Novartis Bioprospecting and Benefit Sharing.pdf

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Towards Earth Summit III – 2002 Bio-prospecting Benefit Sharing and Report of a UNED-UK / Novartis Workshop hosted by the Rockefeller Foundation New York April 22nd 1999

Transcript of Novartis Bioprospecting and Benefit Sharing.pdf

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Towards Earth Summit III – 2002

Bio

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andReport of a UNED-UK / Novartis Workshophosted by the Rockefeller Foundation New York April 22nd 1999

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Contacts:

Dr. Minu HemmatiUNED-UKc/o United Nations Association3 Whitehall CourtLondon SWIA 2ELUKE-mail: [email protected]: +44 171 930 5893

Dr. Dieter Brauer Dr. Andreas SeiterNovartis International AG Novartis Deutschland GmbHNovartis Communication External RelationsCH-4002 Basel D-79662 WehrSwitzerland GermanyE-mail: [email protected] E-mail: [email protected]: +41 61 32 42744 Fax: +49 7762 3595

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Acknowledgements 2

Introduction 3

I Presentations 4

1 Opening Remarks 4

Chair Derek Osborn, UNED-UK

2 An Introduction to Novartis 4

Dieter Brauer, Novartis International AG /Novartis Communications, Switzerland

3 Case Study: Novartis BioLead Project 6

3.1 Alternatives for Bio-prospecting: The Novartis BioLead Project 6

Christel Moeller, Novartis Pharma AG / Novartis Pharma Communications, Switzerland

3.2 Community Forestry and Biodiversity Management: 9Learning from the Oaxaca Experience

Ricardo Ramirez Dominguez, Engineer and Technical Coordinator of the Union for the Zapoteco-Chinantecas Communities, Mexico

4 Bio-prospecting and Benefit Sharing: Some Issues and Prospects 10

R.V. Anuradha, Kalpavrisksh, India

5 Moving on: Less Description, More Prescription for Human Health 13

Katy Moran, The Healing Forest Conservancy, USA

II Discussions 15

Contracts, Principles, Royalties 15Patenting 16Community Diversity and Rights 16How to Allocate Benefits 17

III Chair’s Summary 19

Annex 20

List of Participants 20

Contents

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We would like to thank the Rockefeller Foundation for hosting this workshop and giv-ing us the opportunity to openly discuss some of the issues relating to bio-prospectingand benefit sharing in a group of various stakeholders. The Foundation provided abeautiful room, inspiring the speakers and participants.

We are also indebted to the speakers who travelled to New York, some from great distances, who shared their knowledge and experiences and gave all participants aninformative and inspiring ground for exchange and discussion.

Finally, we thank all who attended the workshop and enriched the discussions with theirquestions, ideas and comments.

We hope the workshop and its discussions will be useful to readers from various stake-holder groups. We believe it is essential to create and use space where stakeholdergroups come together and map out the problems, explore possible solutions and createthe basis for future work. Multi-stakeholder consensus on viable strategies is a difficultthing to achieve. However, it is our common responsibility to invest in trying to achieveit in order to address the complex problems we are facing today.

UNED-UK / Novartis

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Acknowledgements

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This is a report of a workshop held at the Rockefeller Foundation in New York on April 22nd 1999 looking into issues of bio-prospecting and benefit sharing.

During the first half of the workshop the debate was opened with a number of presen-tations. These were primarily focused around case studies of benefit sharing, one whichhad been undertaken between Novartis and one of their project partners, UZACHI from Oaxaca, Mexico, being presented by both parties. More case studies were presentedby R.V. Anuradha of Kalpavrisksh, India, and Katy Moran of the Healing Forest Con-servancy, USA, who also discussed wider problems and thoughts in relation to this issue.

In the second part of the workshop all participants were invited to debate some of the principle themes raised in the first section in greater depth, as well as to widen thediscussion to further considerations relating to bio-prospecting and benefit sharing.

This is but an initial discussion of one afternoon. Many questions remain to be addressed,many aspects need further discussion.

This report aims to feed into such necessary exchange between stakeholders.

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Introduction

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1 Opening Remarks

Chair Derek Osborn, UNED-UK

Throughout the 1990’s the debate has intensified about how to identify and share thosebenefits arising from bio-prospecting activities. Part of this debate has been in relationto an increasing recognition of the need for a neutral territory which brings together allthose concerned to discuss the, at times complex, issues more openly and with the greatest possible clarity. It was with this thought in mind that the Novartis / UNED-UKworkshop was set up, to provide an open forum for the consideration of how benefitsderived from biodiversity can be shared in an equitable and sustainable manner. At pre-sent it is clear that there is insufficient experience of benefit sharing at a practical level,hence a second aim of the workshop was to provide several examples of how companiesand communities have sought to take up this issue of benefit sharing. For instance, thecase study of Novartis is hoped will provide an example of pioneering new partnershipsthat seek to encourage technology-sharing and capacity building as an integral part ofthe process of bio-prospecting.

2 An Introduction to Novartis

Dieter Brauer, Novartis International AG / Novartis Communications, Switzerland

This workshop provides the opportunity for an experimental forum for industry, NGO’s,and government representatives to talk broadly about the political and cultural issuesrelating to bio-prospecting. Complex questions such as of how benefits derived from bio-prospecting can be most effectively and equitably allocated, need to be openly discussedand ultimately dealt with.

Who are Novartis?

Novartis arose out of merger of the chemical and agrochemical companies Ciba andSandoz and is developing into what is described as a life science company. This is aconcept with which Novartis attempts to utilise a more interdisciplinary approach bylinking the different elements of science from Biology, Physics and Chemistry, along with more specialised areas, such as pharmaceutical, agrochemical business and consumerhealth for improved businesses and new business opportunities. This new approach also seeks to incorporate a wider consideration of the impacts that technology can haveupon economic, political and socio-cultural realms. Novartis presently employs a staff of approximately 80’000 individuals in 140 countriesaround the world. Our sales and main business is located in North America and Europewith a very small business only in developing countries.

Position on Bio-prospecting and Benefit Sharing

Novartis and specifically the former Sandoz AG was bio-prospecting only according tolegal requirements. We quickly adapted our bio-prospecting policy in a way that is in linewith the Convention on Biological Diversity. We strictly follow this policy even thoughin most countries detailed rules and legal requirements are not in place yet even today.Our activities also include capacity building in countries which are in need of such help,and we are looking into the future by considering additional cooperation with inde-pendent development organisations on a case by case basis. And we are ready to share

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I Presentations

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benefits derived from future products based on bio-prospecting with future generationsalong the lines of the Convention and the legal requirements derived thereof.In conclusion, we are convinced to be generally in line with the ideas and requirementsexpressed by the Biodiversity Convention, and we contribute to its implementationaccordingly.

Present-day changes in market needs have shown that people are demanding a greaterrecognition from industry of business responsibilities to society beyond the process ofproducing marketable goods. Indeed, Novartis recognises an increasing need to reflectand incorporated interests of society and of our stakeholders more directly in businessplanning because society is increasingly aware that it is directly impacted by these sameproducts for healthcare, agribusiness and consumer health needs.

Product Development – the Classical Approach to Bio-prospecting

So far, the search for new lead-substances with pharmaceutical or agrochemical productpotential was mainly based on chemical approaches. More than 300’000 samples havebeen generated by chemical synthesis and assessed by Novartis scientists over the last 30 years. These molecules were analysed and their properties were screened for e.g. anti-biotic action, disease treatment as well as agrochemical potentials. Due to biological and economic reasons the focus had been on small molecules which can be produced inlarge scale at low costs.Larger and more complicated molecules often have the disadvantage that they cannotpenetrate into body cells (biological limitation) and that too many steps are required forchemical synthesis with a too small overall yield (price aspect). This classical approach is also labour intensive and often of random design, suggesting a clear need for morefocused efforts to obtain “lead substances” which have the potential for developingpowerful new medications or agrochemicals. This also implies a need for more structuredand formalised research & development procedures.Last but not least it should be recognised that there will not be an endless supply of“new” smaller molecules for screening. Maybe more important is the increasing timeneeded to find new active substances which are “better” than existing ones.In addition to the chemical approach, enormous numbers of extracts from soil, micro-organisms, animals and plants have been screened. However, only few substances derivedfrom this “bio-prospecting” have made their way into the pharmacy.

How to Invent or Discover New Species?

Combinatorial chemistry, gene technology and genomic research are very powerful toolsfor the generation of “new” substances and large substance libraries for screening.Combined with “high-throughput-screening” thousands of substances can be screenedper day. In comparison, the period between the initial stages of bio-prospecting (nego-tiating contracts) to analysing substances is a long, drawn out and haphazard process. While it is true that there are much more organisms unknown than known – micro-organisms, insects and plants – it is not so clear whether this can be translated into abreathtaking source for “new” substances as is believed by the public. For example,Shaman Pharmaceuticals, a company often referred to as one of the bio-prospecting suc-cess stories, has experienced certain difficulties in its bio-prospecting activities whichwere based on using “traditional knowledge”. In fact, it is becoming increasingly clearthat the potential contribution of bio-prospecting to the biotechnology industry and the communities involved may not be as substantial, and certainly not as immediate, aswas previously believed. This perception may have resulted both in over-expectations

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of profitability in industry and in over-expectations in respect to benefit sharing whichin turn currently is establishing big hurdles for investments into bio-prospecting.Profits aside, Novartis does recognise that biodiversity, uncovered through bio-prospect-ing activities, has important values including an inherent value to exist in its own right. Biodiversity is an essential asset to human survival and it can generate, through therange of compounds, ideas for new approaches and products. However, if access to bio-diversity becomes too bureaucratic, time consuming and expensive, then the importanceof biodiversity may become limited to research and academic arenas instead of market-orientated industrial applications.

3 Case Study: Novartis BioLead Project

The Novartis BioLead Project was presented at the workshop by Novartis themselves aswell as by one of the community partners. The understanding and discussion of thisexample benefited significantly from presentations of the respective viewpoints of bothpartners.

3.1 BioLead – An ecological approach by Novartis Pharma to the assessment of microbial chemical diversity

Christel Moeller, Novartis Pharma AG / Pharma Communications, Switzerland

Goals

The BioLead project is an ecological approach, developed by Novartis Pharma, whichaims to:

1. evaluate or prove a scientific concept, 2. maintain a project in a manner which fully adheres to the requirements of the

Convention on Biodiversity (CBD),3. ensure the supply of microbial strains for lead finding.

The BioLead process was designed to reveal possible correlations between the chemicaldiversity and creativity of micro-organisms, and ecological factors. It was also conceivedto adopt a more structured approach in bio-prospecting, one which focused on projectactivities and investments. Also, tying in with the CBD, it aimed to utilise a more openand collaborative process of company strategy, to include exchange and sharing of tech-nology and knowledge as a means to help increase the benefits arising from bio-prospect-ing for all partners involved.

Scientific Concept

Since the onset of microbial screening programs in the 1940s, millions of micro-organismshave been screened by dozens of pharmaceutical companies. As a result of these pro-grams, it became obvious that micro-organisms are a very productive source of pharma-cologically active compounds. It is also known from numerous studies that certaintaxonomic groups of micro-organisms seem to be comparably more creative than others.For example, among fungi genera like Aspergillus are known to produce many differentsecondary metabolites whereas yeasts seem to be uncreative.

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Several publications have shown that only a small proportion of the existing microbialspecies have been isolated, described and screened until now. For fungi, around 70’000species have been described as of today, but even conservative estimates assume thatthere are 1.5 million species existing worldwide, suggesting that a vast number of micro-organisms remain to be isolated and screened for their metabolite potential. As of yet,there is a large gap in scientific knowledge regarding the underlying correlations whichmay exist between micro-organisms, their ecology and potential for biochemical use.

For example,

■ it is still uncertain whether particular habitats or climates harbour a higher propor-tion of creative micro-organisms;

■ whether overall biological diversity correlates with metabolic creativity of the micro-organisms present in that habitat and equates to a greater potential;

■ or if other unknown ecological factors might show certain relationships with meta-bolic creativity.

Project in Full Adherence with the Convention on Biological Diversity

The BioLead project was designed to examine such correlations using an approach ofexchange and sharing of knowledge, capacity-building, government and local communitycollaborations, technology transfer and benefit sharing. Sampling took place mostly inundisturbed areas and local research projects were supported.

Microbial Strains for Lead Finding

Drug discovery is a labour intensive, time-consuming and increasingly expensive process.On the average it takes approximately 11.5 years from the point of discovery of a sub-stance to market introduction of a new product. Microbial culture broth extracts enterthe discovery process at a very early stage, namely the high-throughput screening. In high-throughput screening 100’000 samples per assays are analysed. A great number of theseare represented by crude microbial culture broth extracts, others are pure compounds(mainly synthetic) and combinatorial libraries. In general, the success rates are compara-bly low. According to industry averages and Novartis data many million samples haveto be tested per biological disease target before a new product is found. Development ofa single product takes more than 10 years and costs approx. 500 million US$.

Project Implementation

In May 1994, Novartis Research Advisory Board approved the BioLead project. Novartisbegan to select partners by inviting approx. 50 microbiologists and research institutesfrom different tropical and subtropical countries (including the case study in Mexico) tolook at the feasibility and interest of participating in the project in each of their respec-tive countries. Those partners selected had to fulfil certain criteria, including a clearmotivation to see the project through, a certain degree of existing know-how in micro-biology and ecology, as well as suitable site locations and habitats. Three initiatives wereselected and finally agreed in 1995/1996; these were at the Smithsonian Tropical ResearchInstitute, Panama; Mycological Facility, Oaxaca, Mexico; and the University of Goa,India.

BioLead specific methods for sample collection and processing, for isolation and charac-terisation of fungi and actinomycetes were developed in collaboration with the scientistsinvolved in the project. The methods were adapted to conditions in tropical countries

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and allowed efficient and standardised sampling and isolation procedures of micro-organisms to insure comparable results from different sites and people. A unique data-base was developed for the detailed description of sampling sites and samples.Expeditions were made to tropical, subtropical and temperate forests so that samplesfrom the various sites could be compared. Workshops were held with the selected projectpartners and training included looking at the techniques for collecting and processingsamples, isolation and characterisation of fungi, the use of databases to manage informa-tion and to undertake statistical analysis, as well as how to coordinate local projectplanning. Equipment e.g. microscopes and laboratory material were provided and fundsgranted to fully equip a microbiological laboratory. Site visits then provided further sup-port for setting up isolation and characterisation laboratories and carrying out collectiontrips. The principle investigators were encouraged and supported in developing their ownlocal research projects using BioLead data and strains. Finally, a follow-up workshopwas carried out to extend the initial training to the methodology of actinomycetes andto a wider audience. Strains sent to Novartis were selected and cultivated for the preparation of culture brothextracts. These were metabolically characterised using chromatographic methods andbiological assays, selected and channelled into the screening process.

Project Results

More time than anticipated had to be invested until strains of good quality were receivedfrom all partners. By the end of 1998 Novartis had obtained more than 20,000 micro-bial strains. Expeditions carried out by Novartis within the BioLead project suppliedadditional 15’000 strains. Culture broth extracts of 7’000 strains have been tested in high-throughput screening, 60 structurally new compounds have been identified. However,no lead compound has been nominated so far.

Isolation and Characterisation

Analysis of the isolations revealed that skilful “cherry picking” of strains led to a higherdiscovery rate of biologically active and diverse strains for analysis than random isola-tion. Whilst broad morphological attributes did not provide sufficient information forclassification, biological assays and metabolic activity are better parameters for selection.

Diversity

The fungal strains in leaf litter samples displayed a higher biodiversity as compared tosoil or fresh plant samples, but no significant difference was found between leaf littersamples from different regions.

Creativity

Creativity assessed by chromatographic methods and activity in biological assays did not correlate with climatic origin, although there was a slight tendency towards a higherproportion of creative strains in tropical samples as compared to sub-tropical ones.Fungi from soil samples were less diverse, but they yielded a higher proportion of cre-ative strains than those derived from other sample types. In contrast to expectations, no correlation between diversity of fungi within a sample and the proportion of creativeisolates could be found. However, some morphological characteristics, such as colour,did show some correlation with creativity of the strains.

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Conclusions

Despite several initial problems Novartis established two effectively running collabora-tions. From these and from own expeditions a high number of microbial strains of goodquality were received which are currently being tested and analysed. Experience in set-ting up collaborations and in assessing fungal diversity was acquired. Preliminary resultsdid not confirm the initial hypothesis that the tropical biome yields a higher diversity offungi per sample and therefore a higher frequency of new metabolites. A final statisticalanalysis remains to be completed and discussions on how to continue collaborations arecurrently taking place.

3.2 Community Forestry and Biodiversity Management: Learning from the Oaxaca Experience

Ricardo Ramirez Dominguez, Engineer and Technical Coordinator of the Union for theZapoteco-Chinantecas Communities, Mexico

There has been a growing consensus in industry for the need to give back to local com-munities, in part because community groups are seen as central to the generation of and contribution to the development of those goods and services produced by bio-tech-nology companies. Communities need to directly receive the benefits from those institu-tions (such as Novartis) who are using the resources. This feedback mechanism wouldinclude greater investment in projects that seek to encourage productive and developmentactivities within communities e.g. to produce food products, furniture, wood products,fungi and flower crops such as orchids. Furthermore, this investment should seek to en-courage a diversification of infrastructure, one which enhances a community, gives themgreater capacity to develop but avoids any over-dependency on one particular productor market.

The BioLead Project, Mexico

One of the core elements of the BioLead project in Mexico was to help set up a commu-nal silviculture project in conjunction with UZACHI (the Zapoteco-Chinanteca Union).UZACHI consists of 4 indigenous communities who live in the biologically rich SierraNorte of Oaxaca, Mexico. One of the project’s principal aims was to look at the waysthe benefits resulting from a bio-prospecting project could be best shared in community-industrial partnerships.

Before a contractual agreement was secured with Novartis, discussions were held withthe community partners to ensure a fully participatory process which identified commu-nity needs and aspirations. This meant that the community made the key decisionsabout the project’s aims and plan of action. Key questions arose through the discussions,such as whether conservation is a public or a private issue, as well as how best to bothuse and protect their natural resources. This then led to a long-term land use plan, asdefined by the community. The result of this planning process was a division of activitiesaccording to land area: 40% of land for agro-forestry (producing forestry products suchas flowers and fungi), 30% for commercial forestry (fuel and timber) and the remaining30% to be preserved.

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Project Aims

The principle aims of the project were:

■ to support community autonomy and self sufficiency;■ to maintain cultural values;■ to seek to internalise environmental costs of natural resource use; and■ to develop concrete projects which maintained biodiversity.

Novartis supported this plan by providing the community with technical training aboutbiodiversity assessment environmental education. A regional project has since beendeveloped, using the technical capacity and lessons of the local project to promote pro-jects organisations along similar lines within other communities in the region.

Project Outcomes

The project has led to more solid land tenure for the communities in question, and agreater political status of the community in terms of their ability to participate activelyin decision-making processes. This helped to ensure that their benefits were received bythe community members as they took a central role in the management plan and in the development of a framework for investment needs. This also meant a broad range ofland uses were considered, as well as different types of ecologically sustainable systems.This process required consolidation of knowledge and ideas from the different actors in the community. Another result of the project was a better general recognition for thebreadth of values that natural resources contain.

There were specific circumstances which enhanced the chance of success in this project.Most especially, the fact that there was already a strong institutional organisation(UZACHI) in place meant there was an intermediary to oversee and support its develop-ment. Should other projects want to follow a similar process then some similar form of“meta-organisation” may be required to facilitate this process.

4 Bio-prospecting and Benefit Sharing: Some Issues and Prospects

R.V. Anuradha, Kalpavrisksh, India

There are two basic propositions governing the bio-prospecting-benefit sharing debate: a) had it not been for the crucial contribution of traditional knowledge, use and prac-

tices, many of the agricultural and pharmaceutical products we know today may notexist; and

b) were it not for modern scientific and technological input, such products would anyway not have been developed.

Bio-prospecting has been practised for many years in different forms but in more recenttimes, in particular with the development of the CBD, the issue of sharing of benefitsarising from bio-prospecting, has attained significance. The CBD, in the context of itsobjectives of conservation, sustainable use and equitable sharing of benefits arising fromuse of such resources, places special emphasis on the fact that there has to be fair andequitable sharing of benefits with local and indigenous communities. However, certaincritical issues remain unresolved, particularly in relation to how to go about legalisingand formalising the bio-prospecting process in a way which ensures that there is full andprior informed consent of and fair and equitable benefit sharing with the originator ofthe knowledge and resource that enabled the bio-prospecting.

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The Case of the Kani, Kerala, India

The case of the Kani Tribals of Kerala, India, provides certain valuable lessons of theproblems and issues in a benefit sharing arrangement. The Kanis’ use of the fruit of aplant, identified as Trichopus zeylanicus travancoricus, found in the forests where they live, provided the scientists of the Tropical Botanic Garden and Research Institute(TBGRI) with the lead to investigate on the same and identify its active ingredients.Thereafter TBGRI developed a drug called Jeevani from the same, and licensed the manu-facture and sale of the drug to a company Arya Vaidya Pharmacy (AVP) for a period ofseven years, the royalty fee payable to TBGRI being 2% from any future drug sales.TBGRI then resolved that the Kani tribals would receive 50% of the license fee, as wellas 50% of the royalty obtained by TBGRI on sale of the drug.

There were certain factors which made the process less straightforward in reality. Theland where the plant had been discovered, the Agasthyamalai hills of Western Ghats,belonged to the state Forest Department, which meant that the community had no landtenure over the area and are dependent on the Forest Department’s permission for theuse of these resources. They also cannot do much about outsiders exploiting these re-sources; and in the absence of a stake in the resources, the interference of outsiders maynot be a source of concern to them. The issue of benefit sharing cannot be resolvedunless these rights are assured, and unless the community is provided the legal meansand incentives to conserve the resources for long-term sustainable benefit to themselves.

There are also differing views among the Kanis themselves regarding the benefit sharingagreement since they had not been consulted during the original process. Some Kanisfeel that the sacred knowledge of the community has been traded away to TBGRI for apittance, and express affront that they were not consulted and involved in the process of the development of the drug, and the subsequent benefit sharing arrangement.

Also the endemic nature of the plant in question raised questions about the likelihood ofthe plant’s continued survival if harvested. The concerns that still remain to be addressedare the manner in which sustainable cultivation of the plant would be ensured; and theecological impact and the economic feasibility of large-scale cultivation of the plant hasto be assessed. All of these factors suggest there is a need for more in-depth discussions throughout the progress of a project, as well as further consensus building processes and greater re-cognition of diverse community perceptions and needs.

Some Basic Issues in Relation to Bio-prospecting and Benefit Sharing

There is an urgent need for law at the national level which can regulate access to biolo-gical resources and benefit sharing. Such law would have to mandate: a) certain mini-mum standards, and b) a code for best practices that have to be mandatorily compliedwith. A strong enforcement mechanism would be crucial to the success of such law.

The concept of benefit sharing also raises critical questions about the perception towardsa biological resource and the knowledge pertaining to it: is it a mere raw material in the path of modern scientific progress; or should it be accorded the same respect as thescientific knowledge base of another corporate entity, which would then mean that theterms of negotiation would then be far more equitable. When you compare the Kanis2% royalty agreement, a fairly common level for Latin America and Asian countries, tothe 10% royalty received by Yellow Stone Park, USA, for similar bio-prospecting activi-ties something of the variable remit of such agreements becomes apparent, as well as thefact that the bargaining positions of the parties involved is a crucial determinant.

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Given the fact that bilateral deals between a community and the bio-prospector may notalways be feasible/advisable given the unequal bargaining positions, another area ofconcern is the manner in which the role of the State is envisaged in the legal mechanism.It is a truism, and history stands to testify to the fact that the State is not a vanguard of peoples’ interests at all times. However, it is also a fact that the State cannot be doneaway with/replaced by another entity. The challenge therefore would be for the mecha-nism to define and limit the role of the State in a manner such as to ensure control by theaffected interests: in other words, ensure decentralisation in the decision-making processto the local level. This derives its basis from the belief that a resource is best protectedwhen the decision regarding it is left to the people having a stake in its conservation. Theextent to which this would be possible under the constitution of a National Authorityfor biodiversity protection remains to be seen. Such an authority could act as a facilitatorand capacity-builder in situations wherein the access and benefit-sharing debate is be-tween a bio-prospector and a defined community; and as a trustee in a situation whereinthe biological resource and the knowledge pertaining to it cannot be traced down to aparticular area /s, and/or a particular community/ies. In the latter situation the objectivefor benefit sharing could be achieved by the constitution of a biodiversity fund intowhich every bio-prospector would have to contribute specified amounts, with the Stateas a trustee of the fund.

A further area of critical importance and controversy is that of Intellectual PropertyRights with regard to products derived from biological resource, and through relianceon knowledge of local and indigenous communities. Attempts to achieve an equitablestructure for local and indigenous communities within existing IPR regimes is exemplifiedthrough suggestions for the following changes to be brought into IPR laws:

– Any application regarding anything derived from a biological resource and /or fromthe knowledge of local and indigenous communities would necessarily have to bereferred to the National Biodiversity Authority, who’s decision would be binding.

– The norms of disclosure in respect of an application for an IPR should reveal: (a) dis-closure of place and community of origin in relation to the subject matter of the appli-cation; (b) a statement of prior informed consent from the community in relation totheir knowledge, and from the community/competent authority in relation to the bio-logical resource.

– While granting any patent on the basis of reliance on knowledge of local/indigenouscommunities or on the resource obtained from such communities, one of the condi-tions should be that the applicant be mandated to give the provider a non-exclusive,royalty free license under any inventions it may patent that derive from the or trans-ferred material or improvements or derivatives thereof;

– A percentage share of sales or profits from any products that might be developedthrough use of the resource/knowledge transferred from a local/indigenous commu-nity to the applicant for the patent (termed as ‘reach-through’ royalties) should beshared with such community;

– Provisions to prevent access to the material by third parties from the receiver, and tomake it mandatory for third parties to approach the provider.

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5 Mechanisms for Benefit Sharing through the Healing Forest Conservancy

Katy Moran, The Healing Forest Conservancy, USA

To return long-term benefits to countries and culture groups that contribute to thecommercialisation of therapeutics for human health, at the time of its incorporation in1990 as a U.S. for-profit corporation, Shaman Pharmaceuticals, Inc., founded theHealing Forest Conservancy (the Conservancy). An independent non-profit foundation,the Conservancy, was established specifically to develop and implement a process toreturn benefits from product profits to Shaman’s collaborating countries and culturegroups after a product is commercialised and for as long as Shaman has a profit.

The company, and its new division ShamanBotanicals.com, focuses on drug discoveryusing plants with a history of native use. On August 1, 1999, Shaman launched adietary supplement SB-Normal Stool Formula designed to help people who suffer fromchronic diarrhoea. The new product contains a standardised extract from the sap of the Croton lechleri tree that has been used for centuries by shamans in the Amazon rain-forest to promote normal stool formation (see http://www.ShamanBotanicals.com).

The company provides immediate and medium-term benefits to collaborating culturesand countries during the ten or so years of the drug discovery process. Shaman also willdonate a percentage of profits from commercial products to all company collaborators(globally, some 30 other countries and culture groups) through the Conservancy. TheConservancy will distribute these long-term benefits, equally, to all the countries andcultures that are Shaman collaborators worldwide, regardless of where the plant sampleor traditional knowledge that was commercialised originated. In such a financiallyunpredictable industry, spreading the benefits and risks among all Shaman collaboratorsincreases opportunities for benefits.

Trust funds are proposed by Shaman and the Conservancy as the financial mechanismsto receive and disburse long-term revenues generated from the commercial use of bio-resources to the variety of stakeholders that the company works with. Critical to thesuccess of a fund is a constitution which serves as the general operative document estab-lishing the goals, objectives, rights and duties of the fund. A constitution also supplies a legally enforceable mechanism, under domestic law, for a trust fund. Trustees of thefund, as a collective entity, may institute legal proceedings in their capacity to achieve trustfund objectives.

A case study conducted in Nigeria presents such a Constitution, developed out of a pilotproject to test the efficiency and efficacy of the trust fund process. The pilot project wasinitiated by the Healing Forest Conservancy (the Conservancy) to test the benefit sharingprocess for Shaman collaborators. Since the Conservancy will deliver long-term fundingto several different countries and culture groups, the means to do so must be replicableglobally to ensure an equitable distribution of benefits. Monetary resources, targeted fora variety of stakeholders world wide, must finance programs in a consistent manner,while maintaining the flexibility to respond to local needs.

Nigeria offered an ideal situation to develop and test the feasibility of such a Constitu-tion through a $ 40’000 (forty thousand dollars) donation by the Conservancy into atrust fund recently established by the Bioresources Development and ConservationProgramme (BDCP) (see http://www.bioresources.org). The BDCP, a Nigerian NGO,launched the Fund for Integrated Rural Development and Traditional Medicine (FIRD-TM) in 1997. The FIRD-TM has an independent board composed of leaders of tradi-tional healers’ associations, senior government officials, representatives of village coun-cils and technical experts from scientific institutions. Its objective is to receive funds

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that can be used to build technical skills in Nigeria so that bioresources are a viablevehicle for sustainable development and improved health care. The predominance of tra-ditional solidarity systems in Nigeria, such as tribal associations and professional guildsof healers, supplies a social structure to ensure participation at the local level.

The Conservancy Constitution is a template to use for the benefit-sharing actions of the Conservancy in many different countries and is offered as a mechanism that mayalso be useful to others for long-term benefit sharing at http://www.biodiv.org/chm/techno/gen-res.html under “Case Studies on Access and Benefit Sharing”. As statedunder the mission of the Conservancy, the model Constitution is a legal document thatis flexible enough to respond to unique conditions in the numerous countries whereShaman collaborates. Likewise, it supplies a legal mechanism to widely disburse financialresources, over a long time frame, and within varied sectors of society.

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The following section summarises the discussions which proceeded each of the presenta-tions and the broader discussion, held in the second half of the meeting, which wasaimed to open the debate to any issues and questions which had not been raised or wereless well covered during the first session.

Contracts, Principles, Royalties

A question was raised about the structure and nature of the contract between Novartisand the Oaxaca communities. The response was that the details of contract are confiden-tial between partners. As of yet Novartis has no standard contractual procedure butdeals with each project on its merits according to the individual circumstances involved.However, in general, certain different elements are possible to ensure equitable sharingof benefits: fees could be paid in case of market introduction of a new product; successfees could be negotiated if compounds enter various stages in the development process;or upfront payments could be made for each strains or sample delivered. Although thespecific details of the agreement were not disclosed in this discussion it was pointed outthat the principle goal of the project had been to set up research collaborations and tojointly work on the scientific questions addressed earlier as opposed to solely supplyingstrains for development of pharmaceutical products. Also, no ethnobotanic knowledgehad been used for the purposes of the research. In terms of intellectual property rightsany research findings would be made available to the partners and any patents in emerg-ing products would be shared.

Some of the scientific methodology supplied by the Novartis project and the knowledgeobtained could be expanded. In contrast to other bio-prospecting projects, the BioLeadproject did not benefit from indigenous knowledge a lot, but Novartis rather sharedknowledge and experience in microbial isolation and characterisation. A laboratorywhich offers skilful sample collection and preparation as well as isolation and characte-risation of micro-organisms is potentially an attractive partner for any biotechnologicalor pharmaceutical company interested in natural compounds. Further characterisationof strains using metabolic and molecular fingerprints would add additional value.

It was asked whether in principle it would be easy, especially in certain countries, forbio-technology companies to utilise biological resources and biotechnological informationwithout meeting the CBD requirements. The response was that, yes, potentially an un-scrupulous company could do this but larger operators generally experience much greaterlocal and international scrutiny and therefore were more likely to see the benefits ofmaintaining procedural transparency and greater accountability in relation to contracts.This was especially the case where such companies are seeking to maintain and enhancetheir reputation as socially and environmentally aware organisations.

It was pointed out that once a compound has been developed further and derivatizedthe issue of how to assign benefit sharing becomes much more complex compared to asingle isolated compound. This suggests that some form of independent mechanism may be needed to address problematic cases.

Another difficulty is that application of the principle of benefit sharing is dependent onbenefits, financial or otherwise, actually being produced. But as many cases have shownmonetary benefits have been elusive and not as forthcoming as was initially expected, norare they likely to increase unless more focused strategies of bio-technology prove morefruitful. In response to this another participant commented that in their view an uncertain bene-fit outcome shouldn’t imply that the debate about community rights wasn’t necessary. In terms of the CBD access provisions community involvement is still important and as

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II Discussions

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such stakeholder discussion is vital, more specifically in view of the fact that studies have conclusively pointed out that the reliance on the knowledge of local and indigenouscommunities substantially increases the success rates in identifying pharmacologicallyuseful compounds.

It was commented that, ultimately, the choice of allowing another to use resourcesshould remain with communities i.e. they should have the final say whether or not abio-technology/pharmaceutical company could proceed.Another participant felt that, because of the risks and opportunities arising from bio-prospecting projects, contracts were essential. However, as long as certain elements ofconfidentiality were maintained within a contract’s details, it would be inevitable thatquestions regarding non-transparency would be raised by others.In response it was pointed out that the contracts are generally transparent between thesignatories, who would both be aware of details and therefore able to openly negotiatethem.

A further comment was that some companies might not be entirely ethical and open-handed in their approach toward contractual agreements. Therefore, agreeing a set ofbasic principles would be helpful in encouraging their equitability for all parties.

Patenting

Another related problematic issue being raised was that while biotechnology companiesmay have a good understanding of the patenting process and the benefit to themselvesfor protecting their product in this way, communities might have less understanding andtherefore be at a disadvantage. Further, for many communities, “commodification oftheir knowledge and resources” is an inherently abhorrent concept. Patenting productsand compounds developed from bio-prospecting therefore has been criticised as a mechanism of appropriating and monopolising the results developed from reliance onthe knowledge base of local and indigenous communities. Some participants thereforeexpressed that patenting cannot be seen purely as an issue of protecting trade and eco-nomic values but would have to address wider value systems and beliefs.

One respondent cited how in the UK and elsewhere there have been attempts by certainindividuals and groups to address alternative methods to patenting for protecting in-tellectual property of local and indigenous communities (which are not recognised byUK law). However, the limitation of these attempts are that some of them prescribemonopolistic controls over knowledge and resources that are alien to many local andindigenous communities.

Patents were historically designed to protect mechanical products, composed of discreteand identifiably invented units. The debate about the use of patents seems limited be-cause they were not specifically designed to offer protection of traditional knowledge.Hence other mechanisms may be required.

Community Diversity and Rights

Firstly, the question was raised about how the cultural interests and values of the com-munities could be respected and encouraged. This was thought to be especially importantwhere the values systems of the different parties involved may be very dissimilar, so that the erosion of community ideologies might be an outcome from bio-prospectingactivities. It was added that, crucially, there are differences in perception within andbetween community members as well as within industry. A community may not desirecommercial development and they may have different aims, e.g. agro-forestry or foodsupply. Bio-prospecting is only one possible use of biological resources. Where groups

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are not supportive of bio-prospecting projects there needs to be allowance for the rightto say “No”. The diversity of community needs and perspectives should to be respectedat all times. The need to recognise community diversity was further reiterated by another participant.Certainly, some indigenous peoples groups believe these resources to be sacred, butwhilst some groups may have had little contact with the “outside” world, not all groupsor community members will have experienced such limited contact or have the samebelief systems. Therefore, an essential part of any negotiation process is prior and in-formed consent for all those concerned.

Another participant pointed out that whilst we often want to speak on the behalf of acommunity group, if a discussion is to be truly open then community representativesneed to be present, otherwise there’s little point trying to debate the issue. However, someform of preliminary benefit sharing is vital to stimulate capacity building and techno-logical development within a community. It is better to invest some funds at the onset,in a structured way, to meet some basic needs and ensure that the community is able to participate more fully during the course of a project than to rely on long-term benefitsharing agreements alone.

The biotechnology industry is an extremely strong lobbying group, and have played amajor role in shaping the course of discussions at the CBD meetings. For instance, at the Cartagena meeting in February 1999, there were severe objections from the bio-technology industry to the conclusion of a protocol prescribing stringent standards forbiosafety to be complied by them.

How to Allocate Benefits

The issue of how to ensure effective benefit allocation in practice was also raised interms of how the benefits from bio-prospecting and in particular finances received by acommunity can be effectively managed, regulated and monitored, as well as fairly dis-tributed.

In response to this question it was reiterated that in a business contracts should havefinancial benefit sharing built into them. However, ultimately the intellectual propertyrights should lie with communities and they have the right to choose how they are used.Another participant stated that the term “intellectual property rights” implies that theremust be more than just biological resources, e.g. plant species or fungal strains. A patentoffice will not issue a patent on a naturally occurring form of life, unless it is specifiedhow this form of life can be used to achieve a certain goal in an innovative, non-obviousway. In a case where e.g. a plant species is found and harvested in a specific community,but then a multinational company invests heavily into the identification and characteri-sation of active compounds, it seems unfair (and makes it commercially unattractive forthe company) that all intellectual property rights stay with the community. What couldbe accepted by industry is that communities have a general right to deny access to theirbiological resources (which is rather a political question), and that communities have the right to be compensated for their contribution to a commercial product – by variousmodels of participation and financial benefits depending on size and quality of this con-tribution. Another option remains: A community or government could pay a contractresearch company for doing the necessary characterisation work – in this scenario apatent might be issued and belong exclusively to the community or country.

In a sense, industry is a customer to the communities resources. This suggests that sus-tainable business relationships need to be built up. This would include the definition ofparameters and criteria for business practice to ensure common interests can be sharedand developed.

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A similarly complex issue was also referred to in terms of how to compensate for theuse of genetic materials. Some form of international, independent advisory board anduse of voluntary standards might encourage better and more formalised practices.Elements of the CBD refer to the need for inclusion of indigenous and local communitiesbut it is not specified how these communities can exercise their rights over and the useof these resources. General guidelines might help but they may also be limited in termsof detail because of the wide range of circumstances in which communities operate. It would be beneficial to build on the principles of the CBD but seek to avoid over-com-plexity.

One participant suggested that an independent international advisory board would bebeneficial to examine and open up the debate about many of these difficult issues andquestions. However, such a body could only be effective with the positive and active sup-port of the various stakeholders. Another participant questioned if it was fair for regulation etc. to take place under theauspices of an independent entity.It was also emphasised that national strategies cannot be excluded from benefit sharingprocesses, as they may be in conflict with local needs and aims.

The interdependence of cultural and biological diversity was identified as key to the use of any formal guidelines because these two are often complementary factors. Forexample, in Mexico one can find both pharmaceutical treatments but also traditionalmedicine and people are open to choose which support they prefer – hence traditionalmedicines are still important markets in their own right and not merely a source ofknowledge for new treatments.

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In summary the case studies discussed at the workshop indicate how important it is tohighlight examples of good practice and the value of local experience. Amongst a numberof questions and issues for future consideration the following needs were raised:

■ There clearly needs to be a priority made for building local community capacity, not only to participate in the process of benefit sharing but in all aspects of the useof natural resources in their areas, of which bio-prospecting is just one source ofbenefits.

■ Communities have a right to choose the ultimate use and/or preservation of theseresources.

■ Aid and development programs will be important in supporting these goals.

■ Industrial companies and community representatives need to be able to communicateas partners of equal standing.

■ Guidance and professional codes of general practice would be useful for those in thefield, as well as for business.

■ An independent advisory board could be used to develop, validate and monitor theimplementation of these terms of practice, including advising on contracts betweenpartners.

■ National frameworks for benefit sharing may be more effective than an internationalguide but information exchange between different organisations might be morebeneficial than specific guidelines at this level. This raises the question of how theCBD can be developed to further support work in this area.

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III Chair’s Summary

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List of Participants

Chair

Derek Osborn, UNED-UK

Speakers

R.V. Anuradha, Kalpavrisksh, India

Dieter Brauer, Novartis International AG / Novartis Communications, Switzerland

Ignacio Chapela, University of California, Berkeley and UZACHI

Christel Moeller, Novartis Pharma AG / Novartis Pharma Communications, Switzerland

Katy Moran, The Healing Forest Conservancy, USA

Ricardo Ramirez Dominguez, Union de Communicades Forestales Zapoteco-Chinantecas(UZACHI)

Discussants

Alejandro Argumedo, Indigenous Peoples Biodiversity Network, Peru

Margaret Brusasco-MacKenzie, EU DG XI

Paul Clements-Hunt, ICC, Paris

Gordon Conway, President, Rockefeller Foundation

Felix Dodds, UNED-UK

Graham Gordon, Tearfund, UK

Tracey Haller, Novartis International AG

Minu Hemmati, UNED-UK

Indira Khurana, Centre for Science and Environment, India

Warren Lindner, Independent Consultant, former Secretary of the Brundlandt Commission, Senior Advisor to the World AIDS Conference 1998

Chee Yoke Ling, Third World Network, Malaysia

Michael Massey, Department of Trade and Industry, UK Government

Andreas Seiter, Novartis Germany and ICC Working Party on BioSociety Issues

Gordon Shepherd, WWF International

Shiv Someshwar, Rockefeller Foundation

Monika Linn Locher, Department of Environment, Government of Switzerland

Chikako Takase, Secretariat of the Convention on Biological Diversity

Niall Watson, WWF-UK

Ruth West, UNED-UK

Natan Zaichenweber, University of California, Berkeley

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Annex