Dispute Escalating Over Genetic Resources

by jeeg 5. July 2010 00:05

A new dispute is emerging between developing and industrialized countries, with the battle expected to reach a head in Nagoya.

Developing countries are demanding a larger share of benefits from their supplies of the plants and micro-organisms that form the raw materials for many food, pharmaceutical and cosmetics products.

Companies in industrialized nations that develop these products already fear that these "genetic resources" may no longer be readily available if new rules favor developing countries.

A resolution to the dispute will likely depend on the outcome of the 10th Conference of the Parties to the Convention on Biological Diversity (COP10) meeting in Nagoya in October.

In summer 2007, Gentaro Yasuda, deputy assistant manager at Calpis Co.'s Functional Food and Drink Development Laboratory, traveled to Mongolia in search of new types of lactic acid bacteria.

He visited the portable tent dwellings of nomadic tribes to sample and compare airag, a type of homemade fermented horse milk liquor whose recipes date back thousands of years.

Although Yasuda felt there was commercial potential, his visit in 2007 was his only exploratory trip to Mongolia.

He is awaiting the outcome of discussions on "access and benefit sharing of genetic resources" (ABS), a key topic on the agenda of the COP10 meeting. ABS seeks to return to countries that provide genetic resources some of the benefits gained from the commercialization of products developed from these resources.

At preparatory meetings for the COP10, discussions are moving toward strengthening the rights of countries that provide genetic resources.

Currently, companies and research institutes in industrialized nations have voluntarily followed nonbinding international guidelines, which call on them to draw up contracts in advance based on the laws of developing countries that provide genetic resources.

Calpis, with a research institute affiliated with the Ministry of Economy, Trade and Industry, concluded an agreement with the Mongolian government.

It stipulates that bacterium will be isolated at a Mongolian laboratory, the isolated strains will be stored in both countries, and a fixed sum will be paid to the Mongolian side at the time of any patent application.

"If the rules on ABS are made clear at the COP10 meeting, we'll want to utilize them," Yasuda said.

But companies are concerned that it may be impossible to generate profits that will balance out the costs involved.

Tsumura & Co., Japan's largest maker of traditional herbal medicines, acquires 80 percent of the raw materials for its medicines from China. Fifteen percent comes from Japan, and 5 percent comes from Southeast Asia.

However, China has begun restricting exports of some raw materials--substances derived from plants and animals--citing resource depletion and environmental destruction.

If these crude medicines are categorized as a genetic resource, prices could rise.

Tsumura set up a subsidiary in Laos in February to cultivate crude medicinal plants to ensure a steady supply of low-cost, high-quality pharmacognostic resources.

In July last year, the company also began cultivation in Yubari, Hokkaido, to increase its proportion of crude medicinal plants produced.

Annual sales of herbal medicines in Japan reach 150 billion yen ($1.65 billion). Tsumura expects its sales volume of these medicines to double over the next 10 years.

"We have formed ties with Chinese companies over long years. But we don't know how the Chinese are going to react," a company official said.

In the background of the uneasiness among food and pharmaceutical companies lies a problem that major cosmetics maker Shiseido Co. faced in Indonesia.

For its UV White brand of skin-care products, Shiseido used an ingredient extracted from fragrant ginger plants grown in Indonesia.

In 2001, however, an Indonesian environmental nongovernmental organization called for a boycott of Shiseido products, claiming patent infringement and a pillaging of biological resources.

The following year, Shiseido withdrew 51 patent applications.

"We believe that the NGO's claims differed from reality. But we decided to withdraw the patent applications, taking the company's image into consideration," said an official at Shiseido's environmental planning department.

"At that time, we were also unfamiliar with the concept of ABS."

Shiseido has since made it a rule to confirm that the company and its suppliers are not acting in a manner contradictory to ABS ideals.

The United Nations Environment Program estimates that the market using genetic resources is worth $800 billion to $1 trillion (9 billion yen to 11 billion yen) annually.

In 2002, developing countries formed an alliance, saying that most of the benefits derived from genetic resources are being monopolized by businesses and research institutes from industrialized nations.

While voluntary international guidelines were introduced at the COP6 biodiversity meeting in 2002, developing countries are aiming to create an enforceable international framework.

At a meeting of the ABS working group in Colombia in March, member countries moved toward adopting a legally binding Nagoya Protocol to guard against resource abuse.

The discussions in Colombia were contentious.

Developing countries argued that data and chemical compounds resulting from research and development that use genetic resources should be covered by any ABS agreement.

Industrialized nations are growing increasingly wary, saying the demands of developing countries are excessive.

Japan, which will chair the COP10 meeting in Nagoya, will hold further discussions of the working group in Canada in July.


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