LEADLawEnvironment and

DevelopmentJournal

VOLUME

7/1

THE ECONOMICS OF INFORMATION, STUDIOUSLY IGNORED INTHE NAGOYA PROTOCOL ON ACCESS TO GENETIC

RESOURCES AND BENEFIT SHARING

Joseph Henry Vogel, Nora Álvarez-Berríos, Norberto Quiñones-Vilches, Jeiger L. Medina-Muñiz,Dionisio Pérez-Montes, Arelis I. Arocho-Montes, Nicole Val-Merniz, Ricardo Fuentes-Ramírez,

Gabriel Marrero-Girona, Emmanuel Valcárcel Mercado, Julio Santiago-Ríos

ARTICLE

LEAD Journal (Law, Environment and Development Journal)is a peer-reviewed academic publication based in New Delhi and London and jointly managed by the

School of Law, School of Oriental and African Studies (SOAS) - University of Londonand the International Environmental Law Research Centre (IELRC).

LEAD is published at www.lead-journal.orgISSN 1746-5893

The Managing Editor, LEAD Journal, c/o International Environmental Law Research Centre (IELRC), International EnvironmentHouse II, 1F, 7 Chemin de Balexert, 1219 Châtelaine-Geneva, Switzerland, Tel/fax: + 41 (0)22 79 72 623, info@lead-journal.org

This document can be cited asJoseph Henry Vogel et al., ‘The Economics of Information, Studiously Ignored in

the Nagoya Protocol on Access to Genetic Resources and Benefit Sharing’,7/1 Law, Environment and Development Journal (2011), p. 52,

available at http://www.lead-journal.org/content/11052.pdf

Joseph Henry Vogel, Professor of Economics, University of Puerto Rico-Río Piedras (UPR-RP), PO Box 9021833San Juan, PR, 00902-1833 USA. Email: josephvogel@usa.net. Graduate students of the Department of EnvironmentalScience and the Department of Economics. Email: alvarez.nora@gmail.com, norb0964@hotmail.com,jeiger.medina@gmail.com, dionisioperezmontes@hotmail.com, arelis.arocho@gmail.com, lanicopr@yahoo.es,ricardo.fuentes1@upr.edu, gabrielmarrero@yahoo.com, emmaupr@hotmail.com, wetmorei@yahoo.com

Published under a Creative Commons Attribution-NonCommercial-NoDerivs 2.0 License

* Acknowledgments: The authors wish to acknowledge the direct support provided to the first five co-authors by the National ScienceFoundation IGERT Grant (0801577) and indirect support to the first author by the Australian Research Council Grant (LX0881935)and the Sociedad Peruana de Derecho Ambiental. Any opinions, findings, conclusions or recommendations expressed are those ofthe authors and do not necessarily reflect the views of the NSF, ARC or SPDA. Comments to early drafts by Barbara A. Hocking,Manuel Ruiz, and Paul Baymon were especially appreciated. We also thank the scientists and journalists who kindly responded to ourenquiries: Christopher Lowry, Ian C. W. Hardy, Kenneth D. Vernick; Jeff Houck, Maritza Stanchich. The usual disclaimer applies.

ARTICLE

THE ECONOMICS OF INFORMATION, STUDIOUSLY IGNOREDIN THE NAGOYA PROTOCOL ON ACCESS TO GENETIC

RESOURCES AND BENEFIT SHARING

Joseph Henry Vogel*, Nora Álvarez-Berríos, Norberto Quiñones-Vilches, Jeiger L. Medina-Muñiz,Dionisio Pérez-Montes, Arelis I. Arocho-Montes, Nicole Val-Merniz, Ricardo Fuentes-Ramírez,

Gabriel Marrero-Girona, Emmanuel Valcárcel Mercado, Julio Santiago-Ríos

TABLE OF CONTENTS

1. Introduction 54

2. Information as the Object of Access 54

3. Contentious Issues Resolved through the Lens of the Economics 55

4. Cartelisation 58

5. Penetrating the Social Sphere to Gain Legitimacy 59

6. Conclusion 65

1INTRODUCTION

Economic thinking has been absent in all tenConferences of the Parties (COP) to the United NationsConvention on Biological Diversity (CBD) despite itspresence in the academic literature.1 Perhaps as aconsequence of faithful reporting, economics is alsoabsent in the otherwise excellent overview by Kamau etal of the Nagoya Protocol on Access to GeneticResources and Benefit Sharing.2 By ignoring theabstraction that economics affords, ‘access and benefitsharing’ (ABS) has become needlessly complex andcontentious. To resolve the issues so well identified byKamau et al, we will apply the economics of informationto ABS. What emerges is a radically different alternativeto policymaking-as-usual. Key to our endeavor is anarrative that can penetrate the social sphere where ABSmust achieve legitimacy. Language is of paramountimportance.

2INFORMATION AS THE OBJECT OFACCESS

Access is a transitive verb. What is one accessing? Theanswer appears in the full title ‘The Nagoya Protocolon Access to Genetic Resources and the Fair andEquitable Sharing of Benefits Arising from theirUtilisation to the Convention on Biological Diversity’.‘Genetic resource’ as the object is explicit in Article 3:

This Protocol shall apply to genetic resourcewithin the scope of Article 15 of the Conventionand to the benefits arising from the utilisationof such resources. This Protocol shall also applyto traditional knowledge associated with geneticresources within the scope of the Conventionand to the benefits arising from the utilisationof such knowledge.3

Many Parties are dissatisfied. By transitivity, thedefinition of ‘genetic resource’ in Article 2 of the CBDis ‘any material of plant, animal, microbial or other originthat contains functional units of heredity’.4 The rub isthat many patented biotechnologies do not accessmaterial with functional units of heredity and patentholders can thereby refuse to share benefits. Similarly,much associated traditional knowledge has long sincefallen into the public domain. Recognising the first ofthese two lacunae, the concept of ‘derivative’ gainedtraction during the nine Ad-Hoc Working Groups onABS that spanned some ten years. The second lacuna ismore problematic as correctly perceived by Kamau etal, because ‘[t]he question must be answered accordingto general international law’.5 One notes that traditionalknowledge does not appear in the title of the Protocol.

According to Article 2 (e) of the Protocol, ‘‘derivative’means a naturally occurring biochemical compoundresulting from the genetic expression or metabolism ofbiological or genetic resources, even if it does notcontain functional units of heredity’.6 Despite theintroduction of ‘derivative’ in Article 2 (e), ‘derivative’is not incorporated into Article 3 which defines thescope. Nevertheless, many delegates and scholars arenot disheartened. They have inferred ‘derivative’ in thephrase ‘utilisation of such sources’.7 Unfortunately forthe advocates, such an inference is not obvious andwould morph ‘utilisation of such sources’ into a

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1 Joseph Henry Vogel and Manuel Ruiz, ‘Wronged by theWrong Language: The International Regime on Access andBenefit-Sharing’ 10/19 Bridges Trade BioRes (October 2010),available at http://ictsd.org/i/library/90194/.

2 Evanson Chege Kamau, Bevis Fedder and Gerd Winter, ‘TheNagoya Protocol on Access to Genetic Resources andBenefit Sharing: What is New and What are the Implicationsfor Provider and User Countries and the ScientificCommunity?’ 6/3 Law, Environment and Development Journal246 (2010), available at http://www.lead-journal.org/content/10246.pdf.

3 Nagoya Protocol on Access to Genetic Resources and theFair and Equitable Sharing of Benefits Arising from TheirUtilization to the Convention on Biological Diversity,Nagoya, 29 October 2010, available at http://www.cbd.int/decision/cop/?id=12267.

4 See Convention on Biological Diversity, Rio de Janeiro, 5 June1992, available at http://www.cbd.int/convention/text/.

5 See Kamau et al, note 2 above at 255.6 See Nagoya Protocol, note 3 above, Art. 2 (e).7 See Kamau et al, note 2, at 254, cell of Table 1: ‘Contentious

Issues and Final Results’ at row entitled ‘BiochemicalDerivatives’ and the column ‘Comment’.

‘panchrestron’, Garrett Hardin’s neologism forsomething that signifies everything and therefore meansnothing.8

Should ‘user countries’ not interpret ‘derivatives’ as anobject of access, ‘provider countries’ will probablypersevere in future COPs to extend the scope of Article3. The problem of perseverance lies in its opportunitycosts. Besides the time and money, measured in manyyears and millions of dollars, ad hoc deliberations willforgo a robust reform that would include the Article 2(e) definition of derivative as well as other deservingphenomena, some now scarcely imaginable. Forexample, we intuit designs inspired by nature (eg,biomimicry) and non-human culture (eg, chimpanzeepharmacology) as legitimate objects of access eventhough no ‘biochemical compound’ would have beenaccessed.9 While both natural designs and non-humanculture fall outside the Art. 2 (e) definition of derivative,both can be interpreted as natural information. Oncethe parties choose the correct language for the objectof access, they can apply the economics of informationfor which Nobel Memorial Prizes have been awarded.10

3CONTENTIOUS ISSUES RESOLVEDTHROUGH THE LENS OF ECONOMICS

Almost all the contentious ABS issues tabulated byKamau et al can be resolved by interpreting geneticresources as natural information and associatedtraditional knowledge as artificial information. Table 1of this article is an adaptation of Table 1 in the article

by Kamau et al. The final three columns of the originaltable, viz. ‘Articles in ABS Draft Protocol’, ‘Articlesreflecting or maintaining issue in Nagoya Protocol’, and‘Variation/Comment’ have been replaced by ‘Withnatural information (n.i) instead of genetic resource(g.r) as object of ABS: Is issue resolvable? In favor?’and ‘Explanation’. The first new column (5) answerswhether or not a solution from economics exists andthe next column, whether or not it favors the issue listed.For example, for the issue of benefit-sharing forbiological resources: ‘Is issue resolvable?’ (Yes) eventhough the resolution from interpreting g.r. as n.i. goesagainst sharing any benefit: ‘In favor?’ (No). The finalcolumn offers a succinct explanation, in this case,‘Biological resources also exhibit tangible aspects wherevalue-added does not carry monopoly patent protection’.The explanation coheres with Retroactivity I, which isthe linchpin in the North-South dispute over ABS:‘Biological resources exhibit both tangible and intangibleaspects, the latter conceptualised as a set of n.i. wherevalue currently added in a patent is access to a subsetnot previously accessed.’ N.B. The protest of retroactivelaw in ‘3.2 Temporal Scope’ of Kamau et al no longerholds when genetic resources are recognised asintangible.11

Table I: Contentious issues re-examined

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8 Garrett Hardin, ‘Meaninglessness of the Word Protoplasm’,82/3 Scientific Monthly 112 (1956).

9 Joseph Henry Vogel, ‘Architecture by Committee and theConceptual Integrity of the Nagoya Protocol’, in ManuelRuiz and Ronnie Vernooy eds., The Custodians of Biodiversity:Sharing Access and Benefit Sharing to Genetic Resources (Ottawa:International Development Research Centre, forthcoming).

10 See The Sveriges Riksbank Prize in Economic Sciences inMemory of Alfred Nobel 2001: George A. Akerlof, A.Michael Spence, Joseph E. Stiglitz, available at http://nobelprize.org/nobel_prizes/economics/laureates/2001/. 11 See Kamau et al, note 2 above at 255.

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ExplanationWith naturalinformation (n.i)

instead of geneticresource (g.r) asobject of ABS

Issue(s)(quoted fromKamau et al.)

Position ofparties

(quoted fromKamau et al.)

Providers Users Is issueresolvable?

In favor?A\ Scope(quoted fromKamau et al.)

Retroactivity I Benefits from genetic Yes No Yes Yes Biological resourcesresources accessed exhibit both tangiblepre-CBD and intangible

aspects, the latterconceptualised as aset of n.i. wherevalue currently addedin patent is accessto a subset notpreviously accessed.

Retroactivity II Benefits from genetic Yes No Yes Yes Same as explanationresources accessed of Retroactivity Ipre-ABS Protocolwhere nobenefit-sharingagreement has beenestablished inaccordance withthe CBD

Retroactivity III Benefits from continuing Yes No Yes (g.r)/ Yes (g.r)/ For g.r. same as& new uses of genetic No (t.k.) No (t.k.) Retroactivity I; forresources & traditional traditional knowledgeknowledge accessed (t.k.), non-technicalpre-CBD issues of redefining

public domain

Retroactivity IV Benefits from traditional Yes No No No Issues of redefiningknowledge accessed public domainpre-ABS Protocol

Biological/ Should ABS Protocol Yes No Yes No Biological resourcesgenetic resources also apply to biological also exhibit tangible

resources? aspects wherevalue-added does notcarry monopolypatent protection

Biochemicals/ Benefits from Yes No Yes Yes Derivatives are n.i.derivatives biochemicals/derivatives

from entry into force ofABS Protocol

56

The Economics of Information, Studiously Ignored

57

B\ Fair &equitable benefitsharing

Ex situ Benefits from traditional Yes No No No Issues of redefiningcollections knowledge associated public domain

with ex situ geneticresources

C\ Access togenetic resources

Ownership of PIC, approval & Yes Yes/No? Yes No Bounded opennessgenetic resources involvement of where a uniform

indigenous & local royalty rate remits tocommunities needed countries of originin access to genetic upon successfulresources commercialisation of

patent; royalties forubiquitous n.i. remitto the InternationalBarcode of Life (iBOL)

National ABS Provide for legal certainty, No/Yes Yes Yes No Not necessarymeasures clarity & transparency

Non-commercial Provide simplified No/Yes Yes Yes Yes Non-patented usesresearch access are open access

D\ Compliance

Checkpoints Identification & Yes No Yes Yes Disclosure of speciesestablishment of in patent applicationcheckpoints to enhance with subsequentmonitoring, tracking & determination ofreporting utilisation of countries of origingenetic resources, and respectivederivatives & traditional habitats for share inknowledge royalty revenues

Certificate Internationally recognised Yes No Yes No No certificate iscertificate should be neededevidence of compliancewith PIC & MATrequirements

Disclosure of Should be made mandatory: Yes No Yes Yes In addition, tariffsorigin/source -Failure to disclose: user should be levied on

should be given fixed exports exhibitingtime to comply/remedy patented value added- Refusal to disclose: to n.i. fromapplication shall not be non-ratified countriesfurther processed

creating a cartel over genetic resources andassociated traditional knowledge, user countriesencourage provider countries and communitiesto invest time, effort, and money in conservinghabitats and knowledge.

The Protocol seems to be moving toward cartelisationby circumscribing the power of bilateral negotiation.As noted by Kamau et al, ‘Although the Protocolreaffirms sovereign rights of parties over their geneticresources, its provisions on transboundary cooperation,in case the same genetic resources or traditionalknowledge straddle national boundaries, constitute akind of, though weak, derogation of absolute statesovereignty. In such cases, parties shall ‘endeavour tocooperate’ with a view to implement the objectives ofthe Protocol’.13 Despite the explicit recognition oftransboundary resources in Articles 10 and 11, theapplication of rigorous economics slashes any hope thatthe Protocol will ultimately achieve cartelisation. Wereturn to the choice of language. Oligopolies are difficultto maintain because not all members ‘cooperate’ andthe Protocol only requires that they ‘endeavor tocooperate’ (emphasis added). Failed cartels in bananas,coffee, and sugar are legendary. OPEC succeeds becauseSaudi Arabia assumes a disciplinary role due to its highshare of total world reserves and willingness to punishmembers who violate production quotas. For anoligopoly to succeed in natural and associated artificialinformation, the Protocol must reflect ‘mutual coercion,mutually agreed upon’, another apt phrase fromHardin.14 Again, the analogy with monopoly patents isfruitful: coercion underpins the Trade RelatedIntellectual Property Rights (TRIPs) agreement whichhas been hugely successful in achieving enclosure fornew artificial information.

Coercion is not enough. This is a central message fromChristopher May in The Global Political Economy ofIntellectual Property Rights15 ‘Certainly the institution ofproperty is firmly established enough in modern societiesthat the explicit sanction of the state to support orenforce this control is seldom needed, once something

4CARTELISATION

All the explanations in the last column of Table Iemanate from the economics of information. Tounderstand the application of that economics to ABS,we will analogise an excerpt from the landmark textbookECONOMICS authored by Paul A. Samuelson a halfcentury ago and co-authored with William D. Nordhausin the recent editions.

Information is expensive to produce but cheapto reproduce. To the extent that the rewards toinvention are inappropriable, we would expectprivate research and development to beunderfunded…special laws governing patents[and so on]…create intellectual property rights.The purpose is to give the owner specialprotection against the material’s being copiedand used by others without compensation to theowner of the original creator…Why wouldgovernments actually encourage monopolies?...Bycreating property rights, governments encourageartists and inventors to invest time, effort, andmoney in the creative process.12

Cutting and pasting the CBD language into theSamuelson and Nordhaus quote renders:

Genetic resources and associated traditionalknowledge are expensive to conserve but cheapto access. To the extent that the rewards toconservation are inappropriable, we wouldexpect conser vation efforts to beunderfunded…an international regimegoverning access and benefit-sharing can createoligopoly rights. The purpose is to give thecountries of origin and communities specialprotection against the information’s beingaccessed and used by others withoutcompensation to all the countries andcommunities, which have conserved therespective habitat and knowledge…Why wouldgovernments actually encourage oligopolies?...by

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12 Paul A. Samuelson and William D. Nordhaus, ECONOMICS195 (New York: McGraw-Hill Irwin, 18th ed. 2005).

13 See Kamau et al, note 2 above at 253.14 Garrett Hardin, ‘The Tragedy of the Commons’, 162 Science

1243 (1968), available at http://dieoff.org/page95.htm.15 Christopher May, The Global Political Economy of Intellectual

Property Rights: The New Enclosures (USA: Routledge, 2nd ed,2010).

has been accepted as property by those involved in socialrelations’.16 May itemises the extensive resources devotedby the World Intellectual Property Organisation to createthat mindset and observes that ‘[t]echnical assistance isnot merely important in the aid it provides governmentsand legislators to establish specific legislation, but is alsoan important political or even, ideological, programmeof social reorientation’.17 He is fiercely critical of the‘political project to firmly establish all unauthorised useas theft’18 and advocates ‘bounded openness’19 with anuanced approach in the social bargain between thepublic and the private. The parallels between TRIPs andan International Regime on ABS are multiple.

What would be the target audience for ‘socialreorientation’ of an oligopoly over natural and associatedartificial information, i.e., a biodiversity cartel? The answeris the US as so pathetically alluded in Article 24 ‘Non-Parties’. As long as this major user and provider countrylies outside the CBD and the International Regime, therewill be no cartel (barring punitive tariffs, see the cell ofTable 1 at row ‘Disclosure of origin/source of ’ andcolumn ‘Explanation’). Social reorientation meansconvincing a critical mass in the US Congress thatcartelisation behooves the US, economically so. Such asea change in policy is hardly fanciful should nationalinterests become sufficiently evident. May notes ‘Despitearguing for the sanctity of IPRs in the face of the AIDScrisis in Africa, when in November 2001 it seemedpossible that the US had been the target of a bio-terroristattack using anthrax, suddenly compulsory licensingbecame a legitimate strategy in health emergencies. Weshould recall that five people died and a further thirteenfell ill in this supposed terror action (which is not todevalue these deaths, only to note the comparison withthe millions dying of AIDS)’.20

5PENETRATING THE SOCIALSPHERE TO GAIN LEGITIMACY

Alas, when the CBD has penetrated the social sphere inthe US, its expression seems right out of thebiotechnology playbook. Shortly after COP-VI, AndrewRevkin from The New York Times, wrote an article entitled‘Biologists sought a treaty, now they fault it’.21 It too wasdevoid of any economic thinking and thereby missed anopportunity for a more sophisticated journalism.22

However, the place to penetrate the social sphere is notThe New York Times whose readership would probablysupport an economically sound International Regime.Instead, plebian venues from swing states like Floridashould be the target. As an illustration, we have chosenThe Tampa Tribune where Jeff Houck publishes every year‘50 things that we know now (that we didn’t know thistime last year)’.23 Some of those things now known wouldqualify as bio-discoveries and lend themselves to adiscussion about ABS and cartelisation. Table II looksat seven of the two dozen learned since 2006. Thesobriquets are our suggestion for any journalist who wishesto do a follow-up piece on a particular bio-discovery.

Table II: Bio-discoveries from ‘50 things we know now’by Jeff Houck, The Tampa Tribune

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16 Id., at 16.17 Id., at 103. Human evolution may have made social

reorientation far more difficult for intangible than tangibleproperty. The theme is explored in Joseph Henry Vogel ed.,The Museum of Bioprospecting, Intellectual Property, and the PublicDomain: A Place, A Process, A Philosophy (London: AnthemPress, 2010) and coheres with the research streams suggestedby Gad Saad in The Evolutionary Bases of Consumption(Mahwah, NJ: LEA/Psychology Press, 2007).

18 See May, note 15 above 152.19 Id., at 142.20 Id., at 120.

21 Andrew C. Revkin, ‘Biologists Sought a Treaty: Now TheyFault it’, The New York Times, 7 May 2002, available at http://www.nytimes.com/2002/05/07/science/biologists-sought-a-treaty-now-they-fault-it.html

22 Joseph Henry Vogel, ‘Reflecting Financial and OtherIncentives of the TMOIFGR: The Biodiversity Cartel’, inManuel Ruiz and Isabel Lapeña eds., A Moving Target: GeneticResources and Options for Tracking and Monitoring their InternationalFlows 47-74 (Gland, Switzerland: IUCN, 2007), available athttp://data.iucn.org/dbtw-wpd/edocs/EPLP-067-3.pdf.

23 Jeff Houck, ‘50 Things We Know Now (That We Didn’tKnow This Time Last Year)’, The Tampa Tribune, 16December 2010, available at http://www2.tbo.com/c o n t e n t / 2 0 1 0 / d e c / 1 6 / 1 6 1 8 0 2 /httpwwwwebmdcomparentingnews20101107unprotected-se/.

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Sobriquet Year of Ranking of Description quoted Reference in Open Accesspublication bio-discovery from Houck Scientific Literature Publication

in ‘50 in ‘50 (abstract/ things’ things’ full text)

Airborne 2010 42 A common ‘friendly’ Lowry, C.A., Hollis, J.H., Yes/Nointelligence bacteria found in soil boosts Vries, A. de, Pan, B., Brunet,

intelligence and speeds L.R., Hunt, J.R.F., Paton,learning time. The same J.F.R., van Kampen,microbe, which is blown E., Knight, D.M., Evans,around by the wind and A.K., Rook, G.A.W. &inhaled, appears to act as Lightman, S.L. (2007)a natural antidepressant Identification of an

immune-responsivemesolimbocorticalserotonergic system:Potential role in regulationof emotional behavior.146 (2) Neuroscience 756

Bacterial 2010 17 A species of metal-eating Sánchez-Porro C., Kaur, B., Yes/NoTitanic bacteria discovered on Mann, H. and Ventosa A.Busters the sunken hull of the (2010) Halomonas titanicae

Titanic may be speeding sp. nov., a halophilicthe decay of the wreck bacterium isolated from the

RMS Titanic. InternationalJournal of Systematic andEvolutionary Microbiology,60, 2768

Evolutionary 2006 11 Wasps spray an insect Goubalt, M., Batchelor, Yes/YesInsecticide version of pepper spray T.P, Linforth, R.S.T, Taylor,

from their heads to A.J, & Hardy, I.C.W. (2006)temporarily incapacitate Volatile emission by contesttheir rivals losers revealed by real-time

chemical analysis. Proceedings of the Royal Society Biological Sciences, 273(1603),2853-2859

Malaria- 2006 32 A group of genes makes Riehke, M.M., Markianos, Yes/Noresistant some mosquitoes K., Niare, O., Xu, J., Li, J.,Mosquitoes resistant to malaria and Toure, A., Podiougou, B.,

prevents them from Oduol, F., Diawara, S.,transmitting the malaria Diallo, M., Coulibaly, B.,parasite Outara, A., Kruglyak, L.,

Traore, S.F. & Vernick, K.(2006) Natural MalariaInfection in Anophelesgambiae is Regulated by aSingle Genomic ControlRegion. Science 312, 577-579

Alternatively, the journalist may follow-up the bio-discoveries by integrating diverse examples around oneof the contentious issues of ABS. Table III classifiesthe bio-discoveries according to the issue and ease injournalistic exposition. As one sees from the many blankcells for ‘C\ Access to genetic resources’ and ‘D\

The Economics of Information, Studiously Ignored

Onion 2007 29 Onions contain a Nishimura, H., Higuchi, O., Yes/NoRecall sulfur-based antioxidant Tateshita, K., Tomobe, K.,

that binds with harmful Okuma, Y. & Nomura, Y.toxins in the brain and (2006). Antioxidative activityflushes them out of the and ameliorative effects ofbody, helping to prevent memory impairment ofmemory loss sulfur-containing

compounds in Allium species.BioFactors. 26, 135-146

Pumpkin 2009 13 Pumpkin skin contains a Park, S.C., Kim, J.Y., Lee, Yes/NoPower substance that inhibits J.K., Hwag, I., Cheong, H,

growth of microbes that Nah, J.W., Hahm, K.S. &cause yeast infections Park, Y. (2009) Antifungal

Mechanism of a NovelAntifungal Protein fromPumpkin Rinds againstVarious Fungal Pathogens.J. Agric. Food Chem. 57,9299–9304

Tequila is 2009 47 Diamond thin films were J.Morales, J., Apátiga, L. M. Yes/Yesan Industrial grown using Tequila as & Castaño, V.M. (2009)Diamond’s precursor by Pulsed Growth of Diamond FilmsBest Friend Liquid Injection Chemical from Tequila. Rev. Adv.

Vapor Deposition Mater. Sci., 21(2009),(PLI-CVD) onto both 134-138silicon (100) and stainlesssteel 304 at 850 °C

Issue(s)(quoted from Kamau et al)

A\ Scope(quoted fromKamau et al)

Airb

orne

Inte

llige

nce

Evo

lutio

nary

Inse

ctic

ide

Mal

aria

-re

sist

ant

Mos

quito

es

Oni

on R

ecal

l

Pum

pkin

Pow

er

Tequ

ila is

an

Indu

stria

lD

iam

ond’

sBe

st F

riend

Bac

teria

l Tita

nic

Bust

er

Retroactivity I Benefits from genetic resources accessedpre-CBD

Retroactivity II Benefits from genetic resources accessed X X X X X X Xpre-ABS Protocol where no benefit-sharingagreement has been established in accordancewith the CBD

Compliance’, the journalist would have to go into greatdepth to plumb the mechanisms of checkpoints,certificates and disclosure, i.e., compliance. There is noeasy way to describe a legal labyrinth.

Table III: Bio-discoveries and the contentious issues

61

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Retroactivity III Benefits from continuing & new uses of X Xgenetic resources & traditional knowledgeaccessed pre-CBD

Retroactivity IV Benefits from traditional knowledge accessed Xpre-ABS Protocol

Biological/ Should ABS Protocol also apply togenetic resources biological resources?

Biochemicals/ Benefits from biochemicals/derivatives fromderivatives entry into force of ABS Protocol

B\ Fair &equitablebenefit sharing

Ex situ Benefits from traditional knowledgecollections associated with ex situ genetic resources X X

C\ Access togenetic resources

Ownership of PIC, approval & involvement of indigenousgenetic resources & local communities needed in access to

genetic resources

National ABS Provide for legal certainty, clarity &measures transparency

Non-commercial Provide simplified accessresearch

D\ Compliance

Checkpoints Identification & establishment of checkpointsto enhance monitoring, tracking & reportingutilisation of genetic resources, derivatives& traditional knowledge

Certificate Internationally recognised certificate shouldbe evidence of compliance withPIC & MAT requirements

Disclosure of Should be made mandatory:origin/source -Failure to disclose: user should be given

fixed time to comply/remedy- Refusal to disclose: application shall notbe further processed

resources which are the least threatened withextinction.26 Instead, the royalties collected should goto finance the fixed costs associated with the cartel.27

Outstanding among those costs are the classificationof species and the determination of geographicdistribution of habitat. Such data become the baselinein calculating the fair share of benefits for each cartelmember. Fortunately, a technological infrastructureexists that seems custom-made to the task: TheInternational Barcode of Life.28 In other words, iBOLenables ABS through information on species and ABSenables iBOL through financing from ubiquitous geneticresources.29 One should note that the proportionalityinherent in calculating the royalty share also achievesthe objective of the Protocol of Article 1 that links ABSto conservation and sustainable use. Senior managementfrom iBOL is exploring how to deal with ABS and hasaddressed the issues in top-tier journals.30

Table IV: Benefit sharing under a cartel

All the twists and turns of compliance explained byKamau et al can be obviated by a cartel. The onlyrequirement of the cartel would be disclosure of thespecies to which value was added in a patent. Inasmuchas 99.8 per cent of patents do not result in anythingcommercially viable, also duly cited by Kamau et al,24

the cartel eliminates the transactions costs of pursuingABS on dead-ends. Royalties would only be levied onthe commercially viable patents. The rows of C and Dwould be replaced by a simple disclosure of species-anextra line or electronic cell in a standardised patentapplication. Ergo, cartelisation enhances both efficiency andequity which is a rare and fortuitous occurrence in policymaking.

Table IV analyses who would benefit from thecartelisation for the bio-discoveries listed in The TampaTribune. The results are counterintuitive. For example,if the protein found in the pumpkin is in the four speciesof the genus Cucurbita, not only Mexico and CentralAmerica but also the US would be a country of origin,according to the criterion of Vavilov Centers ofDiversity.25 Without the cartel, it behooves the Koreanpatent holder to pass off provision of the specimensresearched in Korea as the US rather than Mexico oreven Korea. Who would know? Indeed, the US isprobably the country where most genetic resources areappropriated for the simple reason that biopiracy doesnot exist there de jure, i.e., one cannot steal what is resnullius. Indeed ‘appropriation’ is the wrong word.Thinking of block-buster biotechnologies that originatein natural product chemistry, the US Treasury is beingdeprived of billions of dollars of tax revenue.

No less interesting for ABS stories are genetic resourcesfound worldwide. ‘Airborne intelligence’ derives from abacterium that is blowing in the wind, globally. Ifeveryone is an owner, no one is an owner. Shouldubiquity mean free? The answer from economics is no:exemption would introduce a distortion for industry toavoid royalties by researching just the ubiquitous genetic

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24 99.8 per cent commercially nonviable is inferred as thecomplement of 0.2 per cent that are viable. See Kamau, etal, note 2 above at 262.

25 Museum of Learning, ‘Centres of Origin of Main CultivatedPlants: Vavilov Centers’, available at http://w w w . m u s e u m s t u f f . c o m / l e a r n / t o p i c s /cen t r e s_o f_or i g in_of_ma in_cu l t i va t ed_p l an t s : :sub::Vavilov_Centers.

26 Joseph Henry Vogel, ‘From the ‘Tragedy of the Commons’to the ‘Tragedy of the Commonplace’ Analysis and SynthesisThrough the Lens of Economic Theory’, in CharlesMcManis ed., Biodiversity & Law 115-136 (London:Earthscan, 2007).

27 Joseph Henry Vogel, Genes for Sale 96 (New York: OxfordUniversity Press, 1994).

28 Mark Y. Stoeckle and Paul D. N. Hebert, Barcode of Life,Scientific American 82-88, October 2008.

29 Joseph Henry Vogel, ‘iBOL as an Enabler of ABS and ABSas an Enabler of iBOL’, in Proceedings of the Seminar ‘Barcodingof Life: Society and Technology Dynamics – Global and NationalPerspectives’ 38-47, UNEP/CBD/WG-ABS/9/INF/15 (10March 2010) available at http://www.cbd.int/doc/meetings/abs/abswg-09-3rd/information/abswg-09-3rd-inf-15-en.pdf.

30 Ronnie Vernooy et al, ‘Barcoding Life to Conserve BiologicalDiversity: Beyond the Taxonomic Imperative’, 8(7) PLoSBiol (2010), e1000417, available at http://w w w . p l o s b i o l o g y . o r g / a r t i c l e /info%3Adoi%2F10.1371%2Fjournal.pbio.1000417 andDavid Schindel, ‘Biology without Borders’, 467 Nature 779(October 2010).

Law, Environment and Development Journal

64

CommercialapplicationsSobriquet Provider

CountryUser

Country

Beneficiaries(Countries ofOrigin, iBOL,exempt, or ISEof UNCLOS)

ABSAgreement

(response fromemail enquiry)

Patentsgranted orpending

Airborne Uganda UK iBOL No US Patent Skin disorders;Intelligence No. 472411 Tuberculosis;

and 6328978; Leprosy; Adjuvant topending Chemotherapeutics;20030170275 Conditions of the

Central NervousSystem

Bacterial Disputed/ US Canada International No response None Pipe corrosion forTitanic Continental Seabed discovered submarineBuster Shelf but Authority structures

beyond200 nm

Evolutionary USA UK Uruguay stated, No No Proven to beInsecticide but if ubiquitous effective as an

across bees, insecticidewasps, andbeetles, theniBOL

Malaria- Mali US Exempt as No No Worldwide inresistant human pathogen tropics andMosquitoes (referenced in subtropics

Preamble ofProtocol)

Onion Unstated Japan Central Asia No response Japanese Patent Treatment ofRecall No. 3725079 schizophrenia,

Alliumvinale Alzheimer’s andother mentalillnesses

Pumpkin Unstated Korea Mexico, Central No response NonePower America and US discovered Fungicide

Tequila is an Mexico Mexico Mexico No response None Industrial uses ofIndustrial discovered diamondsDiamond’sBest Friend

The Economics of Information, Studiously Ignored

65

31 See Samuelson and Nordhaus, note 12 above at 168-169.32 The Edmonds Institute, ‘Mexico’s Genetic Heritage Sold

for Twenty Times Less Than the US Got in Yellowstone’,Press Release, 28 September 1999, available at http://www.biotech-info.net/genetic_heritage.html.

33 David Ricardo, The Concise Encyclopedia of Economics: Libraryof Economics and Liberty, available at http://www.econlib.org/library/Enc/bios/Ricardo.html.

6CONCLUSION

Kamau et al close on a hopeful note, encouraging theParties to ratify the Protocol. We are less enthusiastic.The Protocol is not a move toward cartelisation thatthe economics of information would justify but its exactopposite: a move toward perfect competition. Again,we return to the power in economic abstraction. JoanRobinson, arguably John Maynard Keynes’ best student,pioneered the concept of ‘monopolistic competition’by which products are differentiated to secure someminimal economic rent.31 From the economicsperspective, The Clearing House Mechanism andInformation Sharing of Article 14 would tend toeliminate monopolistic competition. Once every otherelement of access is non-differentiated through ‘modelcontractual clauses’ (Art. 19), industry will be able todrive down the royalty even further from the alreadylaughable percentages.32 ‘Confidential businessinformation’ will be solemnly invoked to preempt anycry of unfairness. In such a scenario, the operability ofthe Nagoya Protocol will hinge on whether WikiLeaksand similar endeavors can be permanently shut down-not a very promising proposition.

Economics need not be dismal or despised. Thehistorian of economic thought will note that DavidRicardo (1772-1823) explained tirelessly how the CornLaws in Britain protected the landed gentry at theexpense of industrial development. Only after Ricardo’sdeath did the rising industrial class prevail. In 1842, theParliament dismantled the tariffs on imported cereals,twenty-seven years after Ricardo published ‘Essay onthe Influence of a Low Price of Corn on the Profit ofStock’.33 If history is any guide, we have another nine

years to go. In the meantime, expect more avoidableextinction due to an international regime that is devoidof economic thinking.

LEAD Journal (Law, Environment and Development Journal) is jointly managed by theSchool of Law, School of Oriental and African Studies (SOAS) - University of London

http://www.soas.ac.uk/lawand the International Environmental Law Research Centre (IELRC)

http://www.ielrc.org