Regulatory harmonisation lessons from comparative studies

Regulatory harmonization: lessons from comparative studies of the

design and implementation of biotechnology regulations in different national contexts

Patrick van Zwanenberg

STEPS Centre

Email: [email protected]

• Two broad issues to highlight– relative flexibility allowed by supposedly harmonised rules, and

their implementation and interpretation– complexity of real world seed production and use and some

regulatory governance challenges

• Worth asking in the Philippine and Kenyan contexts:– What kinds of flexibility have been/are needed? – What areas of complexity need to be considered? By whom?– What are the practical limits to the governability of these new

technologies in these social/agricultural contexts? – How can regulatory systems take into account these local

realities?

www.steps-centre.org

The traditional regulatory model as practiced and/or promoted by USA, EU, OECD & WTO

• Confined to ‘back end’ of innovation process (IPRs one exception)

• Concerned only with individual technological artefacts

• Concerned only with biophysical risks & IPRs

• Biophysical risks narrowly defined,

• i.e. a focus on direct, measurable, relatively well known hazards, arising under idealised use conditions: required minimal evidence of safety and thus favoured approval

• No overt consideration of other forms of non biophysical risk

• e.g. to incomes, employment, land use, food security, availability of export markets, shifts in plant breeding capabilities and research agendas from public to private sectors and domestic to foreign seed firms)


This model exported elsewhere via regulation harmonization activities (GATT, TRIPS, SPS Agreement, OECD & Codex Guidelines, some bilateral capacity building – in part via Cartagena Protocol too)

But, especially after late 1990s, tensions between US/EU over how to regulate biophysical risk (although the consensus that socio-economic risk should be excluded largely remained)


One consequence of the different and changing US/EU approaches is that there is

little international consensus over:

• what categories of biophysical risks to address,

• what baseline of normality to assume

• what changes should count as harm

• how to investigate and measure potential risks (e.g. which causal pathways to investigate, what tests are adequate)

• what counts as sufficient evidence to demonstrate acceptable safety or unacceptable risk


At the same time, WTO dispute processes have affirmed:

• right of countries to choose their own levels of acceptable risk• risk assessments can take into account local realities of technology

use• countries may accept the validity of minority scientific opinions• evidence of risk need not be quantitative.

Implications:individual countries have autonomy to devise biophysical assessments appropriate to their ecological and socio-economic circumstances and choices (e.g. in terms of the scope of those studies and the criteria by which they are to be interpreted)


Despite GATT, SPS Agreement rules, and only limited scope in Cartagena Protocol for socio-economic effects…

… a broad range of socio-economic risks are in practice part of formal bio-safety regulatory remits in many countries


• Argentina – licensing conditional on availability of export markets

• Brazil – licensing may involve assessment of ‘convenience, socio-economic opportunity and national interest’

• Uganda – draft regulations: “no approval shall be given unless the GMO will not have adverse socio-economic impacts.”

• Philippines - “Impacts on small farmers, indigenous people, women, small and medium enterprises, and the domestic scientific community to be taken in to account.”

• Indonesia – “must pay attention to and take into consideration the religious, ethical, socio-cultural and esthetical norms.”

• Norway – “to ensure that the production and use of genetically modified organisms takes place in an ethically and socially justifiable way…”

• EU – labelling requirements reflect extra-scientific issues, i.e. consumer choice Source: STEPS; Falck-Zepeda 2009


Transgenic cotton – Chaco Province, Argentina

Context• 98% of cotton farmers are small/medium sized, with no access to credit

and are not served by commercial markets. 2% are large commercial farms producing most of the cotton

• Conventional cotton seed varieties were traditionally bred and sold by the public sector and sold through cooperatives

• GM commercialisation in the 1990s led by MNCs (soya, maize, cotton)• In late 1990s two GM varieties were introduced by Monsanto – they cost

4 times price of conventional varieties• By late 2000s, conventional cotton varieties no longer available in the

market



Formal regulation• Bio-safety licensing (harmonised rules + export potential)• Intellectual property (harmonised rules based on UPOV 1978, patents) • Seed quality• Private regulation – contracts between seed firms and large commercial

farmers (require payment for saved seed & planting of refuges)

And its limits:• uncertified GM seeds are 90% of the total seed use• seed quality control only for the 10% of certified seeds• private contracts are unenforceable (including refuge requirements)• unapproved GM varieties also available in parallel markets



Local realities:• Large farms (2% of all cotton producers) re-use seed extensively (in breach

of both IP legislation and private contracts) but purchase a small proportion of certified seeds each year to maintain seed quality.

• Small/medium farms (98% of all cotton producers) are trapped in parallel seed markets– Cannot afford or access credit for certified GM seeds, and seed firms

do not make them available– Conventional seed no longer available– Cannot re-use own seed because they do not own cotton gins– Only source of seed is uncertified GM varieties in parallel market – but

no control over seed choice, and seeds are often of poor quality and uncertain identity.



Regulator challenges• Local regulator not well enough resourced to control trade in uncertified

seed• But as a matter of design too, regulations are concerned only with formal

seed supply channels – they by-pass parallel markets• Regulators often assume farmers can choose to avoid parallel markets.

They effectively fail to recognise small/medium farmer realities and the problems they face

• Small cotton farmers have to deal with risks and problems of access to seeds that are entirely different from those regulators address



Possible ‘post-regulatory’ responses? • formalising parallel markets (Monsanto proposal)• state provision of/subsidy for seeds to small/medium farmers• exempting small farmers from intellectual property rules, but providing

seed quality controls• Upstream solutions? e.g. renewed plant breeding by public sector, e.g.

targeted at local pest problems. Niche markets (e.g. support for agro-ecological production)


Transgenic cotton – Tianmén County, Hubei, China

Context

• Farm sizes are homogenous and small (less than 1 hectare)

• Before late 1990s, public sector bred and disseminated conventional seeds (free) to local centers for adaptation and subsidized sale

• But privatisation and liberalisation of seed market has led to very rapid explosion in number of seed firms and seed varieties

• GM technologies in China mainly developed by the public sector, as part of a strategy to develop a nationally and globally competitive biotechnology industry.

• GM cotton varieties introduced in late 1990s by Monsanto and Chinese Academy of Sciences, the latter via commercial spin off firm, Biocentury



Formal regulation

• Bio-safety licensing (harmonised rules + socio-economic criteria, e.g. trade, competition and food sovereignty)

• intellectual property (harmonised rules based on UPOV 1978, patents)

• Seed quality

And its limits:

• many seeds are re-named copies of existing varieties, or marketed before they receive variety approval, or before they are registered

• seeds are often labelled ‘insect resistant’ but no biosafety certification numbers

• F2 seeds (second generation crosses) are sometimes labeled as F1



Local realities:

• rapid emergence of an extensive market in seed production and retail

• faced with an overwhelming choice of seeds, compounded by the challenge of counterfeits and inaccurate labeling, farmers struggle to choose and source reliable cotton seeds.



Regulator challenges• Limited legislative, technical and financial resources prevent regulators

from identifying counterfeit seeds and limited focus on seed quality beyond basic issues (e.g. limited checks on germination rates)

• Scarcity of financial resources also results in a focus on control activities that generate revenue rather than focus on quality assurance

• Local political realities mean that regulators tend not to exert too much pressure on local seed firms

• Activities that are problematic for farmers – the sale by licensed vendors of poor quality seeds – are not dealt with by regulators or at the village level.



Possible ‘post-regulatory’ responses?• consolidation of the seed sector – plans to support 50 “champion” seed

firms, and raise licensing standards, leading to the closure or take-over of smaller firms

• private regulatory strategies to constrain counterfeiters (e.g. seed firms provide a telephone number for farmers to check the legitimacy of the seed packet number)


Summary

• The two country cases contrast markedly.

– structural/historical differences between the two countries (e.g role of state/private sector; big/small farmers) Technologies and their regulation therefore play out differently.

– In Argentina a MNC-led process has led to a narrowing down of options which is squeezing out small farmers.

– In China a state-led process has led to an explosion of 'options' (and private seed companies) in which farmers are not empowered to make real choices.


SummaryFlexibility• Both Argentina and China have used flexibilities in regulatory rules. In Argentina to

support commercial farming sector; in China to support domestic GM seed industries

Complexity / Context Responsiveness• Local regulatory implementation challenges are evident in both cases – resource

limitations, local politics, but also regulatory design issues• Smaller farmers’ circumstances and problems fall at least partially outside of

regulatory design and practice• Realities of imperfect regulation are prompting new approaches amongst

commercial interests (e.g. Monsanto in Argentina trying to formalise the parallel seed market)

Roles and capacity• Regulators; public research system; civil society??

Implications for designing regulation in Kenya?


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Regulatory harmonisation lessons from comparative studies