Undertakings that operate in the plant breeding, cosmetics and biotechnology industries often use genetic resources. These are plant species, bacteria and fungi with special properties that can be used for agriculture and pharmaceuticals, for instance. Users of genetic resources are subject to strict laws and regulations. Violation may lead to drastic sanctions, such as an order subject to a penalty, or a criminal fine. In this blog, we address the main concerns for users of genetic resources.
The Convention on Biological Diversity and the Nagoya Protocol
Genetic resources are (or may be) of great economic value. It is therefore important for undertakings in the agriculture, cosmetics and biotechnology industries to have access to these resources. At the same time, the countries of origin of these genetic resources (“source countries”) have an interest in sharing in the benefits arising from the use of genetic resources.
Against this background, the international Convention on Biological Diversity (CBD) and the related Nagoya Protocol set out general rights and obligations for countries with and users of genetic resources. Briefly stated, the protocol allows source countries to demand consideration from undertakings that use their resources. That consideration must be fair and equitable. At the same time, countries where users are located must adopt legislative or policy measures to ensure that users comply with the laws of the source country. Parties to the protocol must furthermore create conditions in laws and regulations to conserve biodiversity.
There are 141 parties to the Nagoya Protocol, including the Netherlands and the European Union. The Nagoya Protocol has been implemented in the EU in Regulation 511/2014 and in the Netherlands in the Nagoya Protocol (Implementation) Act.
Rights and obligations of users and the ABS system
First, users of genetic resources are subject to various general obligations arising from the Nagoya Protocol. For example, access to genetic resources under the Protocol is subject to prior consent from the source country and the party providing these resources, unless otherwise specified by that party (also known as Prior Informed Consent). The benefits from the use of the resources or the relevant knowledge must furthermore always be shared on Mutually Agreed Terms (agreed on between the supplier and the user).
Second, users must comply with more specific obligations set out in laws and regulations of the source country. It is therefore important that, the moment users wish to make use of genetic resources, they thoroughly investigate the rules that apply in the source country. To facilitate this, the Access and Benefit-sharing Clearing House (ABS) system has been introduced in Article 14 of the Nagoya Protocol. This is a platform on which all the relevant regulations of participating countries are shared, by national contacts designated under the Protocol. In the Netherlands, this is ABS-Loket Nederland.
Third, a user must also comply with specific obligations set out in the laws and regulations of the country in which the user is located. Regulation 511/2014 obligates users in the EU, for instance, to collect all the documentation and information on genetic resources they use. That information must be kept for twenty years. This applies to following data:
- the evidence of a country that gave permission to use the material;
- the agreements made between the user and the supplier of the material;
- the date and place of access of genetic resources or of traditional knowledge associated with genetic resources;
- the description of the genetic resources or of traditional knowledge associated with genetic resources;
- the source from which the genetic resources were obtained;
- information on subsequent users of the genetic resources;
- access permits, where applicable; and
- the presence or absence of rights and obligations relating to access and benefit-sharing, including rights and obligations regarding subsequent applications and commercialisation.
Different regulations for certain plant varieties
The International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) sets out special (different) rules for the use of certain plant genetic resources. Users of the plant varieties listed in this treaty must, for instance, enter into a standard agreement with the supplier. The text of the standard agreement can be found here and cannot be changed by the parties to the agreement. An example of a vegetable covered by the ITPGRFA is asparagus. An important note is that many countries have decided that the entry into the standard agreement from the ITPGRFA Convention is also a requirement to procure certain plant varieties not included in the ITPGRFA Convention.
Furthermore, within the European Union, commercial plant varieties lawfully placed on the internal market are not subject to the ABS system under Regulation 511/2014. These varieties are listed in the national variety registers of the Member States. See here for the Dutch register, as well as the European Variety Finder. An example of such a plant variety is the Romantica potato. Undertakings are therefore free to use such plant varieties for breeding purposes.
NVWA monitoring and sanctions
The NVWA (Netherlands Food and Consumer Product Safety Authority) is in charge of monitoring compliance with the Nagoya Protocol. The NVWA may carry out inspections to check whether undertakings comply with the regulations. It may do so on its own initiative or in response to a complaint, for instance from a country that suspects wrongful use of its genetic resources.
If the NVWA (Netherlands Food and Consumer Product Safety Authority) identifies a violation, it can take significant measures. For instance, enforcement can be carried out through criminal sanctions, such as imprisonment, community service, or fines. Additionally, the NVWA can impose an administrative enforcement order or a penalty payment to bring the violation to an end. If an inspection reveals that a business does not comply with the aforementioned administrative requirements, the NVWA will typically issue an official warning first. The undertaking is then given a period of three months in which to put its records in order. If a re-inspection after three months shows that the undertaking is still in breach of this obligation, the use of the genetic resource must be terminated. More information about NVWA inspections is provided in this video briefing with practical tips and at invalnvwa.nl.
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