Conservation and Community Development
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Genetic Resources Utilization: Critical Issues in Conservation and Community Development |
III. Issues in Genetic Resources Policymaking
by Daniel M. Putterman, Ph.D. Introduction: Genetic resources form the basis for commodities, consumer goods and innovative products in numerous major industries around the globe. The term "genetic resources" describes a category of biodiversity encompassing the diversity of genetic information and naturally-occurring chemicals found in species. The contribution of genetic resources to the global economy ranges from the use of genes in modern agriculture to enzymes used in industrial manufacturing, and from organic molecules used to design new pharmaceutical drugs to extracts of medicinal plants used to prepare herbal products.
Despite the enormous biological wealth of species, varieties and traditional knowledge of their utilization found in developing countries, few have been able, historically, to realize benefits from the commercialization of these resources, minimizing incentives for resource and knowledge conservation. Faced with difficult choices regarding land use, few resource managers, whether national decision makers or heads of rural households, find it easy to justify wildlands conservation over competing uses characterized by resource extraction. Most developing countries now regard the taking of genetic resources and traditional knowledge without prior informed consent and on mutually-agreed terms as "biopiracy" and hence unacceptable. Furthermore, there is a new recognition that market-based incentives are a necessary component of biodiversity conservation, and that the fair and equitable sharing of benefits arising from the utilization of genetic resources can contribute to improved rural livelihoods.
Biodiversity conservation projects can benefit by incorporating sustainable utilization of genetic resources, involving the private sector on mutually-agreed terms. Working with the private sector opens up new funding opportunities, particularly useful given that official development assistance is shrinking worldwide, while foreign direct investment (FDI) is rising. For example, fiscal year 1996 total lending by the World Bank was $21.4 billion, while 1995 total FDI in the developing world topped $170 billion (The Economist 1996).
Definitions: Genetic resources yielding potentially valuable chemicals, enzymes or genes include terrestrial and marine microbes, plants, insects, venomous animals and marine organisms. Tropical rainforests are recognized for their high biological diversity, but dryland ecosystems including dry forests, savannah and deserts, and marine ecosystems such as coral reefs, also contain significant biodiversity known to produce high levels of bioactive compounds. Molecular diversity among microbes, both terrestrial and marine, is likely orders of magnitude higher than that of plants and animals (Paleroni 1994).
Commerce involving genetic resources (a.k.a. natural products) can be divided into research and development (R&D) and production. Examples of production include sourcing plants or microbes for manufacturing of pharmaceuticals, agrochemicals or herbal products. Examples of R&D include research to identify new industrial enzymes or new organic molecules for pharmaceuticals from genetic resources, also called "bioprospecting".
Valuing genetic resources: Large global markets exist for products derived from genetic resources are summarized in the following table:
Market sector Estimated global sales (US$)* Pharmaceuticals $256 billion Pesticides $47 billion Agricultural Seeds (commercial sales) $13 billion Nutraceuticals (herbal products, phytomedicines) $12.4 billion Cosmetics: skin care products $6 billion Industrial Enzymes $1 billion Industrial Microbes $0.68 billion Biotechnology Enzymes $0.6 billion * Market sectors highlighted use genetic resources as starting material, but not all sectors derive 100% of products from genetic resources. For pharmaceuticals, this is about 40%. For agricultural seeds, nutraceuticals, enzymes and microbes, this is 100%.
Numerous environmental economists have attempted to estimate the value of genetic resources, resulting in wildly disparate estimates ranging over six orders of magnitude. Estimates range from a low of $15 to $150 per species, based on actual values captured or capturable through existing patent or royalty schemes (Ruitenbeek 1989), to a high of $23.7 million per species based on the impact on human lives saved through drug development (Principe 1989). It is evident that the value of genetic resources to developing countries increases with the ability to participate in development and marketing of these resources.
The value-adding process of R&D: Unique among commercial uses of biodiversity, genetic resources R&D relies upon trade in information, rather than physical goods per se, to generate high-value products. The size of samples collected for study can be quite small, typically less than 100 grams of material. Genetic resources research can be divided into a series of value-adding processes, beginning with a biological inventory requiring accurate taxonomic identification of specimens. Inventory strategies include random inventories, biorational inventories which rely upon ecological evidence of inter-specific chemical interactions, and ethnobotanical inventories which gather information on traditional knowledge of useful plants. The choice of inventory strategy depends on market sector, with nutraceuticals markets relying most heavily on ethnobotany, enzyme and microbes markets utilizing random and biorational inventories, and pharmaceuticals and agrochemicals relying on all three but emphasizing random and biorational approaches.
Following inventory, the chemicals or genes are extracted from the genetic resource, and the extracts are screened with laboratory tests known as bioassays to detect the desired biological activity. Bioassays are used to guide the identification process until a pure enzyme or microbial strain or chemical compound (called a "lead compound") is isolated. Further commercial R&D may involve expensive animal and/or human testing.
Benefit-sharing mechanisms: Increasingly, developing-country research institutes, NGOs and private companies are finding opportunities to collaborate with natural products industries of developed countries. It is customary to define all the obligations of R&D partners through prior negotiation utilizing legally-binding contracts or material transfer agreements (Putterman 1996, Barton & Siebeck 1994). Numerous mechanisms for compensation exist, including rental feesfor the loan of research material to private firms, rural employmentthrough participatory biodiversity inventories, licensing feesfor the use of patented research material, and technology transferenabling local value-adding R&D.
Technology transfer is especially relevant for augmenting tropical disease research, which is consistently underfunded despite some 600 million cases worldwide (Gibbons 1992). Genetic resources can provide new therapeutics, such as the drug ivermectin, a fungal compound that has helped prevent perhaps 1.5 million cases of river blindness in the Sahel (World Bank 1993). Given that some 80% of the world's population makes use of traditional medicine (Farnsworth et al 1985), the opportunity exists to utilize genetic resources technology to evaluate the efficacy of these treatments to facilitate the development of new low-cost phytomedicines for the poor (Iwu 1994). Deferred or contingent compensationincludes milestone payments and royalties, as well as licensing agreements to market final products regionally, and sourcing agreements to allow rural populations to cultivate high-value raw material for processing into phytomedicines, cosmetics, pharmaceuticals, agrochemicals and so on.
III. ISSUES IN GENETIC RESOURCES POLICYMAKING
Issues in genetic resources policymaking: Developing countries can benefit from the utilization of genetic resources by adopting unilateral policy decisions regulating access to resources and defining national benefit-sharing regulations. The following policy recommendations are intended to allow developing countries to fulfill obligations under the Biodiversity Convention in a way that guarantees community rights and national sovereignty while simultaneously creating incentives for private sector participation. The recommendations posit a central role for NGOs in ensuring equitable benefit-sharing with local communities and hence in creating local incentives for conservation. Biodiversity conservation projects and Protected Area managers can adopt regulations based on these recommendations as well:
- regulate access up-front with contracts:
Because there are no internationally-recognized protocols on rights to genetic resources and traditional knowledge, it is necessary to define rights to these resources by contract before samples are collected. Research contracts including material transfer agreements are used to define rights to unpatentable biological material such as genetic resources. Contracts have also been used to define community rights to resources, including rights to traditional knowledge, through trade secrets and other mechanisms (Barton 1994). Requiring the negotiation of a genetic resources contract prior to issuing a biodiversity collection permit is one strategy for utilizing existing biodiversity regulatory mechanisms.
- develop a prior informed consent mechanism:
Establish a workable prior informed consent (PIC) mechanism at the community level to encourage community control over resource use, and to ensure that genetic resources ventures create local incentives for biodiversity conservation. A national certification law, combined with a PIC procedure, would require citizens providing genetic resources to foreign researchers to first obtain a certificate of origin from their government, certifying that the material had been obtained in compliance with prior informed consent regulations.
- establish
sui generisrights to tangible property and traditional knowledge: In the absence of international laws defining rights to genetic resources, tangible and intellectual property rights, including community rights, must be defined nationally. Tangible property includes genetic resources and value-added research material derived from it. Regarding rights to traditional knowledge, numerous legal mechanisms have been proposed to create these, including modifications of industrial trade secrets laws, plant variety protection laws, and copyright laws.
- create a national benefit-sharing formula:
A national mechanism to apportion monetary benefits through trust funds is necessary to ensure fair and equitable distribution of income from genetic resources utilization. Numerous model projects exist which already utilize this mechanism to create local incentives for conservation and to finance small-scale community development.Information resources: A handful of model genetic resources projects are up and running in Asia, Africa and Latin America, while a handful of policies are in place and numerous policy models have been proposed. Good sources of information are available on the internet regarding policies, as well as codes of conduct published by scientific professional societies and private companies. Hotlinks to these sites are provided below. Information on case studies of model projects, as well as practical considerations when developing genetic resources projects, can be obtained by contacting Genetic Resources Consulting directly.
Laws, Codes of Conduct and Resolutions
Working Group on Traditional Resource Rights (WGTRR)
http://users.ox.ac.uk/~wgtrr/decin.htm (extremely complete list of codes of conduct, resolutions, international agreements, laws, etc.)Convention on Biological Diversity Clearing-House Mechanism
Convention on Biological Diversity Secretariat
http://www.biodiv.org/chm.htmlGuidelines for Members of the American Society of Pharmacognosy
Cragg, GM, et al. (submitted) Interactions with Source Countries. Guidelines for Members of the American Society of Pharmacognosy. Journal of Natural Products.
email cragg@dtpax2.ncifcrf.gov (contact for copy of guidelines)Proposed Indian Legislation on Farmers' Rights
M.S. Swaminathan Foundation
http://www.mssrf.org/ (choose "Workshops" then choose "Technical Consultation on an Implementation Framework for Farmers' Rights")
Corporate Policy on Access to Genetic Resources
Glaxo Wellcome Group
http://www.glaxowellcome.co.uk/ (for a copy of corporate policy on natural products acquisition choose "Glaxo Wellcome World" then choose "Natural medicine")About the author: Daniel Putterman is a molecular biologist with extensive international experience, including a stint as an environmental journalist, and has worked as well for the pharmaceutical industry. Genetic Resources Consulting, a private firm he started two years ago, specializes in combining public and private sector funding to link genetic resources utilization to biodiversity conservation, community development, proprietary technology transfer and tropical disease research.
Daniel M. Putterman, Ph.D.
Genetic Resources Consulting
1828 L Street, N.W.
Suite 1000
Washington, D.C. 20036
U.S.A.
phone +1(202) 293-4600
fax +1(202) 293-4598
email dputterman@igc.apc.orgBarton, JH. 1994. Ethnobotany and intellectual property rights. In: Ethnobotany and the search for new drugs. (Ciba Foundation Symposium 185, John Wiley & Sons, Chichester).
Barton, JH & WE Siebeck. 1994. Material transfer agreements in genetic resources exchange - the case of the International Agricultural Research Centres. Issues in Genetic Resources No. 1 (IPGRI (International Plant Genetic Resources Institute), Rome).
The Economist. 1996. All of a sudden every banker is a World Banker. July 27:61-62
Farnsworth, NR, O Akerele, AS Bingel, DD Soejarto & Z-G Guo. 1985. Medicinal plants in therapy. Bulletin of the World Health Organization 63:965-81.
Gibbons, A. 1992. Researchers fret over neglect of 600 million patients. Science 256:1135.
Iwu, MM. 1994. African medicinal plants and the search for new drugs based on ethnobotanical leads. In: Ethnobotany and the search for new drugs. Ciba Foundation Symposium 185 (John Wiley & Sons, Chichester).
Paleroni, NJ. 1994. Some reflections on bacterial diversity. ASM News 60(10):537-540.
Principe, P. 1989. The economic significance of plants and their constituents as drugs. In: Wagner, H, Hikino, H & NR Farnsworth (eds). Economic and Medicinal Plant Research, Vol. 3 (Academic Press, London).
Putterman, DM. 1996. Model material transfer agreements for equitable biodiversity prospecting. Colo. J. of Intl. Env. Law and Policy 7(1):145-173.
Ruitenbeek, HJ. 1989. Social cost-benefit analysis of the Korup project, Cameroon. (Worldwide Fund for Nature, Godalming, UK).
World Bank. 1993. World development report. Investing in health. (World Bank, Washington, DC).
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