Nagoya Protocol Revisited

Oct 7th, 2014 | By | Category: Capacity Development, International Agencies, News

Now is the time to turn our gaze toward Pyeongchang. While largely overshadowed by the just completed Asian Games, Korea has been hosting an important international conference in Pyeongchang, Gangwon Province. The Twelfth Conference of the Parties (called “COP 12”) to the Convention on Biological Diversity has been underway since Sept. 29. COP 12 runs through Oct. 17. By any standard, this conference is a huge event, with representatives from 194 governments as well as from international organizations.

A critical development will take place during this conference: the Nagoya Protocol is finally scheduled to go into effect as of Oct. 12. This Protocol, a supplementary treaty to the Convention on Biological Diversity, aims at fair and equitable sharing of benefits arising from the utilization of genetic resources around the globe.

In short, the Nagoya Protocol is a legal mechanism that guarantees profit sharing between a manufacturer of industrial products in one country and the provider in another country which has offered the genetic resources used for the manufacture of the products. To put it in more practical terms, direct payment from entities in one country to those in another country is now required when genetic resources are utilized for industrial purposes.

This Protocol, adopted in 2010 at COP 10 held in Nagoya, is unique in many respects. To the best of my recollection, no other treaties have experimented with this type of direct payment between transboundary entities on an international level so far. So, when fully implemented, this treaty could have a seismic impact on companies in various sectors. In the case of Korea, statistics suggest that the nation’s manufacturers would have to face 50 billion won ($47 million) in additional payments to the providing states per year.

But who would oppose the idea of equality and fairness? As you can see, this treaty largely reflects the concerns of developing countries that have been sidelined in sharing the benefits of successfully marketed products that have originated from the genetic resources and traditional knowledge in their own territories.

While innovative, the Protocol also has its own share of controversy. As of today, 50 countries have ratified it, but the list does not include major industrial countries that have been dragging their feet. Korea has also been hesitating over the past two years and has not ratified the Protocol yet. Legislation, an important way station for ratification, is now said to be in the final stage, but the conflicting views among different ministries and agencies have been no secret over the past two years.

This hesitation and controversy all boils down to a critical loophole of the Protocol as an international legal instrument with binding force. Unfortunately, key operating terms of the Protocol’s 36 articles lack clear definitions and are left to be dealt with through domestic legislation in each country. So much so that this treaty has been dubbed “the masterpiece in creative ambiguities” by some watchers ― of course, an unfortunate consequence for this important global effort for sustainable development.

This situation reflects the time pressure during the final hours of adopting this instrument back in 2010 in Nagoya. But, again, unlike other treaties in this area, this one deals with direct payment and compensation, in fact a very sensitive subject for a treaty to handle. Ambiguous terms and loose ends as they currently stand will spark unseemly differences among countries once the Protocol is up and running and payments are sought, refused and negotiated. How the Protocol will overcome this inherent obstacle and achieve its intended objective still remains to be seen.

But if the plan is to set this treaty in motion as an effective vehicle to attain global equality and fairness with the participation of as broad a range of countries as possible, and with the full cooperation of business entities, the states will have to find a way to address these inherent uncertainties and ambiguities. Hopefully, COP 12 in Pyeongchang this week will offer an answer.

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