THE 1990s have seen revolutionary developments in the field of biotechnology across the world. Genetic and biochemical materials are now seen as invaluable information. Major pharmaceutical companies, seed companies and cosmetic manufacturers see them as raw materials for multi-million-dollar businesses.
Researchers from the corporate sector and research institutes are vigorously 'bioprospecting', a relatively recent term. It implies screening of biological resources and the identification of their commercial value. The results are eye-catching. According to conservative estimates, the market for research specimens for natural products - samples or extracts of biological materials - within the US pharmaceutical industry itself is US $30 million to 60 million per year. Surveys have revealed that 50 per cent of the top 10 prescription drugs in the US are based on natural plants.
While the burgeoning industry is concentrated in the North, the bioprospectors are spread out in the interiors of Asia, Africa and Latin America. Because the raw materials, the genetic resources, are locked up in the forests, croplands and drylands of the tropical world. The researchers also screen the indigenous communities' knowledge-base, which provide accurate leads to bioprospectors and serve as a good filter to identify valuable chemical compounds derived from plants, animals and microorganisms.
The 'biotechnology boom' has spawned new business dynamics. Companies making profits from selling a herbal drug or a seed variety demand exclusive rights over the biological ingredients, biotechnological processes and even plants to guarantee returns. The concept of intellectual properly rights (IPRs) is recognised in international law and protected by national legislation varying from country to country. The Trade Related Intellectual Property Rights (TRIPS) chapter of the World Trade Organisation (WTO) says all members countries must protect the rights of the "inventors" of these biotechnology products either through patents or by a sui generis (country specific) system.
But there is a catch. It comes in the form of the Convention on Biological Diversity (CBD), a global treaty which came into force in 1993. CBD says that bioresources belong to the country of origin. If an external party wishes to access the resources, it can only do so with the prior consent of the owner. Also, the party is obliged to transfer technology to the host country and help in building up the technical know-how. Most importantly, the people who provide the know-how must be given a share of the profits by the party which is commercialising their knowledge.
So WTO and CBD focus on two different sets of stakeholders: industry and indigenous communities respectively. Their interests appear to be sharply contradictory as WTO does not recognise communities as legal entities. At present, a debate is raging in these fora, with governments from both the North and the South struggling to forge a workable relationship between systems of indigenous knowledge and the IPR regime.
While governments keep fighting, entrepreneurs will not wait. Some business houses have already taken the initiative to bridge this gap. They have attempted to develop direct bilateral partnerships with indigenous communities or with research institutes in the countries of origin.
COSTA RICA'S TRYST WITH MERCK The first initiative was an agreement in 1991 between scientists in Costa Rica and the US pharmaceutical group Merck and Company Inc. The company linked up with the Instituto Nacional de Biodiversidad (INBio), a non-governmental research institute. Merck was to receive a specified number of specimens and extracts of plants, insects, bacteria and fungal soil which INBio had already identified.
In return, it was to give INBio a two-year research budget of US $1.135 million and provide a laboratory for the scientists at the cost of US $180,000. Also, Merck was to pay a royalty on sates of any drug developed as a result of INBio's samples. The percentage of the share was not disclosed. It was understood by both the parties that royalties, if any, would flow in only 10 years after the sample was taken. INBio agreed to contribute 10 per cent of its up-front payment from Merck and 50 per cent of any royalty it might receive in the future to the ministry of natural resources, energy and mines in Costa Rica.
The Merck-INBio agreement was hailed by US biotechnology traders as a model for pharmaceutical prospectors to generate money and preserve bioresources. But it met with a storm of disapproval from environmental groups, who argued that it totally disregarded the role played by indigenous peoples and their right over granting access to the resources to an external party. INBio used the knowledge and experience of indigenous people to collect samples. But there was no system to compensate them directly. No specialised technical know-how was made available to them. An indignant Costa Rican activist declared that "it is not a real partnership and did not do enough to build capacity in Costa Rica". The deal lacked transparency and INBio was not accountable for any trading of national resources.
The Rural Advancement Foundation International (RAFI), a Canada-based non-governmental organisation (NGO), accused Merck of swindling Costa Rica. 'Tf the Merck-lNBio deal was widely replicated, the South's biodiversity could all be auctioned off for the paltry sum of about US $10 million per Annum," said RAFI. "Merck's research budget in 1991 was 's $1 billion. Given that pharmaceutical companies invest an average of US S231 million on research of each new drug, the discovery charge for one single new drug arising in this deal is barely loose change," the NGO pointed out. Merck, the INBio contract bought cheap labour and access to unidentified biological treasures, concluded the critics.
INBio countered that its primary objective in the deal was raising funds for conservation programmes in Costa Rica. Besides, the agreement fulfilled many of the conditions laid down by CBD. The institute also argued that the laboratory set up by Merck facilitated transfer of technology. Costa Ricans could look forward to a share in the royalties if the drug succeeded in the international market, with the country emerging as the main supplier of the raw material.
The critics, unimpressed, feared that Costa Ricans would be fobbed off with a tiny share of royalty while Merck would manufacture a bulk of the product using synthetic substitutes. INBio has notched six more deals in the last seven years. Though the INBio model is full of loopholes, it served one useful purpose. It stimulated detailed discussions about bio-prospecting and indigenous communities. It also proved that the people could be blatantly deprived of their rights if a balanced system was not put in place to check this.
The Costa Rican government learnt some valuable lessons. The biodiversity law, passed by its legislative assembly in April 1998, is perhaps the most people-oriented national legislation passed by a country till date. It tries to reconcile the government's CBD obligations with the conditions laid down by the TRIPS. The legislation refers specifically to patents, trade secrets, plant breeders' rights, sui generis community intellectual rights, and farmers' rights. It defines the parameters of IPR protection, and mentions that "the local communities are fully entitled to refuse access to their resources and knowledge for any reason".
If the law is properly implemented it would help undo a lot of damages caused by the Merck-lNBio deal.
THE SHAMAN THEORY
The other most talked about benefit sharing model is from Shaman Pharmaceuticals Inc, another US-based drug company set up in 1990. Shaman believes that the best way to find commercially viable plants among the thousands of species in the tropical forests is by talking to indigenous healers and watching them work. Its formula for success is simple: target a plant variety for further study if it is used by three different communities for medicinal purposes.
Indigenous knowledge is a vital part of Shaman's research and development. It claims to be "committed to the compensation of IPRS for the use of plant resources to the indigenous people with whom it works". Shaman's network of collaborative partners includes more than 30 communities spread across countries in Latin America, Africa and Southeast Asia.
Shaman has a novel approach. In the pharmaceutical industry, a new product usually takes a development period of 5 years to 10 years to reach the market. The company advocates that reciprocal benefits should not be limited to the commercialisation of a product but should be returned up-front to the local collaborators who often have immediate needs. Its programmes provide benefits to indigenous communities over varying periods of time. Short-term benefits include setting up community clinics and schools each time a community hosts a field research; medium-term benefits refers to programmes that are taken up anytime during collaboration, such as training of scientists from the host country in Shaman laboratories; and long-term programmes take place after Shaman markets a pharmaceutical drug. The Healing Forest Conservancy (HFC) is an independent non-profit organisation set up by Shaman to handle long-term reciprocity.
Regardless of the origin of the successfully marketed drug, all countries and cultural groups which have collaborated with Shaman will be included in the long-term reciprocity. "If Shaman succeeds, all our collaborators will also succeed" says Katy Moran, executive director, HFC. However, long-term reciprocity is still at a conceptual stage. No drug has been marketed by Shaman as yet.
The first two phases are being tested in countries such as Peru, Tanzania, Brazil, Colombia and Ecuador. In Tanzania, for example, the collaborating organisation is the Institute of Traditional Medicine (ITM) at Muhimbili University in Dar es Salaam. Shaman has helped construct a centre for traditional healers and provided funds for electric lighting in the village clinic, among other things. The company paid US $3,000 as travel funds for some ethnobotanists from ITM and some indigenous people from the Masaai clan who attended workshops and meetings. Shaman is also supporting ITM's research programmes, helping it to interact with premier research institutes in the West such as the Missouri Botanical Garden.
However, the contract is between a research institute and a company. In Costa Rica it was INBio, in Tanzania it is ITM. Although Shaman is keenly promoting its pro-people image, all substantial gains have gone to research institutes. Also, indigenous people are not directly involved in the decisions relating to the terms and conditions of compensation. Shaman's collaborators, mainly consisting of representatives of state-owned research institutes, are negotiating on their behalf.
Pat Mooney of RAFI fears that once Shaman's drugs are ready for sale many other snags would begin to appear in their model. There is a marked imbalance of legal expertise and financial power between transnational corporations and government institutes of the South. The Shaman management can easily fob off its regional collaborators with a small share of the profits once the money begins to flow in. "And the communities would be worst hit," predicts Mooney. "If they do not currently have the right to negotiate the terms and conditions of bilateral contracts, how are they to know if the contracts will be honoured 15 to 20 years later?"
However, with appropriate modifications, the Shaman model can emerge as a pioneering system for compensating the people who contribute so substantially in this business of bioprospecting.
Andes Pharmaceuticals, another US-based company, is new to bioprospecting. It is now promoting what it claims is a benefit-sharing model suited to developing countries. Andes has entered into bilateral contracts with several NGOS and universities in a host of Latin American countries. It has promised to transfer state-of-the-art screening technology to laboratories in the countries of origin. The developing nations collaborating with Andes are not limited to playing the role of a supplier of raw materials and can gradually develop technical expertise. Also, the company invites the host institution to be a joint patent holder of the product developed from genetic materials collected from its territories. This will ensure that they receive a substantial percentage of the actual value of the drugs rather than a small share of the royalties, as offered by Merck.
Though the Andes model also fails to bring indigenous communities directly within its fold, it is certainly more progressive than those of Merck and Shaman. However, the company is yet to come up with anything concrete. No technology has been transferred till date. So it is not yet time to assess Andes - only to wait and watch its progress.
A model being tested in Peru has a strikingly different aspect: indigenous communities are the prime negotiators. The Aguaruana people in Peru have negotiated a 'know-how' licence with Searle, a North American drug company. The Aguaruanas supply medicinal plants and knowledge regarding their use to Searle and get an annual know-how license fee. This fee will increase as the research work progresses, labelled 'milestone payments', promises Searle. The licence is nonexclusive - it does not affect the right of all the various Aguaruana tribes to use, share, sell or transfer plants or knowledge, whether they are parties to the contract or not.
A legal expert is helping the Aguaruanas in the negotiating process. They are also being supported by an organisation, the Sociedad Peruana de Derecho (Peruvian Society for Environmental Law), to make future plans for the development of this model. According to Brendon Tobin, legal counsel of the Aguaruanas, a trust fund will be set up to distribute the benefits. It will have a board comprising representatives of the collaborating community.
All the benefit-sharing models being tried out in different parts of the world by private sector bioprospectors are peppered with loopholes. But they have succeeded in exploding the myth that IPRS, in any form, are totally unsuitable to protect the rights of the holders of traditional knowledge. There are many hurdles to be crossed. But if in-depth research is conducted in close partnership with local communities, it is indeed possible to adapt existing IPRS or to develop practical, effective and culturally-appropriate sui generis alternatives. These will suit the interests of indigenous communities.