Biopolicy Journal Pontificia Universidad Católica de Valparaíso ISSN: 1363-2450 Vol. 2, Num. 1, 1997

Biodiversity, intellectual property rights, and the GATT agreement: how to address the conflicts?

Ashish Kothari and R.V.Anuradha

Indian Institute of Public Administration, I.P.Estate, Ring Road, New Delhi-110002, India Telephone: 91-11-3317309; Fax: 91-11-3319954; Email:akothari@unv.ernet.in; ashish@giasdl01.vsnl.net.in

Received for publication December 1996

Code Number: PY97004
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INTRODUCTION

Decision II/12 of the Second Conference of the Parties (COP2)[UNEP 1995] to the Convention on Biological Diversity (CBD) requested the CBD Secretariat to:

undertake a preliminary study which analyses the impact of Intellectual Property Rights (IPR) systems on the conservation and sustainable use of biological diversity and the equitable sharing of benefits derived from its use;

liaise with the Secretariat of the World Trade Organisation (WTO) to inform it of the goals and the ongoing work of the CBD;

invite the Secretariat of the WTO to assist in preparing a paper for the Conference of Parties that identifies the synergies and relationship between the objectives of the CBD and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS).

Decision L.18 of the Third Conference of Parties [UNEP 1996a] draws attention to the need for conducting case studies of the impacts of IPRs on the achievement of the CBD's objectives, including relationships between IPRs and the knowledge, practices and innovations of indigenous and local communities relevant to the conservation and sustainable use of biodiversity. It further recognises the need for work required to help develop a common appreciation of the relationship between IPRs and the TRIPS Agreement and the CBD, in particular on technology transfer and on the three-fold objectives of the CBD, viz., conservation and sustainable use of biodiversity and the equitable sharing of benefits arising from such use.

Decision L.12 further states that the WTO through the Committee on Trade and Environment (CTE), should consider a better appreciation of the relationship between trade and agricultural biodiversity, and collaborate with the CBD [UNEP 1996b].

Decision L.8 emphasises the need for co-operation between the CBD process and the WTO with regard to the inter-linkages between Article 15 on access to genetic resources and the TRIPS agreement.[UNEP 1996c] This paper has been prepared in view of these decisions. It examines the impact of Intellectual Property Rights (IPR) on biodiversity in general and specifically on the objectives of the CBD. It also addresses the broader issue of the relationship between the GATT/WTO Agreement and the CBD. It then reflects on the choices available to ensure that the objectives of the CBD are not undermined. Though the larger issue of relationship and potential conflicts between the GATT-WTO Agreement as a whole and the CBD, has not been addressed in the COP3 decisions, we feel it is an equally important aspect that requires detailed analysis.

This paper is in the nature of a preliminary study. The purpose is to generate debate and discussion on the issues raised. We look forward to comments and criticism, as well as further information which elucidates the impact of IPRs and the GATT mechanism on biodiversity.

Keywords: UPOV; plant breeders' rights; precautionary approach; indigenous communities

INTELLECTUAL PROPERTY RIGHTS AND THE CBD

IPRs, as the term suggests, are meant to be rights to certain results arising from thoughts, ideas, and information, especially regarding new inventions and processes. The manner in which they are sought to be realised is by enabling an inventor to exclude imitators from the market for a specified time. The effect of IPRs therefore is monopoly over commercial exploitation for the length of the patent. The stated purpose of such rights is to stimulate industrial innovation, by offering higher returns (profits) than the market would otherwise offer. In its practical application therefore, the effect of IPRs is the commodification of its subject matter. Copyrights, patents, and trademarks are commonly known IPRs. While such IPRs are several centuries old, their extension to living beings and related technologies is a recent phenomenon, and one which has evoked considerable controversy.

IPRs on biological resources and related technologies/knowledge are justified much as industrial invention IPRs are: that they stimulate innovation by giving recognition and rewards to inventors, that they encourage investments in research, and that they make possible the eventual disclosure and dissemination of related knowledge. Whether or not these goals are met is however debatable, for the evidence that the lure of private profits is the only or even the most effective motivation for innovation is by no means conclusive. For instance, the development of hundreds of thousands of varieties of rice by farmers in Asia, through selection, on-farm breeding and cross-breeding, had little to do with private monetary profit; at another level, the public sector seed breeding agencies in many countries (for example, the Indian Agricultural Research Institute) have done considerable work motivated by the spirit of public welfare. A recent study evaluating the Plant Patents Act (PPA) of the United States concludes that the Act has neither helped breeding as a profession nor stimulated species, genetic or even market diversification [RAFI 1995]. Moreover, even if it is true that in an increasingly monetorised world, personal profits are a powerful incentive, IPRs on life forms have serious ethical, social, economic, and ecological implications which need to be addressed.

For the purposes of our discussion, it would be useful to keep in view the three-fold objectives of the CBD, viz., (1) conservation of biodiversity, (2) sustainable use of its components, and 3) the equitable sharing of the benefits derived from its use. Our contention is that IPRs would have impacts on each of these objectives.

An examination of these impacts is necessary to determine whether current IPR systems run counter to the objectives of the CBD, and thereby invoke Article 16(5) of the CBD. At the outset we would like to point out that this paper does not seek outright dismissal of the notion of IPRs. The case we are trying to make, however, is that whatever the logic behind the notion of IPRs, its extension to biological diversity would have some very serious implications. While there have been no conclusive studies in this regard, there are strong indications about the possible effects of IPR systems. Our case is that these have to be taken seriously.

(a) Ethical implications

The ethic of conservation is a fundamental objective of any treaty dealing with the environment. The CBD recognises the intrinsic value of biological diversity and its importance for evolution and for maintaining life sustaining systems of the biosphere [UNEP 1994]. Biological diversity is defined under the CBD as the variability among living organisms from all sources [UNEP 1994]. Although it does not explicitly accept the notion of the right to life for all living beings, it could be argued that the overall concern of the CBD with biological diversity indicates that it recognises that notion. It is here that there arises a fundamental conflict between the concept of IPRs and the objective of the CBD to conserve biological diversity as a whole, keeping in view its intrinsic worth. IPRs indicate a move towards the notion of "might is right". It raises the basic question: Do we as a species have the right to claim ownership over other species/taxa; even more stark, does any one individual human being have the right to claim private monopolistic ownership over entire other species/taxa? However inventive scientists are in engineering a new strain of bacteria or a new variety of plant or animal, the essential elements with which they are working - the building blocks of life - are not created by them; nor, unlike industrial inventions, is the replication of the life form essentially dependent on these scientists.

For the majority of the world's civilisations, especially indigenous and traditional ones, oneness with nature has been a part of their philosophy, and to an extent even daily practice, so that establishing property rights over living beings is an alien concept. For example, classical Hindu texts state that, 'The universe is the creation of the Supreme Power meant for the benefit of all.... let not any one species encroach upon the other's rights'; Buddhism rests on similar precepts, as does Jainism; the sect of Bishnois in western India lives by 29 precepts, two of which forbid cutting any tree or killing any animal. What is also alien to these civilisations is treating a part of life as a commodity to be commercially exploited. It could be argued that all notions of private property violate these sensibilities too. In the interests of a focused discussion on IPRs alone, it will not be possible for us to delve into that broader issue in this article. However, we would like to point out that the existence of the notion of private property cannot restrict the questioning of IPRs over life forms, which we feel are perhaps the ultimate violation of the sensibilities expressed above.

Serious ethical issues arise even more starkly in the case of attempts to patent human genetic material or information, which has arisen as a logical extension of the whole process of claiming ownership over life forms. The US Commerce Department was the pioneer in this field when it sought a patent on the human cell line of a woman from the Guyami Indian tribe of Panama which was potentially looked upon as useful in medical research. Although human genetic material falls outside the purview of the CBD, it is important to keep this in view as part the process of commodification of life. From the ethical point of view a number of uncomfortable questions arise which have not been given due consideration. As Kloppenburg asks: "Seeing our own species as a commodity, can we fail to see everything else in the same way? And if the commodity value is low, does that justify the disappearance of that bird, tribe or microorganism?" [Kloppenburg, 19968]

Commodification and the accompanying assignment of monetary value over life forms, could be seen by some to undermine the CBD's ethical approach towards conservation, which is based on the intrinsic value of all components of biological diversity.

(b) Implications for biological diversity

The emerging IPR regimes have serious implications for biodiversity, both wild and domesticated. There may be no direct impact on wild plants and animals, provided these remain outside the purview of IPRs. However, there could be severe indirect effects in the form of increased exports of natural resources for the purpose of debt repayments. Debt repayment is a major cause of environmental and social destruction in southern countries [George, 1989; Kothari, 1995]. This is exemplified by the fact of increased exports of natural resources from developing countries to meet the obligations of debt repayment. In the last few decades, attempts to repay debts by tropical countries have consisted of exporting natural resources in their raw form (timber, fish and other marine life, medicinal plants, orchids, etc.), or in the form of various processed products (agro- products, bird feather goods, medicines, etc.). More often than not, considerable over-exploitation of natural resources, including biodiversity, is the result. Added to the outflow of cash in the form of debt repayments would be the royalty payments arising from IPRs. It is feared that the imposition of IPR regimes over life forms and related knowledge, on Third World economies, would significantly increase debt repayments.

In the case of domesticated biodiversity, the impacts are both direct and indirect. Seed companies look for the three characteristics of distinctiveness, uniformity and stability, which are essential legal requirements for asserting the claim for Plant Breeders' Rights (PBR). An inherent outcome of this would be that repeated cycles of selection would reduce the level of variation within a plant population. As pointed out in the recent FAO Draft Report on State of the World's Plant Genetic Resources, breeders' tendency to find new genetic material within their own breeding lines leads to dependence on an even narrower elite germplasm base for crop improvement.[FAO, 1996] This can directly lead to widespread plant disease epidemics [GRAIN, 1996].

Farmers may also be forced to adopt the homogenous and genetically narrow base of modern agriculture, and be unable to further improve for their own purposes even the seeds or livestock they buy. Companies will want to maximise their profits, since patenting is an expensive process, and will therefore opt for as widely adapted varieties as possible. In such situations, there would be loss of indigenous crop and livestock diversity. On the other hand, it could be argued that farmers may also be induced into reviving and innovating on traditional diversity, as a means of reducing dependence on economically-crippling patented varieties. But for a large number of farmers who are deeply enmeshed in the market economy, dependent on governments and markets for their inputs and sales, such escape routes may prove extremely difficult. It is more likely that seed companies would be able to displace a wide diversity of traditional local varieties by promoting a handful of hybrids and homogenous modern varieties, often through governmental agricultural extension services [GRAIN, 1996]. The development of new varieties by the formal seed industry, even if spurred by IPR-generated incentives, would in no way compensate the loss of diversity of local farmers' varieties. Such a process has already resulted from the introduction of new technologies such as the Green Revolution [Shiva, 1991] in the tropical countries, and would be greatly enhanced by the IPR regimes.

Of course, a complex web of practices and policies, and not IPR systems alone, are responsible for the loss of agricultural diversity. IPR systems would have the role of compounding this effect: the incentives they provide would increase the thrust towards commercialisation of agriculture, oriented more towards industries and exports rather than towards domestic and primary consumption. Such a thrust is inevitably accompanied by the homogenisation of crop varieties, since agro- industries and export markets prefer standardised products. This would have serious implications for agro-ecosystem stability and sustainability.

Promotion of monocultures has very obvious negative implications for biodiversity. In this context a question raised by India at the meeting of the Committee on Trade and Environment (CTE) of the WTO was whether IPRs for plant varieties militated against in situ conservation by promoting monocultures [WTO 1995]. The clear answer seems to be: yes.

(c) Implications for local communities

The impacts of IPRs are strongest on local communities who are directly dependent on the use of components of biodiversity. This can be illustrated using the example of farmers. The form of IPRs relevant in their case is that of patents over plants and plant variety or breeders rights (PBRs or PVRs). The concept of PBRs was institutionalised by the International Convention on the Protection of New Varieties of Plants (UPOV). They provide limited monopoly to a plant breeder over the reproductive material of the variety, i.e., control over multiplication and sale of the seeds. PBRs, as provided for under the 1961 and 1978 versions of UPOV, allow for exceptions in the form of farmers' privilege and breeders' exemption. The breeders' exemption allows scientists and plant breeders to use protected varieties for further breeding work without asking for permission or paying royalty. This was aimed at ensuring that the socially useful activity of breeding improved varieties continued unhindered. Farmers' exemption gives farmers the right to save harvested seed for their personal reuse, and for "across- the-fence" exchange with other farmers.

However there have been increasing demands by the biotechnology industry that these exemptions be withdrawn. The amendments of UPOV in 1991 responded favourably by increasing the monopolistic nature of breeders' rights, and considerably reducing farmers' and breeders' exemptions. Whereas previously farmers' exemption was guaranteed by the Convention, now it is an optional exemption which countries may or may not grant. Unless specifically granted exemption, therefore, farmers may now have to pay royalties for saving and re-using seeds on their own farms even under PBR regimes.

This means that while the user of a patented product would have the right to use the product but not to make it; a farmer purchasing patented or PBR-protected seed would have the right to grow it, but not the right to save and replant it, unless specifically given an exemption by the country in which he resides. The farmer would have to return to the market each year to purchase seed, as has to be done for hybrids at present. It would also be illegal for farmers to pass on harvested seeds to neighbours, or to sell it on a limited scale, affecting a widespread agricultural practice followed by farmers all over the world. For instance, in India, nearly two-thirds of annual seed requirement of farmers is reportedly met through inter-farmer sales and exchange, and only the remainder through formal agencies like seed corporations.

Informal innovations by farmers are a main reason for the stability and sustainability of the agricultural system in most developing countries. And this informal innovation is not a haphazard unscientific process. It is the result of keen observation and careful experimentation. In view of this it is difficult to find a rationale for a shift in the locus of innovation from the farmers' fields to the laboratories of breeders. Such a shift is definitely not necessary to promote the ethic of conservation. It seems unlikely that conservation and generation of new crop varieties can be stimulated on as large a scale as is required, by a scheme that focuses only on the generation of profits and by creating monopolies over such profits. IPR systems would have the drastic impact of displacing the locus of innovation from the farmers' fields, which in turn has serious implications for the objectives of conservation and sustainable use under the CBD.

The owners of the IPR-protected plant varieties are mostly big companies. Given the power of corporate plant breeders to impose these rights and restrict farmers' and breeders' exemptions, the PBR regime becomes almost as monopolistic as industrial patents. It is of course possible to argue that farmers do not have to use the patented seed at all, and in fact that IPRs could force farmers to revive traditional seeds and farming practices. There are, however, aspects of the dominant agricultural policy in many countries which would defeat, or make very difficult, such attempts at being self-reliant. One of these is the increasing power of agro-corporations and/or governments to dictate the nature of agricultural operations on individual farms, especially in terms of pushing seeds, fertilisers, pesticides, livestock breeds, and other inputs into the rural economy. In a situation such as this, the extension of IPR regimes over crop and livestock varieties can only further trap farmers in a vice-like grip. It undermines local peoples' capacities to manage sustainable production systems [GRAIN, 1996]. Moreover, even farmers who are able to retain a degree of self- sufficiency by relying on their own indigenous varieties, may face problems from patent holders who will increasingly claim rights not merely to varieties, but to characteristics which are common to several varieties. For example, a patent has reportedly been granted to the corporation Sungene for the characteristic "high oleic content" in sunflowers. Already, Sungene has announced that the development of any variety high in oleic acid will be considered a violation of its patent. If this stands up in the courts, it means that a patent holder could prevent others from completing research even using totally different genetic systems, and could perhaps also prevent farmers from developing their own high oleic acid varieties of sunflowers. The "species" patent granted in the US on genetically modified cotton and on the soyabean crop [Noiville, 1996], though likely to be revoked due to considerable opposition, are further indications of the risks of the IPR system. There may, indeed, be no end to this; as Cary Fowler and others have stated: "Why not a patent for `tasty' bread or `high-yielding' rice or for `good' kids?" [Fowler, 1988].

This dramatic possibility may not be as far-fetched as one would imagine. In the case of the Harvard mouse, for instance, the patent claim in Europe is not only to the mouse, but to "a transgenic non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into the said mammal or an ancestor of said mammal, at an embryonic stage" [Dutta, 1993]. Thus it is possible that Harvard could charge royalties on any non-human mammal, which has been developed for cancer research by injecting its embryo with an oncogene.

The other aspect of IPRs which is problematic from the perspective of local communities is when their knowledge, innovations and practices are used as the basis for research that gives rise to a patentable invention. This is of significance in view of the fact that the starting point of most research related to the genetic wealth of biological resources is often the existing traditional ecological knowledge of indigenous and local communities with respect to those resources [1]. The CBD mandates that where utilisation of the knowledge, innovations and practices of local and indigenous communities leads to benefits, such benefits shall be equitably shared with the holders of such knowledge, innovations and practices [UNEP, 1994].

There are a number of problems and conflicts that arise from the point of view of local and indigenous communities. The IPR model which is sought to be harmonised under the TRIPS agreement, does not recognise informal community innovation. Further, the notion of private, monopolistic IPRs under the TRIPS is an alien concept for many local and indigenous communities, since for them most knowledge and biological resources are communally owned and are meant to be shared [Posey, 1996]. The notion of collective IPRs is not recognised under current IPR models, or the TRIPS agreement. Regarding the traditional knowledge and informal innovation practices of indigenous peoples and local communities, the CTE simply states that new forms of protection adapted to the particular circumstances of local and indigenous communities do not fall within the purview of TRIPS since they were not discussed during the negotiations [TRIPS, 1995].

The TRIPS agreement is silent on the issue of sharing of benefits with local and indigenous communities. For instance, for making sharing of benefits with local communities feasible, it would be necessary for IPR laws to have stringent norms of disclosure on the country and the community from which a patentable subject matter and information regarding its use was obtained, as well as proof of consent of the country of origin. Both these requirements are mandated by the CBD. The CTE has stated that TRIPS' silence in this regard would not preclude bilateral arrangements between countries and companies to ensure such sharing, provided these are compatible with it [TRIPS, 1995]. The standard of compatibility with the TRIPS thus seems to be the material test. A question which arises is: can a country challenge another country's IPR regime on the ground that it fails to give adequate protection to informal innovations of indigenous or local communities, and is thus in violation of Article 8(j) of the CBD? The Indian delegation to the CTE posed this question at the June 1995 meeting, but there has been no response to this as yet [Dutta, 1993].

A point worth consideration is that the issue of extending IPRs over life forms cannot be viewed in isolation. It has to be seen as a part of a larger process of flow of resources from one country to another and the impacts this would have on the former. This becomes all the more necessary also from the point of view of assessing the whole scheme of extending IPRs in the light of its purported logic. i.e., the logic behind granting of patents is that this would be a protection and incentive for the financially and infrastructurally weak inventor, and bring him just financial rewards. But modern mega-technological progress takes place almost within the framework of institutions heavily funded by rich countries or rich companies from the North. Further monopolies over these processes are sought to be established under the IPR regime, thus leading to a net siphoning out of resources from developing countries. From the point of view of the CBD, the objectives of conservation and sustainable use are clearly undermined by these processes.

Whatever be the justification for IPR systems, their application and impact raise important questions about the need for their existence. The following comment requires serious consideration: "The function of the positive historical purpose of patents is being perverted into a legitimisation of completely new structures. History is being re-written in such a way that the protection of the weak is still being claimed, whilst protection of the strong is what is actually taking place." [Weiszacker, 1996].

EXCEPTIONS UNDER THE TRIPS AGREEMENT : A MATTER OF INTERPRETATION?

While TRIPS does not contain specific provisions to deal with each of the issues already raised, it does provide for certain exceptions in Articles 8(1), 27(2), and 27(3). The ability of TRIPS to answer the concerns of the CBD would partly depend on how these exceptions are interpreted.

Article 27(2) recognises that states can exclude from patentability inventions, the prevention of whose commercial exploitation is necessary to avoid serious prejudice to the environment. Exclusion from patentability is possible only if 1) the commercial exploitation of the invention is prohibited by the law of the Member State in question, and 2) if the exclusion is necessary to prevent serious prejudice to the environment. The proviso to Article 27(2) states that it is not enough that the national law of the Member State contains prohibitions on exploitation. It follows that an invention, the commercial exploitation of which is permitted, can never be excluded from patentability. Therefore, developing non-monopolistic alternatives to patenting, while retaining the right to commercial exploitation, does not seem possible.

Article 8 of TRIPS has been cited by the CTE in its report as being a possible provision through which developing countries can take care of their interests. It reads as follows: "Member states may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote public interest in sectors of vital importance to their socio-economic and technological development." The proviso to this article states that such measures should be consistent with the provisions of TRIPS. Were it not for this proviso, Article 8 would have had much wider scope than Article 27(2). The words used, viz., "adopt measures", provides the opportunity to member states to analyse the diverse implications of IPRs as discussed above, and resort to alternatives to the current IPR model. However, the proviso to a great extent limits the ambit of those alternatives. The proviso seems to clarify that Article 8 does not provide for exceptions to the obligations under TRIPS. It suggests that any measure taken under it has to be commensurate with the other TRIPS provisions, which would include Article 27. But if this were the case, the very purpose of including Article 8(1) under the TRIPS seems a superfluous one, for states would in any case have had the freedom to take measures commensurate with the TRIPS obligations, without having been reminded by Article 8 to take care of their socio-economic and technological development. Why then has the CTE implied in its report the importance of Article 8? What is the scope and ambit of the same? Could it be used as the basis for excluding IPRs over life forms?

Another provision of interest is Article 27(3), which allows states to arrive at sui generis forms of protection in the case of plant varieties. This provision states: "Parties may exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Parties shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. This provision shall be reviewed four years after the entry into force of this Agreement."

The apparent flexibility of this clause may be largely illusory. Two major points have been raised by a number of critics. First, that it forces on countries the patentability of micro-organisms and microbiological processes, leaving very little scope for a nation which may not want to patent any life forms. It is important to realise here that the terms "micro-organisms" and "microbiological processes" have been recently extended to include the genetically modified mouse patented by Harvard, as mentioned above [Dutta, 1993]. The European Patent Office, interpreting Article 53(b) of the European Patent Convention, which is similar in structure to Article 27(3) of TRIPS, ruled that the patentability bar does not cover microbiological processes or the products thereof. To quote from the judgement: "...the general principle of patentability under Article 52 (1) of the EPC is restored for inventions involving microbiological processes and the products of such processes. Consequently, patents are grantable for animals produced by a microbiological process" [EPO, 1990].

This case raises concerns regarding the interpretation of Article 27(3) of TRIPS: as what would a patent claim over a plant or animal genetically modified through a microbiological process be treated? One possible argument could be that unlike the EPC, TRIPS refers only to "microbiological processes", and not to "products thereof". Hence the first part of Article 27(3) could be interpreted to cover all plants and animals, whether or not they are produced through a microbiological process.

Secondly, there has been a great deal of debate to interpret the meaning of the term sui generis, in the case of plant varieties. Does it mean there is a possibility of actually arriving at a non-monopolistic model of protection for plant varieties, which recognises the informal innovations of farming communities and provides incentives for the same, but does not necessarily grant exclusive property rights? The fact that some form of protection is mandated under 27(3) means that the question is more of whose protection and whose monopoly. A scheme that allows for free flow may not, therefore, qualify as sui generis form of protection.

Further, the concept of Plant Breeders Rights under UPOV (as discussed above), is being put forward as the model for such sui generis protection. PBRs, it has been noted above, are also another form of IPRs which provide monopoly powers to the right holder and would have similar consequences as patents for biological diversity and for local communities dependent on biological diversity. Article 27(3) does not lay down the parameters for the sui generis protection, apart from qualifying it by the ambiguous term "effective". This could mean that any sui generis system proposed will be open to review by the WTO, to decide whether or not this is effective. The whole provision on plant varieties is to be reviewed in 1999. There is also the fear that if countries like India continue to disallow IPRs on plant varieties, the US and other industrialised nations could use their influence to push them to change. Such pressure tactics have already been used unilaterally by the USA under Section 301 of its Trade and Competitiveness Act of 1988 [2].

One is tempted to argue that every State has the liberty to arrive at its own provisions for sui generis system to deal with plant varieties. And that this provides for the space to develop measures that could take the form of rewards and subsidies to farmers to follow agricultural practices that enhance agricultural diversity, but be based on a model of free exchange of seeds, with nobody having any exclusive monopoly. Such a free exchange system could also establish a rights system which is defensive, by ensuring access to anyone provided it is not used for monopolistic purposes. It is doubtful, however, whether such a system of free flow could qualify as sui generis for the purposes of the TRIPS agreement, as has been argued above. Another suggestion would then be to re-define the locus where the monopoly is vested, from the corporate plant breeder to the local communities. There have been suggestions for forms of protection such as Community Intellectual Rights [Nijar, 1995], and Traditional Resource Rights [Posey, 1996], which would take into account the ecological concerns of conserving biological diversity, as well as the concerns of equity in recognising the role and contribution of local and indigenous communities.

OTHER ASPECTS OF THE GATT-WTO AGREEMENT VIS-A-VIS THE CBD

Apart from introducing a uniform intellectual property rights regime, the GATT Agreement contains several other aspects, which have a bearing on biodiversity, and would affect the objectives of the CBD.

* One thrust appears to be to free the agricultural sector from most forms of controls and interventions by governments. A direct impact of this could be the easier entry of powerful multinational agribusiness corporations into Third World countries, corporations which would be able to push their crop and livestock varieties onto the farmer. The implications of this have been discussed earlier in the context of IPRs. The same would be relevant in terms of implications for the farmer due to entry of multinational seed corporations into agri-business. Equally troublesome are the potential impacts of industrialised agriculture for biodiversity, in the form of genetically uniform monocultures and massive doses of chemicals which would in turn have long-term impacts on soil fertility and productivity.

* Another change sought is the lowering of subsidies given to various agricultural inputs. On the one hand, this could have the impact of reducing the spread of modern agriculture (especially if fertiliser subsidies are removed), and spur a revival of organic farming methods. However, positive incentives including subsidies may need to be given to help farmers switch to organic and high-diversity agriculture; under GATT, the possibility of such incentives could be reduced. At best, the result on biodiversity of a cut in agricultural subsidies would be mixed.

* Article XI of the GATT curtails the ability of countries to restrict exports of products except through duties, taxes, or other such charges. This could have potentially negative environmental consequences, since countries would find it difficult to enforce policies restricting exports of natural resources, including perhaps even threatened species of wildlife. Regulation of access to genetic resources in fulfilment of Article 15 of the CBD, could also be undermined by the GATT-based argument that it is an unreasonable trade barrier.

* Government support for producers of agricultural products has been essential in most developing countries to off-set competition from subsidised world market prices. The Uruguay Round (UR) on Agriculture calls on GATT members to reduce their spending, direct and indirect, for domestic farm programs. However, the US and the European Union continue to use export subsidies to maintain their position in world markets. In effect, therefore, the Uruguay Round on Agriculture enables agri- business to continue to enjoy extensive export subsidies while farmers' supports are slashed [Dawkins 1996]. The impact of these on local and indigenous communities is self-evident.

Theoretically it may be possible to argue that if adverse environmental impacts are felt, a country may be able to resort to the Article XX exceptions, (particularly Article XX, clauses (b)[3], (g)[4]), under GATT. However, this may be easier said than done. Firstly, Article XX does not mention "environment" as a reason for providing for substantive exceptions to an obligation under GATT. In the absence of this, it is open to interpretation. Secondly, in a situation which is increasingly biased toward the economic stakeholders, the concerns of the environment often get obscured [5].

SPACE UNDER THE CBD: ARTICLE 16(5) AND ARTICLE 22

Article 16(5) of the CBD mandates the Contracting Parties to co-operate to ensure that IPRs are supportive of and do not run counter to the objectives of the CBD. The caveat to this provision is "subject to national legislation and international law". This creates some kind of ambiguity about what is to prevail over what. Are the objectives of the CBD paramount? Can non-compliance with IPR obligations be justified if they cannot be supportive of the objectives of the CBD? The weakness of the provision is enhanced in view of the fact that the Contracting Parties are only obliged to "co-operate"; there is no affirmative assertion as to the substantive obligation in this regard. It may however be argued that Article 16(5) is further strengthened by Article 22, which provides that the CBD "shall not affect the rights and obligations of any Contracting Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity." Both together provide a strong case for CBD to prevail over the obligations under any other agreement.

Article 22 is a highly interesting provision whose effectiveness would depend upon interpretation of the phrase "serious damage or threat to biological diversity". To justify non-compliance with a GATT obligation because of the adverse impacts on biodiversity may be a difficult task because, more often than not, these adverse impacts are in the nature of "possible effects". There may not be hard scientific data to substantiate them. While the environmental law regime has confronted this issue of lack of scientific certainty by means of new principles such as the "precautionary principle", the trade and economic regimes show no signs of being inclined towards the same.

A precautionary approach?

The essence of the precautionary approach is embodied in Principle 15 of the Rio Declaration which provides that: "Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost effective measures to prevent environment degradation". The Preamble to the CBD also recognises this when it states that "where there is a threat of significant reduction or loss of biodiversity, lack of full scientific certainty shall not be used as a reason for postponing measures to avoid or minimise such threats." The threshold terms for application of the precautionary approach in the context of the CBD would have to be based on "threat of significant reduction or loss of biodiversity". The effectiveness of the precautionary approach would depend on how this is interpreted. What is the threshold for "serious or irreversible damage" or for "significant" reduction or loss, and who will determine this? There has been some discussion of this principle in the context of climate change [Cameron 1991], but it is yet to be given serious consideration in the context of the CBD. The effect of this principle in the context of the CBD would essentially be as follows:

(a) assessment of the potential impacts of an IPR regime or a GATT obligation must be carried out before, and not after, such measures are undertaken. This, in any case, is a basic principle of environment impact assessment.

(b) the burden of establishing that no real threat exists to the objectives of the CBD should lie with the Party alleging that another Party has violated GATT norms.

But again, it is difficult to say how the trade regime under GATT would react to these kind of arguments. It is always easy to insist that each issue ought to be examined in a harmonious manner in the context of all related developments, i.e.: trade cannot be divorced from environmental arguments; the IPR regime cannot be divorced from the issue of rights of the farmers and local communities; and so on. But these arguments based on how things "ought to be" may tend to be mere rhetoric in the absence of some kind of certainty about what is to prevail over what, and who should decide the same.

THE CHOICES TO BE MADE

In view of the above discussion, and the mandate of the COP decisions referred to at the beginning of this paper, a number of issues arise which need to be addressed immediately:

[1] To begin with, case studies referred to in COP3's Decision L.18 should soon be initiated to examine the potential conflicts between IPRs and the objectives of the CBD [UNEP, 1996a] Such studies need to specifically focus on the following propositions:

- Patents on life forms should not be made compulsory.
- Article 27 of the TRIPS should be modified, at or before the formal review in 1999, to allow for exemptions on all life forms including micro-organisms.
- The concept of sui generis under Article 27(3) of the TRIPS should be clarified to allow for development of alternative non-monopolistic IPRs.

[2] Studies also need to be initiated to understand the impact of trade liberalisation for agricultural biodiversity, keeping in view the impacts for agro-diversity, as well as for local communities.

[3] The general proposition that the provisions of the CBD should prevail over the GATT agreement where the principles of conservation, sustainable use and the sharing of benefits arising from the use of biodiversity are in question, needs to be examined carefully. For this purpose there has to be a clarification as to how to interpret Article 16(5) and Article 22 of the CBD. The precautionary approach should be adopted in interpreting serious damage or threat to biological diversity.

[4] Both national and international actions taken as a follow-up to the GATT provisions, including the TRIPS agreement, should be monitored vis-a-vis the impacts of such developments on the objectives of the CBD.

[5] To facilitate the realisation of objectives of the CBD, such as that of equitable benefit sharing, the existing IPR model under TRIPS should mandatorily specify that norms of disclosure pertaining to an IPR application should reveal the country of origin and the community which provided the knowledge about the resources pertaining to the patentable subject matter [Gadgil, 1995], as well as proof of consent of such country and community of origin. In other words, the applicant must satisfy the requirement that the provisions of the CBD have been fulfilled.

[6] Article XX of the GATT agreement should be amended to specifically include concerns relating to biological diversity. The precautionary approach should again be applied here to assess threat to biological diversity.

The COPs until now have avoided confronting the issue of conflicts between the CBD on the one hand, and the GATT Agreement and the IPR regime on the other. The CBD Secretariat's papers on this subject have not squarely taken up the analysis, choosing instead to focus on the potential synergies between the two regimes. The potential of case studies, if thoroughly carried out, is to provide a concrete basis for the CBD to adopt a more pro-active approach. Whether the next COP will live up to that expectation remains to be seen.

ACKNOWLEDGEMENT

We are grateful to David Downes from the Center for Environmental Law, Washington, Graham Dutfield from the Working Group on Traditional Resource Rights, Oxford, and the editor and referees of Biopolicy Journal for valuable comments on the drafts of this paper.

NOTES

[1] See, for example, N.Taylor, Plant Drugs That Changed The World, (London: George Allen & Unwin Ltd., 1965) where it has been explained that without the input of indigenous knowledge many of the drugs we use would not exist; N.R.Farnsworth, Screening Plants For New Medicines in E.O.Wilson(ed.), Biodiversity, (Washington D.C.: National Academy Press, 1988) where it is has been pointed out that of 111 commercially useful plant-based drugs, 74 percent were in prior use by indigenous communities; D.M.Lewis, Millennium: Tribal Wisdom And The Modern World, (New York: Viking Publ., 1992), illustrates numerous instances where the folk remedy of tribal people has lead to the pharmacopoeia of modern medicine; UNDP, Conserving Indigenous Knowledge, An independent study by the Rural Advancement Foundation International (Nairobi: UNDP, 1994), where it is explained that indigenous knowledge has made important contributions to agriculture, pharmaceuticals, DNA research and other industrial production; Pat Mooney, The Law Of The Seed, Development Dialogue (1983) where the use of genetic resources from crop plants of indigenous farmers by seed companies is discussed.

[2] It is felt that the present GATT-WTO Agreement actually legitimises such unilateral tactics through its provisions on cross-retaliation: if a complaining party finds that retaliating in the same sector as where violation is alleged will not be practical or effective, it can retaliate in any other sector. This basically means that retaliation against non-compliance with obligations under the TRIPS could be done by withdrawing concessions in trade in another sector, say, goods, where a developing country like India is most likely to be hurt.

[3] Article XX (b), GATT provides for exceptions that may be resorted to when it is "necessary to protect human, animal and plant life or health."

[4] Article XX(g), GATT refers to measures that maybe resorted to when such measures are "relating to the conservation of exhaustible natural resources, if such measures are made effective in conjunction with restrictions on domestic production or consumption."

[5] A number of cases involving application and interpretation of Article XX exceptions have been considered by GATT panels, and recently by the WTO Dispute Settlement Body. The recent WTO Panel decision in the United States Standards for Reformulated and Conventional Gasoline, 17 January 1996, as modified by the WTO Appellate Body decision of 29 April 1996, relies on previous GATT Panel decisions, and lays down the following principles for applying Article XX: A two tier test should be adopted; first, provisional justification by reason of characterization of measures under Article XX exceptions; second, further appraisal of the same under the introductory clause of Article XX, viz., it should not be arbitrary discrimination, unjustifiable discrimination or a disguised restriction of international trade. The test to be applied for applying Article XX (b) are: whether the measure is necessary for fulfilling the policy objective of human, animal or plant life or health; the term necessary was further interpreted as least trade restrictive. For application of Article XX (g) the effects test has to be applied, viz., whether the measure adopted is primarily aimed at conservation of an exhaustible natural resource, and whether it had the desired effect. A further consideration is whether the measure was taken in conjunction with restriction on domestic production and consumption.

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