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Convention on Biological Diversity - 7th Conference of the Parties (COP-7)

At the seventh meeting of the Conference of the Parties (COP-7) to the Convention on Biological Diversity (CBD), held in Kuala Lumpur, Malaysia, from 9 to 20 February 2004, trade-related considerations cropped up in almost every area of discussion, including in some of the more unlikely places, such as mountain biodiversity and inland water systems. While delegates managed to resolve some of the more overt disagreements over trade-related language, the impact of underlying trade considerations continued to be felt during plenary discussions and in the final outcomes. The agenda included the following trade-related issues:

Tech Transfer | Access & Benefit-Sharing | Incentive Measures | Sustainable Use | Invasive Alien Species

Technology transfer, IPRs and biotechnology

The transfer of technology was one of the three priority areas of COP-7, along with mountain biological diversity and protected areas. Parties adopted elements of a work programme on facilitating the transfer of and access to technology, which stress the need to create enabling environments, including appropriate IPR regimes, for the transfer as well as absorption, adaptation and diffusion of technologies.

While not explicitly referring to biotechnology, the suggested activities include an analysis of potential benefits, risks and associated costs related to the introduction of technologies, "including new technologies"; the promotion and advancement of priority access to results and benefits arising from technologies based upon genetic resources; and the encouragement of joint research programmes with associated jointly held patents or other IPR protection as well as other mechanisms to facilitate transfer of genetic resources-based technologies.

Decision: Transfer of Technology and Technology Cooperation (Articles 16 to 19) - Decision VII/29

Background documents:

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Access and benefit-sharing

International ABS regime

Delegates agreed to mandate the CBD's Ad hoc Open-ended Working Group on Access and Benefit-sharing to "elaborate and negotiate an international regime on access to genetic resources and benefit-sharing" based on the terms of reference included in the COP decision. As expected, delegates did not attempt to resolve the contentious issues of the regime's legal nature, scope and elements, opting for setting a broad framework for further talks in the Working Group. After lengthy discussions over the pace of negotiations for the international regime, delegates agreed to hold two sessions of the Group before COP-8 in Thailand and Spain respectively. As one observer noted, delegates did not include a discussion on the objectives of the regime in the terms of reference, raising concerns that without clear objectives the negotiations might become more drawn-out and difficult.

The ABS Working Group carried out its work in close collaboration with the Working Group on Article 8(j) and Related Provisions, dealing with indigenous issues, which was mandated to make recommendations to ensure that the ABS regime includes sui generis systems and measures for the protection of traditional knowledge (TK). Furthermore, the Working Group assessed the role of databases and registers in the protection of TK; the potential of and conditions under which existing and new forms of intellectual property rights (IPRs) can contribute to the objectives of Article 8(j) and related provisions; and non-intellectual-property-based sui generis forms of TK protection. Several of these issues are also under discussion at World Intellectual Property Organization (WIPO)'s Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (see BRIDGES Trade BioRes, 20 December 2002).

Relationship with WIPO

One of the last issues to be resolved in the ABS decision concerned the reference to WIPO, discussed in the context of measures to ensure prior informed consent and mutually agreed terms. While acknowledging the usefulness of drawing on WIPO's expertise, some developing countries expressed concern over language inviting WIPO to address the IPR issues related to access to genetic resources and disclosure requirements. Underlying these concerns were questions regarding the CBD's relationship with WIPO, which had already been raised at the last meeting of the ABS Working Group in December 2003 (see BRIDGES Trade BioRes, 15 December 2003).

To address these concerns, the compromise text invites WIPO to "examine and where appropriate address" the interrelation of access to genetic resources and disclosure requirements in IPR applications in a manner supportive of the CBD objectives, while also calling on UNCTAD and other relevant organisations to examine these issues. Similarly, WIPO together with the CBD Secretariat, UNCTAD and other relevant organisations was invited to prepare technical studies on the role of IPRs in technology transfer in the context of the CBD as part of the Work Programme on technology transfer adopted at the COP. In addition, references to specific WIPO bodies were dropped in the decisions on ABS and Article 8(j), thereby leaving it open where these issues would be addressed in WIPO. Moreover, the ABS decision invites WIPO to regularly provide reports to the CBD Secretariat on its work, thereby formalising a process that has in practice already been in place since 1998 when COP-4 called for enhanced cooperation and information exchange with WIPO, including in the context of discussions on Article 8(j).

Decisions

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Incentive measures

Perverse incentives

Delegates failed to adopt the proposals on removing and mitigating perverse incentives -- ie policies or practices that encourage resource uses leading to the degradation and loss of biodiversity -- which set out a number of principles and guidelines for the identification and reform of such policies as well as the monitoring and enforcement of the reforms. Instead, the proposals were sent to the CBD's Subsidiary Body on Scientific, Technical and Technological Advice (SBSTTA) for further consideration at its next meeting. In the meantime, Parties are encouraged to use the draft proposals as "voluntary interim guidelines". Argentina in particular -- supported by Brazil and Australia -- had raised a number of concerns over the proposals, broadly related to the use of positive incentives and mitigating measures. During the plenary, Argentina registered reservations on 18 paragraphs in the decision, which should be given special attention by SBSTTA. The country cited concerns over agricultural subsidies as underlying these concerns, noting that the decision should not be used by any country to justify the provision of agricultural subsidies. Argentina furthermore stressed that before advancing on positive incentives, necessary measures should be taken to eliminate perverse incentives.

In the WTO, Argentina, Brazil and Australia, which are all members of the Cairns Group of agricultural exporting countries, are among the strong supporters of reducing agricultural subsidies. In contrast, the 'Friends of Multifunctionality', including the EC, Switzerland and Japan, are generally more reluctant to liberalise agricultural trade, arguing that agriculture also addresses so-called 'non-trade concerns' such as environment, food security and rural development.

Trade and agricultural biodiversity

Agricultural subsidies have been cited as a major contributing factor for biodiversity loss (see BRIDGES Trade BioRes, 22 January 2004). A study by the CBD Secretariat on domestic support measures and their effects on agricultural biological diversity concludes that reducing trade-distorting subsidies at the WTO could help to achieve the CBD's objective to conserve and sustainably use biological diversity. Nevertheless, the study notes that "unfettered market forces cannot be expected to automatically give rise to biodiversity-friendly agricultural production systems", and that therefore "well-designed flanking policies" in both subsidising and non-subsidising countries were key to complement the liberalisation process.

Specifically, in the case of production-linked (Amber Box) subsidies, the overall effects of removing these clearly-trade distortive subsidies would likely be positive for biodiversity in the subsidising countries of the North, given that agricultural land could be expected to contract as a result. However, the corresponding expansion of farming in most non-subsidising countries could be expected to have negative impacts on agro-biodiversity, the extent of which would depend on various regulatory and socio-economic factors. At the same time, carefully targeted, designed and implemented agri-environmental programmes under the Green Box (decoupled and only minimally trade distorting payments) were found to potentially constitute positive incentives for conservation and sustainable use of agricultural biodiversity. Regarding Blue Box payments (partly decoupled support under production-limiting programmes), which are less distorting than Amber Box measures, the study identified "positive repercussions for biodiversity" although they seemed more limited than those under the Green Box.

Decision: Incentive Measures (Article 11) - Decision VII/18

Background documents:

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Sustainable use of biological resources

At the centre of the debate under this agenda item were the draft Addis Ababa Principles and Guidelines for Sustainable Use of Biodiversity. Acknowledging the potential of sustainable use as an effective tool to combat poverty and achieve sustainable development, the draft Principles provide a framework for governments, resource managers and other stakeholders to ensure that the use of biodiversity components will not result in a long-term decline of biological diversity. While delegates adopted the Principles and Guidelines, they noted the need for further elaboration of issues related to agricultural biodiversity, which they recognised had not been adequately addressed during the development of the Principles. The decision requests SBSTTA to "explore the applicability of these principles and guidelines to agricultural biodiversity" before COP-9.

A number of principles are of particular interest from a trade perspective. Specifically, Principle 3 calls for the identification and removal of market-distorting policies, laws and regulations at the national and international levels that provide perverse incentives undermining biodiversity conservation and use (see also above). Principle 10 acknowledges the need for national and international policies to better reflect the current and potential values derived from the use of biological resources, encouraging this information to be incorporated in policy- and decision-making processes, including in trade and development policies. Principle 13 stresses the importance of also internalising the costs of management, encouraging governments to, inter alia, provide economic incentives for managers, such as tax incentives and/or the promotion of "green" labels.

Decision: Sustainable Use (Article 10) - Decision VII/12

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Invasive alien species

The COP-6 President Hans Hoogeveen conducted informal consultations on the Guiding Principles for the prevention, introduction and mitigation of the impacts of alien species (Decision VI/23), based on a compromise proposal put forward on his own initiative. Delegates, however, failed to reach agreement on the proposal, which was subsequently withdrawn. During the plenary, Australia expressed its "deep and profound regret" that no consensus could be reached, reiterating its trade-related concerns over the decision (see BRIDGES Trade BioRes, 2 May 2002). Brazil reiterated its objection to the decision's adoption on procedural grounds. Australia will seek clarification of the dispute at COP-8 and has requested the COP-7 President to conduct informal consultations in the interim.

References to trade-related issues in the decision on alien species remained largely unchanged (see BRIDGES Trade BioRes, 6 February 2004). The decision invites the WTO and its relevant bodies to take into consideration the risks of alien invasive species in their deliberations, calling on the CBD Executive Secretary to collaborate with the WTO "whenever feasible and appropriate" on raising awareness of the issues and promoting cooperation. Delegates avoided the contentious Decision VI/23 by removing all references to the decision in the COP-7 texts, opting for a broader reference to "decisions" of the COP. Australia expressed its regret that no chapeau paragraph had been included in the decision on alien species to address trade-related issues. Australia noted that it had supported the three decisions as well as the decision on sustainable use on the assumption that Parties would implement the decisions in a manner consistent with their international rights and obligations.

Discussions on alien species had proven highly contentious at the last meeting of the COP when Australia, supported by some other Parties, had rejected the Guiding Principles for the prevention, introduction and mitigation of the impacts of alien species at the last minute over trade concerns (see BRIDGES Trade BioRes, 2 May 2002). The Principles were nevertheless adopted with Australia registering its formal objection. Since then, the issue has arisen during various biodiversity-related negotiations In particular, the draft decision invites the WTO and its bodies to consider the risks arising from invasive alien species in their deliberations and asks Parties to take into account the risks in their bilateral and regional trade arrangements. Furthermore, it requests the CBD Executive Secretary to collaborate with the WTO on integrating the issue into the WTO's training, capacity-building and information activities, and to renew his application for observer status in the WTO Committee on Sanitary and Phytosanitary Measures.

Decision: Alien Species that Threaten Ecosystems, Habitats or Species (Article 8(h)) - Decision VII/13

Background document:

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IUCN POLICY PAPERS FOR COP-7. These policy recommendation papers and information papers have been prepared by different components of IUCN as a contribution to COP-7.

CBD COP-8 will be held in Brazil in the first half of 2006.