Recently celebrating the 10th anniversary of its entry into force, the Nagoya Protocol is a supplementary agreement to the Convention on Biological Diversity of 1992, which seeks to facilitate the protection of biodiversity globally. Parties to the Nagoya Protocol (Parties) have committed to so-called “Access and Benefit Sharing” (ABS) principles regarding the acquisition and utilization of genetic resources and associated traditional knowledge.
In a nutshell, access to those resources is conditioned upon obtaining the prior informed consent of authorities in the country of origin. Resources should then be used according to “Mutually Agreed Terms”, which shall include benefit sharing mechanisms with the country of origin.
This structure places concrete obligations on any company dealing with nature-based products and, notably, a need to obtain appropriate administrative authorizations and set up contractual arrangements toward benefit sharing. Beyond that, the key driver for compliance is to avoid the reputational costs associated with possible allegations of bio-piracy. Given the complexity of the global supply chains involved, global compliance is a challenge.
In this Blog Post, we discuss the practical implications of the Protocol on international businesses and their supply chains.
Resulting from a fragile compromise between negotiating countries, the Nagoya Protocol only sets out framework principles and rules on ABS and leaves to the Parties the task of developing their own specific, national legislations.
Where most of the Parties have adopted national legislations that retain, to a large extent, the principles of the Nagoya Protocol, those are endowed by a singular scope and understanding. With currently 129 Parties, businesses must deal with substantial differences among national legislations. While some of the Parties are still in the process of developing their own legislation, others already have already adopted sophisticated legal regimes. Some countries have relevant legislation that preexisted the Nagoya Protocol, or have since adopted broad legislations that fully or partially address it. As an example, Brazil is a highly bio diverse country with its own “Biodiversity Legislation” in places with concrete and far reaching consequences for any companies developing products involving Brazilian Genetic Heritage.
The clarity and quality of national legislations is very unequal, which may create difficulties for companies attempting to identify their ABS obligations. In particular, some national legislations go beyond the material scope of application of the Nagoya Protocol in terms of the covered resources (i.e., genetic resources and associated traditional knowledge) or the activities (e.g., “utilization”, R&D) subject to ABS obligations. A common example is that of ‘derivatives’ of genetic resources that may be regulated under certain national legislations, significantly broadening the scope of ABS obligations beyond what is contemplated in the Nagoya Protocol. The Nagoya Protocol has also left to the Parties the task to define some essential definitions such as “access” or “research and development”, leading to great variations among national laws.
European Union Focus
In addition, the European Union, as a Party to the Nagoya Protocol, has adopted a regulatory framework to ensure that users exercise due diligence in ascertaining that R&D activities they conduct in the EU territory on resources falling within the scope of the Nagoya Protocol were accessed in compliance with applicable ABS obligations. This is not without consequences for industries conducting R&D activities in the EU: the industry shall ensure it obtains, keeps and transfers the necessary information throughout its supply chain, creating an incentive for enhanced transparency within it.
How Can We Help?
Mayer Brown is uniquely positioned on this topic, with its EU Regulatory Team having significant experience in advising clients on the Nagoya Protocol national ABS legislations. Our Brazilian team adds its great expertise of the Brazilian Biodiversity Legislation.