Unfair share, uncertain futures

By Shalini Bhutani & Kanchi Kohli
20 Sep 2010

As the world finalises an International Regime on Access and Benefit Sharing (ABS), concerns in India remain regarding the efficacy of National Biodiversity Authority to ensure that the commercial entities share their benefits with the local communities and guarantee biodiversity conservation.

Institutional and legal mechanisms to conserve biodiversity are there,
but where is the will?
Around this time governments representing over 193 countries of the world are negotiating an International Regime (IR) on Access and Benefit Sharing (ABS) under the multilateral environmental agreement – Convention on Biological Diversity (CBD). The IR is meant to be finalised at the CBD's next Conference of Parties (COP) scheduled in October 2010 in Japan. In 1993, after this treaty came into force, each member country was to enact its own legislation towards conservation of biodiversity and the regulation of biological resources accessed from its territory.

India finalised its Biological Diversity (BD) Act in 2002 and its implementing Rules in 2004. These legislative dictats are meant to streamline procedures when non-Indians and corporate entities use any biological material for research or commercial activities. The intention is the distribution of wealth generated and a fair share of benefits guaranteed for local people when any local resources or traditional knowledge from their areas is so utilised. India's Guidelines for such 'benefit sharing' are still in draft form.

Since 2005, when the National Biodiversity Authority (NBA) was set up in Chennai, it has worked to implement the BD Act. It has granted approval to over 325 applications seeking access to India's biological material. The requests for access from applicants mostly government institutions and private enterprises have varied from research, commercial utilisation, IPRs as well as third party transfer of the material. The approval procedure mandates consultation with a Biodiversity Management Committee (BMC) to be constituted at village and urban ward levels. The law also requires the consultation to be followed up with the finalisation of an agreement laying down conditions for use and the terms of benefit sharing.

In one such instance in 2007, the NBA entered into two agreements with PepsiCo India Holdings Private Limited. Some facts need to be mentioned here. PepsiCo is a US multinational company and its Chair and CEO is also the head of the US-India Business Council. And till date the US is not a party to the CBD. These were 'benefit sharing' agreements, one for commercial access and the other for third party transfer of Kappaphycus alvarezii, a particular type of sea weed to Malaysia. The company paid INR 37.26 lakhs to the NBA for a type of dry sea weed (Kappaphycus alvarezii) accessed around the Gulf of Munnar area in the southern Indian State of Tamil Nadu. PepsiCo signed a yearlong agreement with the NBA to export this to Indonesia, Malaysia and the Philippines for commercial utilisation in the food and cosmetics industry.

When this approval took place, the State of Tamil Nadu neither had any local BMC nor the required Tamil Nadu State Biodiversity Board. This remained the situation till December 2007 when the agreement was signed. Thus there was no means by which mandatory consultations were held with the local communities – the potential “benefit-claimers”, as defined in the law. Till date none of these structures have come into place. However, as per due procedure laid out in the legislation, the NBA would have got a sum equalling 5% of benefits claimed as 'administrative costs'.
In reply to a Right to Information application, in July 2010 the NBA admitted that the money received from Pepsi is “yet to be ploughed back to the benefit claimers”. The delay is explained by the fact that guidelines for utilisation of such monies deposited in the National Biodiversity Fund are yet to be finalised.

But there is more to this story. In 2004, following the Tsunami tragedy, the Asian Development Bank (ADB) offered 'Tsunami Assistance' to India. One element of this was micro-enterprises which entailed setting up self-help groups with forward and backward market linkages. In the planned implementation, over 200 micro enterprises were conceived of and multiple women’s groups were federated into societies. They were to focus on the production of commercial activities for e.g. sea food products, dairy products, etc, including sea weed products. In the latter half of 2005 the Tamil Nadu Government issued Government Orders granting subsidies for sea weed cultivation to 19 special village Panchayats across 5 districts in the State.
It is yet again visible how international financial institutions by the nature of projects they propose, pave the way for the entry and operation of large corporations. All this in the name of rehabilitation and livelihood support for affected communities. The ADB part loan part grant to India thus actually aided PepsiCo sea weed cultivation plans, ensuring the company contract growers! PepsiCo also facilitated bank loans to the coastal communities through the State Bank of India. PepsiCo has been doing sea weed farming in TN since 1999. In 2000 the license for the particular kind of cultivation was obtained by the company from India's Centre for Salt and Marine Chemicals Research Institute (CSMCRI).

Therefore, not surprisingly, in its Agreement with the NBA, PepsiCo suggests that the local communities are already getting benefits from it on this sea weed cultivation programme. The company states that it provides training to the women, facilitates bank loans and guarantees a buy back from the SHGs.

There is no indication that the NBA questions this when determining the quantum of benefits to be shared. If the company can cite pre-NBA benefits, surely the NBA can point to the pre-NBA profits from sea weed export that the company has made! Since the agreement was signed by an authorised representative of the NBA, the logic of the company is accepted. Is this a fair share of the benefits as per CBD, leave aside the issue of biodiversity justice?

On the contrary there is obvious silence of the NBA, which is also meant to be the topmost biodiversity conservation body in the country, on the issue of bio-invasion by the non-native red weed in very close proximity to a Coastal Marine Reserve. In 2008, it was reported that the algae, Kappaphycus alvarezii, has invaded coral reefs in the marine reserve in the Bay of Bengal. “Experts are trying to establish who let the seaweed escape into the wild: a government lab, a multinational company, or careless farmers”, an article in Science Magazine said.

So the world may get an International Regime and a country may have its Access and Benefit Sharing (ABS) law, but there is no guarantee that agreements signed hereafter will be life-changing for local communities. Or that biodiversity conservation will be guaranteed either. The benefits to businesses will surely continue, now “legally”.