The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS) to the Convention on Biological Diversity (CBD) is set to enter into force on 12 October 2014, and the first Conference of Parties serving as Meeting of Parties to the Protocol (COP MOP 1) will be held from 13-17 October 2014 in South Korea. The Protocol has somewhat set a record in terms of the length of time it took to establish a legally binding framework to deal with implementation of Article 15 of the CBD, which came into force on 29 December 1993.

One of the key issues currently under consideration by the contracting Parties to the Protocol and others is the establishment of administrative, regulatory and legal frameworks on ABS at national levels. Several donor agencies, UN bodies and countries are developing plans to support national action to implement the Protocol.

Given this, it is pertinent for countries to consider ABS frameworks that are easy to operate, respond to national situations and do not become a significant regulatory burden for both those seeking access and those providing access. Experiences from countries such as Australia, Brazil, India, South Africa and others demonstrate a series of lessons that can be learnt.

In support of such national action, an article written by Balakrishna Pisupati, Senior Research Fellow at Fridtjof Nansen Institute, and Kabir Bavikatte, JSPS Fellow at the UN University-Institute of Advanced Studies, titled ‘Access and Benefit Sharing as an Innovative Financing Mechanism,’ discusses innovations around ABS and how ABS could potentially be seen as an innovative mechanism. The article is accessible from the Asian Biotechnology and Development Review, 2014, 16 (2): 27-44.

For national ABS systems to function well, innovation around ABS models could occur in three possible ways. These include:

• Prioritizing modest but steady revenues from ABS over infrequent, but big pay offs;
• Prioritizing cooperation over competition when it comes to shared genetic resources and associated traditional knowledge;
• Prioritizing incentives over penalties to motivate compliance with ABS laws.

Prioritizing modest but steady revenues over infrequent, but big pay offs

Facilitative ABS systems do not focus on infrequent, potentially big pay offs where ABS is seen as a way to secure extraordinary profits from blockbuster drugs or cosmetics. In fact, facilitative ABS systems are designed to capture modest, but steady revenues. Realistic market related benefit-sharing has the advantage of encouraging users to enter into ABS agreements and attract more investment in sectors that rely on the utilization of genetic resources and associated traditional knowledge.

Innovative models of facilitative ABS systems incorporate a variety of ways to capture benefits along the value chain rather than only through mutually agreed terms. These could include deposits, taxes and fees. An ABS tax, for example, could be imposed on companies and research institutions developing products based on the utilization of genetic resources and associated traditional knowledge and could be transferred all the way to the end consumer of these products.

Access fees and processing fees could be charged at the point of application for bio-prospecting permits and could be used to offset the costs incurred in processing bio-prospecting applications. Security deposits could be required when genetic resources are accessed for the scoping phase of bio-prospecting, and could be returned at the completion of this phase. These security deposits could be channeled into an ABS fund and the interest from these security deposits could be used to fund community conservation projects. The security deposits themselves could be viewed as short-term interest free loans that the provider country can use to finance its ABS implementation strategies.

Prioritizing cooperation over competition when it comes to shared genetic resources and associated traditional knowledge

Genetic resources and associated traditional knowledge are usually common pool resources that are shared between countries and communities. ABS-related competition between countries and communities sharing these resources invariably leads to cherry picking by users and a race to the bottom that forces lower benefits and regulations. A way to overcome this is for countries and communities to experiment with pooling shared resources and knowledge, and developing cost-efficient regional, rather than a national, regulating authorities and ABS funds.

Prioritizing incentives over penalties to motivate compliance with ABS laws

While much discussion has ensued around penalties (sticks) to ensure compliance with domestic ABS regulatory frameworks, there hasn’t been much thought given to incentives (carrots) to motivate benefit-sharing. Carrots could include: ABS certification (like fair-trade certification); tax subsidies for users who engage in ABS and increased taxes for those who don’t; government investment and low interest loans for research institutes and companies involved in research and development related to genetic resources and associated traditional knowledge; and risk sharing where publicly funded research and public sector companies engage in initial research and development of specific genetic resources and associated traditional knowledge, and after which they invite private companies to enter into ABS agreements to do further research based on useful leads.

The Need for a Paradigm Shift

The need of the hour in the post-Nagoya process is a paradigm shift in how ABS systems are perceived and placed. We need to stop looking at ABS through the lens of the Nagoya Protocol negotiations where the focus was to prevent bio-piracy at all costs. Instead, we now have to start viewing ABS as an innovative financing mechanism, not a regulatory burden. It can also be convincingly argued that such actions could contribute to the new paradigm of a green economy, which is now struggling to find its niche at national and local levels. This bottom-up approach needs to be considered by the High Level Panel in their final submission to CBD COP 12.

Linking arguments around the assurance of a functional ABS regime at the national level (Target 16), it can now be posited that the investment in national processes related to making ABS frameworks functional should also consider approaches that promote ABS as a possible option for raising finance to achieve goals set under the CBD.

Going by the ‘Report of the High-Level Panel on Global Assessment of Resources for Implementing the Strategic Plan for Biodiversity 2011-2020′ presented in 2012, it will cost between US$7-$33 million per year to achieve Target 16. The GEF 5 portfolio allocation for ABS-related components alone was up to US$40 million, with similar or increased figures possibly assigned for the next funding cycle, the GEF 6 replenishment for 2014-2018.

Additionally, about US$10 million is available under the Nagoya Protocol Implementation Fund (NPIF), which has a limited number of countries accessing the funding. Combined with funding from other initiatives such as the multi-donor, multi-regional ABS Capacity Building Initiative for Africa, Pacific and the Caribbean as well as other ABS projects in the pipeline, it is promising that adequate funding needed to earnestly begin actions to realize Target 16 is available. Considering the need for finance to operationalize functional ABS systems, and based on a case study undertaken in Ecuador, it might cost anywhere between US$2-$3 million per country to implement the Protocol at the national level.

The time has come for CBD Parties to review this situation and move forward progressively. The ABS framework needs to be developed not as a legal-centered, heavily administrative process, but as a resource-centered instrument that offers streamlined opportunities to raise local resources for implementing the Nagoya Protocol.