29 Oct

Biological Diversity Act, 2022

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Contents

• Institutional Framework for the implementation of the law
• Issue of fair and equitable sharing of benefits arising out of use of biological resources and associated knowledge
• The Biological Diversity (Amendment) Bill, 2021

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Introduction

• In order to help it realize the objectives of CBD, India has enacted an umbrella legislation called the Biological Diversity Act 2002. India was the first country, to pass a law to uphold the CBD nationally.
• The objective of the act are conservation, sustainable utilization, and fair and equitable sharing of benefits arising out of use of biological resources and associated knowledge.
• The act extends to whole of India.

Institutional Framework for the implementation of the law

The act is being implemented through three tiered institutional structure
i. National Biodiversity Authority (at central level): It performs facilitative, regulatory and advisory function for Government of India on issue of Conservation, sustainable use of biological resource and fair equitable sharing of benefits of use
ii. State Biodiversity Boards (at state level)
iii. Biodiversity Management Committees (at local level)

The act works towards biodiversity protection in the following ways:

• Regulation of extraction to biological resources
• Protection of Biodiversity Heritage Sites
• Biodiversity Management Committees play a crucial role in promoting conservation and sustainable use of biological resources within their respective areas and facilitate people’s participation in biodiversity conservation.
• Conservation of Endangered species: The act prohibits the transfer of any endangered species, parts, or products without the permission of the State Biodiversity Board (SBB) or the NBA
• Conservation of Traditional Knowledge – the act recognizes the importance of traditional knowledge associated with biodiversity conservation and ensures its protection and preservation.

The act recognizes the contributions of Indigenous local communities in conservation of biodiversity and a company using these resources is required to share 0.5% of the sales post tax to these ILCs. Only those companies whose turnover is more than 3 crore are required to make this payment.

A) Issue of fair and equitable sharing of benefits arising out of use of biological resources and associated knowledge

Introduction

• The Biological Diversity Act, 2002 regulates the extraction of biological resources through the state Biodiversity Boards and the National Biodiversity Authority.
• Broadly, all foreign entities (companies, institutions and individuals) are within the jurisdiction of NBA while all Indian entities are the subject matter of the state board.

What does the law say about sharing of Benefits?

• Before a commercial entity extracts biological resources, it must make prior approval of the state board or the NBA and also undertake to share benefits arising out of the use of such biological entities within the local community, which has conserved and protected these biological resources. The benefits can be in the form of monetary compensation as well as ‘joint ownership of IPRs’ and/or ‘transfer of technology’.

Divya Pharmacy vs Union of India case: Landmark Judgment by Uttarakhand High Court on Dec 28, 2018

• Background of the judgment
  • Divya Pharmacy had opposed either seeking prior approval from the State Biodiversity Board or sharing a part of its revenue with the local communities as ‘fees’ under what is termed as ‘fair and equitable sharing of benefits’.
  • It raised contentions such as ‘a swadeshi company’ was not required under the law to share its revenue with desi people and only a Videshi company should share its revenue with Indian people.
• Core Issue: Whether the State Biodiversity Board could impose ‘Fair and Equitable Benefit Sharing’ as one of the regulatory functions on the Indian entities using Biological Resources.
  Key Highlights of the Judgment:
• Indian companies which are extracting biological resources are liable to seek prior approval as well as share part of their revenue with the local communities that are responsible for conserving and protecting such resources.
  • The court also referred to international conventions and treaties such as Nagoya Protocol on Access to Genetic Resources and Fair and Equitable Sharing of Benefits arising from their utilization to the Convention on Biological Diversity.
• The court held that rights of indigenous and local communities have to be protected, equally from outside as well as from within.
• The court finally ordered that the State Biodiversity Board does have jurisdiction to demand “fair and equitable sharing of benefits’ from Divya Pharmacy and, by implication, from all Indian companies.

Significance of the judgment

• Bringing clarity on the matter.
• Many big industry players will have to follow this order and thus get in benefit sharing agreement with the respective SBBs.
• Better protection of rights of indigenous people.

Way Forward

The real test will be the implementation of the HC judgment and transfer of the money to real beneficiaries. Further, it is important that a favourable and equitable sharing of benefits are collected and reaches the indigenous people.

B) The Biological Diversity (Amendment) Bill, 2021

The bill was introduced in LS by MoEF&CC in Dec 2021. It was later referred to the Joint Parliamentary Standing Committee which submitted its report in Aug 2022. The bill was finally passed in Lok Sabha in July 2023.

Key Highlights
i. Simplify compliance requirements for domestic companies:
ii. Users of codified traditional knowledge and AYUSH practitioners will be exempted form sharing benefits with local communities

• Issue/Criticism: The term Codified Traditional Knowledge hasn’t been defined by the bill or by CBD. A broad interpretation might exempt all local traditional knowledge form benefit sharing requirements.
• Legal experts also feel that exemption to Ayush practitioners would be detrimental to ecology and go against the principle of sharing commercial benefits with indigenous communities.

iii. Removes research and bio-survey from the purview of benefit sharing.
iv. Benefit sharing will be based on terms agreed between the user and the local management committee represented by the National Authority

• Issue/Criticism: The bill removes direct role of local communities in determining the benefit sharing provisions.

v. Simplifying the IPR Process:

• The act specifies that approval of NBA is required before applying for IPR involving biological resources obtained from India, or (ii) sealing of patent.
• The bill says that approval would be required before the approval of IPR instead of before the application itself.

vi. The bill decriminalizes all offences under the act and provides for wide range on penalties. Further, it authorizes government officials to hold enquiries and determine penalties.

• Issue/Criticism: Such discretion with government official may promote corruption/rent
  seeking.

vii. The bill allows for foreign investment in research into biodiversity. However, this investment will necessarily have to be made through Indian companies involved in biodiversity research.
viii. A new section – 36(A) has been added emphasizing on the monitoring of the Biological Resources obtained from foreign countries for use in India as per the provisions of the Nagoya Protocol on access to benefit sharing.
ix. Section 36(B) enables state government to develop strategies and plans for conservation and sustainable use of biological diversity.

Other criticisms:

• Lack of Focus on Biodiversity Conservation: the bill prioritize intellectual property and commercial trade at the expense of the key aim of conserving biological diversity.

Positives:

• The bill encourages a conducive environment for investments – by promoting Ease of Doing Business
• Simplification of patent process would encourage innovation in India and ensure more IPR for companies in India.

The report by the joint parliamentary committee examining Biological Diversity Amendment Bill 2021, was finally submitted in Parliament in Aug 2022.

Key Recommendations:

• Promoting Indigenous Medicines:
  • Reducing the pressure on wild medicinal plants by encouraging cultivation of medicinal plants.
  • Indian system of medicine should be encouraged by clearly defining codified traditional knowledge.
  • Promote indigenous research
• Exemption to Ayush Practitioners (agreed with the provisions of the bill)
• FDI Inflows:
  • There is a need to attract more foreign investments in the chain of biological resources, including research, patent, and commercial utilization, without compromising national interest by defining foreign companies as per the companies act and by defining a protocol for utilization of biological resources from India.
• The committee recommended that biodiversity management committee under the proposed law and indigenous communities should be empowered by clearly defining benefit claimers to be conservers of biological resources.
• Offences should attract civil penalties with proportionate fine structure so that the violators don’t escape. It shouldn’t be too meagre.