Capson, T.L. 2009. Biodiscovery research in Panama_Linking science, technology, human health, and...
Transcript of Capson, T.L. 2009. Biodiscovery research in Panama_Linking science, technology, human health, and...
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IUCN Environmental Policy and Law Paper No. 67/4
Contracting for ABS: The Legal and Scientific Implications
of Bioprospecting Contracts
ABS Series No. 4
Shakeel Bhatti, Santiago Carrizosa, Patrick McGuire, Tomme Young, Editors
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Contracting or ABS: The Legal and Scientifc
Implications o Bioprospecting Contracts
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Contracting or ABS: The Legal and Scientifc
Implications o Bioprospecting Contracts
Shakeel Bhatti, Santiago Carrizosa, Patrick McGuire, Tomme Young, Editors
IUCN Environmental Policy and Law Paper No. 67/4
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Te designation o geographical entities in this book, and the presentation o the material, do not imply the expression oany opinion whatsoever on the part o IUCN or the German Federal Ministry or Economic Cooperation and Development
(BMZ) concerning the legal status o any country, territory, or area, or o its authorities, or concerning the delimitationo its rontiers or boundaries.
Te views expressed in this publication do not necessarily reect those o IUCN or BMZ.
Tis publication has been made possible in part by unding rom BMZ.
Published by: IUCN, Gland, Switzerland in collaboration with the IUCN Environmental Law Centre,Bonn, Germany
Copyright: 2009 International Union or Conservation o Nature and Natural Resources
Reproduction o this publication or educational or other non commercial purposes isauthorized without prior written permission rom the copyright holder provided the source is ully
acknowledged.
Reproduction o this publication or resale or other commercial purposes is prohibited without
prior written permission o the copyright holder.
Citation: Young, omme (Ed.) 2009. Contracting or ABS: Te Legal and Scientifc Implications oBioprospecting Contracts. IUCN, Gland, Switzerland. xxiv + 308 pp.
ISBN: 978-2-8317-0982-6
Cover design by: magoodesign Markus Kahlenberg
Cover image by: Beverly Lorenc
Layout by: ceterum printdesign Dieter Mller, 53340 Meckenheim, Germany
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Table o Contents
Foreword xiii
Series Editors Preace xv
About the Series xvii
Acknowledgements xix
Acronyms and Short Names xxi
Other Terms Used in Part I xxii
Introduction: Inquiring into the Legal and Scientifc Implications o
Bioprospecting Contracts xxiii
Part I 1
ABS Contracts and Contract Law 3
The contractual challenge 4The contractual side o the international ABS negotiations and implementation 4
Organisation o Part I 5
Contents, methodology, and sources used in Part I 6
Other examples 7
Other sources o relevant law 7
Commercial law and analysis 7
ABS law and analysis 8
Merging commercial and ABS legal concepts 8
Generalising about national laws 8
Integrating cultural actors 9
1 A Contractual View o ABS 11
1.1 Basic obstacles o ABS as a unctional regime 12
1.1.1 Regime gaps and inconsistencies aecting ABS contracts 12
1.1.2 Integrating ABS commercial elements with environmental and social purposes 14
1.2 Access and benet-sharing requirements 15
1.2.1 Sovereign rights in genetic resources 16
1.2.2 Scope and coverage o ABS 17
1.2.2.1 Genetic resources 17
1.2.2.2 Providers and countries o origin 181.2.3 Te paradox o ownership o genetic resources 18
1.2.4 Prior inormed consent and mutually agreed terms 20
1.2.5 Granting and obtaining reasonable access to genetic resources 21
1.2.5.1 Applying ABS in source countries with no ABS legislation 21
1.2.5.2 Practical legal administrative requirements or access 22
1.2.6 User-side measures: Te unullled requirement 23
1.2.7 Other components o the benet-sharing objective 24
1.3 Te Bonn Guidelines 25
1.3.1 Primary elements o the Bonn Guidelines relevant to ABS contracts 25
1.3.1.1 Institutional arrangements 251.3.1.2 ABS elements and processes 26
1.3.1.3 Participation 26
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1.3.1.4 Benets and benet-distribution 27
1.3.1.5 Procedural matters: Issuance, implementation and enorcement o
ABS contracts
1.3.2 Incentives and other matters o interest in ABS contract negotiations 28
1.3.3 Why were urther international ABS negotiations needed? 29
1.4 Te International reaty on Plant Genetic Resources or Food and Agriculture 30
1.4.1 Overall provisions and approach 31
1.4.1.1 Coverage 31
1.4.1.2 Implementation and Enorcement 32
1.4.1.3 Farmers rights 33
1.4.2 Access concepts 33
1.4.2.1 National legislation and sovereignty 33
1.4.2.2 Food shortage exception 34
1.4.3 Mutually agreed terms or acquiring plant germplasm 34
1.4.4 Pre-agreed benet-sharing 35
1.4.4.1 Benet-sharing at the country level 351.4.4.2 Benet sharing in individual transactions 35
1.4.5 Next steps: Coordinating with the CBD regime 37
1.5 Expectations 37
2 Applying Contract Law to ABS 39
2.1 Legal certainty a primary objective o all contracts 40
2.1.1 Contractual certainty in general 40
2.1.2 Legal uncertainty in ABS 41
2.1.2.1 Legislative, procedural and practical uncertainties 41
2.1.2.2 Conceptual uncertainty 422.1.3 Inter-sectoral uncertainties 44
2.2 Te contract mechanism and the orces that control why/how it unctions 44
2.2.1 Control 44
2.2.2 Motivation 47
2.2.3 Value 48
2.2.4 Summary 48
2.3 Contract validity: Requirements, governing law and ormalities 49
2.3.1 Requirements o a valid contract 49
2.3.1.1 Legal authority 49
2.3.1.2 Legal capacity 502.3.1.3 Fraud, misrepresentation and non-disclosure 51
2.3.1.4 Statutory and constitutional provisions 53
2.3.2 Reliance Validating an invalid contract 54
2.3.3 Contractual ormalities and the importance o a written contract 54
2.3.4 Other concepts: Governing law, customary law, traditional law and
private international law 55
2.3.4.1 Governing law 55
2.3.4.2 Industry-wide custom and practice 56
2.3.4.3 Indigenous and traditional law 56
2.4 Enorceability: Creating a binding contract 56
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2.4.1 Principles o airness, good aith and trust 57
2.4.2 Characteristics o a binding contract 57
2.4.2.1 Mutual intention to be bound 57
2.4.2.2 Sufciently denite 58
2.4.2.3 Unambiguous 59
2.4.2.4 Un-coerced 60
2.4.3 Necessary components o a binding contract and o an ABS contract 61
2.4.3.1 Mutual assent and prior inormed consent 61
2.4.3.2 Agreed terms and conditions/mutually agreed terms 63
2.4.3.3 Contracts that are accepted by action (shrink-wrap and click-wrap) 63
2.4.3.4 SMA and shrink-wrap/click-wrap concepts 65
2.4.3.5 Other possible ABS use o click-wrap concepts 66
2.4.4 Assignability, transer and the rights o third parties 66
2.4.4.1 Restrictions on the transer ores 67
2.4.4.2 Assignment o contract rights and duties 67
2.4.4.3 Tird-party rights 682.5 Te taxonomy o contracts whats in a name? 68
2.5.1 Contracts vs. statutory permits 73
2.5.2 Specialized types o contracts 74
2.6 Special issues 75
2.6.1 International trade controls and related issues 75
2.6.1.1 International trade law and ABS contracts 76
2.6.1.2 Possible areas o urther analysis 76
2.7.2 Antitrust and other controls 77
3 Contract Provisions and Experience 793.1 Examples, models and orms 87
3.1.1 Using contracts as examples 89
3.1.1.1 Nature o the parties 89
3.1.1.2 Specic activities and rights granted 91
3.1.1.3 Sectoral ocus 92
3.2 Contract provisions 92
3.2.1 Identiying and binding the parties to an ABS contract 93
3.2.1.1 Ownership/rights in genetic resources 94
3.2.1.2 Authority o signatory 96
3.2.1.3 Ability to complete the contract 973.2.1.4 Rights o third parties 97
3.2.2 Core provisions: Objectives and scope 98
3.2.3 erminology 102
3.2.4 Basic ABS rights and duties 107
3.2.4.1 Access and use o genetic resources 107
3.2.4.2 Monetary provisions and other benets 113
3.2.4.3 National procedures: PIC, MA and other processes 121
3.2.5 Assignment, change o use, tracking and the conclusion o the ABS relationship 123
3.2.5.1 Assignment and transer provisions 123
3.2.5.2 Change o use 1273.2.5.3 Derivatives 128
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3.2.6 racking 128
3.2.7 Intellectual property and other intangible properties 129
3.2.7.1 IPRs 129
3.2.7.2 Licensing o existing rights in genetic resources and products 136
3.2.7.3 Condential inormation 137
3.2.7.4 Publication 143
3.2.8 Management o termination and change 144
3.2.8.1 ime issues and termination o the contract 144
3.2.8.2 Revision, rescission and amendment 149
3.2.9 Contractual technical provisions 150
3.2.9.1 Governing law and other choice-o-law provisions 150
3.2.9.2 Reporting and contract-related inspection 152
3.2.9.3 Boilerplate and contract ormalities 157
3.2.10 Compliance provisions: Addressing enorcement o the legal rights o
the parties 159
3.2.10.1 Dispute resolution 1593.2.10.2 Liability discussion 162
3.3. Aligning contractual risk with actual risk 165
3.4. A ew nal observations 166
Glossary or Part I 169
Reerences and Bibliography or Part I 175
PART II 181
4 Science, Technology, and the Renaissance o Bioprospecting: 183A Comparative Analysis
4.1 Marine Organisms 185
4.2 Symbionts: Are they the true sources o natural products? 187
4.3 Extremophiles 188
4.4 Natural products discovery: Te role o modern technologies 189
4.4.1 Accelerating the natural product discovery process: Genes, targets, and assays 189
4.4.2 Combinatorial chemistry: Exploring the linkages with natural products 190
4.4.3 Genetic engineering and bioprospecting 191
4.4.3.1 Generating chemical diversity through bioprospecting and
synthetic biology 1914.4.3.2 Creating protein diversity through directed evolution 192
4.4.3.3 Harvesting the potential o microorganisms through
site-directed mutagenesis 193
4.5 Science and its implications or ABS agreements 193
4.5.1 Identiying biological samples: Are these samples the true sources o
natural products? 193
4.5.1.1 Identiying microbes: A new challenge or the providers o
genetic resources 194
4.5.2 Supplying biological samples: A new paradigm determined by science
and technology 195
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4.5.3 ranserring technology and building capacity: Are science and technology
aecting the choices made by negotiators o ABS agreements? 196
Conclusions 197
Reerences 203
5 Research Collaborative Agreements and Bioprospecting in Costa Rica:
Scientifc, Technological and Legal Impacts 207
5.1 Overview o INBios bioprospecting approach and its technologies 207
5.1.1 NBios philosophy 207
5.1.2 Overview o INBios technological evolution 209
5.1.2.1 Te technological development o the inventorying and
biodiversity inormatics processes 209
5.1.2.2 Te technological development o the bioprospecting process 210
5.1.2.3 Te impact o the inventorying and biodiversity inormation
on the bioprospecting process 211
5.1.3 Overview o inactive bioprospecting projects 2145.1.4 Costa Rican political and legal context or the development o INBio 216
5.2 Key technologies used in the context of active bioprospecting projects 218
5.2.1 Bioprospecting projects: Objectives, partners, and negotiation process o contracts 218
5.2.1.1 Chemical prospecting projects 218
5.2.1.2 Biotechnology prospecting projects 220
5.2.2 Scientic technologies in the context o current bioprospecting projects 221
5.2.3 Contractual provisions: Addressing scientic issues and transer o technology 223
5.2.3.1 ranser o proprietary inormation and equipment 223
5.2.3.2 raining 224
5.2.3.3 Protection o inventions 2245.2.3.4 Publications 224
5.2.3.5 Benet sharing 224
5.2.4 echnologies and scientic training transerred to INBio 225
5.2.5 Issues that may hinder science and technology transer 226
5.3 Mergers, assignments and market impacts 227
Conclusions 227
Reerences 229
6 Access Issues Related to the USA National Cancer Institutes (NCI) Natural
Products Drug Discovery and Development Program 2316.1 Contract collections: 1986 to the present. Te NCI Letter o Collection (LOC) 231
6.1.1 Access to source-country resources 232
6.1.2 NCI interactions with source-country representatives 233
6.1.3 Collection specications: Conservation and sustainable use 233
6.1.4 Source-country collaboration 234
6.2 Sample volumes and initial processing 237
6.3 Distribution o extracts rom the NCI natural products repository material
transer agreements (NPR-MA) 237
6.4 Direct collaboration with source-country organizations: Te NCI memorandum
o understanding 2386.5 echnology transer 239
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6.6 Case studies: Anti-HIV agents 240
6.6.1 Michellamine B: A potential anti-HIV agent rom the Cameroon Liana,
Ancistrocladus korupensis 240
6.6.2 Te Calanolides: Potential anti-HIV agents rom Calophyllum species,
Sarawak, Malaysia 241
6.6.3 Prostratin: A potential anti-HIV agent rom Homalanthus nutans,
American Samoa
6.7 Case study: Anti-cancer agent 242
6.7.1 Halichondrin B rom the New Zealand marine sponge, Lyssodendoryxspecies 242
Conclusions 243
Recommendations 245
Appendix A. National Cancer Institute: Letter o Collection Agreement 247
Appendix B. Source-countries with which NCI has collaborated in the collection o
plants and marine organisms 251
Appendix C. Short-term (1 to 2 weeks) visitors to the USA sponsored by NCI 253
Appendix D. Long-term (1 to 12 months) visiting scientists under the auspices o theNCI LOC 255
Appendix E. National Cancer Institute: Memorandum o Understanding 257
Appendix F. MoUs between NCI and source-country organizations: Direct collaborations 261
Appendix G. Long-term (1 to 12 months) visiting scientists under the auspices o the
NCI MoU* 263
Reerences 265
7 Biodiscovery Research in Panama: Linking Science, Technology, Human Health,
and Conservation in the Host-Country Context 269
7.1 Te International Cooperative Biodiversity Groups Program: A unique model ornatural products-based drug discovery 269
7.2 Biodiscovery research in a post-CBD world: Circumstances that inuenced the
design o the Panama ICBG and its contractual arrangements 270
7.2.1 An overview o the drug-discovery and development process 270
7.2.1.1 Collecting o biological materials 270
7.2.1.2 Bioassay-guided ractionation and the isolation and characterization
o compounds 270
7.2.1.3 Development o promising candidates or the treatment o disease 271
7.2.1.4 racking o samples made available or biodiscovery research 271
7.2.1.5 Te benets to the host country rom actively participating inthe drug-discovery process 271
7.2.1.6 Case study: Te University o British Columbia and Papua
New Guinea and the development o the hemiasterlins 272
7.2.2 Commercial versus nonprot: wo paradigms or developing new medicines 273
7.2.3 Natural products and contemporary drug discovery 274
7.2.3.1 Natural products and the pharmaceutical industry 274
7.2.3.2 It is in the best interest o researchers rom industrialized
countries to play by the rules 275
7.2.3.3 Te industry standard or biodiscovery research: Long-term
relationships between host-country participants and well-dened contractual agreements 275
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7.2.3.4 Drug discovery or diseases o importance to developing countries 276
7.2.3.5 Te importance o natural-products research or
tropical parasitic diseases 276
7.2.4 Summary: Removing access to biodiversity is a lose-lose proposition 278
7.2.5 Losing the orest or the trees? ropical biodiversity is a disappearing resource 278
7.2.6 Biodiscovery versus conservation: A alse dichotomy 279
7.3 Contemporary biodiscovery research in Latin America 279
7.3.1 Regional approaches to regulating access to biological resources in Latin America:
Decision 391 o the Cartagena Agreement 280
7.3.2 National approaches to regulating access to biological resources in Latin America:
Costa Rica 281
7.3.3 Putting the cart beore the horse: Regulations to implement the CBD are
hindering all access to biodiversity, stiing opportunities rom which
host countries could gain experience 282
7.3.3.1 Contracts as tools or building bridges between the participants
in biodiscovery research 2827.4 Te Panama ICBG: Investing in the host country in order to maximize its role
in the drug-discovery process and to link the research to conservation 283
7.4.1 Context o ABS issues in Panama at the beginning o the Panama ICBG 283
7.4.2 Overview o the Panama ICBG drug-discovery process 284
7.4.3 Associate programs in the Panama ICBG 284
7.4.4 Organisms collected by the Panama ICBG 284
7.4.5 Disease targets selected by the Panama ICBG: echnology transer and
development or bioassays 285
7.4.5.1 Drug discovery or cancer 285
7.4.5.2 Collaboration with the Novartis Institutes or Biomedical Research 2867.4.5.3 Drug discovery or malaria 286
7.4.5.4 Drug discovery or leishmaniasis 286
7.4.5.5 Drug discovery or Chagas Disease 287
7.4.6 General investments in inrastructure and in research programs 287
7.4.7 Te training o students and creation o research opportunities in the
Panama ICBG 288
7.4.8 Te Panama ICBG and traditional knowledge 288
7.4.9 Biodiversity conservation component o the Panama ICBG 288
7.4.9.1 Public outreach 288
7.4.9.2 Collections in protected areas and collaboration with ANAM 2887.4.9.3 Te Coiba National Park: Providing scientic input to
strengthen protected areas 289
7.4.9.4 Conclusion: Linking biodiscovery research to biodiversity conservation 289
7.4.10 Access and benet-sharing contracts utilized by the Panama ICBG 290
7.4.10.1 First-generation access and benet-sharing contracts or
the Panama ICBG: Te hub-and-spoke model 290
7.4.11 Elements o the ANAM-SRI agreement or the Panama ICBG 291
7.4.11.1 Key concepts and denitions specied in the agreement 291
7.4.11.2 Procedures or the collection and testing o biological materials 291
7.4.11.3 Te use o traditional knowledge 291
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7.4.11.4 Procedures or obtaining ANAMs authorization or use,
transer, and export o biological materials 292
7.4.11.5 Establishment o an environmental trust und 292
7.4.11.6 Distribution o net revenue and access ees 292
7.4.11.7 Management o intellectual property 292
7.4.11.8 Te inuence o science and technology on contract negotiations 293
7.4.12 Te essential role o USA- and Europe-based academic and
governmental collaborators or technology transer and development
or the Panama ICBG 293
7.5 Evolution o the Panama ICBG 294
7.5.1 Addition o new disease targets 294
7.5.2 Te changing landscape or biodiscovery research in Panama 294
7.5.3 South-south technology transer 295
Conclusions 295
Applying the experience in Panama in other settings 295
Biodiscovery research at a crossroads 296Reerences 297
Acknowledgements 306
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It is my pleasure to present this bookContracting or ABS: Te Legal and Scientifc Implications o Bioprospecting
Contracts, edited by Shakeel Bhatti, Santiago Carrizosa, Patrick McGuire and omme Young, which is published
as IUCN Environmental Policy and Law Paper (EPLP) No. 67/4. Tis book represents an important contribu-
tion to the body o ABS literature currently available and is provided at a critical time in the development o
ABS as a unctional concept and international regime. It is a part o IUCNs EPLP series, which dates back to
1972 and has through 35 years maintained a high standard o legal scholarship and quality outputs.
Te ABS Series, which includes this book, is the rst sub-series within the EPLP series, designed in this
way to maximize the useulness and accessibility o these writings to the broad range o participants address-
ing the ABS challenges at both national and international levels. We believe that this Series oers a substantial
contribution that will enable progress on an issue which has, to now, been stymied both by its complexity and
by its controversial nature. It is only through the understanding o those complexities that consensus and useulcompromise can be attained that will resolve the controversies and enable a unctional system or achieving the
all-important equity objective o the Convention on Biological Diversity.
Dr. Alejandro Iza
Director
IUCN Environmental Law Centre
June 2007
Foreword
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Series Editors Preace
In the course oTe ABS Project, IUCNs Environ-
mental Law Centre has taken a central position inpromoting researched and balanced analysis o critical
components o the current discussions o the inter-
national regime on access and benet sharing under
the CBD. Te ABS Seriesprovides the culmination o
these eorts, enabling recognized experts to undertake
intensive research and present detailed, balanced, and
reasonable analysis. It operates as a counterpoint to
the growing numbers o authors whose work in ABS
issues is sometimes ocused more on advocacy than on
research. With this Series we are trying to take a very
dierent approach and to achieve a very dierent objec-
tive. Simply put, we hope to provide a deeper under-
standing o the legal, economic, practical, and actual
issues aecting the debate, and to build our analyses
and recommendations on intensive legal research.
Tis ourth book in our Series, entitled Contract-
ing or ABS: Te Legal and Scientifc Implications o
Bioprospecting Contracts, is designed to provide two
types o inormation that have sometimes been in short
supply. First, it ocuses on contractual issues analysiso ABS Agreements as legal contracts, and legal advice
regarding the ways that they are dierent rom (and
more difcult to negotiate than) other types o legal
instruments and contracts. Second, it attempts to ll
a signicant gap in the awareness and inormation
available to persons negotiating the contracts regard-
ing the scientic, technical, and practical activities that
the users will be undertaking activities that must be
addressed by the Agreement.
Te editors and contributors o this book include
a number whose names and reputations are well known
in conservation and genetic resources policy, including
Shakeel Bhatti, who headed the Genetic Resources,Biotechnology, and Traditional Knowledge Section of
the World Intellectual Property Organization when
the writing o this book began and has since been
named Secretary o the International reaty on Plant
Genetic Resources, Santiago Carrizosa, currently
Regional echnical Advisor or Biodiversity with the
United Nations Development Programme/Global En-vironmental Facility, and Patrick McGuire, who headed
the UC Genetic Resources Conservation Program. It is
my pleasure, as well as my duty on behal oTe ABS
Projectto express my gratitude to these and all contribu-
tors to this book.
Tis book and indeed the entire Project owe a
great debt to our primary nancial supporter, the Ger-
man Federal Ministry or Economic Cooperation and
Development (Bundesministerium r wirtschatliche
Zusammenarbeit und Entwicklungor BMZ), and espe-
cially to Julia Kaiser, Andrea Laux and Frank Schmied-
chen without whom this work could not have been
completed. Numerous other partners and collaborators
have also made important and sustaining commitments
or which we are very grateul.
Finally, without the support and oresight o Dr.
Alejandro Iza and the IUCN Environmental Law
Centre, this book and all o the other works oTe
ABS Projectwould not exist. It was through Dr. Izaseorts that TeABS Projectbecame a reality, and his
understanding o the difculties in its implementation
as well as his support and the unstinting assistance o
the sta o the Environmental Law Centre in produc-
ing this book, including Legal Ofcer Jane Bulmer,
Project Assistant Ann DeVoy, Senior Inormation and
Documentation Ofcer Anni Lukcs, and Documen-
tation Assistant Monica Pacheco-Fabig. Collectively,
these individuals have been the primary reason that the
Project could nish its work and that outputs through-out the term o the project have achieved the level o
legal excellence expected o the IUCN Environmental
Policy and Law Papers, among which Te ABS Series
has been included.
omme Rosanne Young
Series Editor and Project Manager, Te ABS Project
August, 2009
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About the Series
Te ABS Series represents a response to two realities:
First, the ABS issue is controversial and technicallyand legally complex. Because o the constant interna-
tional concern over controversial policy and political
issues, the primary ocus o all writing on ABS has
been ocused on political positions and advocacy, even
where the expressed purpose o a particular document
is practical legal advice. Lack o a rigorous body o
ABS analysis has been one part o this implementation
problem. Many proessional inputs are characterized by
opinions that are unsupported, or supported only by
citations to the opinions o other experts or random
reerences to or excerpts rom laws and policy instru-
ments, taken out o context.
o IUCNs Environmental Law Centre, it has
become clear that the complexity and the controversial-
ity are linked problems. Solutions to the international
ABS controversies are currently stymied by the lack o
credible, non-biased technical analysis o the elements
and issues o national implementation. Serious in-
depth analyses are needed concerning not only the ew
ABS examples, but also the kinds o legal options thatare available and the manner in which they unction.
Simply put, one cannot build a structure without the
right tools and having the tools is meaningless without
knowledge o what they can and cannot do.
Te second reality aced by this project is the
act that, despite the long-extending international ne-
gotiations, genetic resources are being taken, studied,
developed, and utilized every day. Countries do not
have the luxury o waiting or international negotia-tions to answer their questions, beore taking action.
It is consequently urgent or all parties (users, source
countries, source communities and resource owners,
user countries, researchers, middlemen, and others) to
have some basis or taking these actions. More impor-
tant, each party needs to have some certainty that this
basis will be robust enough to protect its rights, even
ater international negotiations provide some guidance
or assistance to all or part o the ABS issue. Even where
national laws and practices exist, they are proving inad-equate to this objective, in some measure owing to the
lack o technical help, as described above.
Consequently, Te ABS Seriesocuses on national
implementation and the legal and legislative issues thatmust be addressed, rather than advocating or addressing
a particular side or position in the international negotia-
tions. Trough this process, Te ABS Seriesseeks to cre-
ate the best possible basis o researched inormation on
the practical application issue. It is thus not only a tool
or national decision-makers but also or implementers.
While it is not always possible to be certain that one has
been unbiased, we have made an eort, at minimum,
to note the existence o other credible positions on the
issues discussed, and to give some reason why these
positions were not more ully expounded.
As o this writing, the international process or
development o the ABS regime is still ongoing. While
not intended to inuence that process, Te ABS Series
has been designed and written in the hope that a bet-
ter knowledge o the realities o ABS will enable the
negotiators to develop the regime as a unctional and
eective tool o conservation, equity, and international
development. As such, we believe that the books in this
Series will continue to be primary works o scholarshipand proessional analysis on which the architects and
implementers o the ABS regime will rely long ater the
negotiations have concluded. In addition, it is hoped
that the authors in the Series (or a team o similarly
qualied experts) will be engaged to update relevant
books rom the Series, when the time is right.
arget audiences: Writing or a broad audience
can sometimes be challenging or lawyers. In Te ABS
Series, however, we recognize that our primary audienceincludes national decision-makers, NGOs, and others,
as well as lawyers and economists. We have endeavored
to present our research in an accessible way, without
doing harm to our absolute standard o legal correct-
ness. Although many readers would like a simplied
pamphlet-style analysis o the ABS issue, which can
answer all o their questions in a ew pages, this is not
possible the only simple act about ABS is that it is
not simple. Te ABS Seriesprovides summaries o the
complexities in the issue that legal specialists mustgrapple with, but at the same time attempts to avoid
legalese and its companion econo-ese. In this way,
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we eel that Te ABS Seriesprovides both clarity and
understandability or the non-lawyer, who may obtain
a thorough grounding in the ABS issue through reading
these books. For the legal or economics proessional,
however, these books also provide resources and inor-
mation that will enable their deeper understanding o
ABS issues.
Te uture: Te ABS issue is still evolving. Ater the
commencement oTe ABS Project, the CBD entered
on a groundbreaking process o re-evaluating ABS and
attempting to develop the necessary tools, consensus,
and understanding (e.g., a clearer and more unctional
international ABS regime) that will enable progress
toward achieving the goals o the CBD. With this de-
cision, Te ABS Projectunderwent its rst evolution.It had begun as a project aimed at helping national
governments to nd some positive steps to enable them
to try to achieve the xed language o CBD Article 15.
In 2004, it necessarily expanded that ocus embracing
the goal o inorming all participants and interested
persons (at national, regional, and international level)
regarding the options, instruments, practices, and
processes that can enable the ABS regime to become
a unctional mechanism or achievement o the CBD
third objective. Only time can decide how ar the in-
ternational negotiations will go toward assisting and
supporting ABS implementation. Te team o proes-
sionals who have worked to provide Te ABS Serieshope
that a useul and innovative result is quickly obtained,
and that we will all have the opportunity to extend the
work o this Series and to guide, analyze, and promote
the new regime components that will be developed.
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Acknowledgements
Te editors and authors o this book wish to express
our gratitude to those who made the most signicantcontributions to its completion and substantive cor-
rectness. Among these, we are grateul or inormation,
documents, research, and other inputs rom and or
substantive input and comments rom Jorge Cabrera
Medaglia, Jorge Caillaux, Fernando Casas, Carlos
Correa, Jose Esquinas Alcazar, Valerie Etim, Ute Feit,
Jos Carlos Fernndez Ugalde, Jagath Gunawaredena,
Francis Gurry, John Herity, Sarah Hernandez, imothy
Hodges, Olivier Jalvert, Ted James, Nancy Kgeng-enyane, Richard Kjeldgaard, Bernard LeBuanec, Rob-
ert Lettington, Ikechi Mgbeoji, Phyllida Middlemiss,
Gerald Moore, Valerie Normand, Dan Ogalla, MariaJulia Oliva, Alberto Parenti, Franois Pythoud, Preeti
Ramdasi, Manuel Ruiz, Sezanneh M. Seymour, Clive
Stannard, Caroline Strulik, Seizo Sumida, Antony
aubman, and Morten Walle vedt.
We are also grateul to the numerous commercial,
academic, and other persons and entities who shared
contractual examples, models, orms, and other inor-
mation about the true-lie use o contracts in ABS.
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Acronyms and Short Names
ABS or access and access to genetic resources and equitable sharing o the benets arising rom their utilisation or
beneft-sharing access and benet-sharing as conceived in Articles 1 and 15 o the CBDAHWG-ABS or CBD Ad-hoc Open-ended Working Group on Access and Benet Sharing
Working Group
Bonn Guidelines Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing o the
Benets Arising Out o Teir Utilization (2002)
Cartagena Protocol Cartagena Protocol on Biosaety to the Convention on Biological Diversity (Nairobi,
2000)
CBD Convention on Biological Diversity (Rio, 1992)
CHM Clearinghouse Mechanism o the CBD
CNA competent national authority (on ABS matters, unless otherwise stated)
COP Conerence o the Parties (o the CBD unless stated otherwise)
DNA deoxyribonucleic acid
GEF Global Environment Facility
IGC WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources,
Traditional Knowledge and Folklore
ITPGRFA International reaty on Plant Genetic Resources or Food and Agriculture (Rome,
2001)
MAT Mutually Agreed erms
MLS Te Multilateral System o Access and Benet-sharing created under Part IV (Articles
10-1) o the IPGRFA
MOP Meeting o the Parties
MTA Material ranser Agreement
NFP National Focal Point1
PIC Prior Inormed Consent
SCBD Secretariat o the Convention on Biological Diversity
SMTA Standard Material ranser Agreement, adopted in 2006 by the governing body o the
IPGRFA
TRIPS Agreement rade-Related Intellectual Property Rights Agreement
1 Within the CBD, each Contracting Party is expected to designate at least one national CBD ocal point. In addition, the Bonn Guidelinesrecommend that each Party designate a national ABS ocal point. I they choose not to identiy a separate NFP or ABS, the countrys CBDNFP will ll both roles, receiving all ABS related inormation and inquiries.
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UPOV International Union or the Protection o New Varieties o Plant (Union internationale
pour la protection des obtentions vgtales)
WIPO World Intellectual Property Organization
WSSD World Summit on Sustainable Development (Johannesburg, 2002)
WTO World rade Organization
In attempting to discuss ABS issues, the authors o Part I have requently been stymied by the act that many
terms are used imprecisely. For example, the common mode o discussing ABS relationships is to use three terms
user, provider country (or country providing genetic resources) and country o origin. Tese terms are dened
in ways which, in many cases, would not be precise enough to enable a court or other legal expert to determine
clearly when those terms apply. Te authors thereore elt that is appropriate to introduce some clarity into our
own terminological choices by spelling out the precise way we are using terms within this book. Te usage othe key terms o ABS within this book is thereore set out in the Glossary, ound at page 169 and the reader is
reerred to this Glossary in case o any questions over terminological issues.
Other Terms Used in Part I
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Contracts and contract law are deeply integrated into
ABS. o address them, this book is divided into twovery separate component parts.
Part I ocuses on the creation o ABS contracts,
with particular attention to the actors and issues which
cause such contracts to be very dierent rom other
types o contracts. Its goal is to provide a unied start-
ing point rom which those whose primary expertise
is in commercial and contractual law and practice can
gain an understanding o the ABS concept and the
special concerns o contracts or genetic resources. At
the same time Part I should allow ABS experts and bio-
prospectors to gain some insight into contract law and
the reasons that ABS contracts adopted have later been
discovered to be legally awed and un-implementable
as commercial instruments. Besides the dierence, Part
I also notes certain similarities which exist between
ABS contracts and commercial contracts used in other
elds.
Te authors do not wish to suggest that a contract
that does not meet basic legal standards is not valid.So long as there is good will among the parties to a
contract, it does not matter whether its provisions are
legally enorceable or not. In the current climate o un-
certainty and in some cases distrust between providers
o genetic resources and various types o users, however,
it is important or all parties to nd a way o clariying
the meaning and requirements o their contracts and
ensuring that those documents are legally valid. Such
certainty will enable all parties to avoid misunderstand-
Introduction: Inquiring into the Legal and
Scientifc Implications o Bioprospecting
ContractsThere has been a temptation in policy discussions to think o development and the preservation o the environment inantagonistic terms We have to move away rom the limited and limiting idea that the environment is basicallyin confict with development.
Professor Amartya Sen2
2 Address to the 22d UNEP Governing Council, February 2003.
ings, litigation and other conict.
Chapters 1 and 2 seek to provide a basis or ap-
proaching these two aspects o ABS in an integrated
way. In Chapter 3, a more immediately practical
discussion uses examples rom a collection o actual
ABS contracts, to provide some ideas or negotiators
regarding some o the options available to them. While
it does not attempt to identiy best practices or provide
some standard or model or negotiation, Chapter 3 is
oered in the hope that negotiations will be improved
by a broader knowledge o the provisions actually be-
ing used.
Part I oers an analysis o, and lessons learned
rom, a wide range o existing ABS contracts and seeks
to present these lessons in systematic orm according
to clearly dened categories o contractual issues which
have been customized according to their relevance or
ABS contracts.
Following this analysis Part II(Chapters 4-7) be-
gins the books attempt to provide a better understand-ing o many o the possible scientic bases on which
ABS contracts may be built. In this part, the objective
was satised through rst-hand accounts. In early
2005, key scientists and lawyers rom three organiza-
tions involved in bioprospecting practices were asked
to develop three in-depth reports (Chapters 5 through
7) about scientic issues associated with bioprospect-
ing contracts. Specic issues that all o the experts were
asked to discuss included:
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xxiv
Currentscienceandtechnologyappliedbytheir
organizationandthemannerinwhichthistech -
nologymayinuencethecontractnegotiation
process.
Usesof microorganism, molecules, genes, and
othersubstancesidentiedbytheirorganization
inthecontextofbioprospectingagreements.
Theimpactthatthese scienticoptions upon
contractualnegotiatingstrategiesandcontents.
Chapter 4 provides an overview o science and technol-
ogy in the context o bioprospecting projects imple-
mented since the CBD came into orce and presents a
comparative analysis o key.
Finally, we note that this book includes statements
and opinions rom numerous dierent authors, which
are not in all cases shared by all. In all cases, we agree
that the most important aspect o this work is its abil-
ity to provide critical inormation o value to all parties
and other stakeholders, and sincerely hope that it has
done so.
Shakeel Bhatti
Santiago Carrizosa
Patrick McGuire
omme Young
June 2009
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Part I
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3
ABS Contracts and Contract Law
Te Convention on Biological Diversity (CBD)1 hasbeen described as everything rom the key document
regarding sustainable development to a display o all
the reasons why UN eort to conserve the environment
rarely succeed.2 Tis divergence seems relatively minor
when compared to the level o divergence displayed in
CBD discussions o Article 15 and the other concepts
linked together under the sobriquet access to genetic
resources and equitable sharing o the benets arising
rom their use (usually shortened to access and benet-
sharing or ABS.)
From the earliest negotiations, the ABS issue engen-
dered controversy. While the negotiations or the CBD
began rom a conservation objective, the third objective
o equitable benet-sharing was added as an integral part
o the Convention. Tis basic objective ocuses on equity
and the need to address the possibility that the relation-
ship between developed and developing countries might
be inequitable, rather than on strict conservation and
environmental concerns. In addition, it uses commercialconcepts as its tool or achieving equity. Specically, it
directly ocuses on the companies, researchers, and in-
dustries that are increasingly applying technologies that
usethe unique properties o biological resources, but donot need to purchase bulk quantities o specimens rom
the source country in order to do so. 3 As a result o this
technological evolution, developing countries ability to
directly reap benets rom those that use their biologi-
cal resources (i.e., to sell those resources in bulk) is di-minishing. A commercial developer or researcher might
obtain immense value by utilizing the unique proper-
ties o a particular species, subspecies, or variety, having
only taken (either with or without payment) a very small
number or volume o samples or extracts o the species.Te resulting new commercial paradigm would separate
the developing country rom obtaining value rom the
species, without enabling them to share in the new mar-
ket, whether nancially, technologically, or developmen-
tally.
While the existence o these activities and commer-
cial evolutions was undisputed, there was dispute rom
the beginning o the CBD negotiations as to whether
they create inequity. One o the roots o this controversylies in a very simple question why is ABS created un-der the CBD, rather than a trade or commercial regime?Te answer to this question helps to clariy the equity
question. Te CBD was intended to address the growing
diculties with preservation o the green web o lie on
Planet Earth. Its rst goal (both in time and as expressed
in the nal instrument) was and is conservation o bio-
logical resources and especially o the diversity among
them a quality that is essential or the continued health
and existence o lie on earth.
Second, it sought/seeks to ensure that human utili-
sation o the worlds biological resources is sustainable.
Tis second objective is essential both or conservation
and or the creation o resource-dependent enterprises
and societies. Communities and countries that develop
on the basis o their biological wealth risk catastrophe
i that wealth should disappear. Hence, it is essential to
them, as well as to planetary conservation principles that
biological resources should be used sustainably.
Consequently, the justication o the CBDs bene-
t-sharing provision was not solely based on commercial
1 Rio, 1992, entry into orce, 1993.
2 First quote rom Report o the th Norway-UN Conerence on Biodiversity, (rondheim, 2007); second rom Oxley, A., Green Gold and CargoCults, CS Daily, 29 March 2006.
3 In general, these activities are thought o as utilization o genetic resources, however, it is not clear what specic role genes must play in theutilisation. Many activities that have been assailed or announced as the utilisation o genetic resources have involved a range o dierent types oactivities that are not specically utilizinggeneticresearch (such as the synthetic replication obiochemicalormulas or use in urther research and
development). Similarly a number o conventional agricultural development activities (such as seed propagation and new variety development), andeven activities that do not involve any replication at all (such as the direct use o naturally collected essences that have been purchased in bulk in thesource country) have sometimes been considered to be utilization o genetic resources.See, e.g., Mgbeoji, 2006b; and Laird and en Kate, et al., 1998(and other case studies posted on the CBD website at http://www.cbd.int/abs/cs.shtml).
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4
equity. Negotiators and other commentators assumed
that ABS would operate as an incentive to conservation.
Since the opening o negotiations, the scope and eec-
tiveness o ABS to realistically address these inequities
and to provide a unctional incentive to conserve bio-
diversity and to use it sustainably has oten been ques-tioned.
Te third objective was both last to be developed
and most controversial. It was intended to recognise two
critical acts: First, that conservation is a dicult burden
when it prevents the conserver rom obtaining reason-
able value and return on the resource being conserved.
Second, that the above-described evolution in the use
o biological resource has resulted in a diminishing in-
centive (or even a disincentive) or developing countries
(stewards o a large share o the worlds biodiversity) to
grant access to their biological largesse.
Stated directly, ABS was expected to be a quid proquo o the Convention. Developing countries were gen-erally unwilling to make another international commit-
ment to conservation at the request o more developed
countries, without some reciprocal benet to them. Ul-
timately, the bargain was successul ABS was adopted
as part o the CBD and the overwhelming majority o
developing countries signed and later ratied it.
At this writing, negotiations are ongoing to clariy and
improve the unctionality o the international regime on
ABS.5 While some participants are proposing that sec-
toral Material ranser Agreements (MAs) would bring
The contractual challenge
Unortunately, the initial quid pro quowas only part othe ABS challenge. Developed countries, already bur-
dened with signicant international nancial obliga-
tions, were beginning to express an unwillingness to in-
crease those burdens, even where issues o environment
were at stake. In particular, they were not willing to com-
mit to resolve these inequities through direct assistance
and other intergovernmental mechanisms, or to assume
nancial responsibility or the equitable sharing. Hence,
another important compromise was also built into theABS process, and continues to be important today. Spe-
cically, the ABS concept was based on strongly stated
assumptions that the private sector the users o genetic
resources (a term that is oten used but as yet ambigu-
ously dened) would bear the primary burden o ben-
et sharing. Most important, although not expressed in
documents, it was broadly assumed and stated that con-tractual mechanismswould be the vehicle or this shar-ing.4 Given this historical genealogy and these tacit as-
sumptions, the law o contract assumes a role which is
central to the implementation o ABS under the CBD,
but which has not been explicitly stated in the Conven-
tion.
Starting rom these statements and assumptions,
some companies, countries, communities, and individu-
als took the initiative o attempting to negotiate ABS con-
tracts and to adopt basic legislation and other practices
regarding access to genetic resources. Tese early ABS
systems were based on the assumption that each countrycan control all access to its own genetic resources, and
that it can require benet-sharing as a prerequisite to
release o that control. In other words, they assumed that
one could not gain access to or utilize genetic resources
without rst obtaining an ABS contract. Over the years,
many deciencies have been ound in this ABS paradigm
particularly the idea that existing contractual practices,
coupled with source country legislation would be a su-
cient unctional basis or control o access to genetic
resources and traditional knowledge.
4 See, e.g., Report o the International Negotiating Committee, and International Committee or the CBD (ICCBD), as well as Glowka, 1998 at 80,and en Kate and Laird, et al., 1999, throughout.
5 Te current status o the international ABS regime negotiations is reported in the (regularly updated) ABS pages o the CBDs website athttp://www.cbd.int/
The contractual side of the international ABS negotiations and implementation
an increased use o contract mechanism, others are rec-
ognizing that new legislation and practices are needed
to enable all ABS contracts (standard or non-standard)
to unction eectively and to ensure that the regime eq-
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5
ABS Contracts and Contract Law
althoughusedinABS,contractlawsareunaected
by the uniqueness o ABS, and
thereforethereisnoneedtostudyorconsidercon-
tractual legal and practical issues in the course o
ABS implementation or even ABS contractual ne-gotiations.
In act, however, the law o contracts is complex and
highly relevant to ABS. Many actors relating to ABS
make it very dicult to apply contract law easily or
simply. Attempts to determine and apply contract law
to ABS have long been recognized as quite complex by
experts working in natural resource industries and relat-
ed commercial sectors, such as orestry, agriculture, and
sheries.7 Consequently, the government ocials and le-
gal experts who have actually applied relevant commer-
cial law to ABS contracts in non-theoretical situations
(i.e., in real lie) generally disagree with the ABS expert
view that the contractual and legal concerns o ABS are
relatively simple and ew.
Organisation of Part I
In Part I, this book attempts to provide some insight
into the application o contractual and commercial law
to ABS. Part I begins with a discussion o some o the
components of ABS relationships and factors rel-
evant to how they are negotiated and documented
(Chapter 1) and
areasinwhichABSprocesses, systems, anddocu-
ments raise substantive challenges and other ques-
tions under contract law that have not been an-
swered as yet, either in legislation or by judicial
decisions (Chapter 2).
Following this background, Chapter 3 ocuses on par-
ticular examples, providing
adviceregardingtheadvantagesanddisadvantages
o the development, use, and reliance on model
contracts, orm contracts, and specimen provisions
rom other contracts, Chapter 3, and
actualABSexamples(contracts inforce,contracts
negotiated, orm contracts, and model contracts), as
described below.
Part I is intended to assist negotiators in preparing anddiscussing ABS contracts and related instruments aect-
ing those relationships.
6 Tis comment was most oten made by technical assistance providers involved in the negotiations o the Philippines Executive Order 247, whichcontinues to have unctional problems arising rom the original system design. Benevidez, 2004.
7 Young, 1994.
uitably addresses the needs o both the provider and the
user.
For a variety o reasons, the application o contract
law and practice to ABS has not yet been the subject
o in-depth legal analysis or commentary. Most authorswho have considered the legislative and commercial law
aspects o ABS have been writing at the theoretical level
rather than on the basis o practical legal research into
commercial law issues. For example, early national ABS
legislation was later in some cases described as an experi-
ment in ABS implementation.6 Such legislation oten
did not address or coordinate with national contractual
principles, much less the more dicult problems o in-
ternational contractual law described in this book.
In this legal ambience, many existing legal works
on ABS address the relevance o contract law oten with
only a ew sentences, indicating three key perceptions:
contractlawisrelativelysimple,
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6
Contents, methodology and sources used in Part I
In undertaking this task, the authors have drawn on a
wide range o sources o contracts and other legal in-
struments, studies, and databases, including the WIPO
Contracts Database, as a source o real-lie contracts andother ABS instruments. Te authors interpretation o
contractual issues has been based on a number o general
sources discussing contractual law under various legal
systems, supported by the authors own experience with
contractual negotiations and the application o contrac-
tual and commercial law, both in the ABS context and
more generally.
Te compilation and completion o the chapters
was aided by the existence o the WIPO Contracts Da-
tabase,8compiled by the Genetic Resources, Biotechnol-ogy, and raditional Knowledge Section o WIPO. Te
Database contains over 30 contracts and other legal in-
struments, both models and examples, whose authors or
parties have allowed these instruments to be made pub-
licly available. As noted in chapter 3, only a portion o
these instruments are actually ABS Contracts that is,
contracts between users rom one country and a provider
rom a dierent source country (or the source country
itsel). Te remainder consist primarily o post-access
contracts, transerring rights and resources between theuser and other researchers, distributors, or licensees/de-
velopers. Although this latter group o contracts are not
specically examples o user-provider relationships in the
narrow sense o the term as dened in an ABS context,
they provide important examples which can enlighten
contractual practices and terminology in the primary ne-
gotiations between users and providers as well.
Te WIPO Contracts Database represents only
a part o the collection o contracts used in this Part.Other contract examples which have not been redacted
and/or approved or public release were also used. Specic
elements have been excerpted rom both public and non-
public contracts within that collection and provided here
as tables showing a variety o actual current approaches
to particular issues or contractual requirements. In addi-
tion, the book utilizes other examples and inormation,
obtained through interviews and other personal commu-
nications, regarding which they are similarly bound by
commitments o condentiality, although permitted topublish redacted excerpts. In order to ensure protection
o the various parties who have submitted condential
inormation to the authors, no inormation about the
parties or sources o any o the contracts discussed are
provided. Consequently, these tables do not include the
names o particular parties or other details that would
allow the reader to identiy a provision as being part o a
particular contract. Where possible, the actual wording
and material rom actual contracts has been used, with
indications to note where the instrument being used is a
model or orm.9
Te authors are happy to note that the WIPO Con-
tracts Database will continue to be updated, and to pro-
vide parties with a basis or analyses o current practices
and provisions in ABS agreements and contracts or the
use o traditional knowledge. Further inormation is
available by contacting the Genetic Resources, Biotech-
nology, and raditional Knowledge Section o WIPO
directly at the contact address given in the WIPO Con-
tracts Database.
Most importantly, the Database is an important
contribution to promoting the unctionality o ABS, and
its transparency, and might over time become a refec-
tion o the evolution o ABS practices. ABS has existed
or a very short time relative to most legal concepts, and
in many ways it is not parallel to any other existing legal
or commercial system. Consequently, it is important to
build a body o practical experience and knowledge o
the provisions and practices being used to apply the ABSconcept. Tis will enable both sides o an ABS transac-
tion to know better what to expect and what their rights
are within those relationships. In addition, transparency
provides a useul base o inormation or those trying to
produce legislation and/or to negotiate a uture instru-
ment addressing the utilisation o genetic resources and
8 Available online at http://www.wipo.int/tk/en/databases/contracts/index.html
9 Where only an excerpt o a provision has been used, we have endeavoured to provide sucient inormation to enable the reader to understand thecontext o the excerpt.
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ABS Contracts and Contract Law
traditional knowledge. Finally, a broader understanding
o how actual ABS contracts unction is critical to the
system, enabling all stakeholders to evaluate the suc-
cess o ABS in achieving the objectives and o the CBD.
Consequently, parties to ABS agreements and related in-
struments are encouraged to continue providing copies
o those documents to the WIPO Contracts Database
and similar initiatives.
Other examplesIn addition, many specic issues or experiences are dis-
cussed in detail in Part II o this book. Tose examples
are provided with all respect and gratitude to the coun-
tries and projects described in those chapters and case
studies.
Other sources of relevant law
o achieve its purposes, this Part cannot ocus solely on
this small range o existing ABS contracts, none o which
have been legally interpreted by a court or governmental
body. It must look to the elements o law that are both
primary and essential. In the commercial world, very ew
contractual elds are governed entirely by specialized law
o their particular type o contract. Even concepts such
as intellectual property rights (IPRs), although governed
by a large body o detailed and specialized statutes and
regulations, are also directly subject to contract law and
to laws that govern the legal and commercial rights o
the parties (property ownership, anti-trust, unjust en-
richment, national organic instruments, sovereign
rights and many other matters). In addition, the bodyo practical knowledge and analysis o ABS extends well
beyond the ew available contracts.
Commercial law and analysis
A critical source o this work is the long-established law
and analysis o the law o contract ormation, implemen-
tation and enorcement, which is heavily linked to com-
mercial, procedural and organic laws, including legal
systems governing intellectual property rights, trade, an-
ti-trust and other commercial issues. Te complexity othis body o law is signicantly increased in trans-border
contracts where any contract question may be governed
by the laws o two or more countries in various situa-
tions.
In any country, the law libraries will contain thou-
sands o books addressing contracts and commercial law,
including both those which provide the specic elements
and decisions o the countrys own law and those which
describe these issues in comparison with other countries
and systems. Analytical works on any sub-area o con-
tract law, limited to any one country or legal system will,
in that country, be many times the length o the current
book. Beyond this, one must also consider the nascent
body o private and public international law address-
ing these issues. Once a contract is international, the
amount o relevant legal material that must be examined
increases. In the words o one o the most respected legal
compendiums:
Of all areas of law, perhaps none has been sub-
jected to comparative study as consistently, frequentlyand intensely as contract law. Te International En-cyclopaedia of Comparative Law devotes two out ofseventeen volumes to the subject of contract law, andcontract law takes up more than half of the subjectmatter in [another basic compendium]. It is by far themost prominent topic in international debates aboutprivate law.10
International principles generally rely on national law o
one or more countries, so that they may be understoodonly by considering national contract law in detail.
wo other critical sources o research data and ana-
lytical material are case law (judicial decisions) and case
studies (analyses o how a particular contract worked in
real lie). Both are essential elements o any legitimate
advice or analysis in contract law and practice. In many
countries, the past decisions by judges regarding a partic-
10 Reinmann and Zimmermann, 2006, at 900.
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ular law or legal principle have a dening role, with prior
court decisions becoming part o the legal requirements
imposed on each party to a new or ongoing contract. Tis
approach, incorporating judicial law or precedent into
a single seamless body o national law o contracts, is nor-
mally associated with common law legal systems. How-ever, companies in nearly all countries study how judges
and other decision-makers are applying contract law and
terms o specic contracts. It is the basis on which they
build their expectations, and negotiate contracts that are
commercially reasonable and enorceable.11 Te cumula-
tive impact o business practices within a given sector or
industry may eventually come to be accepted as de factolegal standards.12 Especially in the years beore such stan-
dards are recognized, it is important to be broadly aware
o provisions that are being negotiated and how they are
applied and implemented.
ABS law and analysis
A second basis or this Part is ound in legal and policy
work under the CBD and IPGRFA. Te authors note
the existence o literally hundreds (at least) o dierent
articles, books, and discussions on ABS, ABS transac-
tions, and related matters such as IPRs in GR and K.
While some o these specically address some contract
law matters, most do not, although they may raise issues,
objectives, and concerns o great relevance to the con-tents, interpretation, implementation, and enorcement
o ABS Contracts.
Merging commercial and ABS legal concepts
Obviously, all o the data in the two elds cannot be
amalgamated in this section. Instead, the intent is to
provide a basis or integrating these two large bodies
o legal literature (contract law and ABS legal issues),
which dier in one very serious respect. Contract law is
long-established and based on a process o development,scholarship, detail, and accuracy. It addresses known re-
lationships and has evolved out o practical application
through many centuries. By contrast, ABS consists pri-
marily o policy-type documents and a very limited body
o relatively new and untested legal instruments the
CBD, IPGRFA, Bonn Guidelines, and a small num-
ber o national ABS laws and policy documents. ABS
legal work has ocused on an entirely dierent set o legal
issues and principles, relating to national implementa-
tion, policy- and equity-based objectives and the practi-
cal questions o how a new international system can becreated.
o date, there has been relatively little crossover be-
tween contractual and ABS expertises even when writing
about the intersection o these two specialties. Tis lack
o integration has proven problematic where companies
and source countries attempt to apply ABS principles to
create legally certain and enorceable contracts.
Although Part I is an attempt to inorm contractual/
commercial specialists about ABS and the ABS specialist
about contracts, it is not intended as a treatise on either
issue. Its more modest expectation is simply to provide a
uniying summary, at a level that will be useul to both
lawyers and non-lawyers. It is designed to be used in prac-
tice, rather than studied by legal theorists. o this end,
the authors have attempted to avoid legalese and tried to
keep discussions o dicult issues o law relatively short
and ocused. In some cases, reerences to sources o more
detailed discussion have been provided or particular legal
issues that might be studied to shed more light on thelegal details o the concept have been identied.
Generalising about national laws
In discussing these complexities, one must be careul
because many points which are considered obvious or
unchallengeable in one countrys contract law will not
exist in another countrys system. Unortunately, it was
not possible, within the time available or researching
and writing this book, to deeply research all o the con-
tractual issues, questions, problems and situations thatarise in the ABS context in all legal systems. In the end,
some o the issues were dicult to analyse in even one
system.13 While recognizing that there are numerous di-
erences among national legal systems and international
codes, as well as many points o similarity, this book does
11 See, e.g., Visser t Hoot, 2002, at 25, citing recent studies in Japan, considering the disposition o 114 court cases on commercial contract disputes.
12 SeeVisser t Hoot, 2002, noting that Japanese law specically authorizes or requires the recognition o customs within the relevant industry, as ameans o determining the meaning and validity o contracts.
13 It is notable that the authors come rom dierent legal backgrounds. Both have worked extensively with many dierent legal systems, writing andadvising on legislation, contractual negotiations, and legal advocacy, in over 100 countries, as well as acilitating or participating in internationaltribunals and arbitration. Tis experience has colored their understandings o the issues described in this Part.
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ABS Contracts and Contract Law
not (cannot) inquire in detail into the underlying legal
issues in any single country. When used in any trans-
action, this book should probably be supplemented by
speaking with legal experts with substantial contract law
experience and knowledge o legal issues and practices in
the countries involved in that transaction.
Integrating cultural factors
Finally (and perhaps most important), throughout Part
I, it will be most important to remember that contracts
are one o the key areas in which the law interaces with
cultural actors in determining how commercial and reg-
ulatory systems actually unction.
Every legal system needs to be understood in its own
cultural, economic and political context. Even i black-
letter law14 as expressed in legislation and caselaw may
turn out to be quite similar (between various countries
legal systems), the political and cultural context o the
law, such as the provisions or dispute resolution and
peoples attitudes to the law, may lead to a divergence
rather than a convergence o actual living law.15
Tis statement is equally true between countries
within the same region or sharing a common type o
legal system (i.e., between two common law countries
or between two civil law countries, or example) as be-
tween those with completely divergent systems. In act,
countries with the most in common, legally, will otenbe so dierent, in cultural and geographic terms, that
their practical needs and implementation o ABS will be
entirely dierent in some ways.16
Part I is backed by extensive research in interna-
tional/comparative law and in national law to the extent
available to us. It was not possible in the space available
to provide a detailed account o all relevant research. Te
authors hope and believe that the most immediate need
in ABS contracts is not or a detailed legal tome, but or
an analysis that can help guide parties negotiating ABS
Contracts and those advising them.
14 A legal colloquialism, reerring to written law as distinguished rom the way that the law works.15 Visser t Hoot, W., 2002, at 15.
16 Id., identiying signicant similarities between the legal systems o Japan and the Netherlands with regard to contracts.
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11
A Contractual View o ABS1Shakeel Bhatti* and omme Rosanne Young**
Dating rom the CBD negotiations, it has been requent-
ly stated that ABS would be implemented by contracts
between the user (individual or entity) and the source
country (and/or the private provider where national law
gives private individuals or entities the right to contract
as providers o genetic resources.) Te intention o thepersons making these statements was to support their
claim that ABS would operate on the basis o an existing
legal system, so that countries would not have to create
detailed national ABS provisions, nor would any system
be needed in the CBD. Tese statements grew more em-
phatic as the deadline or adoption o CBD approached
with the parties still unable to agree on clear statements
about how ABS would unction.
In order to rely on contract law, however, CBD ne-
gotiators and advisors made several additional assump-
tions. First, they specically stated that questions o
ownership o genetic resources would be decided under
national law o property,1 assuming that existing proper-
ty law in all countries would be sucient to address these
matters. Second, they assumed that it would be possible
or all countries to control the access to and use o ge-
netic resources to detect access and prevent use o ge-
netic resources, unless it was based on a contract. Finally,
they assumed that, despite the signicant lack o agree-
ment among the countries regarding what ABS woulddo and require, it would be possible or the courts to
apply and enorce ABS contracts in transborder (multi-
country) transactions without any special adjustment to
existing international law and practice. As discussed in
the next section, however, none o these assumptions was
ultimately true.
Tis chapter cannot provide a complete or detailed
summary o the ABS system and processes. Te authors
presume that any readers needing such a description willturn to other sources, including the other books in the
ABS Series, as well as numerous publications, case stud-
ies, and other documents available through the CBD-
CHM,2 the IPGRFA website,3 and elsewhere. Instead,
this chapter will provide a contractual perspective o
ABS, discussing
thechallengesandobstaclesthatindicatethatcon-
tractual negotiators need to investigate ABS issues
more closely;
the CBD provisions most relevant to ABS con-
tracts;
howABScontractstwithintheABSsystem;
two of the most important international instru-
ments which have sought to clariy and simpliy
ABS contractual discussions (the Bonn Guidelines
and the SMA o the IPGRFA); and
obstacles and disconnections which are currently
impacting the role o contracts in the negotiation,
implementation, and enorcement o ABS con-
tracts.
* he speciic statements and contents o this chapter do not necessarily relect the opinions o the World Intellectual Property Organisation, itsSecretariat or Member States, nor the IUCN, with which he was ailiated during the writing o this chapter, nor those o the Governing Body o theInternational reaty on Plant Genetic Resources or Food and Agriculture, its Secretariat or its Contracting Parties, with which he has become closelyailiated in the interim between writing and publication o this book.
** omme Rosanne Young is an independent consultant on environmental law and policy, currently based in Bonn, Germany.
1 Glowka, et al., 1994, at 76.
2 www.cbd.int/chm
3 www.planttreaty.org
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Te current gaps and ambiguities in the ABS concept
have existed since the CBDs adoption. Tis is one o the
main reasons that new international negotiations havecommenced regarding ABS. Tis book is not aimed at
remedying those gaps and obstacles, or at advising or
predicting the outcome o those negotiations. Rather its
goal is assisting countries and users who are today nego-
tiating ABS contracts, licenses, and permits, under the
current legislative and political systems. Given that most
contract parties engage in that work without rst study-ing the ABS issue, it seems appropriate to summarize
some o the conceptual obstacles that are most directly
relevant to ABS contracts, beore beginning a more sys-
tematic examination o those issues.
1.1 Basic obstacles o ABS as a unctional regime
1.1.1 Regime gaps and inconsistencies aecting ABS contracts
Te heart o the problems acing ABS implementation
arise rom the act that there is little legislation imple-
menting ABS at the national level, and most o it is not
unctioning eectively. Although a ew countries have
adopted legislative systems or granting permits to use
their own genetic resources, none has yet complied with
the CBDs requirements regarding user measures4 mea-
sures applicable to the users under their jurisdiction
when they utilize genetic resources o oreign origin. 5
Even rom the provider side, at the time that the
CBD was adopted (and still today) no country had ad-
opted a workable system or identication o ownership
o genetic resources.6 Although the denitions are con-tested, genetic resources can be ound in and derived
rom virtually any biological material. Consequently, it
is normally not possible to control or track the physi-
cal ability to obtain (and thereater test) samples, unless
either (i) the users voluntarily provide the relevant inor-
mation and agree to these controls, or (ii) both source
and user countries (and other countries in which the
biological material has been held) are willing and ableto oversee all potential utilization activities involving ge-
netic resources derived rom any biological material.7
It is still unclear whether either challenge mustbeaddressed under the CBD. It remains true that many
parties to the current ABS negotiations expect users and
user countries to control the utilization o all genetic
resources o oreign origin. Tis approach appears to as-
sume that any person/entity whose products are basedon genetic inormation rom species not endemic to
the user country are by denition potentially engaging
in misappropriation o genetic resources regardless o
4 User measures is the common way to reer to the obligations under CBD Art. 15.7. Most relevantly, it requires that each Contracting Party shalltake legislative, administrative or policy measures, with the aim o sharing in a air and equitable way the results o research and development andthe beneits arising rom the commercial and other utilization o genetic resources . A ew countries have adopted laws calling or the disclosurein patent applications o the origin or source o genetic resources used in the invention/innovation. However, as a study by the Spanish patent oiceindicated, until recently most disclosures have been voluntary oered by patent applicants. Such disclosure has usually been contained within thedescription o the invention (in the patent application). Even in those countries with mandatory disclosure requirements, those requirements couldtheoretically be a basis or reusal to grant a patent. Once the patent is granted, they rarely aect the validity o the patent, and do not create any
obligation (or incentive) to share beneits with the provider o the genetic resources.5 here are many possible reasons or Parties poor Article 15 perormance to date. National legislative dratsmen generally ind it very diicult to
create legislation that implements ABS due to the ambiguities and uncertainties regarding the practical meaning o Article 15. Standard examples oambiguity include the impenetrability o the terms genetic resources and utilization o genetic resources, as well as the uncertainty regarding themeaning o access and its relationship to the obligation to share beneits. hese points are considered in more detail in Cabrera and Lopez, 2007 at1.2 and 2.1.3, and vedt and Young, 2007 at Chapter 2.
6 At least one country, Australia, has legislated in a way that indicates that any person that owns or possesses as specimen o biological origin also ownsthe rights to genetic resources it contains. SeeAUSRALIA, Environment Protection and Conservation Regulations, 2000, Statutory Rules 2000N 181, as amended (taking into account amendments up to SLI 2006 N 131, Parts 8A, 9, 10, and 17).And see, Queensland Biodiscovery Act, ActN 19, 24 Aug 2004; and other documents available on the CBDs ABS Measures database. http://www.cbd.int/abs/measures.shtml. his provision,however, appears to be inconsistent with the Australian law on patents, which apparently recognizes the right to patent naturally occurring genes
without getting permission rom the owners o rights in that material. Consequently, although having espoused this approach to ownership o geneticresources, it cannot be said that Australia has integrated that approach into its property/commercial law.
7 Even i all uture movement o biological material rom the source country can be controlled, this may not enable any actual control o the utilization
o genetic resources rom that material. Various aspects o the proposals or control or tracking o access and utilization o genetic resources arediscussed in detail in Ruiz and Lapea, 2007, Book 3 in this Series. his separation between beneit-sharing and control is equally true or traditionalknowledge, where widespread dispersion o such knowledge among communities and oten among community members makes it diicult tocondition beneit-sharing on control o even the most sacred or secret species-related knowledge.
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A Contractual View of ABS
the conditions under which the resources or inorma-
tion was acquired, unless the user previously obtained
ABS permission rom the country o origin.8 By con-
trast, most userseel that ABS responsibilities apply onlywhere the user specically obtained the resource rom
the source country directly i.e., by engaging in directbioprospecting under a permit.9 Tey appear to eel that,
i the material is acquired rom another collector, it is
not covered by ABS. Tis approach appears to create a
signicant loophole.10
From the most basic legal perspective, it is not yet
even clear what kindo property genetic resources mightbe. Tis determination would be critical to any attempt
to deal with genetic resources as property under nation-
al law, given that in virtually all countries the rules gov-
erning ownership o land and permanently constructed
improvements are very dierent rom those governing
ownership o other types o property, such as movable
property, common property, sovereign property, patrimo-
ny, intellectual property and other kinds o intangible
property. Within these categories, there are oten dozens
o more specialized categories which again are subject to
unique rules, including rules determining who may own
(