June 1997

BIOPIRACY'S LATEST DISGUISES

Bioprospecting is currently being hailed by many as an important tool to bring about sustainable development and the conservation of biological resources through their sustainable use and the fair and equitable sharing of benefits. Others see it simply as legalised "biopiracy," the 21st century's `politically correct' version of the age-old practice of appropriating the genetic heritage and knowledge of local communities around the world. For better or worse, bioprospecting is becoming quite a boom industry, and numerous corporations, aid agencies and funders have recently recognised it as a potentially lucrative and green investment.

Bioprospecting is promoted as a `win-win-win' opportunity for all involved. Corporations and research institutions gain from the exploitation of the world's genetic booty; countries and communities providing the raw materials and knowledge share in the profits; and biodiversity conservation is promoted through the increased value attributed to genetic resources and a share of the profits being directed towards conservation programmes. Many fear that in reality, however, bioprospecting simply allows today's bio-colonialists to wander the world continuing to raid local communities of their tangible and intangible resources — seen as raw material by the genetechnology industry — and patenting anything they come upon having a market potential.

Although most of the new bioprospecting deals are still in their infancy, claims are already being made about their effectiveness in promoting conservation and sustainable development, under the assumption that biodiversity must pay its way towards conservation in the globalised market economy. According to Steven Rubin of the US NGO Conservation International, "Prospecting agreements are fast becoming one of the most influential tools in promoting conservation of and stewardship over biodiversity resources." This enthusiasm is not shared, however, by many local communities and other NGOs, in whose experience such deals have not lived up to their promises. Biopiracy deals have almost without exception been characterised by inadequate consultation with and compensation for local communities, and the extension of the reach of the global market, which is rarely of benefit to the communities involved. Nevertheless, new deals are being forged, and new initiatives are springing up.

One of the big attractions of bioprospecting as a tool for conservation is the involvement of private finance in a world where governmental aid programmes are shrivelling up fast. Another perceived bonus is the market-driven nature of such a conservation strategy, which ties it in neatly with the push towards globalisation and a world dominated and controlled by free market principles. It also helps to cajole or bully gene-rich countries of the South into accepting and adopting Northern models of intellectual property rights (IPRs) and the privatisation of genetic resources, to which many countries and local communities are opposed.

The Convention on Biological Diversity (CBD) spurred interest in bioprospecting. Its recognition of genetic resources as the sovereign rights of nation states, its call for the equitable sharing of benefits derived from genetic resources, and its encouragement of private sector involvement set the stage for the first bilateral deals to be drawn up. UNCTAD suggests that the Convention enjoys "a clear advantage ... compared to other multilateral environmental agreements, since it has the potential to draw upon private sector investments and market forces as a means for achieving its objectives." While the Convention does not set out any specific standards for the promotion or regulation of bioprospecting, it does articulate several over-arching principles that encourage countries to create their own standards within the context of bilateral private contractual agreements among prospecting parties and local groups. A number of new initiatives have been initiated in the last few years, and in this article a few of them are analysed.

Biotrade or Bioraid?

The Biotrade Initiative was conceived by the United Nations Conference on Trade and Development (UNCTAD), which envisages it as a collaborative effort with the CBD, other intergovernmental and NGOs, the private sector, local communities and academic institutions. The Initiative proposes to help biodiversity-rich countries to "add more value" to their genetic resources so that they can sell them on more favourable terms. It plans to undertake market research, disseminate model contracts, broker deals, and offer training in the technical and legal aspects of bioprospecting to developing countries.

Biotrade has been introduced to the international community over the past year at international fora including meetings of the Organisation for Economic Cooperation and Development (OECD), the Parties to the Biodiversity Convention and the UN's Commission for Sustainable Development. According to Antony Artuso, one of the prime movers behind the Initiative, it has received "tremendous political support" from developing countries such as South Africa, Colombia, Costa Rica, Venezuela, Brazil, Malaysia, Philippines and India. The USA and UK remain ambivalent, but other developed countries such as Spain, Italy, Canada, Germany and Norway have been supportive.

UNCTAD is seeking $US 6.5 million for Biotrade's initial three year pilot phase. The Netherlands has provided initial financial support, and corporate contributions are also being sought. Biotrade is eager to point out that it offers the international community "a unique occasion to give the private sector its full role" in the implementation of the CBD. In order to make this "ambitious undertaking" different from other development strategies, Artuso emphasises that the Biotrade Initiative intends to create dialogue among locals and collect case studies of successes and failures and use the information collected to shape the future of the Initiative.

UNCTAD has done much to support the interests of Southern countries in the international arena in the past, but much of Biotrade seems to work against the South, not for it. The export-dependent nature of the Biotrade Initiative seems more likely to increase dependency on Northern markets and Northern expertise. It also urges countries to adopt the kind of intellectual property rights that transnational bio-buyers demand. As Kathy McAfee of Grassroots International has pointed out, it is likely to become a Trojan horse to smuggle a transnational-corporate version of IPRs into countries working to develop sui generis systems to defend sovereign and local community rights.

The World Bank's Search for Playmates

In late 1993, the International Finance Corporation (IFC), the World Bank's private sector arm, and the Global Environment Facility (GEF) created quite a stir when they met with private foundations to discuss their interest in investing money in venture capital funds to "exploit the knowledge stock" of traditional communities. Project ideas included ecotourism, the screening of plants for medicinal and other potential applications, buying up the knowledge of traditional communities, and even selling the rights to "charismatic" ecosystems to large corporations for public relations value. NGOs and local communities responded with outrage that the Bank, with its supposed mission of helping the poor, would consider investing in commercialisation activities that many local people consider unfair, unethical and even sacrilegious.

Nevertheless, this proposal became a reality in the form of the $30 million "Terra Capital Fund" (originally known as the "Biodiversity Enterprise Fund for Latin America"), which aims to support private companies undertaking sustainable uses of biological diversity in Latin America. The areas for investment include sustainable agriculture, bioprospecting, sustainable forest management, non-timber forest products and ecotourism. Despite the Bank's enthusiasm for them, bioprospecting activities have proved problematic for the Bank, according to the IFC's Michael Rubino. "It would be nice to be a trail-blazer in this arena, but the reality is that bioprospecting is a very high risk proposition. It is too risky for the IFC to put up venture capital for such projects -- they require such huge investments of time and money for such small returns." Rubino points out that none of the Latin American companies IFC has approached are willing to enter into licensing agreements with any of the pharmaceutical giants which would make such activities financially viable. They wish to remain independent, rather than being beholden to the Merck's and Monsanto's of this world. The IFC, meanwhile, continues to search for more amenable partners.

International Cooperation: Northern-Style

The International Cooperative Biodiversity Groups (ICBG) Program was set up in 1992 by the US National Institutes of Health the National Science Foundation and the US Agency for International Development (USAID). It has disbursed five grants of $400,000 to $500,000 for bioprospecting projects, each involving US aca
demic institutions, US pharmaceutical companies and host-country academic institutions. According to ICBG, the projects have so far resulted in approximately 2,000 species of plants and animals being screened for biological activity in 13 therapeutic areas, and in training for 130 individuals and capacity building in 20 institutions. The three-tiered goals of the ICBG (see box next page) rely on the same extremely questionable assumptions and huge leaps of faith that are widely used to justify and promote biopiracy. Two of these projects are discussed in some detail below - neither seem likely to meet these lofty goals. There are a number of reasons for this, the most significant of which is that local people are not treated as equal partners, and their knowledge and resources are undervalued. Without better recognition of their value as stewards of biodiversity and greater respect being shown for their knowledge and resources, we cannot expect to see their forests, gardens and knowledge pools protected.

In addition to the above, there have been a number of other commercial deals. For instance, both Pfizer and Glaxo have made bioprospecting agreements with the Chinese government to study medicinal plants in Chinese medicine. And Hoechst is busy researching Ayurvedic medicines and screening soil samples in India. The company already holds a number of patents related to a Ayurvedic plant, Coleus forskohlii, has screened more than 90,000 soil samples, and is building a new, high-efficiency screening system in Frankfurt where the company will sift through its genetic booty.

Snakes and Ladders in the Pirating Game

The most celebrated and one of the first (September 1991) "new" bioprospecting deals, that between Merck and Costa Rica's InBio, was pretty crude. Still hailed by many as a model for future agreements, it hardly lived up to the CBD's "fair and equitable" terms. Merck got a bargain basement price ($1.3 million) for privileged access to Costa Rica's riches (representing 5-7% of the world's biodiversity). In addition it was made unilaterally between Merck and a quasi-governmental body, without attempting to address the question of sharing the benefits with local communities, the stewards of Costa Rica's rain forests.

Some of the agreements drawn up since then have attempted to improve on the Costa Rican model and address more adequately the rights of indigenous peoples, particularly where local communities are directly involved in ethnobotanical collection work. Small gains have been made in certain cases, but the deals still seem to be far from equitable and these gains do not justify a continuation of the practice. Some of the main problems and challenges these projects have run into are described below.

Of Lawyers and Loopholes

To date, bioprospecting agreements have been very weak with respect to the rights of and benefits for local communities. Local communities are faced with complex negotiations led by specialised corporate lawyers. In the case of the ICBG project in Peru, the initial agreements between Searle - a US company owned by the chemical giant Monsanto - and the Aguaruna people were negotiated by plant collector Walter Lewis of Washington University, who had no experience of negotiating such complex agreements. Consequently, when the Aguaruna came to realise what a poor deal they had and tried to renegotiate, they had little room for manoeuvre with Searle, which flatly refused to budge on some fundamental issues, such as royalty rates. After long-drawn negotiations, the Aguaruna have since managed to improve their standing.

In the case of the ICBG project in Suriname, Conservation International (CI) admits that the agreement has weaknesses and loopholes which offer Bristol-Myers the opportunity to benefit disproportionately. For example, the company put up $50,000 as an initial grant for the CI-administered Forest Peoples Fund, designed to support local communities in their search for conservation-based alternatives to forest destruction, as part of its way of compensating local people for their resources and knowledge. According to Lisa Farmolare of CI, the organisation had hoped this would be an annual contribution, but the company only came up with $10,000 the following year.

A number of governmental and academic bodies in the US have drawn up a Letter of Collection or Letter of Intent to fill the gaps created by patent law, which they recognise fails to address the concerns of those involved in the natural products drug discovery chain. However, these agreements are often woolly and vague and offer little reassurance to host country partners. For instance, the US National Cancer Institute agreement with the University of Ghana states that NCI "will make its best efforts to ensure that royalties and other forms of compensation shall be provided to the University of Ghana and to individuals of Ghana as appropriate .." (our emphasis). Whatever efforts the bioprospectors promise to make, once they take out intellectual property rights over indigenous knowledge and materials the control over them is removed from the original innovators.

Take your Partner ...

One of the problems faced by indigenous groups wishing to enter into bioprospecting agreements is the ease with which commercial partners can turn to alternative groups if they are not happy with the terms proposed. When the Quichua Federation of Pastaza province refused to strike a deal with Shaman Pharmaceuticals, the company moved on to establish a working relationship with a community not integrated into the Federation.

In the ICBG project in Peru, early agreements were made with individual Aguaruna Federations without any concern about whether this was fair or not. The final agreement does, at least in theory, extend benefit sharing to all groups of the Aguaruna people, but this is still an arbitrary distinction of ownership or stewardship. The Aguaruna are only one of a number of indigenous groups that have been responsible for nurturing the forest resources in that region of the Amazon rain forest and singling them out is not fair on the others.

Beads and Barter

Bioprospecting agreements are characterised by the provision of compensation for sovereign nations and in some cases local communities for the knowledge and resources they contribute to drug development. This is obviously a thorny area in negotiations, as it involves subjective judgement about the value of genetic resources and translating the value of indigenous knowledge into monetary terms. Several deals include some form of royalty agreements, the rates of which are generally kept as closely guarded secrets, and other forms of more immediate compensation, which may take the form of technical assistance and training for host country scientists, and a variety of projects to promote economic development amongst local communities. However, royalty rates are often in the realm of the ridiculous, and compensation measures are generally paltry and patronising, reflecting the low value industry ascribes to indigenous knowledge and resources and the unequal nature of the "partnership."

In Suriname, the ICBG research agreement states that "In determining royalty rates, consideration will be given to the type of patent claims granted, potential product sales, the level of development and potential costs of subsequent R+D, marketing exclusivity available to B-MS (Bristol-Myers Squibb), the competitive impact of related marketed products, the degree to which the patents in question are dominated by B-MS patents, the necessity of paying royalties to third parties having dominant rights and the extent of the contribution of ethnobotanical knowledge or uses." Given the myriad of factors local knowledge is competing with, the percentage of royalties going to Suriname is likely to be very small. Local communities are destined to receive 30% (drugs derived from random collection) or 50% (ethnobotanical collection) of this final figure. In the case of the Merck/InBio agreement, figures of 1-5% have been suggested as Costa Rica's royalty share, and other agreements have been lower.

Credit where Credit is Due

Financial remuneration alone is generally not considered adequate compensation by local communities. Although they do not favour or believe in the North's system of IPRs, some see this as the only realistic recourse they have for recognition. In 1993, Shaman Pharmaceuticals met with indigenous leaders to discuss their ongoing collaboration. One of the main concerns of the local leaders was gaining scientific and intellectual credit for their scientific discoveries and achievements in addition to getting financial credit for them. They pointed out that all the modern medicines based on plants used by indigenous people have found their way into the pharmacopoeia without proper acknowledgement. They requested that Shaman address this issue in the process of bringing products to the market and accord proper intellectual credit where it is due.

It seems that Shaman has not taken these concerns on board. None of its patent applications make any reference to the contributions of indigenous communities, let alone include them as inventors, and its promotional material talks less and less about the origins of its products. The 1995 annual report at least mentions local communities and Shaman's benefit-sharing policies, but the 1996 report does not even do that.

In Suriname, the agreement does allow provision for local healers and shamans to be patent holders. However, as Lisa Farmolare of Conservation International points out, it is highly unlikely that this would ever happen. For a local healer to be granted a patent, the drug in question would have to be used for exactly the same application as it was used traditionally and would not be modified in any way. It would be easy for Bristol-Myers to modify the product ever so slightly, just to assure its own patent rights. Besides, patent law was not created to protect traditional nor collective rights. Local healers are usually considered by the community as custodians of hereditary knowledge, not as owners in a western sense.

Just How Low Can You Go?

One of the biggest problems with bilateral bioprospecting deals is that few species have convenient geographical niches to fit the agreements. For example, the Nopalea plant, which Shaman Pharmaceuticals has expressed an interest in, is found all over the world, from Mexico to Turkey to the Bahamas. Sangre de Drago, the plant which has yielded some of Shaman's most advanced products in the R+D pipeline, is found all over the Amazonian region where its therapeutic qualities are widely known, yet the company has been negotiating its deals with individual Amazonian groups. Not only does such a situation raise questions about who the beneficiaries should be, but it also presents the opportunity for bioprospectors to shop around for the best deal.

The Suriname ICBG agreement states that "B-MS (Bristol-Myers Squibb) will in good faith seek to utilise Suriname as a source of supply and/or cultivation for raw (natural product) materials required for the manufacture of a Covered Product, provided that such material can be made available in quantities, quality, and time-frame sufficient for B-MS needs, and at a mutually agreeable fair price based on reasonable costs of collection or cultivation." Such loose language gives bioprospectors ample opportu
nity to shop elsewhere for plant collection, just as the laws of globalisation have drawn Nike to Indonesia and Reebok to the Philippines.

A matter of rights

The quality of bioprospecting agreements depends heavily on the commitment, knowledge and understanding of the implications of what is being undertaken by the various parties involved in the negotiations. Some recent agreements have painstakingly managed to nudge the imbalance of the deal slightly further towards the interests of local communities. Nevertheless, these deals are still far from the "fair and equitable" terms the Convention on Biological Diversity describes. The fact is that it is highly unlikely that such deals will ever be reached, because the costs incurred would be unpalatable to the commercial partners, which have been too used for too long to getting their raw materials at bargain basement prices and appropriating traditional wisdom for free.

Given that bioprospecting is borne of a market-driven, corporate worldview, it is hard to see a way forward for such deals other than one in which the agreements continue to be unfair, patronising and exploitative. Tinkering with the terms of such agreements will not lead to fair deals. Nevertheless, local communities are still faced with difficult choices. Peru's Aguaruna people were prepared to compromise because they felt that if you search too hard for perfection you can end up with nothing. From some groups' perspective, they are resigned to the fact that biopiracy is a reality whatever they decide to do. If they turn a pharmaceutical company down, some other industrial interest will simply step in.

But this is not the kind of choice communities should be forced to make. One of the premises of bioprospecting deals is that the interests of local and indigenous communities will best be served by their incorporation into the global economy and the free market. Yet in many international fora, such as the meetings of the World Trade Organisation, the Biodiversity Convention and the UN's Food and Agriculture Organisation, representatives of these groups have been arguing that such an approach runs completely counter to their interests. In a statement read at the Second conference of the Parties in Jakarta, 1995, the Indigenous Peoples Biodiversity Network stated: "What you call bioprospecting we call biopiracy until sufficient consultations with indigenous peoples and farmers organisations have been carried out, and consultation is not consultation unless it is carried out among equal parties." A world in which patents govern access to and control over resources is not likely to provide the conditions in which such parties can be equal. Local communities' relationship with their resources and knowledge is closer to a sense of belonging than to a concept of private property, and this should be the starting point.

Sources:

- Sam Aning (1996), The Economic Potential of Biodiversity in Ghana: Legal and Policy Perspectives, Paper prepared for the National Service Secretariat, Ghana.

- Stephen Brush and Doreen Stabinsky (1996), Valuing Local Knowledge - Indigenous People and IPRs, Island Press, Washington DC.

- GRAIN articles in Seedling: "The Value of Sangre de Drago" (March 1996), and "Towards a biodiversity community rights regime" (October 1995).

-International Finance Corporation (1994), Biodiversity Enterprise Fund for Latin America - Draft Feasibility Study, IFC, Washington DC

- Steven King (1994), Establishing Reciprocity: Biodiversity, Conservation and New Models for Cooperation Between Forest-Dwelling Peoples and the Pharmaceutical Industry, In: Intellectual Property Rights for Indigenous Peoples, A Sourcebook (T.Greaves, ed), The Society for Applied Anthropology, Oklahoma City, OK, pp 69-82.

- Steven Rubin and Stanwood Fish (1994), Biodiversity Prospecting: Using Innovative Contractual Provisions to Foster Ethnobotanical Knowledge, Technology and Conservation, Colorado Journal of International Environmental Law and Policy, vol. 5.1, pp 23-58

- Brendan Tobin, Putting the Commercial Cart Before the Cultural Horse: a Study of the Peruvian ICBG Project, in C Zerner (ed), People, Plants and Justice, Colombia University Press. (In press)

- United Nations Conference on Trade and Development (1996), The Biotrade Initiative: a New Approach to Biodiversity Conservation and Sustainable Development, UNCTAD, Geneva.

Personal communications: Michael Rubino, IFC; Lisa Farmolare, Conservation International, Brendan Tobin, attorney for Aguaruna people since late 1995; Kodzo Gwebonyo, Bioresources International; Dianne Robertson-Wynn, Phytomedica; Steven King, Shaman Pharmaceuticals; Jim Miller, Missouri Botanic Garden; Richard Cahoon, Biodiversity Sovereignty and Management Fund, Cornell University; Chip Barber, WRI; Kathryn Saterson, WWF-US; Charles Zerner, Rainforest Alliance; David Kingston, Virginia Polytechnic and State University; Joshua Rosenthal, ICBG.

Special thanks to Deanna Notaro of the Institute of Agriculture and Trade Policy (IATP) for her input on the Biotrade Initiative for this article.