Even as the Access and Benefit Sharing (ABS) Guidelines prepared by National Biodiversity Authority (NBA) have royalty slabs for domestic and foreign companies towards sustainable use of bio- resource and has been notified on November 21, 2014, an official associated with the development says that guidelines if not implemented would lead to a revenue loss to the respective boards to the tune of Rs.10,000 crore annually and even more. NBA alone may have to bear a loss of Rs.5,000 crore annually.
A wide range of industries — biotech, pharma, forestry, herbal etc — use biological resources. Globally, the potential value of biological diversity and genetic resources is pegged at around US$ 1 trillion.
According to informed sources, guidelines on ABS have been held back in the past 10 years due to pressure from powerful industry lobbies both domestic and foreign during successive government regimes as it helped save companies thousands of crores that they would have to shell out as royalties every year. Besides this, NBA is without a full time chairman since Balakrishna Pasupati was forced to resign in February 2014, six months before his term.
The ABS guidelines which took the NBA six years to notify the rules mandates collection from domestic and foreign companies 0.1-1 per cent of their ex-factory gross sales of products using biological resources and traditional knowledge.
Fair and equitable sharing of benefits accrued from utilisation of genetic resources is a key objective of the Convention on Biological Diversity (CBD), adopted in June 1992 and ratified by 194 countries, including India. In compliance of the CBD, the Biological Diversity Act was passed in 2002 and the Biological Diversity Rules followed in 2004.
But, a decade later, India has finally notified the quantum of revenue companies need to share, under the Act, with local communities and for biodiversity conservation in the form of ABS guidelines. Providing for benefit-sharing in both monetary and non-monetary modes, the guidelines have slabs that should encourage small companies.
The benefit-sharing slabs for domestic companies are 0.1 per cent, 0.2 per cent and 0.5 per cent on annual ex-factory gross sales of a product, depending on if the sales are less than Rs.1 crore, between Rs.1-5 crore and above Rs.5 crore, respectively. Foreign companies have to pay double the rate — so between 0.2 per cent and 1 per cent — in the three slabs.
For bulk exports, benefit-sharing is 3 to 5 per cent of the total Free on Board value of resources. For different categories of transfer of research and intellectual property rights, benefit-sharing ranges from 0.5 to 5 per cent.
Once notified, the guidelines will be reviewed periodically, at least once in five years. The monetary benefits will go to the National Biodiversity Fund for sharing with 29 state biodiversity boards, more than 32,000 local biodiversity management committees and specific individuals or communities from whom biological resources or traditional knowledge were accessed.
Under the Biodiversity Act, foreign companies require the NBA’s prior approval to access India’s biological resources and traditional knowledge. Domestic companies do not need prior approval but must intimate the state biodiversity board concerned.