- India has notified new regulations on access benefit-sharing from the use of biological resources, linking obligations to a business’s annual turnover.
- The regulations streamline access procedures and fix timelines, but experts say they lack clarity on key terms like traditional knowledge and do not ensure meaningful community consent.
- Critics warn of weakened community rights and centralised control.
India’s Ministry of Environment, Forests, and Climate Change notified a new set of regulations on how the benefits arising from the access and use of biological resources should be shared, altering how businesses that rely on biodiversity “pay back” communities that provide such resources.
Ideally, individuals and businesses seeking to use biological resources will take prior informed consent from communities providing the resource and share the benefits arising from their use – a convention called access benefit sharing (ABS).
The Biological Diversity (Access to Biological Resources and Knowledge Associated thereto and Fair and Equitable Sharing of Benefits) Regulations were notified on April 29, and follow the amendments made to the Biological Diversity Act. The Act was amended in 2023 to fast track the approval process, draw in foreign investments, and exclude users of cultivated medicinal plants, codified traditional knowledge, and AYUSH practitioners from the access-benefit sharing mechanism.
The new regulations fix timelines on how quickly requests for access to biological resources are to be approved, and introduce changes to how monetary ABS is to be calculated and paid. The regulations also open up the possibility of upfront payments to the National Biodiversity Authority.
“The biggest visible addition in India’s new ABS framework is the inclusion of Digital Sequence Information as a ground for benefit sharing. This is timely given the global developments on this issue,” said Shalini Bhutani, an intellectual property rights expert. Digital Sequence Information refers to genetic sequences of biodiversity stored in databases, the use of which is being debated globally.
Turnover decides value
The new regulations depart from older norms by introducing a tiered ABS regime, based on annual turnover. “In the 2014 regulations, commercial users had two options to pay monetary ABS. One option was based on the purchase price of the bio resources, and the other one was based on the ex-factory sale of the product. Now it’s just based on the ex-factory sale of the product, but this amount is tied to how much annual turnover an entity makes,” explained Alphonsa Jojan, a researcher of environmental law and policy and a Ph.D. candidate at the Newcastle School of Law and Justice, Australia.
As per the new regulations, both domestic and foreign companies seeking to use resources for commercial use needn’t pay any ABS if their annual turnover is less than ₹5 crores. The previous regulations had no such exemption and covered all commercial entities regardless of turnover.
If an entity reports a turnover between ₹5 and 50 crores, it will have to pay the value of 0.2% of the annual gross ex-factory sale price of the product, as ABS. That percentage goes up to 0.4% if the turnover is between ₹50 crore to 250 crores, and to 0.6% if turnover is above ₹250 crores.
“This simplifies the payment for the user and could also result in higher earnings for benefit claimers, because payment of ABS based on ex-factory sales is likely to be higher than payment based on the price of the bio-resource,” said Shyama Kuriakose, an independent legal consultant who co-wrote an analysis of the regulations with Jojan.
The regulations also state that for biological resources of high conservation value (such as red sanders, sandalwood, agarwood and others), ABS for commercial use could be up to 5% of proceeds from the auction, sale amount, or purchase price of the resource. For users applying for the commercialisation of intellectual property rights based on traditional knowledge, the ABS obligation is 25% more than what is generally prescribed.
But experts say the regulations still leave much to be desired. “The regulations award higher ABS for resources based on traditional knowledge, but the law doesn’t clarify what exactly constitutes traditional knowledge. All we have is a reference to “codified traditional knowledge” in the main Act, which does not cover other kinds of traditional knowledge,” said Kuriakose.
The amended Biological Diversity Act excludes “codified traditional knowledge” from the purview of ABS, and defines it as being knowledge derived from authoritative books specified in the Drugs and Cosmetics Act, 1940.
The ABS regulations state that the State Biodiversity Boards must accept or reject requests to access resources within a fortnight, in consultation with Biodiversity Management Committees (BMCs) – the lowest administrative rung implementing the law. BMCs are also entitled to charge collection fees, separate from the ABS payment. The new regulations make these collection fees mandatory.
“BMCs don’t always have the capacity to directly negotiate collection fees with powerful companies or other large entities, which can result in an unequal situation,” said Bhutani.
“State boards are obligated to respond within 15 days of receiving an application in the interest of easing business. Is this enough time to obtain prior informed consent from the communities involved? The regulations place a greater emphasis on the benefit-sharing, but less on the access procedure per se. Both the BMCs and local communities claiming benefits will need to be supported much more to be able to derive meaningful benefits, whether monetary or non-monetary,” Bhutani added.
Amendments to the Biodiversity Act
The amendments to the Biological Diversity Act were made after the AYUSH industry – which includes goods and services related to ayurveda, homeopathy, and other forms of alternative medicine – raised demands to reduce compliances. Several plants and other genetic resources used to make these products are protected by the Act.
Apart from making exemptions to access and benefit sharing, the amendments to the law also decriminalised offences and replaced them with fines. The changes to the law would “encourage foreign investments in the AYUSH Drug industry and popularise the medicines used in the Indian systems of treatment, thereby earning more foreign exchange and providing better employment in our country,” India’s environment minister Bhupender Yadav had said when the amendments were considered in Parliament. The number of medium to small enterprises in the AYUSH industry has risen from 38,216 in 2021 to 53,023 in 2023.
Previously, agreements to access and use biological resources were tripartite – between the user, the National Biodiversity Authority or State Biodiversity Board and the Biodiversity Management Committee. The law was amended to give the National Biodiversity Authority greater bargaining power when designing agreements, by allowing them to “represent” the BMCs.
The amendments were criticised for centralising the law’s implementation and reducing the scope for benefit-sharing. The latest regulations further reduce the share of monetary ABS to the BMCs from 95% of proceeds to 85 to 90% of proceeds, with the remainder going to the NBA. In other words, the regulations allow the NBA to collect a higher proportion of ABS proceeds.
“The law has provisions for sharing non-monetary benefits too, like technology transfer, improving capacity at local levels, and education and training, for example. The regulations don’t really address how these measures can be made effective, and focus almost entirely on the collection, apportionment, and use of monetary benefits,” said Jojan.
Banner image: A woman in Madhya Pashchimanchal, Nepal dries medicinal plants and herbs used in traditional medicine practices. Image by Bioversity International/B. Sthapit via Flickr (CC BY-NC-ND 2.0).
