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Bio-diversity and Benefit-sharing:
Experience of the Republic of South Africa
Prepared by: Khungeka Njobe & Marcel Mitchelson, Republic of South AfricaPlease send comments to: Introduction
The 1990’s have seen increased awareness and demand for sharing benefitsarising from use of bio –genetic resources. This, to a large extent, can becredited to the Convention on Biological Diversity (CBD) which has the followingobjectives : • Fair and equitable sharing of benefits arising out of utilisation of genetic Biodiversity, has for many centuries, been a provider of an array of benefits tohumankind. It is a source of food, fuel, medicine for many people and is the basisof industries such agriculture, pharmaceutical and biotechnology. Except for afew cases such as China’s prohibition on silkworms in the last century or SouthAfrica’s protection of the ostrich based industries, biodiversity has been largely afreely accessible resource. It has been argued that the distribution of benefitsarising from biodiversity have been skewed, with countries owning the resourcereceiving very little rewards or benefits derived from the resource.
The South African example as in the Box 1 is illustrative of both the economicvalue of bio -genetic resources as well as imbalances in distribution of benefitsarising.
Box 1. A South African example illustrating economic benefits of bio –
genetic resources & skewed distribution of benefits arising.

South Africa is the third most biologically diverse country in the world. Much of thebiodiversity is endemic to the country. The Cape Floristic Plant Kingdom (fynbos)for example is endemic to South Africa and is the basis of a lucrative horticultureindustry.
To a large extent South Africa has not benefited from the commercial developmentof its bio –genetic resource.
For example, the Freesia plants generate about US$50 million per year. Revenuegenerated from sales of Pelargonium species species in the Netherlands, Germanyand Belgium approximate US$ 6 billion annually. Of the 7,000 succulent plantspecies endemic to southern Africa, 5000 are already being sold elsewhere in theworld.
Source : Wynberg & Laird, 1997 The CBD objectives are all important but the objective on fair and equitablesharing of benefits arising from use of genetic resources, is considered strategicfor countries and provides an incentive for conservation of biodiversity. Countriescan now invoke Article 8j which states that equitable sharing of benefits arisingfrom the utilisation of indigenous and local knowledge, innovations and practices,should be encouraged ; as well as Article 15 on access to genetic resources which provides for countries to require prior informed consent (PIC) on theirgenetic resources.
2. Benefit – sharing : A conceptual analysis and
discussion
.
The concept, benefit – sharing, for some, conjures up visions of local community,owners of indigenous knowledge or poor countries being empowered andenriched through partnerships with industry or institutions from richer countries.
The concept of partnership, in turn, conjures up visions of equity and altruisticrelationships between those involved. In practice, however, as the later sectionswill illustrate, this ideal is afar and instead economic power (for example financialresource, human and technological capacity) is still influential in determining thedistribution of benefits arising from biodiversity. Despite the gap between the idealand the practice, it is clear that the concept is a move away from intellectualproperty rights (IPRs) which grants exclusive rights, and do not require the holderto share benefits.
Perhaps, it is also important to first sketch where we are in terms of developmentof the concept that is benefit sharing. The CBD establishes an internationalframework which enables establishment of mechanisms for benefit sharing. Itdoes not however, establish the mechanism itself, and does not elaborate on howbenefits should be shared.
Since the CBD came into force, much has been written on how benefit –sharingshould ideally work and on specific contractual agreements countries haveentered into. The most cited example of these agreements is, the arrangementbetween Costa Rica’s National Biodiversity Institute (INBio) and the United Statespharmaceutical company Merck. Under the agreement, INBio provides Merckwith chemical extracts from wild plants, insects and microorganisms collectedfrom Costa Rica’ s protected areas. In return, Merck provides a research budgetof about a US$1 million and royalties on resulting commercial products. Thecontractual agreement between the Government of Cameroon and the UnitedStates National Cancer Institute (NCI) provides yet another example of a modelon benefit sharing arrangement. Under this agreement, the Government ofCameroon undertook to provide the NCI with plant samples from a specific forest(Korup), and payments received on plant samples are to be used for communitydevelopment projects.
The examples provided above highlight the following points : (1) Benefit sharing is linked to access to genetic resources and such arrangements tend to be negotiated in the context of seeking access to othercountries genetic resources.
(2) Mutually agreed upon terms is the first step to establishment of benefit sharing arrangements (e.g. contractual agreement) (3) The nature and content of the contractual agreement varies from country to (4) The nature of benefits is dependent on the intended beneficiaries (e.g. local communities, national research institution or government conservationagency) (5) Benefits from contractual agreements do take several forms (e.g. up front payments, royalties, skills enhancement or scientific know how) Some important elements of such agreement, have been suggested and theseinclude the need to ensure that : (1) benefit sharing arrangement provide an incentive for conservation of biodiversity. For example benefits should accrue directly and tangibly to thosewho invest in conservation of biodiversity (e.g. local communities,conservation agencies) (2) those who contribute intellectually to the conservation and knowledge on biodiversity are rewarded. Again, indigenous knowledge and scientificallygenerated knowledge need equal acknowledgement and reward.
(3) such arrangement foster and do not impede technological exchange and 3. National Experience : South Africa
South Africa’s past political history led to the country being excluded from much ofthe relating international discussion and debates which culminated to the RioConference on Environment and Development. Nevertheless, upon its re –acceptance to the international community, the country signed and ratified manyof the Rio Conventions and has been an active participant hence.
3.1. Policy and Legislative Regime on Biodiversity Benefit
Sharing

South Africa ratified the CBD in November 1995. Following that, the Departmentof Environmental Affairs and Tourism (DEAT) which is responsible formanagement of biodiversity issues, embarked on a policy development process.
The policy development process followed a consultative route involving a range ofstakeholders. This process culminated into a White Paper stating the officialgovernment policy on conservation and sustainable use of biodiversity.
The White Paper, which was published in 1997, embraces the objectives of theCBD. It has six goals and several policy objectives on conservation ofbiodiversity, use of biological resources that ensures minimal impact on it, and onaccess to genetic and benefit sharing.
The White Paper on conservation and sustainable use of biodiversity has as one ofits goals being : “ to ensure that benefits derived from use and development of South Africa’sgenetic resources serve national interests.” Objectives relating, seek to control access and biodiversity but also ensure thatsectors such as food and agriculture and forestry continue to have access to thecountry’s genetic material.
The policy also make a statement to the effect that benefit sharing arrangementsin South Africa need to take into consideration the following: 1. The need to strengthen the conservation of biodiversity in South Africa.
2. The need to promote the reconstruction and development of South Africa, and to stimulate economic development in the most disadvantaged parts ofthe country and sections of the population.
3. The rights of local communities, farmers, and others holding traditional knowledge to benefit from co –ownership of research data, patents andproducts derived from their knowledge.
4. The need to adopt a multi –faceted approach to benefit sharing , whereby a range of short term and long term financial and non –monetary benefits aregleaned 5. The need to strengthen South Africa’s science and technology capacity.
A legal framework on access to genetic resources which is still in the planningstages, is expected to elaborate and give guidance on benefit sharingarrangements in South Africa.
3.2. Some practical examples on benefit sharing arrangements in
South Africa

Despite the legal vacuum with respect to access to genetic resources and benefitsharing, some institutions in South Africa have entered into contractualagreements with overseas institutions and companies. To a large extentdevelopment of such arrangement, have taken guidance from the existing policyframework, and consultative processes some have sought to follow. The threeexamples provided below, are the most cited in South Africa.
3.2.1.The Agreement between the National Botanical Institute (NBI) and US
based Ball Horticulture Company (Ball).

This agreement which has recently been signed between NBI and Ball, is a fiveyear agreement and is known to be first of its kind in the horticulture industry.
The NBI is public institution with a mandate to “promote the utilisation andconservation of, and knowledge and services in with southern Africa flora”. Theinstitution manages several botanical gardens and a herbaria throughout thecountry.
According to the agreement, NBI will use its in house expertise and provide ballwith select plants from its living collections and from the wild. The NBI will do aninitial evaluation of the plant material, propagation of seeds and cuttings forsupply to Ball. Ball will provide NBI with a grant for locally based research anddevelopment activities, and for technology training at its facilities. Ball will pay aroyalty on all products containing genetic material supplied to them in terms of theagreement.
As regards to plants collected from the wild, the NBI will is to obtain prior informedconsent of landowners on whose land they collect. The NBI in turn has undertook,to put the profit made from royalties in a trust fund aimed at capacity building inlocal indigenous plant horticultural industry.
In developing the agreement, the NBI followed a consultative process whichgenerated a lot of debate on the issue of access to genetic resources. Associatedcriticism related to the Chapter on Intellectual Property Rights and the benefitsharing provisions.
3.2.2. Agreement between the Council for Scientific and Industrial Research
(CSIR) and Phytopharm / Pfizer

The CSIR division for Food Science and Technologies (Foodtek) launched abioprospecting program in 1998. The CSIR is the largest public research andtechnology organisation in South Africa and indeed in Africa.
As part of its bioprospecting programme, its first project is on development of anappetite suppressant (P57) which is derived from a species of Hoodia plant, asucculent plant indigenous to southern Africa. The CSIR signed a licensingagreement with Phytopharm plc, for further development and commercialisationof the product. Pfizer a pharmaceutical giant, has been granted an exclusiveglobal license by Phytopharm to further commercialise the product.
The Hoodia species which is the basis of the appetite suppressant, has a historyof use by the San people as a thirst quencher. It is claimed by some that theproperties of an appetite suppressant in the plant were discovered through thisuse. The CSIR has been doing research on the species since the 1970’s andhave not linked the discovery of the appetite suppressant properties to the use bythe San people.
According to the deal, Phytopharm will receive up to US$32 million in license feesand milestone payments. The CSIR will receive a “substantial” payments linked tothe performance of P57 in clinical trials. Royalties to the CSIR, amounting toabout a million of dollars, are expected through licensing the patented technology.
In addition Pfizer and Phytopharm have financed a medicinal plant extractionfacility at the CSIR for pilot scale manufacturing of P57.
3.2.3. Agreement between Rhodes University, Eastern Cape, South Africa
and the National Cancer Institute (NCI), in the United States.

The collaborative effort between Rhodes University and NCI which is structuredvia a Letter of Collection and a Memorandum of Understanding, is rather uniquein that it is one of the few agreement based on coastal and marine micro –organisms and algae. The project aims to investigate these organisms for theirpotential as anti –cancer agents. Collecting occur mainly in Algoa Bay, EasternCape and local scientists are involved. Material extracted will be tested at NCIand some isolation will be done at Rhodes University and possibly someinstitutions in the US. Extracts are provided to institutions signing MaterialTransfer Agreements (MTA’s) which guarantees collaboration and compensationin the event of commercialisation.
The benefits derived from the arrangement seem to have a less emphasis oncommercial gains, with Rhodes University mainly interested in training students,and advancing knowledge about natural products and biodiveristy.
4. Conclusion from South African Examples
It is clear from the examples provided that the approach to benefit sharingagreements differ depending on the parties involved.
Although there are policy statement on considerations in benefit sharingarrangement, it is interesting to note that out of the five suggested considerations,in all almost all cases only one is considered in the agreement i.e. strengtheningSouth Africa’s science and technology capacity. The element of strengtheningconservation efforts, promoting reconstruction and development and economicdevelopment are not obvious from the agreements.
Nevertheless, these benefit sharing arrangements will provide lessons for thelegislation on access to genetic resources and benefit sharing, that is in planning.
The concept that is benefit sharing is obviously intricate, and new and experiencecan only add value to its practical implementation.
Some material used for this paper
Department of Environmental Affairs and Tourism . 1997. White Paper on theConservation and Sustainable Use of South Africa’s Biological Diversity.
Government Gazette. Vol 385 (18163), Pretoria, South Africa.
Diversity, Vol. 14, No 1 &2. 1998.
Horak, M. 1999. Bioprospecting Partnerships : chess match or relay race.
Abstract Mugabe, J ; Barber, CV ; Henne, G; Glowka, L & La Vina, A (eds). 1997. Accessto Genetic Resources : Strategies for Sharing Benefits. African Centre forTechnology Studies, Nairobi , Kenya.
National Botanical Insititute . 1999. Unpublished briefing notes on the NBI –Ballaccess and benefit sharing agreement Wynberg, R . 1999. Benefit Sharing in South Africa : Fact or Fiction. To bepublished in Biodiversity & Traditional Knowledge : Equitable Partnerships inPractice . Edited by Sarah Laird.
Wolfson, M. 1999. Unpublished summary report on key conclusions of the expertpanel on access and benefit sharing.

Source: http://r0.unctad.org/trade_env/docs/rsa-bs.pdf

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