Legal Protection for Biodiversity Products

For a long time the market has been focused on the production of products using inputs obtained from biodiversity, particularly the cosmetics, pharmaceutical and biotechnology industries, following the trend of sustainable development.

Plant extracts, such as carnauba wax, assai, andiroba and passion fruit, represent the vast majority of natural ingredients that have been used in many different products on the market.

In Brazil, the subject is regulated by Provisional Measure 2,186-16, which, in particular, establishes definitions and rules for access to so-called genetic patrimony, traditional knowledge associated with genetic patrimony and the sharing of benefits originating from this access.

The Provisional Measure has also created the Genetic Patrimony Management Council (CGEN), a body subordinated to the Ministry of the Environment, which is of a deliberative and normative nature and responsible for deciding on requests for access and benefit sharing. The application of the Provisional Measure relies subsidiarily on some Technical Orientations, currently totalling around 40.

Article 7, items IV and V, of the Provisional Measure define access to genetic patrimony as being:

(.) the obtaining of a sample of a component of genetic patrimony for the purposes of scientific research, technologic development or bioprospecting, seeking its industrial or other application.

And access to associated traditional knowledge as being:

(…) the obtaining of information about individual or collective knowledge or practice, associated with genetic patrimony, of an indigenous or local community, for the purposes of scientific research, technological development or bioprospecting, seeking its industrial or other application.

The principle of the Provisional Measure is that benefits, monetary or otherwise, are shared with those who provided the biodiversity and associated traditional knowledge. Harsh penalties are set out if access is not provided according to its provisions, such as: fines; seizure of products; suspension of sales; total or partial shutting down of the establishment; suspension and cancellation of the registration of the patent, license or authorization, amongst others. The amount of the fine can reach 50,000.00 Brazilian reals and, in the event of recurrence, the amount is doubled.

In spite of being in force since 2000, the Provisional Measure started being discussed more intensely with the beginning of "Operation New Directions – Phase 1" at IBAMA (Brazilian Institute for the Environment) in August 2010, through which national and international entities were fined for allegedly contravening the provisions of this Measure. Curiously, these entities were those that tried, working with CGEN, to follow the provisions of the complicated Provisional Measure and, as a result, were fined.

In June of 2012, "Operation New Directions – Phase II" started, through which 70 national and foreign companies and 30 research institutions were fined for alleged illegal access to Genetic Patrimony – which is understood to be "a component of biodiversity" – without benefit sharing with the provider.

Given these facts, industry has been intensifying its efforts to better understand and cope with the legal uncertainty brought about by different discussion forums and CGEN.

The questions are numerous and complex. As examples, we highlight two of them which have been the subject of intense discussions:

(i) once an industry has obtained the component of biodiversity from a commercial distributor, which in turn could also have obtained it through another distributor, how is it known which is the provider of the material of biodiversity? With whom are the benefits supposed to be shared?

(ii) when the property of the component of biodiversity – used in an industrial product obtained through conventional manufacturing methods – is already in the public domain, how would the technological development defined in the Provisional Measure be verified?

Answers to these questions are not easy and are being put together bit by bit. The fact is that industry needs to pay attention to the discussions about the use of resources of biodiversity in its products and processes so that it does not run the risk of suffering the penalties set out in the Provisional Measure, and worse, being considered a bio-pirate.

It should be noted that the concern over this issue affects many countries rich in biodiversity, who share their experiences at international events. One of these events with major repercussions will be the Conference of the Parties 12 (COP-12) for the Convention on Biological Diversity (CBD), in the Republic of Korea, which will take place from October 6th to 17th, 2014. We must pay close attention and follow the results.