechnology as a key area for growth,14indicating that

12

MORST, 2002.13MORST, 2002.

14MORST, 2002.


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the industry is likely to be the focus of investment and achieve rapid expansion in thenear future.

3.2 THE INTERNATIONAL SITUATION

Internationally, large multinational pharmaceutical and agricultural corporationsdominate bioprospecting and biotechnology activities. The nature of the industrynecessitates large amounts of capital with returns often on the distant horizon,attracting large organizations more willing to adopt and secure large repayment risk.Infamous names from the industry include Monsanto, Glaxo-Smith Cline, and Merck,all US-based corporations which conduct activities all over the globe.

Bioprospecting is therefore big business. Although an exact monetary figure for thecontribution of bioprospecting to the global economy is difficult to calculate, manykey industries are dependent on bioprospecting and biotechnology for their continued

growth. As an example, the global market for pharmaceuticals is more than US$300billion per year, with expenditure by such corporations on research and developmentin the order of US$250-US$500 million.15 Of the top 150 prescription drugs sold inthe United States, 118 of these were developed from living organisms: 74% from

plants, 18% from fungi, and 5% from vertebrate species.16 In the agrochemicalindustry, it costs approximately US$40-US$100 million for the production of a novel

pesticide as one example. In both of these industries, approximately 37% of theresearch and development budget is devoted to the discovery of desired compounds,with the remainder spent on product development, in-depth trials, and marketing.17

Tempering these costs however is the knowledge that very few bioprospectedcompounds actually make it to commercial sale.

Many small companies are also involved in bioprospecting and biotechnology,principally in the niche health food and beauty product end of the market, as well assmall plant and animal breeders and ornamental horticulture operators. Thecontribution of these companies however pales in comparison to the research anddevelopment undertaken by multinationals, highlighted by the ornamental horticultureindustry where 90% of the global trade in plants, cut flowers, and bulbs is dominated

by ten corporations.18 In addition, pharmaceutical and herbal medicine industries arebecoming increasingly blurred as multinationals recognize the growing demand fornaturally derived products, leading them to diversify into this area and frequently buy

out smaller institutions in the process.

15

Laird and ten Kate, 2002.16

Stone et al., 1997.17Laird and ten Kate, 2002.

18Laird and ten Kate, 2002.


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4.0 AN ISSUE OF CONCERN TO NEW ZEALAND

Bioprospecting is of particular significance for New Zealand. As a nation built onprimary production, bioprospecting and biotechnology play a major role in

maximizing agricultural output, and for finding new and innovative ways to use andmarket our agricultural goods and services. Indeed, New Zealand is at the forefront of

biotechnology in the areas of the milk and milk product research, pasture and soildevelopment. Researchers are also increasingly diversifying into the area of industrialand medical biotechnology, providing a reliable, cost-effective alternative foroverseas corporations than American, European or Asian biotechnology firms.19

One of the newer areas of bioprospecting and biotechnology for this country is theexamination and commercialization of endemic and native species, their products andderivatives. Examples include manuka honey products, fungi with medicinal

properties, the breeding and marketing of ornamental native plants, and marineorganisms being examined for possible medicinal or health properties. With anabundance of unique and rare flora and fauna, combined with a wealth of Maoriknowledge behind this biodiversity, New Zealand holds considerable potential for

bioprospecting.

Although a precise figure cannot be placed on the extent of bioprospecting activitiesin this country, the Ministry of Economic Development acknowledges that it is beingconducted by a wide range of agencies, including both domestic and foreign

biotechnology firms, universities, and research institutes.20 Current activities areconducted in the absence of any overarching guidelines, principles, or legislation,

with some parties concerned that such activities have the potential to undermine otherenvironmental, social or economic policy objectives. Particular concerns includemanaging access to biological resources, controlling harvesting, protecting indigenousknowledge, and ensuring that benefits are maximized for New Zealand.21 Thedevelopment of policy or regulation to oversee bioprospecting activities musttherefore balance the potential costs and benefits of this activity.

19

Professor Garth Cooper, pers. comm.20MED, unpublished, p2.

21MED, 2002.


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5.0 INTERNATIONAL COMMITMENTS

5.1 INTRODUCTION

New Zealand has a number of international commitments of direct relevance to themanagement of bioprospecting activities. As a Member of several internationalorganizations and a signatory to a number of international treaties and declarations,this country is obligated to implement the provisions of these documents whenexamining an issue or drafting new policy. Many of these commitments are bindingwhereby New Zealand has a legal obligation to adhere to the requirements of thesedocuments. Examples include the Convention on Biological Diversity, the TRIPSAgreement, and the United Nations Convention on the Law of the Sea. Others arenon-binding moral commitments including Agenda 21, the Rio Principles, and theMillennium Development Goals. In addition, New Zealand is a member of a numberof organizations to draft voluntary guidelines and standards which aim to influence

policy making, as provided by the World Intellectual Property Organization (WIPO)and the Conference of the Parties to the Convention on Biological Diversity.

A brief account of the key international commitments in relation to bioprospecting areprovided in the following section. A more extensive list of internationalorganisations, treaties, and declarations to which New Zealand is a signatory orMember can be sourced from the Ministry of Foreign Affairs and Trade.22

5.2 THE CONVENTION ON BIOLOGICAL DIVERSITY

5.2.1 Introduction

The Convention on Biological Diversity (CBD) was signed in 1992 at the WorldSummit on Environment and Development held in Rio de Janeiro, Brazil, andrepresents the first international commitment to the preservation of biologicaldiversity on a global scale. As of March 2003, there were 187 Parties to theConvention, representing a groundbreaking 90% of the United Nations. This figureincludes 156 nations which have formally ratified23meaning that they have officially

pledged to adopt the principles of the treaty into national law. New Zealand signedthe document at the Summit in 1992 and ratified the following year on 16 September

1993. The Convention entered into force on the 29 December 1993, ninety daysfollowing the receipt of the 30thinstrument of ratification.

The CBD was a landmark international treaty. The immense support given to theagreement at Rio de Janeiro 1992 represented a global commitment to biodiversityissues, principally a need to balance resource use with conservation, and promotegreater equity and understanding between nations in the burgeoning industry of

biotechnology. Significantly, the CBD was the first international environmentaldocument to transcend national boundaries,24providing states with specific

22

www.mfat.govt.nz23

http://www.biodiv.org/world/parties.asp24Compare for example; the Convention for the Protection of Migratory Birds; The Antarctic Treaty;

the Convention on the Law of the Sea.


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to facilitate sustainable human use rather than to achieve biodiversity conservation forits own sake, on moral or ethical grounds irrespective of use values to humanity.35

Irrespective of the Conventions imperfections, it undoubtedly illustrates a mammothtask to attempt to preserve the worlds biodiversity and achieve an equitable balancing

act between the desires of both developed and developing states.36

5.2.2 Key Articles

The CBD has three main objectives, provided in Article 1:37

1. The conservationof biological diversity2. Thesustainable useof its components3. The fair and equitablesharing of the benefitsarising out of the utilisation

of genetic resources, including by appropriate accessto genetic

resources and by appropriate transfer of relevant technologiesand byappropriate funding.

These objectives are followed by 41 subsequent Articles which outline how they areto be implemented. In Article 6 the Convention requests Contracting Parties todevelop national strategies, plans or programmes for the conservation and sustainableuse of biological diversity,38which is mirrored in Article 10 which requires Parties tointegratethe conservation and sustainable use of biological resources into nationaldecision making.39 Emphasis is placed on in-situ conservation, including the requestto establish systems of protected areas,40promote the recovery of threatened species,41

rehabilitate degraded ecosystems,42and promote the conservation and sustainable use

of biodiversity both within and outside of protected areas.43

Parties are also tomonitor species and ecosystems,44introduce environmental impact assessment

procedures,45and promote public awareness of biodiversity, conservation andsustainability.46

Although the Convention does not specifically refer to the activity ofbioprospecting, it does cover a number of closely related issues involved in the

bioprospecting process and which are of direct relevance to the drafting ofbioprospecting policy. The key obligations concern the principles of statesovereignty, conservation and sustainable use, access to genetic resources and benefitsharing, and the protection of indigenous knowledge. Most obligations focus on

activities whereby one Party is acquiring genetic material from another, but do notcover activities which are conducted by national actors. This illustrates how the

35Boyle, A., 1995.36

Birnie, P.W., and Boyle, A.E., 2002.37

CBD, 1992, Article1, emphasis added.38CBD, 1992, Article 6(a).39

CBD, 1992, Article 10(a).40

CBD, 1992, Article 8(a,b)41CBD, 1992, Article 10(f).42

Ibid.43

CBD, 1992, Article 8(c,d,e,i)44

CBD, 1992, Article 7.45CBD, 1992, Article 14.

46CBD, 1992, Article 13.


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Convention is primarily concerned with managing activities between countries,namely balancing access to biodiverse developing countries by biodiversity poor buttechnologically advanced developed countries.

Article 3 of the CBD asserts the principle47that States havethe sovereign right to

exploit their own resources pursuant to their own environmental policies and aresponsibility to ensure that activitiesdo not cause damage to the environment ofother states or to areas beyond the limits of national jurisdiction. This affirms that astate is free to conduct activities within its borders as long as they do not adverselyaffect activities of neighbouring states or common areas, however through signing theConvention a nation is committing itself to implement the obligations set out in thetext.48 Article 15 then follows by recognising the sovereign rights of States overtheir natural resources,49including the authority to determine access and benefitsharing regimes in line with the objectives of the Convention. This statement issignificant as it effectively removes biological resources from the commons wherethey had been placed in the past which had facilitated the free collection and exchange

of biological material worldwide. The CBD therefore marks a definitive pointtransferring the management of biological resources to individual states, and mirrorsother treaties whereby property rights have been established over previously commonresources in order to improve management.50

Two of the three overarching aims of the CBD are the conservation and sustainableuse of global biodiversity. Although conservation is left undefined, sustainableuse is defined as the use of components of biological diversity in a way or at a ratethat does not lead to the long-term decline of biological diversity, thereby maintainingits potential to meet the needs of present and future generations.51 It can be arguedthat neither term has an accepted working definition; conservation has evolved fromexclusion to inclusion, from species to ecosystem to process management, andsustainability remains a somewhat hypothetical term which has had limited successfor the management of biodiversity.52 In general however, conservation is frequently

prohibitive, whilst the newer principle of sustainability is more facilitative whichpermits use of resources at a level consistent with the carrying capacity of theenvironment. Irrespective of precise definitions, a number of Articles emphasise theimportance of scientific research to help achieve these objectives. Of particular notefor bioprospecting management, Article 11(b) requests that Parties promote andencourage research which contributes to the conservation and sustainable use of

biological diversity. It is acknowledged that properly managed scientific research,

including bioprospecting activities, may aid in the achievement of the principles ofthe Convention.

A much emphasised section of the CBD of relevance to bioprospecting can be foundin Articles 15 (Access to Genetic Resources) to 19 (Handling of Biotechnology and

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The principle of state sovereignty is found in the Charter of the United Nations and is a guidingprinciple of international law.48Birnie, P.W., and Boyle, A.E., 2002; Boyle, A., 1995.49

CBD, 1992, Article 15(a).50

Principally transboundary fish stock and migrating animal treaties.51

CBD, 1992, Article 2.52An examination of global fish stocks provides clear evidence of the failure of sustainable

management regimes for biodiversity.


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Distribution of its Benefits). These sections request that Parties are to facilitate accessto genetic resources in return for a share in the benefits arising from the utilisation ofthese resources, with particular emphasis placed on the needs of developing countries.Genetic resources are defined as any material of plant, animal, microbial or otherorigin containing functional units of heredityof actual or potential value53but for

sections 15 to 19 are specified as only those that are provided by Contracting Partiesthat are countries of origin of such resources or by the Parties that have acquired thegenetic resources in accordance with this Convention.54 This means that access and

benefit sharing regimes developed under the CBD apply principally to native orendemic species, and do not cover introduced species (unless acquired under the

provisions of the Convention), biochemicals or other biological products, or cellcomponents which do not contain DNA or RNA.

Article 15 specifies the parameters for access to genetic resources:

15(2): Each Contracting Party shall endeavour to create conditions to

facilitate access to genetic resources for environmentally sounduses15(4): Access, where granted, shall be on mutually agreed terms and15(5): Access shall be subject to prior informed consent of the Contracting

Party providing such resources

These requirements are complemented with requirements for benefit sharing:

15(7): Each Contracting Party shall take legislative, administrative or policymeasures as appropriatewith the aim of sharing in a fair andequitable way the results of research and development and the benefitsarising from the commercial and other utilisation of genetic resourceswith the Contracting Party providing such resources. Such sharingshall be on mutually agreed terms.

Although the specific method for achieving improved access and benefit sharing fromthe utilisation of genetic resources is left unqualified, a number of Articles request forthe transfer of technology between Parties,55information exchange,56scientificcooperation,57and the provision of funding.58 Of particular importance, scientificresearch arising from genetic resources is requested to be undertaken with the full

participation of, and where possible in the country of origin of such resources.59

Access and benefit sharing has proved a contentious issue for Contracting Parties, and

is the subject of the Bonn Guidelines adopted at the 4

th

Conference of the Parties heldin Geneva, 2002 (refer section 5.2.3).

Another significant feature of the CBD is the recognition of indigenous knowledge,including the role than indigenous communities can play in the conservation andsustainable utilisation of biological resources. Preambular paragraph 12 and the much

53

CBD, 1992, Article 2.54CBD, 1992, Article 15(3).55

CBD, 1992, Articles 1 and 16.56

CBD, 1992, Article 17.57

CBD, 1992, Article 18.58CBD, 1992, Articles 1 and 20.

59CBD, 1992, Article 15(6).


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celebrated Article 8(j) are frequently quoted as the key directives requiring priorinformed consent, involvement of and benefit sharing to indigenous peoples. UnderArticle 8(j) the CBD requests that Parties:

respect, preserve and maintain knowledge, innovations and practices ofindigenous and local communities embodying traditional lifestyles relevant forthe conservation and sustainable use of biological diversity and promote theirwider application with the approval and involvement of the holders of suchknowledge, innovations and practices and encourage the equitable sharing of

benefits arising from the utilisation of such knowledge, innovations andpractices.60

This ambitious Article however is significantly weakened by statements that it is to beimplemented as far as possible and as appropriate and subject to [a Partys] nationallegislation. The text also provides no definitions or a framework for how this Articleis to be interpreted or implemented, and as such it has caused much debate among

Contracting Parties. In response to this the Conference of the Parties has establishedan ad hoc Working Group on Article 8(j)61(refer section 5.2.4).

The provisions of Article 8(j) are accompanied by Article 10(c) which requests thatParties protect and encourage [the] customary use of biological resources inaccordance with traditional cultural practices and Article 17 which aims to facilitatethe exchange of information [between Parties] from all publicly available sourcesincluding indigenous and traditional knowledge. Whilst Article 10 complements thegoals of Article 8(j) namely the respect and preservation of traditional knowledge,Article 17 somewhat contradicts this by promoting the widespread dissemination of

publicly available traditional knowledge. It is noted however that Article 17 must be

interpreted together with other sections of the Convention, meaning that this exchangeof information must be accompanied by the approval and involvement of traditionalknowledge holders.

60CBD, 1992, Article 8(j), emphasis added.61

COP Decision IV/9.


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5.2.3 The Working Group on Access and Benefit Sharing

The CBD Working Group on Access and Benefit Sharing is one of four Conventionbodies established to aid in the implementation of the treaty by Member States. Theother organizations are the Conference of the Parties (COP) which is the governing

body and main decision-making agency of the Convention; the Subsidiary Body onScientific, Technical and Technological Advice (SBSTTA) which is a subsidiary ofthe COP and focuses on improving biodiversity assessments and monitoring; as wellas the Working Group on Article 8(j) discussed in section 5.2.4.

Issues concerning access to genetic resources and benefit sharing have arisen in COPnegotiations from 1995. At the fourth COP held in the Slovak Republic May 1998,Member States addressed the matter for the first time as a separate agenda item, andas a result of these discussions agreed to establish a regionally balanced panel ofexperts in order to developa common understanding of basic concepts [of accessand benefit sharing] and to explore all options for access and benefit-sharing on

mutually agreed terms including principles, guidelines, and codes of conduct of bestpractices for access and benefit-sharing arrangements.62 Members of the Panel wereto be appointed by Governments and composed of representatives from the privateand public sectors, as well as representatives of indigenous and local communities.The Panel convened in 1999 and 2000 and reached broad consensus on the issues of

prior informed consent, mutually agreed terms, information needs and capacitybuilding.

In May 2000 at the 5thCOP held in Nairobi, Kenya, Member States agreed tosupplement the work of the Panel of Experts and established an Ad Hoc Open-endedWorking Group on Access and Benefit Sharing. The Group consisted ofrepresentatives nominated by Governments and regional economic integrationorganizations, and was open to the participation of indigenous and local communities,non-governmental organizations, industry and scientific and academic institutions, aswell as intergovernmental organisations. The mandate of the Group was to developguidelines and other approaches in order to facilitate access and benefit sharing

between Parties and to submit the results of this analysis to the sixth COP.63 TheGroup convened from 22-26 October 2001 and developed the Draft Bonn Guidelineson Access to Genetic Resources and the Fair and Equitable Sharing of the BenefitsArising from their Utilization (the Bonn Guidelines) which were adopted by MemberStates at COP VI in April 2002.64

The Bonn Guidelines on Access to Genetic Resources and the Fair and EquitableSharing of the Benefits Arising from their Utilization (the Bonn Guidelines) representthe first time that Contracting Parties to the CBD have collectively negotiated termsfor the implementation of Article 15 and related sections. Prior to this point accessand benefit sharing regimes had been very limited, implemented on an ad hocandunilateral basis. The Guidelines aim to provide a voluntary set of standards and

procedures designed to aid Contracting Parties in the development of legislative,administrative or policy measures for facilitating access and benefit sharing. They areacknowledged as a useful first step of an evolutionary process of implementation of

62

COP Decision IV/8 paragraph 3.63COP Decision V/26A paragraph 11.

64COP Decision VI/24.


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relevant provisions of the Convention65meaning that they are a work in progress andthere is provision for further strengthening and/or amendments of the document in thefuture.

The Bonn Guidelines establish a number of roles and responsibilities66for

Contracting Parties, however they are designed to be simple and flexible to suit arange of situations and to gain widespread adoption by both provider and usercountries.67 Consequently many of the provisions are weak and imprecise, howeverthey can provide proactive countries with a legitimate starting point from which todevelop appropriate legislation. The Guidelines request that countries designate anational focus point for access and benefit sharing to coordinate and disseminateinformation on access and benefit sharing to intending applicants.68 It also outlinesthe role of competent national authority(ies), which may be established to grantaccess to genetic resources, and provide advice on a range of issues including theconservation and sustainable use of genetic resources; promoting the effective

participation of stakeholders including indigenous peoples; in addition to processing,

monitoring and enforcing access and benefit sharing agreements and contracts.Section IV of the Bonn Guidelines then describes the steps to be taken in developingaccess and benefit sharing regimes. It emphasizes the need for prior informed consentand mutually agreed terms for benefit sharing, and advises that such systems may bedeveloped as part of a wider national biodiversity strategy required under Article 6 ofthe CBD:

Access and benefit sharing systems should be based on an overall accessand benefit sharing strategy at the country or regional level. This accessand benefit sharing strategy should aim at the conservation and sustainableuse of biological diversity, and may be part of a national biodiversity

strategy and action plan and promote the equitable sharing of benefits.69

Access and benefit sharing systems may apply to all activities related to the use ofgenetic resources including activities prior to access (such as literature searches andconsultation), research and development of a product, commercialization, and otheruses, including benefit sharing.70 The Guidelines therefore cover activities such as

bioprospecting, biodiversity research, as well as other downstream biotechnologyactivities. They also request that access and benefit sharing conditions be honoured ifand when the material is transferred to third parties, and ask that new prior informedconsent and mutually agreed terms71be negotiated should the resource be used forany other purposes than initially negotiated.

Articles 24 to 40 specify the procedures which may be taken by a Contracting Party inorder to develop a prior informed consent system. The Guidelines request thatcountries facilitate access to genetic resources at minimum cost; that there is legalcertainty over the process and provisions required; that no undue restrictions to access

65

COP Decision VI/24.66

Bonn Guidelines Section II.67Provider and user countries are those which are providing or using genetic resources inaccordance with the Convention.68

Bonn Guidelines Article 13.69

Bonn Guidelines Article 22 (emphasis added).70Bonn Guidelines Article 23.

71Bonn Guidelines Article 16(b)(v).


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are enforced; and that applicants obtain the consent of the relevant competentnational authority(ies)[and] relevant stakeholders, such as indigenous and localcommunities, as appropriate to the circumstances and subject to domestic law.72

Although a specific framework is left undefined, prior informed consent systems mayinclude:

a) Competent national authority(ies) granting or providing for evidence ofprior informed consent

b) Timing and deadlines, including timeframes for application and processingprocedures

c) Specification of use for the resources requestedd) Procedures for obtaining prior informed consent

eg. environmental impact procedures; the type, quantity and location of thegenetic resource requested; duration of activity; intended use.

e) Mechanism for consultation of relevant stakeholdersf) Details of the process required.

eg. documented permits or licences; national registration systems.

Requests for prior informed consent are also linked to the requirement of mutuallyagreed terms for access to genetic resources and benefit sharing. Mutually agreedterms may include agreement between Parties over the type, quantity and location ofgenetic material to be accessed; limitations on the possible use of the material;whether the terms of the agreement can be renegotiated (eg. following a change of useor involvement of a third party); preservation of the knowledge and cultural practicesof indigenous peoples; treatment of confidential information; and arrangements for

benefit sharing. Article 42 suggests the development of standardized materialtransfer arrangements covering such parameters, with a model Agreement includedin the Appendix of the document. Benefits are requested to be shared fairly andequitably with all those who have been identified as having contributed to the resourcemanagement, scientific and/or commercial process, and may include governmentinstitutions, non-governmental organisations, academic institutions, as well as indigenousand local communities.73 Although a specific mechanism for how these benefits are to

be distributed is not specified, the Guidelines acknowledge that they may include bothmonetary (eg. access fees, milestone payments, royalties, licence fees, research funding)or non-monetary benefits (eg. collaboration and cooperation in scientific research,technology transfers, institutional capacity building, access to scientific information). Itis also requested that such benefit sharing be conducted in line with the objectives of theCBD to promote the conservation and sustainable use of biological diversity.74

Further negotiation relating to access and benefit sharing is likely to continue in theCOP. Contracting Parties have requested that the Working Group on Access andBenefit Sharing report to COP VII in 2004.

72

Bonn Guidelines Article 26(d).73

Bonn Guidelines Article 48.74The Bonn Guidelines build on the CBD and actually define specify examples of monetary and non-

monetary benefits.


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5.2.4 The Working Group on Article 8(j)

In parallel with issues surrounding access to biological resources and benefit sharing,concerns regarding the promotion and protection of traditional knowledge arosefrequently in COP discussions from 1992. At COP 1, traditional knowledge was

identified as an issue of importance, to be addressed at COP 3 as part of the firstmedium-term work program.75 At COP 3, Contracting Parties agreed to convene afive day Workshop to consider a number of issues surrounding traditional knowledgeincluding, inter alia,the possibility of developing a workplan on Article 8(j) andrelated sections, and the need to establish an open-ended inter-sessional workinggroup or subsidiary body to address the role of traditional knowledge, innovations and

practices of indigenous and local communities embodying traditional lifestylesrelevant to the conservation and sustainable use of biological diversity.76 TheWorkshop on Traditional Knowledge and Biological Diversity was held in Madrid,Spain, on 24-28 November 1997 and a report drafted for COP 4. At COP 4 theoutcomes of the Workshop were complemented by the establishment of an Ad Hoc

Open-Ended Inter-Sessional Working Group on the implementation of Article 8(j)and related provisions (the Working Group on Article 8(j)).77

The purpose of the Working Group on Article 8(j) is to act as an advisory body to theCOP on issues of concern related to traditional knowledge, innovations and practicesof indigenous and local communities embodying traditional lifestyles relevant to theconservation and sustainable use of biological diversity. The Group advises on a widerange of issues with particular emphasis on applying and developing methods for the

protection of indigenous knowledge, innovations and practices; developing andmaintaining a work programme for the implementation of Article 8(j) and related

provisions; identifying objectives and priorities for discussion in the COP;encouraging synergy between international institutions dealing with traditionalknowledge and associated issues; as well as strengthening cooperation betweenindigenous and local communities at the international level.78 The Group aims tocomplement but not compete with the activities of other organisations working in thisarea, and concentrates solely on issues related to the conservation and sustainable useof resources and access and benefit sharing.

Although not specifically addressing issues related to bioprospecting, the Group doesdelve into a number of related areas; specifically ways to protect indigenousknowledge, improve involvement and consultation of indigenous and local

communities, and facilitating access to biological resources and benefit sharing.

The Working Group on Article 8(j) has convened on two occasions; March 2000 andFebruary 2002. The Group is open to participation by government representatives,non-governmental organizations as well as members of indigenous and localcommunities.

75

COP Decision I/9.76

COP Decision III/14.77COP Decision IV/9.

78COP Decision IV/9 and V/16.


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5.2.5 The Cartegena Protocol on Biosafety

The Cartagena Protocol on Biosafety was adopted at the first extraordinary meeting ofthe Conference of the Parties to the CBD on 29 January 2000. The Protocol is asupplementary agreement to the CBD and as of April 2003 has been signed by over

100 nations, and ratified, accepted, approved, or acceded to by 46 nations, includingNew Zealand. The Protocol will enter into force and become legally binding on theninetieth day following the deposit of the fiftieth instrument of ratification,acceptance, approval or accession by Parties to the CBD.79

The Cartegena Protocol reflects growing concerns regarding the effects of geneticallymodified organisms on existing biodiversity and human health. It follows requests inArticle 19(3) of the CBD for Parties to consider the need for and modalities of a

protocol setting out appropriate proceduresin the field of the safe transfer, handlingand use of any living modified organism resulting from biotechnology that may haveadverse effect on the conservation and sustainable use of biological diversity. The

Protocol defines precise rules and regulations for the transboundary transfer ofmodified organisms between CBD Parties and to non-Parties, in addition toestablishing requirements for risk assessment prior to the initial release of anorganism in the country of origin. Significantly, the Protocol is grounded in the

precautionary principle whereby a lack of scientific certainty over the potentialadverse effects of an organism should not prevent a state from taking a decision inorder to minimise such potential adverse effects. The Protocol also establishes aBiosafety Clearing-House to facilitate the exchange of information on living modifiedorganisms and to assist countries in the implementation of the Protocol.

The Cartegena Protocol is not of high significance for the management ofbioprospecting in New Zealand. The Protocol principally governs activities of tradeand movement of modified organisms between Parties which is primarily adownstream activity following bioprospecting research and development.

79

Cartegena Protocol, Article 37.


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5.3 COVENTION ON THE LAW OF THE SEA

5.3.1 Introduction

The United Nations Convention on the Law of the Sea (1982) is the key international

treaty governing the activities of states in the marine environment. The documentestablishes a new order for the ocean, collating and codifying existing customaryand treaty law, extending state jurisdiction over the marine environment to the widthof the continental shelf, and enacting new rules for the management of activities suchas fishing and mineral extraction. As of April 2003 the Convention has 157signatories and has been ratified or formally approved by 142 states 80including NewZealand.

Prior to the twentieth century, the oceans had been subject to the freedom of the highseas doctrine, whereby all states had the right to sail on and utilize resources in theoceans, with state sovereignty solely limited to a narrow band of coastal water

surrounding coastal states known as the territorial sea.81 The majority of the ocean,its resources, and the resources of the sea floor were considered a commons,unmanaged and with free access to all.82 Initially this regime was sufficient given thelimited technology of states to exploit the marine environment, however by the early20thcentury, widespread degradation of fish stocks combined with increasing risks ofmaritime pollution and growing tensions between states over access to the marineenvironment made a new regime for oceans management a necessity.

Initial attempts to improve the management of the oceans came in the form ofnumerous bilateral and multilateral treaties drafted on an ad hocbasis to managespecific maritime activities. Frequently however the limited scope of theseagreements, combined with inconsistent application and a lack of enforcementmechanisms meant that they often did little to prevent business as usual. In 1924 theLeague of Nations initiated the fist intergovernmental effort to codify the law of thesea and established a Committee of Experts and a Preparatory Commission toconsider a number of issues of concern. Three reports were prepared and aCodification Conference was convened at The Hague in 1930, however disagreementover states rights to the territorial sea meant that consensus could not be reached andno binding agreement was concluded. When the League of Nations was replaced bythe United Nations in 1945 the International Law Commission was established andcharged with the task of codifying international law, including the law of the sea. In

1956 the Commission produced a detailed report on the law of the sea which includedan array of draft articles for consideration by states, forming the basis of the firstUnited Nations Conference on the Law of the Sea (UNCLOS I) held in Geneva 1958.

UNCLOS I was attended by eighty-eight states, and after some negotiation resulted inthe adoption of four conventions: the Convention on the Territorial Sea and theContiguous Zone, the Convention on the High Seas, the Convention on theContinental Shelf, and the Convention on Fishing and Conservation of LivingResources of the High Seas. Collectively, these are known as the GenevaConventions on the Law of the Sea. The first three agreements were widely ratified

80

Ratifications, formal confirmations, accessions and successions.81Joyner, 2000.

82UN, 2003.


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and represent a major achievement in codifying and clarifying pre-existing maritimecustomary and treaty law. The fourth convention on fishing and conservation and anassociated optional protocol on dispute settlement attracted less ratification as manystates were unwilling to bind themselves to rules more stringent than existingcustomary or treaty law.83 In parallel with the Codification Conference of 1930,

UNCLOS I was unable to resolve the issue of the width of the territorial sea andassociated fishing limits. A subsequent conference UNCLOS II was convened in1960 to discuss these issues, however this too failed. It remained for UNCLOS III forcontention over the territorial sea to be settled.

The fourth and final evolution of modern international maritime law began in 1967when the Maltese Ambassador to the United Nations alerted states to the growingdeterioration of ocean resources and rising tension over the use of maritime space

beyond the territorial sea and continental shelf. He called for an effectiveinternational regime over the sea bed and the ocean floorto avoid the escalatingtension that will be inevitable if the present regime is allowed to continue. Many

states had unilaterally claimed sovereignty over the resources on the continental shelf,whilst others had established large territorial seas and fishing zones as a result of thesomewhat inadequate provisions of the Geneva Conventions. Other states were

beginning to explore the resources of the ocean floor, alarming a number of stateswho were wary that this would result in a land-grab on the deep seabed benefitingsolely the more technologically advanced developed states who were in a bettercapacity to explore, utilise and lay claim to these resources.84 In 1967 the GeneralAssembly established an ad hocCommittee to address these issues, evolving thefollowing year to the 41 member Committee on the Peaceful Uses of the Deep Seabedand the Ocean Floor beyond the Limits of National Jurisdiction (the SeabedCommittee). In 1970 following results of the Committees work and growing concernover a number of issues which were absent or inadequately addressed in the GenevaConventions, the General Assembly adopted Resolution 2570 which requested theconvening of a global Conference to draft a comprehensive international conventiongoverning all aspects of the law of the sea.

The first session of the third United Nations Conference on the Law of the Sea(UNCLOS III) was held in New York in 1973, and was followed by nine years ofintense negotiation involving representatives from 157 states.85 The final text of theConvention on the Law of the Sea was adopted on 30 April 1982 and opened forsignature on 10 December 1982 at Montego Bay, Jamaica. Initial ratification was

slow, but the document finally entered into force on 16 November 1994, one yearfollowing the sixtieth instrument of ratification or accession. Parties havesubsequently adopted two additional Agreements to the Convention concerning deep-sea mining and migratory fish stocks, which were negotiated in 1994 and 1995respectively.86

83

Churchill R.R. and Lowe, A.V., 1999.84Churchill R.R. and Lowe, A.V., 1999.85

Brown, E.D., 1994.86

Principles for deep-sea mining were established by the 1994 Implementing Agreement of UNCLOS

XI, and migratory fisheries under the 1995 Convention on the Law of the Sea relating to theConservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (the FishStocks Agreement).


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5.3.2 Key Articles

The United Nations Convention on the Law of the Sea (LOSC) (1982) has anincredibly broad scope and covers nearly all anthropogenic maritime activities in asuccession of 320 articles and nine technical annexes. The provisions of the

Convention are numerous, setting precise boundaries and limits on issues such as theoccupation and use of ocean space, conservation of marine resources, conduct ofmarine scientific research, transfer of technology, settlement of disputes, and theutilisation of the seabed beyond the continental shelf. Significantly, whilst UNCLOSI and II had largely codified existing maritime law, UNCLOS III and the LOSCaddressed a number of new areas of concern resulting from rapid technologicaladvances and the ability of humankind to exploit larger and larger areas of the ocean.The key provisions of relevance to bioprospecting include the various maritime

boundaries, and the provisions for scientific research.

One of the most significant achievements of the LOSC was the standardization of

ocean boundaries and establishment of the limits to state jurisdiction which hadproved so contentious in previous UNCLOS meetings and had resulted in a plethoraof claims and disputes over various parts of the ocean prior to 1982. These Articlestook significant negotiation as they effectively usurped the existing freedom of theseas doctrine by removing much of the ocean from the commons and placing it understate jurisdiction. The Convention established nine maritime zones,87each withspecified jurisdiction for both coastal states and foreign states wishing to use theresources in the area. A brief review of the nine zones are outlined below andillustrated in Figure 5.1.

States are permitted full sovereignty over internal waters (landward of the coast) andthe territorial sea (the sea and seabed to 12 nautical miles offshore). Within thesezones a state can enforce any law, regulate any use, and exploit any resource, howeverin the territorial sea foreign vessels are permitted the right of free passage, meaningthat they can travel through another states coastal waters, provided that such passagedoes not harm the coastal state and does not violate or threaten its security. Thecontiguous zone is the area of ocean from 12 nautical miles to 24 nautical milesoffshore. In this zone a coastal state has the right to prevent and punish theinfringement of its laws, and can include the pursuit, arrest, and/or detainment ofcriminals, suspected drug smugglers, illegal immigrants and customs or tax evaders.

The area of ocean and ocean floor from the edge of the territorial sea to 200 nauticalmiles offshore is known as the exclusive economic zone (EEZ). Here, a coastalstate has the sovereign right to exploit, develop, manage and conserve all resources inthis area, pursuant to the provisions of the Convention. A state also has jurisdictionover the construction of artificial islands, marine scientific research and protectionand preservation of the marine environment in this area. This zone is subject to therights of other states, namely the freedoms of navigation, overflight, and laying ofsubmarine cables.

87

Prior to the LOSC, the oceans were delineated into four jurisdictional zones (internal waters,territorial sea, contiguous zone, and high seas), which were highly variable from state to state due to a

lack of comprehensive guidelines for consistency. The nine zones under UNCLOS are: internal waters,territorial sea, contiguous zone, exclusive economic zone (some states refer to this as an exclusivefishing zone), archipelagic waters, continental shelf, high seas, and the Area.


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The continental shelf is defined as the seabed and subsoil of the submarine areaswhich extend from the edge of the territorial sea to the end of the continental margin(with the seaward limit as defined in LOSC Part VI). Where the continental margindoes not extend beyond 200 nautical miles the continental shelf ends at the edge ofthe EEZ. In this zone a state has the sovereign right to exploit minerals and sessile

biological resources on the seabed and subsoil, and the jurisdiction to construct,authorise, and regulate the use of artificial structures and drilling. All states areentitled to lay submarine cables and pipelines in this zone.

The high seas and the Area of deep seabed are outside state jurisdiction. The highsea is the zone of ocean beyond 200 nautical miles from shore, and is predominantlysubject to the freedom of the seas doctrine. All states are permitted freedom ofnavigation, freedom of overflight, freedom to lay submarine cables and pipelines,freedom of fishing, and freedom of marine scientific research. The freedom of fishing

provision is subject to states having the duty to implement measures to ensure theconservation of living marine resources. The deep seabed beyond the limits of the

continental shelf is termed the Area and is deemed to be the common heritage ofhumankind.88 All activities conducted in this zone must be carried out for the benefitof humankind as a whole, and benefits which may accrue from seabed activities are to

be distributed equitably among all states. The Convention specifically encourages theconduct of mineral extraction and marine scientific research in the Area.

FIG 5.1: Maritime zones established under the Convention on the Law of the Sea (1982).

88

LOSC, Article 136.

CONTINENTAL SHELF

12nm end of shelf or to 200nm whichever reater

THE AREAMARITIME ZONES WITHIN THE LIMITS OF NATIONAL JURISDICTION

TERRITORIAL

SEA

(0nm - 12nm)

INTERNAL

WATERS

CONTIGUOUS

ZONE

(12nm - 24nm)

0nm 12nm 24nm 200nm

HIGH SEAS

EXCLUSIVE ECONOMIC ZONE

(12nm 200nm)

0nm

12nm


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In accordance with the Convention, New Zealand has the jurisdiction to managebioprospecting activities in the water column to 200 nautical miles offshore, and onthe seabed and subsoil to the edge of the continental shelf. The specific obligations ofstates in this regard are outlined in Part XIII entitled Marine Scientific Research

(MSR).

The first Article of Part XIII asserts that all stateshave the right to conduct marinescientific research subject to the rights and duties of other states as provided for in thisConvention.89 The Convention requests that states promote and facilitate theconduct of marine scientific research90in all areas of the ocean, with emphasis placedon research for peaceful purposes and the need for cooperation between states. Acoastal state has full sovereignty to control and regulate bioprospecting within itsinternal and territorial waters, with research by another state to be carried out onlywith the express consent of and under conditions set forth by the coastal state.91

Within the EEZ and on the continental shelf a coastal state has the jurisdiction to

regulate and control bioprospecting, but this must be done in accordance with theprovisions of the Convention and must not unduly delay or deny the MSR activities ofother states.92 States wishing to conduct MSR must receive the consent93of thecoastal state concerned and are required to provide full details of a project at least sixmonths before research is due to begin, including the nature and objectives of theresearch, methodology to be used, the specific location and full duration of thework.94 The coastal state is requested to consider this application and respond withinfour months of receipt, otherwise implied consent is considered to have beengranted.95 On approval of an application a coastal state may require certain conditionsto be met such as access to research data, results, and reports, as well as the

participation in or observation of the research activities.96 If the conditions of thisconsent are not adhered to, the coastal state may suspend MSR activities.

All states are permitted to conduct MSR on the waters of the High Seas and the Areaoutside state jurisdiction pursuant to the provisions of the Convention. Whilst nospecific obligations are included for the High Seas, MSR in the Area is requested tobe carried out exclusively for peaceful purposes and for the benefit of mankind as awhole,97to be monitored and managed by means of the International SeabedAuthority.

In parallel with the Convention on Biological Diversity, the LOSC places some

emphasis on the need for benefit sharing in the conduct of MSR. States are requestedto make available by publication and dissemination through appropriate channelsinformation on proposed major programmes and their objectives as well as knowledgeresulting from marine scientific research.98 The subsequent paragraph then

89

LOSC, Article 238.90LOSC, Article 239.91

LOSC, Article 244.92

LOSC, Article 246.93LOSC, Article 246(2).94



LOSC, Article 249.97LOSC, Article 143.

98LOSC, Article 244(1).


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elaborates by requesting that states cooperate to promote the flow of scientific dataand information and the transfer of knowledge resulting from marine scientificresearch in addition to strengtheningmarine scientific research capabilities with

particular emphasis on the needs of developing states.99 Part XIV of the Conventionthen requests that states cooperateto promote actively the development and transfer

of marine technology on fair and reasonable terms and conditions, including the needto promote the acquisition, evaluation and dissemination of marine technologicalknowledge and facilitate access to such information and data. This second provisionis weakened by states permitted to implement it in accordance with their capabilitiesand whilst hav[ing] due regard for all legitimate interests including, inter alia, therights and duties of holders, suppliers and recipients of marine technology. The textof the Convention provides little clarification on how either knowledge or technologytransfer is to be achieved or practically implemented by states.

Part XIII also requests that MSR complies with requirements for the protection andpreservation of the marine environment.100 This includes obligations to prevent the

overharvesting of species and to minimise marine pollution. In addition, states arerequested to promote the establishment of general criteria and guidelines to assiststates in ascertaining the nature and implications of marine scientific research.101

This infers the establishment of environmental impact assessments, however theprovisions of this article have not been elaborated upon.

99

LOSC, Article 244(1).100

The first Article of Part XII asserts that states have the obligation to protect and preserve the marineenvironment.101

LOSC, Article 251.


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5.4 WORLD ITELLECTUAL PROPERTY ORGANISATION AND

WORLD TRADE ORGANIZATION

5.4.1 Introduction

The World Intellectual Property Organisation (WIPO) and the World TradeOrganisation (WTO) are the two key institutions governing global intellectual

property and intellectual property rights. Formed in 1970 and 1995 respectively, therole of both organizations is to harmonize the conduct of intellectual propertyactivities worldwide, although the mandate of the WTO is wider and includes themanagement of all aspects of international trade.

Intellectual property (IP) refers to a defined set of intangible products which are theresult of human intellectual activity;102the creativity and inventiveness expressed ininventions, literary and artistic works, scientific discoveries, industrial designs, aswell as symbols, names and images used in commerce.103 The associated term

intellectual property rights (IPRs) refers to the rights of a creator or more specificallythe right-holder over this intellectual property, and generally permits the right-holderto a temporary or permanent monopoly over the use and economic exploitation of thematerial concerned.104 IPRs protect the application of ideas and information or theexpression of an identity that is capable of being ascribed to a person, and conferslegally enforceable rights to the person who holds this IPR. IPRs cannot be grantedover ideas or knowledgeper se which have no clearly defined use or application, norto ideas or inventions which are public knowledge and therefore do not exhibitnovelty. IPRs are primarily prohibitive, in that they aim to prevent counterfeiters,imitators, pirates and in some cases third parties who have independently reached thesame ideas, from exploiting them without license from the right-holder.105 They arealso distinct from private property rights which are granted to the purchaser upon

public sale or ownership of a physical good, whereas IPRs principally protect theintangible ideas and creativity which have been invested in the development and

production of a good.106 The rationalebehind IPRs is that they promote creativity,research and investment by guaranteeing a limited or unlimited monopoly over an IP

product as an economic reward for the time and effort spent in development. Theyalso serve to protect consumers from counterfeit products thus improving the qualityof goods and services available, and providing a stable environment for the nationaland international marketing and trade in products.107

IPRs traditionally fall under two categories; industrial property rights andcopyrights,108however as the field of IP protection expands some authors prefer todelineate these two groups into numerous separate categories.109 Industrial property

102

Abbot, F., et al., 1999.103

WIPO, 1997; WIPO Convention, Article 2(viii).104Walden, 1995. Note: The use of the term intellectual property is frequently used to infer the rights

behind this intellectual property (ie. intellectual property rights) and is frequently used interchangeably.See: Cornish, 1999; WIPO, 1997.105Cornish, 1999.106

Abbot, F., et al., 1999.107

WIPO, 2002.108

WIPO, 1997.109Abbot, F., et al., 1999 lists seven major forms of IPR: patents and related industrial design rights;

copyrights and related neighbouring rights; trademarks and related service marks; integrated circuit


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rights cover inventions and commercial symbols used in advertising by way ofpatents, trademarks, geographical indications of origin, plant variety rights, industrialdesigns, in addition to repressing unfair competition. Copyright and associated rightscover the rights of artists over the use and dissemination of their work.

Patents are granted to the inventor of a product which is (i) new, (ii) useful (capableof industrial application), and (iii) involves an inventive step (is non-obvious), inreturn for the public disclosure of the means for replicating or practicing theinvention.110 Patents permit the holder to the monopoly right to produce, use andmarket an invention, predominantly for a period of twenty years, and are frequentlyutilized in the commercialization of scientific research. Trademarks and geographicalindications of origin are representative signs or symbols used on or associated with agood or service, to aid in product differentiation and marketing. Trademarks include

brand names, logos and associated symbols, in addition to service marks for thedelineation of particular goods or services, for example on certified organic productsor rated accommodation. Geographical indications of origin are trademarks which

portray the country of origin of the product or service. They can be grantedindefinitely111offering long-term product differentiation, even if the product itself isno longer patented.112 Plant variety rights grant the developer of a new plant varietythe exclusive right to produce for sale and to sell reproductive material of the varietyconcerned (refer section 5.5). Industrial designs are another type of industrial

property right and cover the outward appearance of a particular product. Industrialdesigns are usually protected against unauthorized copying or imitation, and last five,ten or fifteen years.113

Copyrights or authors rights114are granted to authors and artists in order to protecttheir work from unauthorized copying or reproduction.115 Copyrights cover numerous

products including books, poems, theatrical productions, music, paintings, films,photographs, clothing designs, and even computer software.116 The copyright-holderis permitted to prevent unauthorized copying, and the staging or creation of distortedreproductions of the work, although third parties are permitted fair use of the work,for example sections of a book may be copied for instructional purposes. Unlike

patents, a copyright does not preclude independent creation whereby other peoplecan produce an identical or similar work by independent means and not breach thecopyright.117 The duration of a copyright can be substantial, and may stand for theduration of the authors life plus numerous subsequent decades.118

layout rights; geographical indications of origin; plant variety rights; and undisclosed information (alsoknown as trade secrets). Cornish, 1999 lists four categories.110

Abbot, F., et al., 1999.111

Although subject to periodic renewal.112For example the product the Big MacTM a hamburger is not patented. Many restaurants sellhamburgers, but only McDonalds

TMcan sell Big Macs

TM. This illustrates how trademarks can help to

differentiate similar products in a competitive market.113WIPO, 1997.114

The term authors rights is used in most European languages other than English to describecopyright.115Abbot, F., et al., 1999.116

Abbot, F., et al., 1999, WIPO, 1997.117

For example breach of copyright would be using a copyrighted photo in an advertisement without an

artists consent. It would not be breach of copyright if another person took a photo of the same sceneand used it in an advertisement.118

Frequently an additional fifty to seventy years following the authors death.


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An additional form of intellectual property right of relevance to bioprospecting istrade secrets or undisclosed information. A trade secret may be granted over aspecialist process or product which is unknown to the public (and competitors) andhas commercial value in being kept secret. The duration of a trade secret is indefinite

so long as the information remains undisclosed and it has commercial value and theinventor makes a concerted effort to keep the information secret.119 Significantly,whilst a patent requires the release of information regarding the methodology toreproduce the product or process, the details of a trade secret remain confidential tothe company concerned. A trade secret does not however prevent competitors fromcopying a product once it is on the market, or from reverse engineering a process,effectively limiting the utility of a trade secret where the secret is revealed once a

product is available for commercial sale. It is therefore most effective if it relates to aprocess (for example the method for extracting a valuable chemical from a biologicalorganism), which can not be determined by competitors once the product is on themarket.120 The most renowned example of a trade secret is the recipe and process for

producing Coca-ColaTM. Trade secret protection has effectively prevented othercompanies from reproducing the drink, allowing Coca-Cola to maintain a profitableadvantage over competitors.

5.4.2 World Intellectual Property Organization

The World Intellectual Property Organization (WIPO) is a specialist United Nationsagency charged with promoting the use and protection of intellectual property rightsworldwide. As of April 2003 the organization has 179 Member States, including NewZealand.

The origins of WIPO date to the birth of international property law in the 19thcenturyfollowing growing concern over the misappropriation and commercial exploitation ofscientific and technological innovations. Prior to this period, IP laws were negotiatedand enforced unilaterally, and no international regime existed for the protection ofworks of the mind beyond national borders. In 1873 the shortcomings of this systemwere illustrated by the International Exhibition of Inventions in Vienna where foreign

participants refused to attend because they feared that their ideas would be stolen andcommercially exploited in other countries.121

In 1883 the Paris Convention for the Protection of Industrial Property was concluded,marking the first time that inventions, trademarks, and industrial designs which wereinvented in one country could be granted industrial property protection in another.Three years later the Paris Convention was complemented by the Berne Conventionfor the Protection of Literary and Artistic Works which provided internationalcopyright protection to artists to control and receive royalties from the use of theircreative works. Initially both Conventions were administered independently, but in1893 they were integrated under the United International Bureau for the Protection ofIntellectual Property (known by its French acronym BIRPI). In the early to mid1900s intellectual property began to receive growing international attention, as states

119

Abbot, F., et al., 1999.120Abbot, F., et al., 1999.

121WIPO, 2002.


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realized the potential and importance of IP and IP protection to achieve economicgrowth and promote scientific, technological and social development. In 1970 BIRPIevolved into the World Intellectual Property Organization following the adoption ofthe Convention Establishing the World Intellectual Property Organization in 1967.The agreement changed the administrative structure of BIRPI, establishing new

negotiation and financial structures, and creating a secretariat answerable to MemberStates. In 1974 WIPO was embraced by the United Nations system of organizations,with the mandate to administer IP matters recognized by the Member States of theUnited Nations.

Today, WIPO administers twenty-three international IP treaties122(including twotreaties administered jointly with other international organizations) in addition todrafting non-binding rules and recommendations clarifying the conduct of IP

protection worldwide. The objective of the organization is to promote the protectionof intellectual property throughout the world123which it achieves by promotinginternational cooperation between states and international organizations in relation to

IP; aiding members in the development of national IP law, including providing legaland technical assistance to developing nations; facilitating the resolution of IPdisputes; drafting studies and facilitating the exchange of IP information worldwide;in addition to granting international IPRs such as transnational patents and copyrights.

The key treaties administered by WIPO of relevance to bioprospecting are the ParisConvention for the Protection of Industrial Property (1883), Patent CooperationTreaty (1970), Patent Law Treaty (2000), and the Budapest Treaty on theInternational Recognition of the Deposit of Microorganisms for the Purposes ofPatent Procedure (1977). Collectively, these treaties serve to clarify the conduct of IP

protection by harmonising how member states draft and implement IP law. The ParisConvention is the most widely adopted IP treaty worldwide with a total of 164contracting parties, followed by the Patent Cooperation Treaty which counts 120states as members. These two laws permit the international registration of industrial

property and patents and generally establish the standards and requirements forgranting industrial IPRs. The latter two agreements are less widely accepted and havenot been adopted by New Zealand, however they have been signed or ratified by anumber of our trading partners such as the United Kingdom an the United States. TheBudapest Treaty has 56 contracting parties and establishes procedures for theinternational registration of microorganisms for the purpose of patenting.124 ThePatent Law Treaty is one of the most recently concluded WIPO treaties and is not yet

in force, with only seven contracting parties. The purpose of this law is to harmoniseand streamline national and regional patent applications.125

WIPO also conducts studies, convenes discussions and develops recommendations onspecific topics as an alternative to the lengthy process of developing or amendinginternational law. Although this method results in non-binding decisions which aresubsequently weaker than new law, it effectively permits WIPO to respond morequickly to the concerns of Member States and address new issues in the rapidly

122

Refer: http://www.wipo.org/treaties/index.html123

WIPO Convention, Article 3.124Note: Not all WIPO member states permit the patenting of micoorganisms.

125WIPO, 2003.


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changing area of IP.126 One area where this method is being utilised is on theIntergovernmental Committee on Intellectual Property and Genetic Resources,Traditional Knowledge, and Folklore (the IGC). The IGC was established in October2000 following a request by Member States to address intellectual property issuesrelating to the protection of traditional knowledge, access to genetic resources and

benefit sharing, and the protection of expressions of folklore.127

This effectivelysupplemented existing work of WIPO in the area of traditional knowledge and createda formal structure for dealing with these and related issues. The IGC has convenedfour times since 2000 and results of the discussions are reported to the WIPO GeneralAssembly. Participation is open to all Member States of WIPO and the Paris Unionfor the Protection of Industrial Property, in addition to Member States of the United

Nations which are not members of WIPO or the Paris Union. The Committee hasconsidered a number of issues and published numerous of reports, including how bestto protect indigenous knowledge under the current IP system,128however it has yetachieve widespread agreement over these issues among Member States. The fifthsession of the IGC is to be held in Geneva in July 2003.

5.4.3 World Trade Organisation

The World Trade Organization (WTO) was established on 1 January 1995 followingthe conclusion of the eighth round of trade talks under the General Agreement onTariffs and Trade (GATT). The WTO effectively usurped the GATT which had beenformed in 1947 at the conclusion of World War Two in order to stabilise andformalise the conduct of international trade in the post-war world. Whilst the GATThad been a legal document and ad hocorganisation with relatively limited scope andlittle legislative teeth, the WTO became a formal international institution ratified bymember governments with considerable scope and political, legislative and economic

power.

The WTO is based on the philosophy of freeing trade in order to encouragecompetition regulated by the workings of the market. By encouraging the unhinderedexchange of commodities across borders, free trade is seen to encourage internationalcooperation and global economic growth by phasing out protectionist policies,creating a stable environment for trade and investment, reducing prices, increasing thevariety of goods available and enhancing quality of life for consumers. The role ofthe WTO is three-fold; helping trade to flow as freely as possible whilst minimising

undesirable side effects, acting as a forum for trade negotiations, and providing anavenue for dispute settlement.129

The role and mandate of the WTO was defined in the Agreement Establishing theWorld Trade Organization (WTO Agreement), signed at Marrakesh in April 1994 atthe conclusion of the GATT Uruguay round. The WTO Agreement consists of 16Articles and four detailed Annexes which spell out the rules and regulations for theconduct of states in the multinational trading system. The first three Annexes areknown as the Multilateral Trade Agreements, and constitute the Multilateral

126

WIPO, 2002.127

GA Decision WO/GA/26/6.128Bodoni, 2003.

129WTO, 2001.


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Agreement on Trade in Goods (Annex 1a), the General Agreement on Trade inServices (Annex 1b) and the Agreement on Trade-Related Aspects of IntellectualProperty Rights (1c), in addition to Annex Two which covers dispute settlement andAnnex Three which covers trade negotiations. Annex Four encompasses PlurilateralTrade Agreements which have been negotiated between selected members of the

WTO and are only binding to those members concerned. All parts of the WTOAgreement (excluding Annex Four), in addition to subsequent WTO decisionsnegotiated multilaterally, are binding to Member countries and must be incorporatedinto national law. WTO membership currently stands at 144 in addition to 30 stateswhich have observer status.130 New Zealand has been a Member and active

participant of WTO negotiations since its inception.

The key aspect of the WTO Agreement for the management of bioprospecting is theAgreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)contained in Annex 1c. The TRIPS Agreement was negotiated following growingconcern over the dissemination of pirated and counterfeit products worldwide and

widespread dissatisfaction on behalf of developed countries over the ability of WIPOto control these activities.131 The inclusion of IP into the GATT (now WTO) agendafollowed four successive attempts to renegotiate and strengthen the WIPO ParisConvention,132but which failed following inherent differences in the views ofdeveloped and developing nations.133 Developed countries saw IPRs as private rightsrequiring detailed rules for enforcement and dispute settlement in order to allowindustry to receive a return on their investment in research, technology and/orcreativity, whilst developing countries saw them as public goods that should be usedto promote technology transfer and enhance economic development.134 In the absenceof definitive requirements for consistent IP policies worldwide combined with theflouting of state commitments by a number of countries under the WIPOConventions,135developed countries lead by the United States began to use tradesanctions as a means to protect national industry against piracy and counterfeiting.These actions were seen as potential barriers to free trade, forcing the GATT Councilto consider IPRs in the agenda for the Uruguay trade round.

The TRIPS Agreement was developed in order to reduce distortions andimpediments to international trade, and taking into account the need to promoteeffective and adequate protection of intellectual property rights, and to ensure thatmeasures and proc

Documents

HALL, K._bioprospecting Background Paper. What is Bioprospecting