The Nagoya Protocol on Access and Benefit Sharing is the main global mechanism to regulate the access and utilization of biological resources. The agreement entered into force nearly five years ago, on October 12, 2014, as a supplement to the 1992 Convention on Biological Diversity. Today, 118 countries are a contracting party to the Protocol. The volume of national implementing rules has continued to proliferate, and with that, the impact on pharmaceutical, food, cosmetics, and other life sciences companies has become increasingly apparent.
The Nagoya Protocol applies to companies that conduct research and development (R&D) on biological materials of non-human origin. This is common for life sciences companies: microorganisms are engineered for the production of fermented foods, pathogens are used to develop vaccines, natural toxins are the basis for new chemotherapies, and natural ingredients are used in the formulation of cosmetics.
How the Nagoya Protocol Works
The Nagoya Protocol consists of three elements:
- First, the contracting parties may regulate access to biological materials (“genetic resources”) originating from their territories. States that choose to do so, are called “provider countries”.
- Second, these provider countries may also require that “benefits” from using the biological materials are fairly shared with them. Together, these requirements are known as access and benefit-sharing (“ABS”) rules.
- Third, all contracting parties must monitor the use of biological material on their territory to ensure that companies comply with the ABS rules where the material originated.
ABS rules mostly exist in countries that are rich in biodiversity such as India, South Africa, Argentina, Brazil, France and Spain. China is likely to adopt ABS rules in 2020. Access rules typically require a permit to acquire biological materials from that country. Such a permit is usually not transferable and will almost always impose strict conditions on commercializing the results of R&D. With regard to “benefit-sharing”, two requirements are common:
- First, the obligation that a local research institution is involved in the R&D.
- Second, the requirement that if the R&D on the resource leads to a commercial product, the country of origin receives a share of the profits.
