In 1992, 170 countries met in Rio de Janeiro to discuss the details of a proposed Biodiversity treaty, the Convention on Biological Diversity (CBD). Even though the US delayed signing of the treaty, the other Members endorsed the Convention. The CBD has enunciated its primary objectives as (1) conservation of biodiversity, (2) sustainability of biodiversity, and (3) equity in use of biodiversity.
Of these three, the most relevant to the current discussion is the issue of equity in use of biodiversity resources, particularly of developing countries.
A simple model for defining sovereign rights over genetic resources has been developed, which includes provisions for negotiating access to natural products by private organisations through an approved Material Transfer Agreement including payment terms approved by a centralised agency. The ownership of natural products as tangible property could be according to land tenure; samples gathered from public land are owned by the State, while those gathered from private or commercial land are owned by the landowner or the community. An option to transfer traditional knowledge confidentially as trade secrets for commercial research and development should be available to individuals, groups and communities against appropriate compensation.
Article 15 of the Convention on Biodiversity (CBD) deals with the Sovereign Rights of Nations over their genetic resources. These are deemed not to be the heritage of mankind, but are the properties of the countries and/or communities and are, therefore, trade-able commodities with economic value. This is in contrast to protection of Intellectual Property Rights. Patent Laws do not permit patenting of natural products under the doctrine of nature principle. Hence, to protect the biodiversity resources uniquely available to sovereign States, new legislations are required.
Very few countries have legislation with appropriate statutes to protect Biodiversity and therein lies the immediate problem of establishing legal rights to indigenous natural resources. Countries should enact Biodiversity Bills (to protect their natural treasures), the basic principles being that a foreigner or foreign organization can not take away any biological resources for research or commercial use without permission of the country of origin. Local organizations will not be allowed to transfer even research results on biological resources to any foreigner without permission. Based on models as described above, parties from the source countries and sourcing agencies could negotiate and sign material transfer agreements prior to granting permission to use genetic resources for R&D or for commercial exploitation.
The legislation should also ensure that benefits are equitably shared between conservers of the resources and users. However, even though all the signatories to the CBD have confirmed such approaches for the protection of their sovereign rights, most are yet to enact appropriate legislations in this regard.
An issue which needs to be considered in detail is a mechanism to determine a fair and equitable compensation to the owners or guardians of bio-resources. Since all natural resources cannot be profitably converted to viable commercial products, it is difficult to assess the real value of the transferred material at the time of the transfer. The most equitable way would probably be to pay a relatively low upfront compensation, followed by an agreed royalty payment as a percentage of commercial revenue for a specific period of time.