CCK

CBDCOP16

Businessviewsonamultilateralbenefitsharingmechanism

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Introduction

Awell-designedMultilateralBenefitSharing

Mechanism(MLM)hasthepotentialtoenhancebenefitsharingandsupportthegoalsoftheConventiononBiologicalDiversity(CBD),

includingbydevelopingasustainable

bioeconomyandincentivisingresearch

todevelopsolutionsfortacklingmajor

challengessuchasbiodiversityconservation,climatechange,healthandfoodsecurity.

FortheMLMtodeliveronexpectations,andencourageinvestmentsinbiodiversity-basedinnovation,itshouldbeworkableinpractice,comprehensiveinscopetoreflectscientificandbusinessrealities,andincentivise

participationbybothcountriesandabroad

baseofusers.Benefitsharingis,however,onlyoneofmanysourcesoffundingidentifiedin

theresourcemobilisationstrategyandcan

complement,butcannotnotbeexpectedtobesufficientonitsowntoclosethe

financinggap.

Businesscontinuestobereadytoengage

atCOP16andbeyond,inthefurtherwork

neededtobuildaworkablemechanism

whichcouldprovidelegalcertaintyandhavethebroadestpossibleengagementfrom

countries,rightsholdersandstakeholders.

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Keyconsiderations

Belowaresomekeyconsiderationswhichbusinessbelievesareessentialtobuildingsuchamechanism-thesearedetailedfurtherinthepaper:

?BusinessengagementwiththeMLMwillbeincentivisedbytheassuranceof

legalcertaintyandabroadlicence-to-operate,aswellasbytheknowledgeandrecognitionthatcontributionswillfundworktowardsreachingbiodiversitygoals.

?Atrulymultilateralmechanismwithasinglesetofsimple,transparentrulesand

operatingproceduresatagloballevelwouldhelpprovidelegalcertaintyandalevelplayingfieldforcompaniesacrosscountries,avoidfragmentationandalsohave

thepotentialtopromotealignmentacrossthevariousmultilateralABSsystems.

?Forthemechanismtobeproportionate,theexpectedlevelofbenefitsharing

shouldcorrespondtothescopeoftheMLM.

?Keytermsandconceptsunderpinningwhicheverapproachisagreedwillneed

tobedefinedbeforetheMLMcanbeoperationalised,toensureclarityandlegalcertaintyforbothusersandgovernmentswhentheyhavetoimplementthe

systemontheground.

?Toenableandsupportresearchandinnovation,themechanismshouldbe

consistentwithopenaccesstodataandrecognisethattrackingandtracingthroughthevaluechainisnotpractical,assetoutinDecision15/9,aswell

asencouragecontinuedsharingofscientificinformationthroughthepublicdatabasesystem.

?Manycompaniesalreadyengageincapacity-buildingprojectswithintheirsectors.Thisshouldberecognised,encouragedandstrengthenedasa

voluntarytrack.

?FundscollectedfromtheMLMshouldbeusedsolelytofurtherbiodiversityconservationandsustainableuse,basedonneedsandscientificevidenceofmerit.Thisincludessupportingtheroleofindigenouspeoplesandlocalcommunitiesinallcountriesasstewardsofbiodiversity,accordingtotheirdifferentneedsandcapacities,andbuildingcapacityinbiodiversity-basedresearchandinnovatione.g.,throughpublic-privatepartnerships.

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Anincentive-basedsystem

ToensuretheMLM’ssuccess,itshouldbedesignedtoincentivisebothusersandcountriestoparticipate,aimingathavingthewidestpossibleengagement.

Tobeeffective,theMLMshouldbesimple,providelegalcertainty,giverisetolow

administrativecostsandfacilitateratherthandiscourageresearchandinnovation,inlinewiththecriteriaagreedinDecision15/9.

Animportantincentiveforbusinessistheclearandreliableassuranceoflegalcertainty-

thatis,fulllicence-to-operatefromanABSperspectivethroughoutthewholeinnovationandcommercialisationprocess-supportedbyproofofcompliance(e.g.throughacompliancecertificateuponyearlypayment).

TheCOP16decisionshouldthereforeclearlystatethatCBDPartieswillrecognisethat

complyingwiththerequirementsoftheMLMwillbedeemedtoalsofulfilanyequivalent

nationalobligations.Thisisessentialtoprovidelegalcertaintyforusers,andpreventthe

stackingofobligationsandmultiplepayments.Additionally,thereshouldbeacommitmenttoworkwithothermultilateralbenefitsharingmechanismstowardsthesameend.

ThisincentiveforbusinesswillincreaseinproportiontothecomprehensivenessofthescopeoftheMLM,asabroaderscopewillleadtoabroaderlicence-to-operate,andhaveincreasedvalueforcompanies.

UnderthecurrentproposedscopeoftheMLM,contributorswouldbeconsideredcompliant–andthereforegainlegalcertainty–onlywithnationalobligationsrelatedtotheuseofnon-

humandigitalsequenceinformation(DSI)inpublicdatabases.IftheMLM’sscopeisexpandedtoincludeallnon-humanDSIorgeneticresources,contributorswouldalsoberecognised

asbeingcompliantwithnationalbenefitsharingobligationsrelatedtothisbroaderscope.Thisexpandedlegalcertainty,effectivelyservingas“l(fā)icencetooperate”,wouldoffera

muchstrongerandmorevaluableincentiveforcompaniestocontribute.IfonlyDSIinpublicdatabasesisinscope,thelicence-to-operatewillbenarrowerandthereforelessvaluabletocompaniesthanascopewhichincludesallnon-humanDSIandgeneticresources.

ItshouldbenotedthatDSIinpublicdatabasesrepresentsonlyafractionofthemany

inputsnecessaryinresearchandproductdevelopment.BothDSI–representinginformationongeneticresources-andgeneticresourcesareusedinmostresearchprojectsand

productdevelopment.

Anadditionalimportantincentivewouldbetheassurance–andsomeformofpublic

recognition–thatcompaniescontributingtotheMLMaresupportingconservationand

sustainableuseofbiodiversity.Thiscouldalsohelpencourageparticipationfromabroaderrangeofsectors.

Forcountries,theMLMshouldprovideanattractivealternativetoregulatingbenefitsharingonDSIatthenationallevel.Toincentivisecountries,allPartieswhichengagewiththesystemby

recognisingcompliancewiththeMLMasfulfillingequivalentnationalABS-relatedobligationsshouldbeassuredofbenefitinginsomewayfromthefundsfromtheMLM.

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Ensuringaninclusivegloballycoherentsystem

DiscussionsatthesecondmeetingoftheWorkingGrouponDSIindicatedthepossibilityof

diversenationalapproachestotheimplementationoftheMLM,withtheriskofafragmentedlandscape.Asinglesetofsimple,transparentrulesandoperatingproceduresatgloballevel,

whichbothusersandcountriescouldendorse,wouldprovidelegalcertaintyandensurea

levelplayingfieldforcompaniesacrosscountries,avoidfragmentationandhavethepotentialtopromotealignmentacrossthevariousmultilateralABSsystems,ensuringgreatercoherencyandefficiency.Suchasystemwouldalsoallowalluserstoparticipate,includingthosein

countrieswhichdecidenottojointhesystemorarenotPartiestotheCBD.

Contributionmechanism

Thecontributionmechanismshouldbesimple,affordable,andpredictable,withproportionatecontributionsandasinglepointforannualpayments.

Forthemechanismtobefairandproportionate,benefitsharingshouldcorrespondtothe

benefitsgeneratedfromtheuseofDSIwithinthescopeoftheMLM.Theunderlyingrationaleandthelevelofcontributionsshouldbeclear,tofacilitatecommunicationandtoincentivizebroadengagementduringimplementation.

Itshouldalsobeclearandstraightforwardforpotentialcontributorstodeterminewhether

theyareexpectedtocontribute,whenandhowmuch,usingatransparentcalculationmethodtofacilitatecomplianceandmonitoring,aswellashelpbuildtrustamonggovernmentsand

stakeholders.

Abroadpayerbasewithreasonablerateswouldhelpensureameaningfulstreamoffunds,

helpraiseawarenessoftheprincipleofbenefitsharingandencourageasenseofcollective

responsibilityamongallsectorsbenefitingfrombiodiversity.Areasonablerateisonethatwillnotnegativelyimpactresearchandinnovation,oneofthecriteriainparagraph9ofDecision15/9.

Careshouldbetakenwithoverallturnoverfiguresforsectorsandcompaniesas,inmany

cases,theserepresentinlargepartthesalesofproductsorserviceswhosedevelopmenthas

notinvolvedtheuseofDSIwithinthecurrentproposedscope.

Whicheverapproachistakentocontributions,keytermsandconceptsunderpinningthiswill

needtobedefinedbeforetheMLMcanbeoperationalized,toensureclarityandlegalcertaintyforbothusersandgovernmentswhentheyhavetoimplementthesystemontheground.As

mentionedabove,companiesneedtobeabletodeterminewhether,when,howmuchandtowhomtheyshouldmakecontributions,aswellastounderstandwhy.Clarityonkeytermsandconceptsisessentialforlegalcertainty,effectiveimplementationandtoavoidambiguity.

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Non-monetarybenefitsharing

Manycompaniesalreadyvoluntarilyengageincapacity-buildingprojectswithintheirsectors

andarelikelytocontinuetodoso,regardlessoftheMLM.Thevalueofthesecontributions

towardsreachingbiodiversityandotherSustainableDevelopmentGoalsshouldberecognised.

Non-monetarybenefitsharingshouldnotbeamandatoryobligationwithintheMLMbut

shouldbeencouragedandstrengthenedasavoluntarytrack.Thediversityofindustryplayerswouldmakeitverydifficulttodevelopaone-size-fits-allmandatorymechanism.Forsome

companies,non-monetarybenefit-sharingactivitiesmaybestrategicallywell-aligned,whileforotherssuchactivitiescouldbeimpracticalorverychallenging.

Funddisbursement

ItisveryimportantforbusinessesthatfundscollectedfromtheMLMareusedsolelytofurtherbiodiversityconservationandsustainableuse,basedonneedsandscientificevidenceof

merit.Thisincludessupportingtheroleofindigenouspeoplesandlocalcommunitiesinallcountriesasstewardsofbiodiversity,accordingtotheirdifferentneedsandcapacities,andbuildingcapacityinbiodiversity-basedresearchandinnovation,e.g.throughpublic-privatepartnerships.

Themethodologyfordisbursementoffundsshouldensurethattheiruseisaseffectiveas

possibleinachievingtheseobjectives.ItshouldalsoincentivisecountriestoparticipateintheMLMbyensuringth