4.1. Equity issues in bioprospecting

CHARLES ZERNER and KELLY KENNEDY

Biodiversity 'prospecting', under different guises and different names, has a long and complicated history linked to colonialism, the establishment of plantations and imperial botanical gardens, and the world trade in biological commodities. The term 'prospecting' itself contains the idea of a vantage point from which social, scientific, or botanical landscapes are viewed, or in anthropological discourse, are constructed. Every act of viewing or 'prospecting' in the developing world involves politics and power relations in which views of the tropics, natural environments, and biodiversity, as well as of peoples and nations, are embedded. Prior to the post-World War II, post-colonial era, the flow of plant materials from gene-'rich' developing countries to gene-'poor' developed countries, especially if their commercial value was unknown or speculative, was not often the object of contentious discourse or protest. Plant materials were often treated as a free, open-access public resource, or as the property of colonial governments. Only within the past two decades has the search for wild and cultivated organisms, their genes and chemical products, and the ecological and pharmacological knowledge associated with them, been characterized as socially inequitable and, potentially, environmentally destructive.

The scene for bioprospecting in the tropics began to change dramatically during the post-colonial era as developments in screening technologies made a return to the tropics technically possible and potentially profitable. The institutional and contractual arrangements under which bioprospecting was conducted became subjects of intense contention. Debate concerning North-South inequities and uneven development, movements advocating recognition and respect for the rights of indigenous peoples and communities, and, since the 1970s, the debate on conservation and sustainable management, have all converged to highlight the controversy surrounding biodiversity prospecting. According to some critiques, it is not at all clear whether specific acts of bioprospecting, or bioprospecting in general, are acts of 'co-operation' or of 'co-optation'.

Contractual agreements are only one form of instrument, for articulating relationships between companies, nations, educational or scientific institutions, and local communities. Many recent policy pronouncements, at least by national and international environmental non-governmental groups, assume that capital- and technologically-rich, developed nations should equitably compensate the biologically-rich developing countries for access to their resources.

In this highly politicized arena, the description of several institutional and contractual arrangements offered below touches on many of the most contentious issues in the bioprospecting debate. On what legal theories and sources of law are claims to ownership or control of biological diversity justified? Will establishment of commodity values for biological organisms lead to conservation or sustainable management? What are the relationships and rights of indigenous peoples and local communities, nations, and the 'global public' to biodiversity, local territory, and local knowledge? Is making links between advocacy for local communities, conservation, and North-South equity, a practical and politically feasible objective?

Debates about biodiversity prospecting often centre on how the contractual arrangement is structured, whether it is responsive to the relevant communities, and whether it is equitable. Several key issues are embedded in discussion of how concerns for social, economic and environmental equity may be embodied in particular contractual arrangements:

o What form should benefits take?
o Which are the relevant communities?
o Which institutions or actors are appropriate parties for negotiations with a 'prospector'?
o What is the process by which benefits are determined?

What form should the benefits take?

There are many forms of monetary and non-monetary options for providing immediate and longer-term benefits (see Table 4.1). The options for non-monetary benefits are numerous and can be targeted towards the needs and preferences of specific recipients, be they governmental or scientific bodies, specific communities or individuals. The most common non-monetary benefits offered are training, research exchanges, and contributions to scientific or institutional infrastructure. Innovative agreements may include unique technology and information exchanges, such as screening for host-country diseases.

Table 4.1. A matrix of options for return of benefits

(Laird, 1993)

Which are the appropriate parties for negotiation?

Agreements may be made at a national or regional level with governmental as well as with non-governmental organizations. Biodiversity prospecting agreements may also be concluded with national or regional federations representing local peoples, as well as with individual collectors, informants, or specific indigenous groups. A key political and social policy issue in all biodiversity prospecting endeavours is: which institutions, public or corporate, governmental or community-based, are ethically and legally entitled to negotiate terms for the exchange of biodiversity and local knowledge?

The specification of the appropriate community may be further complicated where particular genetic resources are dispersed throughout a region, a country or many countries, or ethnobiological knowledge is possessed, as is often the case, by more than one community.

How should the benefits be determined

The use of terms such as 'benefits', 'compensation' and 'returns' reveals social and legal assumptions about the nature of the prospecting process. What is being extracted? What is being exchanged? Is there a legal 'injury', 'invasion' or 'faking'? If so, by which parties? What acts or injuries entail the offer of compensation? What are the processes, legal and institutional, by which decisions about the nature of the appropriate benefits are determined?

The purposes for which the benefits will be used are always policy decisions: what values and priorities underlie each contract? Are these policy decisions directly specified in the agreement or are they implied in the priorities and allocation principles employed by the biodiversity prospector, host country governmental agency, or indigenous people's organization?

Contractual agreements, because they are a form of 'private law', offer more flexibility than statutes in determining the goals, objectives, and means through which equity is achieved. It is as important to question the contractual priorities, how these decisions about priorities were reached, and the policy theory behind decisions, as it is to know the concrete terms of the agreement.

To investigate the issues posed above, we examine below aspects of policies and/or contractual arrangements made by three biodiversity 'prospectors: Merck, Shaman Pharmaceuticals, and Biotics. The discussion which follows should not be construed as an endorsement of any of these relationships, but rather as a lens through which some the equity issues posed above may be examined. It is hoped that concrete description of the details of these arrangements will stimulate further critical, comparative discussion of these and other arrangements.

Models of co-operation

The Merck-INBio deal

The Instituto Nacional de Biodiversidad (INBio) is a non-profit research institute established in 1989 by the Costa Rican government and a large number of biologists to meet the need for a unified biodiversity programme in Costa Rica. Although nominally independent, INBio is tightly linked to the national and private institutions that created it, including the Ministry of Natural Resources, Energy and Mines (MINREM). INBio has two aims: to conduct a comprehensive inventory of the biological species found in the protected areas of Costa Rica; and to exploit commercially the country's biodiversity in such a way that funds are generated for conservation efforts. INBio embodies a vision in which scientific research is a catalyst increasing knowledge of biodiversity, generating funds, and creating a stream of support for biodiversity conservation.

When negotiating commercial bioprospecting contracts, INBio insists on three kinds of benefits. First, direct payments in cash and in kind are required in exchange for the provision of samples and extracts. Second, direct contributions toward the cost of maintaining Costa Rica's National System of Conservation Areas (SINAC), or 10% of the initial project budget and 50% of royalties must be provided. Thirdly, royalty payments on net sales from the commercialization of biodiversity materials, must also form part of the agreement. In addition, INBio policies place priority on carrying out pharmaceutical research and development in Costa Rica, the source country; minimization of the period during which the prospector has exclusive rights to commercialization of the sample; a clear definition of sample and patent ownership; and chemical synthesis or cultivation in-country.

INBio's agreement with Merck In exchange for a specified number of samples over a two-year period and the exclusive right to evaluate these samples for this time, the US pharmaceutical company Merck & Co provides INBio with research funding of $1 million and laboratory equipment and materials valued at $135 000. In addition, Merck will pay INBio a royalty of between 2% and 6% on any commercial product development as a reflection of INBio's contribution to product development. Merck owns any inventions created through this collaboration and has the right to file for patents. Merck also provides training for INBio staff in Merck facilities.

As part of the agreement, Merck receives the exclusive right to screen, develop, and patent new products derived from samples provided by INBio. The agreement also allows Merck access to all of the biological diversity located in Costa Rica's national parks, which constitute 25% of the country's total area. Due to the high level of government support for INBio, Merck also has access to a reliable supply of plant, insect and environmental samples which will be accurately labelled. Merck has generated and received considerable public relations benefits due to the high profile of the Merck-lNBio agreement.

As a result of the Merck-INBio agreement, INBio gains funds and inkind contributions for equipment, training, transfer of 'know-how', and support for the collection and inventory of biological resources. Costa Rica also gains increased support for conservation of biodiversity through more effective administration of its national parks.

Shaman Pharmaceuticals

In contrast to Merck, Shaman Pharmaceuticals (Shaman hereafter) exclusively uses ethnobotanical methods as a 'first screen' in the search for medically useful plant-derived compounds. Shaman seeks to extract, analyze, and scientifically build upon the knowledge and practices of local communities in developing natural product drug leads. One of Shaman's most promising products is an antifungal agent derived from a species commonly used as a folk remedy for wound healing in Peru and parts of Mexico.

While the Merck-lNBio agreement focuses on the allocation of benefits at a national level, Shaman concentrates on returning benefits to local communities. Shaman emphasizes a policy of 'immediate reciprocity', and company documents state that it has, or will, share benefits immediately with all communities with which it works directly. Benefits are said to be allocated via three mechanisms:

o a common pool trust fund, administered by the Healing Forest Conservancy and supported by Shaman's profit stream, to distribute funds to all communities and countries in which Shaman works

o support for sustainable natural product supply and extraction industries in local communities in host countries where Shaman operates

o provision of immediate benefits in response to requests from local people.

With the exception of immediate benefits, Shaman's policies focus on contributions to a general fund for 'all' local communities or indigenous peoples, often through indigenous organizations living in areas where Shaman has operated, rather than creating streams of long-term benefits to those communities or individuals which directly contributed knowledge, practices or plant materials to commercial products.

In the words of one of its senior scientists, Dr. Stephen King, 'A ten-year waiting period for any potential benefits for any particular indigenous group is almost the same as never'. Immediate benefits, usually targeted at communities in whose areas Shaman is collecting specimens, have included the construction of an airstrip in a Quechua community and temporary coordination of a supply of methaloquine for Yanomami Indians to cure malaria. Decisions on the nature and scope of these benefits are determined by Shaman executives; principles determining priorities, amount of support, and the selection of beneficiaries have not yet been articulated.

The Healing Forest Conservancy (HFC) is a non-profit foundation funded through a capital donation from Shaman Pharmaceuticals. The theory of the HFC is that after Shaman commercializes a product, the HFC will channel a percentage of product profits to each community and country with which Shaman has worked. The allocation of benefits is determined by an independent board of directors. The Conservancy currently has four projects:

o Medicine Women provides education and training programme for indigenous women.

o Terra Nova provides support for an ethnobiomedical plant reserve in Belize.

o Usko-Avar Amazonian School of Painting sponsors exhibits and sale of paintings from a Peruvian art school which trains students to record myths and plant knowledge in painted form.

o Richard Evans Schultes Award presents an annual award to an individual or organization that has made an outstanding contribution to ethnobotany.

Biotics Limited

Biotics is a biotechnology consultancy and service company, founded in 1983, that specializes in natural product chemistry and sample procurement. Biotics is also a broker of plant materials to developedcountry organizations and companies conducting high-throughput screening. Biotics embodies its agreements in a Letter of Intent which covers the first 100 samples provided to companies interested in commercial product development. If a company desires more samples, Biotics will negotiate an agreement for those samples that also retroactively applies to the first 100 samples. All agreements include a provision that Biotics' share of any royalties resulting from commercialized products will be shared equally with the collaborating institution in the source country.

Biotics does not articulate principles or priorities for the use of royalties derived from commercialized products, nor does it specify to in-country collaborating institutions the manner in which benefits must be dispersed. Biotics plans to establish a foundation or trust into which it will channel a part of its royalties, which will be allocated to 'source' countries or collaborating institutions.

Balancing the Benefits?

The characteristics of the three agreements are outlined in Table 4.2.

The INBio-Merck agreement: key issues

While initially heralded as a positive model for biodiversity agreements by many, the Merck-INBio deal raises many important questions. Did the money Merck paid represent the true value of Costa Rica's biodiversity, which has been estimated at millions of dollars, and should rights be sold at all for something for which the value is unknown?

Table 4.2. Comparison of approaches to return of benefits

(Zerner and Kennedy)

National sovereignty over biological resources Did INBio, as a private, non-profit organization have the authority to grant access to control of Costa Rica's national genetic wealth? Whether or not INBio had the de jure authority to sign such a contract, is a quasi-governmental or nongovernmental institution such as INBio an appropriate gatekeeper for expressly 'national' biological diversity? In the Costa Rican case, and other nations in which natural resources on public lands are considered a national patrimony, only governmental organizations with express authority to grant access for 'prospecting' purposes should possess the right to commercialize them. However, under the agreement with Merck, INBio possesses the right to determine how these national resources are marketed and how Merck funds are allocated. Has the Merck-lNBio arrangement, in a de facto sense, privatized national resources? The refusal to disclose the royalty rate negotiated in the agreement is often cited as evidence to support the proposition that Costa Rica's biological diversity is being privatized and national sovereignty is being eroded. It was only under considerable public pressure that INBio revealed the range of the negotiated royalty rate, despite the fact that this is information relating to the sale of public goods obtained on public land.

National vs local community needs The agreement between Merck and INBio addresses equity and benefits at a national level, but it does not address the concerns or the rights of local communities, including recognition of potential land rights or intellectual property. Costa Rica is atypical of most developing countries in Latin America and many countries throughout the developing world, within whose borders live many diverse and demographically significant indigenous cultural communities. The applicablity of this model to other countries is limited.

Shaman Pharmaceutical's approach to return of benefits: key issues Shaman's approach to the return of benefits to local communities also raises questions about compensation for indigenous knowledge, assumptions about the nature of local conceptions of property and its relation to ethnobotanical knowledge, and priorities and procedures for channeling trust funds to communities and countries. Because Shaman initally focuses on development of drug leads obtained by tapping into local practices and ethnopharmacological knowledge, it needs to articulate better the policy rationale for its common pool approach to benefits.

What problems, social or economic, does the common pool approach solve? While it obviates the necessity for calculating the 'worth' of individual contributions to the drug discovery process, it leaves unresolved several kinds of problems, including the question of individual contributions to the drug discovery process.

Local knowledge and the problem of authorship If local knowledge is crucial, then which policies deal with compensation to local people who provide ethnobotanical leads? Or is the principle of 'authorship' of ethnobotanical knowledge, collective or individual, outweighed by the general needs of all indigenous communities? Shaman, like many other organizations concerned with rights to ethnobotanical knowledge, assume that such knowledge is a collective - 'possession'. While such an assumption may be accurate in certain cases, it is certainly not justified as a generalization about tribal or peasant societies.

The cultural construction of ethnobotanical knowledge and property rights Cultural and historic variations in how property rights are constructed, and deployed, are as nuanced as are the uses of ethnobotanical knowledge. To assume that ethnobotanical knowledge is a certain 'thing' which entails 'property rights' is to transpose a preexisting cultural schema about property, knowledge, and rights on to peoples or individuals who may not share any of these assumptions or preoccupations. To assume further that such knowledge is a collective property is to assume that tribal or peasant peoples are somehow unable to create or value alternative notions of property, including individual property. What are the equities to be considered, moreover, when knowledge of a particular plant is dispersed among several communities?

Determining the proper community How does Shaman determine the demographics and social composition of a particular community or of an 'indigenous people?' The social and topographic 'mapping' of ethnic communities is a problematic venture, subject to the vicissitudes of particular community histories, state policy, migration, and other factors. For example, are seasonal migrants or immigrants not considered 'members' of indigenous groups? Would they be disinherited from Shaman's benefit scheme?

There is another practical question about the trust fund approach: if Shaman's equity policy rests on providing a trust fund for communities in general, is it not possible that the amount of compensation potentially available to specific local communities may be negligible?

Meeting national needs By focusing almost exclusively on meeting community needs as communicated by the local groups with whom it works, Shaman does not deal with the question of 'balancing the equities' between national and local needs. How are national needs and a public good larger than that of local communities to be met?

Biotics: key issues

Biotics' approach to the return of benefits raises critical questions about institutional responsibilities in the era of bioprospecting. Like the MercklNBio arrangement, Biotics' modus operandi is to conclude an agreement with non-governmental institutions which do not possess legal responsibility for the management or conservation of national lands. Should a private company like Biotics be permitted to conduct operations with institutions that are not vested with formal responsibilities 'rational gatekeepers' to national resources?

Unlike Merck and Shaman, which have invested considerable resources, human and financial, prior to any 'pay-off', Biotics does not provide upfront benefits. Moreover, the relationships between Biotics' potential royalty payments to source country institutions and the purposes to which they are directed is relatively open and ambiguous. Biotics negotiates on an individual basis with collaborating institutions in developing countries: there are no assurances that collaborating institutions will allocate the benefits for social, economic or environmental equity.

Whether developed country institutions or companies should be empowered to shape the purposes of any trust fund or benefit plan for source country institutions, nations or communities - at any level is a highly charged policy issue. It may be argued convincingly that the determination of allocation plans or principles by developed country institutions for developing countries or communities constitutes the imposition of another form of hegemony, whether 'green' or 'equitable'.

Conclusion

The comparisons and critiques offered in the above discussion need to be contextualized: whatever the imperfections, ambiguities or flaws noted in these private sector arrangements, they need to be recognized as exceptions to general practice. Preliminary results of an in-progress survey of pharmaceutical companies and research organizations being conducted by the Natural Resource and Rights Program of the Rainforest Alliance suggest that these companies are among a very small percentage of corporations that have actually developed concrete policies toward the return of benefits for natural product development or 'sourcing'.

These companies' attempts to address social equity and conservation policy within the context of commercial exploitation suggest a willingness to address problematic and highly politicized issues in areas where there are no simple solutions. While it is clear that colonial and neo-colonial assumptions about resource extraction and the institutional arrangements which underlie them are no longer acceptable, new arrangements inevitably bring to light a host of new challenges.

One of the fundamental lessons about designing equitable solutions in the era of bioprospecting is the recognition that there is no single appropriate model governing relationships among prospectors, source nations, nongovernmental institutions, local communities and individuals. Generic contracts designed for generic developing countries may only obscure the needs of specific communities and countries. In an era where plants, peoples, ideas and molecules travel and combine in unexpected, and often unpredictable, ways we may be learning that locally-crafted solutions, engaging particular peoples, their needs and histories, may be far more appropriate and useful than generic principles or contracts.

In this era of intense mobility, social uprooting and rapidly migrating capital, moreover, where it is becoming increasingly difficult to specify, in simple social or topographic terms, the boundaries of particular social communities, the needs of immigrants, and pockets of poor and disenfranchised peoples living in cities and on their margins, need to be as much the object of global policies on equity and environment as are those groups we continue to imagine as locally rooted in the forest.

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