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Synthesis/Regeneration 19   (Spring 1999)

Global Trade and Biodiversity in Conflict

by the Gaia Foundation and Genetic Resources Action International (GRAIN)

Global Trade and Biodiversity in Conflict is a series of exposes produced jointly by the Gaia Foundation and Genetic Resources Action International (GRAIN). The series examines critical points of conflict between the privatization of biodiversity, which is being driven by corporate interests and the Word Trade Organization, and peoples' efforts to empower local communities in biological and cultural diversity management, particularly in developing countries.


CBD -- Convention on Biological Diversity
GATT -- General Agreement on Tariffs and Trade
IPRs -- Intellectual Property Rights
PVP -- Plant Varieties Protection
TRIPs -- Trade Related Aspects of Intellectual Property Rights
UPOV -- Union for the Protection of New Varieties of Plants
WIPO -- World Intellectual Property Organization
WTO -- World Trade Organization

TRIPS versus CBD

The Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement of the World Trade Organization (WTO) threatens to make the Convention on Biological Diversity (CBD) impossible to implement. Yet as an international commitment, the CBD is as legally binding and authoritative as TRIPs.

Well over 130 countries adhere to both treaties. Because the two agreements embody and promote conflicting objectives, systems of rights and obligations, many states are questioning which treaty takes precedence over the other.

In particular, TRIPs imposes private intellectual property rights (IPRs) on the South's biodiversity while the CBD recognizes the collective rights of local communities to the same. Governments, scientists and many social sectors accept that our survival depends on the conservation and free availability of biodiversity, not on its privatization.

Governments and civil society therefore must urgently confront the contradiction between TRIPs and the CBD by taking the following measures:

  1. Countries should recognize and affirm in law the primacy of the CBD over the WTO TRIPs Agreement in the area of biological resources and traditional knowledge systems.
  2. At the TRIPs Review commencing in 1999, governments should ensure that TRIPs provides the option to exclude all life forms and related knowledge from IPR systems.
  3. Implementation of TRIPs in developing countries should be challenged and suspended on the basis of its irreconcilable conflict with the CBD.
  4. The Collective Rights of indigenous and local communities freely to use, exchange and develop biodiversity should be recognized as a priori rights and be placed over and above private intellectual property rights. This has to be reflected in legislation and public policy at the national level.
  5. The CBD should be fully developed as an international instrument to promote the sustainable use and conservation of biodiversity, based on community control of resources. The CBD should not be allowed to degenerate into a marketplace for the commercialization of biological resources and related knowledge.
  6. There should be a return to the basic assumption that the conservation and sustainable use of biodiversity is based on the rights and empowerment of local communities, which inspired the CBD in the first place.

1. Introduction

In the early 1990s, it was finally recognized at the international level that the industrial system of production and its drive for continued growth at all costs, was literally costing the Earth. The planet's life support systems are severely threatened; as evidenced by: increasing climate instability caused by the greenhouse effect; dramatic levels of soil and genetic erosion; the drying up of the equatorial rainforests leading to unprecedented fires, which will add to climate instability; marine pollution and the depletion of fish stocks; an estimated loss of 100 species per day, extinct forever.

At the same time, there has been a realization that local and indigenous communities in developing countries, who have nurtured this biological diversity and depend upon it, are equally under threat from the same forces. Not only their livelihoods but their traditional knowledge systems and practices of innovation, accumulated over generations, and their a priori rights to this heritage, are being undermined by industry's hunger to exploit and deplete biodiversity and claim exclusive ownership over life forms.

The 1993 Convention on Biological Diversity (CBD) is a legally binding commitment to stop this destruction and secure the conservation and sustainable use of biological diversity. Less than a year after the CBD came into force; however, the World Trade Organization (WTO) was established with quite a different agenda.

The Convention is founded on the principle that local communities generate and are dependent on biodiversity and should continue to benefit from it. The WTO administers a global trading system, much of which is founded on the private monopoly rights of transnational corporations over biodiversity.

These rights and objectives clearly conflict. Yet both treaties provide legally binding obligations for governments. This briefing reviews the main points of the conflict and suggests approaches to resolve it.

2. The CBD

2.1 The CBD recognizes the contribution of local communities to the enhancement, diffusion and conservation of biodiversity.

Perhaps the most important feature of the Convention is that it give s formal international recognition to the central role that indigenous and local communities play in biodiversity conservation, through their traditional and sustainable practices and cultural knowledge systems.

The Convention explicitly recognizes the intrinsic value of communities' knowledge systems, and gives their use and preservation greater importance than those used and commercialized by corporations.

Basic principles of the CBD

The CBD affirms:

2.2 The objectives of the CBD are founded on the recognition of Community Rights. The CBD's objectives are simple and straightforward: to conserve and sustainably use biological resources, and to provide for the equitable sharing of the benefits derived from them. To ensure that these objectives are met, the agreement sets out obligations which member states must implement and respect. They fall into four broad areas:

If the signatories to the CBD are to meet their obligations, it is crucial that the rights of indigenous peoples and local communities are fully recognized and implemented.

It is equally important that the conflict between the recognition and protection of these community rights and private monopoly rights is acknowledged, and a clear boundary line is established to stop private IPRs from encroaching at an increasing rate upon the collective domain of biodiversity and related knowledge.

2.3 The CBD runs the risk of being co-opted by commercial interests.

The original aims and stated objectives of the CBD are to promote the conservation and sustainable use of biodiversity, and to ensure that benefits from it are equitably shared.

Many see a potential for the CBD to be an effective tool for biodiversity conservation and use if it provides practical means for local communities to assert their rights against the privatization of biodiversity. However, there is a real risk that the CBD might degenerate into a mere legal charter for the transfer of germplasm from South to North under the guise of mutually agreed contracts.

Agencies, companies and governments who believe that millions of dollars can be raked in from the rainforests and farmers' fields are effectively trying to co-opt the CBD and use it as a tool to derail community rights and resources.

The emphasis in such deals is to establish codes of conduct to help corporations access local and indigenous communities' wealth of knowledge about their biodiversity, as well as samples of their materials. This is done under the guise of giving the communities a fair deal. In fact, this is the classic colonial practice of buying off some individuals to appropriate collectively held resources.

Benefit sharing cannot be reduced to financial compensation for giving corporations access to and monopoly rights over collectively held biological resources and knowledge. These are inalienable elements of intergenerational inheritance. Benefit sharing simply cannot take place in a context of monopoly rights.

3. The World Trade Organization and TRIPs

3.1 Free trade and intellectual property rights exclude people from the management of biodiversity.

The World Trade Organization was set up six months after CBD came into force. It promotes and oversees global rules on trade. The institution is particularly occupied with removing what it determines to be "trade distortions" and "barriers to trade."

In the last round of GATT negotiations, which gave rise to the establishment of WTO, the absence of strong intellectual property rights in developing countries was said to be a barrier to trade, costing industrialized countries some $200 billion in lost royalties per annum. TRIPs was thus directed to bring developing countries' IPR laws to the level which transnational trading interests deem necessary.

TRIPs was expressly designed to ensure that intellectual property rights could be universally applied to all "technologies," especially those which had previously been declared unsuitable for monopoly rights at the national level. These include pharmaceutical products and biological materials such as plants and microorganisms, all of which must now be 'eligible for private property rights by IPRs.

3.2 The TRIPs Agreement requires patents on life.

The new commercial opportunities opened up through developments in biotechnology have resulted in engaging in a massive campaign to wrest market control over biodiversity through the patent system, as well as change the rules of that system in the process. Legal questions and controversy related to IPRs on life are raging. For example, many people contest the idea that genes can be considered "new" or that routine DNA sequencing involves an act of "invention."

Basic facts about the TRIPs Agreement

The TRIPs Agreement:

  • Came into force on January 1, 1995 and must be implemented by all WTO member states
  • Entails obligations for seven areas of intellectual property rights available for all fields of technology.
  • Sets up the first global system of IPR on biological diversity, and specifically plant varieties.
  • Requires the application of either patents or an "effective" Sui generis (i.e. unique) system, to "protect" (i.e. gain monopoly rights over) plant varieties at the national level
  • Must be implemented in developing countries by the year 2000.
  • Must be implemented in least-developed countries by the year 2005.
  • Will be reviewed in 1999 (Art. 27.3b) and 2000 (the entire Agreement).
  • Is subject to the same dispute settlement procedures as other WTO agreements: failure to implement the terms of the agreement will result in trade retaliation against the offending country.

    These controversies are aggravated by the fact that many genetic "inventions" claimed in the North derive from biological products and knowledge from the South. Further still, there are no ethical boundaries in place. Patents are being granted on human genes and on techniques to alter the fate of human reproduction.

    Public outcry against genetic manipulation has driven the world's number one seed company, Pioneer Hi-Bred, to now denounce ethics as "a barrier to free trade." (1) Despite the terrible controversy, TRIPS requires developing countries to provide "legal protection" for the "intellectual property" of genetic engineers hailing from the US, Australia, Japan and Europe. The justification given for this is that without patents, companies will not invest in genetic engineering, and without genetic engineering we cannot feed the world -despite 12,000 years of community "research and development" work without which there would be no genetic engineering, which goes to feed commodity markets, not people.

    Trading interests reflected in the WTO have overridden two basic assumptions which are fundamental to the CBD.

    The first is that intellectual property is a matter of national sovereignty and policy, because it establishes monopolies and monopolies are, de facto, dangerous. Historically, countries have taken great care with their national IPR systems in order to protect the balance between private incentives and the public interest. The possibility of doing so is now forfeited to service the imperative of the TRIPS Agreement.

    The second assumption is that life forms are part of the public domain. Biodiversity represents a cultural and ecological heritage developed over generations and upon which our collective survival depends. Subjecting this heritage to a legal regime of commercial monopoly rights under TRIPS will destroy the conditions for its conservation and sustainable use, especially by the communities, and thereby destroy society's access to diverse food and medicine.

    Sui generis trap of TRIPs

    Implementation of the sui generis option for plant varieties under TRIPs means that:

    • The majority of developing countries will need to provide some form of intellectual monopoly right on food and medicinal biodiversity for the first time.
    • Many countries may be lured into adopting the UPOV model of PVP; which imposes genetic uniformity as a legal requirement for monopoly rights.
    • Developing countries might rush to join UPOV before the 1978 Act is closed in April 1999.
    • Seed prices will rise in poor countries and the seeds will be tailored by TNCs to suit their related commodity market interests in agrochemicals, processing and trade.
    • Farmers' access to diversity, their choice of planting material and options for management systems will be significantly impaired.
    • Farmers' rights to save and exchange seed will be legally restricted, if not prohibited, because of "protection" granted only to the interests of monopoly holders.
    • Varieties further selected by farmers from those with IPRs will be considered genetic derivations falling under the extensive legal ownership of the original IPR holder.
    • The top seed companies will further consolidate their control of the industry, with 40% of the market already in the hands of 10 firms.
    • Corporations will be able to secure legal ownership of plant varieties, which contain genetic information, obtained from farmers' own fields in the South, which they then sell back to them with an added royalty charge.
    • The biodiversity and associated community knowledge systems which form the basis of the adaptability of agriculture to population and other pressures will be lost.
    • Food security and agricultural innovation will severely decline.

    3.3 The TRIPS Agreement imposes biological and cultural uniformity

    TRIPs requires countries to provide patents on products or processes from any field of technology which are new, represent an inventive step and are capable of industrial application. States may limit the availability of patents on inventions whose commercial use would offend " ordre public" or morality (Article 27.2). States may also exclude plants and animals from IPR protection, but not plant varieties (Article 27.3b).

    Because of this provision, biodiversity falls firmly under the legal regime of TRIPs. Plant varieties must now be patentable or be open to an "effective sui generis system" of IPR. The precise meaning of "effective Sui generis system" is unknown.

    Should TRIPS be implemented as it is, developing countries will suffer an unprecedented loss of control over and benefits from their own biodiversity:

    Countries which opt to extend their patent laws to plant varieties will be setting up a system of private rights for individuals to prevent others from making, using or selling the protected variety or any product that might contain patented genetic information. Who stands to gain? Farmers will not be able to access freely or re-use seeds. Scientists will be subjected to research restrictions on their use of patented materials. In addition, they reduce the availability of diversity and threaten the survival of public research.

    By the year 2000, developing countries will have to implement a regime of private property rights on their own biodiversity for the benefit of Northern transnational corporations (TNCs). According to the World Intellectual Property Organization (WIPO), citizens and corporations of industrialized countries hold 95% of the patents in Africa, almost 85% of those in Latin America and 70% of those in Asia (5). The patent system operates for the North. To impose it on life forms-biodiversity and the community knowledge embedded within it-in the South, is nothing short of perverting the very objectives of the CBD.

    Increasingly, people realize that the TRIPS Agreement blatantly contradicts the CBD. TRIPS is a totally inappropriate vehicle for legislating new rights to biodiversity. The option for countries to develop a sui generis system of rights over these resources, within the TRIPS framework, is also increasingly viewed as a trap.

    4. CBD and TRIPs: a full-scale conflict

    The conflict between CBD and TRIPs over rights to biodiversity runs deeply through both treaties and will force parties to decide which agreement should take precedence over the other.

    4.1 The CBD and TRIPs have conflicting objectives

    The CBD is intended to strengthen developing countries' capacities to conserve and use biological diversity on a long-term basis, taking into account all rights over those resources, and including the right to enjoy the benefits of this resource base. Because of structural imbalances between countries rich in biological diversity and those strong in technological and legal instruments, the South has consistently been exploited.

    The CBD is supposed to rectify this and level the playing field by:

    • Empowering the South to regulate access to its biodiversity.
    • Conditioning access to the South's biodiversity, by requiring prior informed consent and the sharing of the benefits.
    • Providing for transfer of technology from North to South.
    • Recognizing the a priori collective rights of local communities in developing countries, who are the source of biodiversity and traditional knowledge and whose role in conservation is now universally acknowledged as fundamental.

    On the other hand, TRIPs is intended to provide private property rights over products and processes, be they biodiversity-based or not, in order to ensure that corporate interests are safeguarded equally worldwide. The uniform legal regime which TRIPs aims to achieve would provide monopoly control to those who claim to have "invented" new plants, animals, micro-organisms or uses thereof.

    Put simply, the agenda of TRIPs is to privatize, not to protect, biodiversity.

    It is likely that a country; which in all good faith seeks to implement community rights, and does so through a CBD-framed policy, could find itself in serious contravention of the TRIPs Agreement.

    The fundamental conflict between CBD and TRIPs is simple and irreducible.

    CBD recognizes that states have national sovereignty over their biological resources. TRIPs tries to introduce private individual rights over the same. Within one country the states' sovereignty takes precedence, and the CBD framework may prevail. But between a foreign IPR holder and a sovereign state, the state's jurisdiction is limited and cannot countervail the IPR holder.

    Ultimately, these essential contradictions between CBD and TRIPs will come to a head, unless governments resolve this discrepancy soon.

    5. Resolving the conflict

    If the CBD is to be implemented in the interest of humanity's survival and well being, then urgent measures need to be taken to ensure that its very objectives are not undermined by the narrow agenda of TRIPs.

    In essence this is a simple exercise, and the main lines of action proposed are summarized on the first page of this briefing. It is fundamentally a matter of:

    • Recognizing that the CBD has primacy over the WTO in the area of biodiversity and traditional knowledge systems.
    • Ensuring that the review of the TRIPS Agreement allows sovereign states to exclude all life forms and related knowledge from IPR systems.
    • Urgently recognizing the a priori collective rights of indigenous peoples and local communities over their biodiversity and related knowledge.

  • For more information, contact GRAIN, Girona 25, pral., 08010 Barcelona, Spain, Tel: (34-93) 301.13.81, Fax: (34-93) 301.16.27, Email: grain@bcn.servicom.es

    or The Gaia Foundation, 18 Well Walk, Hampstead, London NW3 1LD, UK, Tel: (44-171) 435.50.00, Fax: (44-171) 431.05.51, Email: gaia@gaianet.org

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