Required Report - public distribution

**Date:** 6/23/2005

**GAIN Report Number:** EC5008

EC5008

**Ecuador**

**Biotechnology**

**Ecuador Standing Biotechnology Report**

**2005**

**Approved by:**

![](media/image1.wmf)Melinda D. Sallyards

U.S. Embassy

**Prepared by:**

Rene Alarcon

**Report Highlights:**

Ecuador does not have a specific national law on Biotechnology and
Biosatefy. However, the country signed and ratified the Cartagena
Protocol on Biosafety, and is currently in the process of issuing
General Rules on Biosafety that will ease application of the protocol,
which is considered as national law in Ecuador.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Quito \[EC1\]

\[EC\]

## SECTION I. EXECUTIVE SUMMARY

Ecuador does not have a specific law that regulates biotechnology and
its application. However, a proposed General Rule that invokes the
precautionary principle and calls for labeling is currently out for
public comment. Ecuador imports --mainly from the United States and
Argentina- almost 60 percent of its corn demand, 99 percent of cotton,
98 percent of wheat, and 90 percent of soybean meal, which enter without
any specific requirements related to biotechnology. The animal feed as
well as the poultry, pork and snacks industries currently use these
products in their formulations, and it is unlikely that Ecuador would
have the capacity to supply their growing demand in the near future.
Therefore, the possible issuance of restrictive rules not only would
hurt U.S. export interests, but would also complicate the survival of
these local industries.

Ecuador ratified the Cartagena Protocol on Biosafety in November 2002.
Ecuador's general policies on Biosafety are expressed in several
existing laws, and the Constitution of Ecuador amended in 1998, includes
general provisions related to biosafety and environmental protection.
Article 89 of Ecuador's Constitution mandates that the Government will
take all measures to "regulate, under strict biosafety standards, the
propagation, research, use, trade, and importation of genetically
modified organisms".

## SECTION II. BIOTECHNOLOGY TRADE AND PRODUCTION

According to the Ecuadorian Institute for Agricultural Research (INIAP),
given the incipient technology and infrastructure available, Ecuador
does not have the capacity to conduct any GMO-related research;
therefore it does not commercially produce any biotechnology crops.
However, INIAP conducts genetic research to improve the quality of seeds
through hybrids for cocoa, potatoes, tomato, corn, rice and soybeans.

Furthermore, given the inexistence of biotechnology legislation, Ecuador
does not allow importation of seeds containing GMOs. According to the
Ministry of Agriculture, all seeds used for rice, corn, soybean and
other plantations are either hybrids developed by the INIAP or other
certified imported seeds that do not contain GMOs, and which have passed
through a rigorous in-country certification process.

On the other hand, a growing proportion of the supply of corn, cotton,
soybean meal and wheat for industrial use is of foreign origin. A brief
description of the commercial situation of these products follows:

-   Presently, Ecuador imports 57 percent of its corn demand. Imports
    reached 384,000 MT in 2004, 91 percent of which originated in the
    United States and 9 percent in Argentina.

-   Ecuador purchases 99 percent of its cotton needs from the United
    States, reaching 17,000 MT in 2004.

-   Soybean meal imports are also rising with Argentina and Uruguay as
    main suppliers. However, depending on prices, in some years, Ecuador
    purchases important volumes of soybean meal from the United States.
    Overall imports in 2004 reached 312,000 MT.

-   Wheat also represents an important commodity for U.S. agricultural
    interests in Ecuador. In the past five years Ecuador has imported an
    average of 400,000 MT of wheat (98 percent of its needs) from Canada
    and the United States.

Finally, Ecuador receives food aid from the United States since 1985,
and in the past five years it has received 164,000 MT of wheat, 60,000
MT of soybean meal, and 5,000 MT of soybean oil.

## SECTION III. BIOTECHNOLOGY POLICY

### Regulatory Framework

According to the Environmental Management Law, the Ministry of
Environment of Ecuador is the entity in charge of regulating the
production, propagation, research, use, trade and importation of
genetically modified organisms (GMOs). The same law under article 8
establishes the coordination authority of the Ministry of Environment
over the decentralized Environmental Management System, and allows for
other institutions, such as the Ministries of Agriculture, Health and
Foreign Trade to have direct authority over their own relevant issues.

Although the institutions are in place, there is no specific law or
regulation on biotechnology and biosafety. The environmental management
law is very broad and does not deal with specific issues of agricultural
biotechnology and biosafety. However, a broad national policy on
biosafety is clearly expressed in existing laws. The Constitution, for
example, promotes a series of guidelines regarding biotechnology; such
as the right of Ecuador's people to "live in a safe and balanced
environment" (article 23), the government's obligation to promote public
debate regarding decisions that may affect the environment (art. 88),
the precautionary principle (art. 91), the strict regulation of
biosafety (art. 89), and the protection of consumers rights (art. 92).

Other national laws such as the Environmental Management Law, the Health
Code, the Consumer Rights Protection Law, the Agricultural Development
Law, the Law of Seeds, and the Plant and Animal Health Law are of
general applicability but do not give specific guidance on biosafety
issues.

On the international front, as a signatory of the Convention on
Biological Diversity and the Cartagena Protocol on Biosafety, Ecuador is
obliged to issue policies and regulations in accordance with the
precepts of these international agreements. Also, as a member of the
Andean Community of Nations, Ecuador is subject to Andean Decision 523,
which states an Andean Strategy on Biodiversity that must be taken into
account by all members in issuing their regulations on biosafety.

There is a proposed text for a "Law of Conservation and Sustainable
Management of the Biodiversity" (Biodiversity Law) that would serve as a
framework for Ecuador's regulations on biosafety and biotechnology.
However, the text was first submitted to Congress in April of 2002 and
later debated without consensus. A second debate was scheduled for
February of 2003, but it never happened. The reasons for delaying this
law are basically political. Indigenous groups along with
environmentalists continue to have negative positions on biotechnology
and biosafety issues.

In the Ecuadorian legal system, international agreements such as the
Cartagena Protocol on Biosafety are considered supreme law under the
Constitution. In that case, given the absence of a national law on
biosafety, the Executive (the President, a Ministry or group of
Ministries) may issue general rules for application of an international
agreement; in this case for the Protocol on Biosafety. This legal
principle avoids for a set of rules to be debated and approved by
Congress, thus speeding up the process.

Based on the commitments born in the Protocol on Biosafety, Ecuador is
currently implementing a project called "National Biosafety Framework",
which is managed by the National Biosafety Committee, an
inter-institutional working group accountable to the Ministry of
Environment. The mission of this committee is to issue proposed texts
for the following:

-   A National Policy on Biosafety

-   General Rules on Biosafety (including agricultural biotechnology)

-   Handbook of Procedures

-   National and International Cooperation Mechanisms.

Currently, the working group has finalized the first two parts of its
mandate, and a proposed text for the General Rules on Biosafety is open
for public debate. However, there is uncertainty as to what would the
next steps be on issuing the rules due to the conflicted political
environment in Ecuador and the current Andean-U.S. Free Trade talks,
which include Intellectual Property Rights and Environmental issues.

### Specific Laws dealing with Biosafety and Biotechnology

#### Labeling: The Law for Protection of Consumer's Rights

This law, enacted on July 10 of 2000, regulates the supplier-consumer
relations by promoting knowledge and protection of consumer's rights. It
has a clause by which ambiguous dispositions should be interpreted to
favor the consumer. The public entity in charge of enforcing this law is
the Office of the Ombudsman. However, little or nothing has been done to
exercise such enforcement.

On regards to Biotechnology, article 13 of this law states clearly that
" in case that products sold for human or animal consumption had been
produced using biotechnology or any type of genetic manipulation, labels
must warn of this fact using highlighted characters". Despite this
specific regulation, there are no products in the Ecuadorian market,
whether imported or locally produced, that contain such warning. Article
14, furthers the explanation of labeling by declaring minimum labeling
requirements for food, which should include the biotech process.

As to health and safety, this law has a supplemental character by
leaving room for specific laws dealing with health protection matters to
regulate specific issues. However, the non-existence of a law on
biosafety and biotechnology provides that this law is currently the only
one in place dealing specifically with biotechnology labeling.

Currently, an inter-institutional working group that includes Ecuador's
Standardization Institute and the Ministry of Health are preparing a new
standard for food labeling. The proposed text is ready for final
approval and submission to the WTO for comment. Based on the provision
of article 13 of the aforementioned consumer rights law, the new
standard sets a requirement for biotech foods to be labeled as to
contain GMOs, and for foods containing GMO ingredients to declare the
percentage of such GMOs in their composition.

#### Imports of Vegetable Materials and Animals: Laws of Animal and Vegetable Health

Article 4 of the Vegetable Health law establishes that any import of
vegetable materials for propagation, including those used for research
must obtain a previous authorization from the Ministry of Agriculture.
In the case of animals used for genetic improvement, the Animal Health
law provides requirements and authorizations from the Ministry of
Agriculture, and establishes the obligation to comply with Andean
regulations.

#### Authorized Biotech Foods: Rules for Sanitary Registration and Control

This regulation deals with the sanitary registration of national and
imported food and beverage products for human consumption in Ecuador.
Article 50 of this regulation makes reference to fines and penalties,
which will be applied according to the dispositions of the Consumers
Rights Protection law.

Furthermore, article 54 mentions that biotech and/or GMO foods will only
be authorized to enter Ecuador when such products comply with the
requirements of the Ministry of Health, which would issue a positive
list of transgenic products authorized for import. Such a list does not
exist, and it is unlikely that it will be issued in the future.

#### Proposed General Rules on Biosafety

Since June of 2003, the Ecuadorian Biosafety Committee has been working
on a proposed text for the general Rules on Biosafety. In May of 2005,
the working group issued a text that is currently out for public
comment, with the possibility of becoming law through an executive
decree signed by the President. Given the inexistence of a law on
biotechnology and biosafety, the role of these general rules is to
regulate and follow the precepts of the Cartagena Protocol on Biosafety
and the Convention on Biological Diversity. The rules must also be in
accordance with the regional strategy issued by the Andean Community.

##### Applicability

These rules will be applicable to all activities related to development,
research, entrance, management, production, distribution,
transportation, import, export and use of viable and non-viable
Genetically Modified Organisms (GMOs).

The proposal includes several principles of applicability, including the
[Principle of Precaution]{.underline} by which the government is obliged
to exercise precaution in case of possible severe damage to the
environment. This principle also provides that a lack of absolute
scientific evidence shall not be used to delay measures to stop
environmental degradation. A second principle provides that risk
analysis for GMO-related activities will be conducted on a [case by
case]{.underline} basis. Finally, the release of GMOs should be made
based on a step-by-step principle. This means that any GMOs to be
released should undergo tests, risk analysis and evaluation, and pilot
experimentation programs.

##### Prohibitions

Article 5 of this proposal prohibits imports of GMOs that have been
rejected in their countries of origin. The entrance of certain GMOs and
technologies that may affect the environment or human's health are also
prohibited until scientific evidence proves on the contrary.

##### Authority

The Ministry of Environment, according to article 9 of the Environmental
Management law, is the national authority for application of the
proposed rules, with the support of other public institutions that play
a role in the Decentralized Environmental Management System: The
Ministries of Agriculture, Foreign Trade, Public Health and others.

##### GMO Research, Use and Release 

The text proposal provides for two ways of using, releasing and
experimenting with GMOs: Confined Use and Voluntary Release.

Confined use of high-risk and low-risk GMOs is authorized only for
research with the previous authorization of the Ministry of Environment,
which will issue the Environmental License. The Ministry will also keep
strict control over the operations of these research facilities.

Voluntary release of GMOs into the environment is intended for all
activities except trade and transportation. Whoever wants to release
GMOs in the environment must request authorization from the Ministry of
Environment, and among other requirements, submit an environmental
impact study that estimates all possible risks. This shall be made on a
case-by-case basis.

##### Trade

In order to trade with [viable]{.underline} GMOs, the incumbent must
request an authorization from the Ministry of Environment. Except for
biotechnology seeds, all trade activities, including imports of viable
GMOs will only require a risk analysis.

In the case of seeds containing GMOs, the environmental license will be
issued only after the Ministry of Agriculture has provided
authorization, which would be issued after the submission of an
environmental impact study and a risk analysis.

Traders of [non-viable]{.underline} GMOs destined for food should keep
records of toxicity and allergic tests and copies of their import
permits. These products must be labeled and customers should receive
instructions for use. Traders of [viable]{.underline} GMOs should
maintain careful records of the documents for each GMO product.
Information on the genetic modification of the product is also to be
kept in order to ease traceability. All sales of these products must be
made with the label indicating their transgenic origin, and must
indicate that products for human or animal consumption should not be
planted or propagated.

Finally, an authorization issued by any of the member countries of the
Andean Community for a viable or non-viable GMO will automatically
authorize its import and trade in Ecuador. This will happen only if the
regulations of the authorizing country are not less restrictive than
Ecuador's.

## SECTION IV. MARKETING ISSUES

The use of biotechnology in food is a new and intricate topic for
discussion in Ecuador. The majority of consumers are not aware of the
existence of food products derived from the use of biotechnology, and in
a country with great food insecurity like Ecuador, this may not be an
issue of major concern to the poor and struggling majority. However,
environmental and indigenous groups are fully aware of the issue, and
although they lack scientific evidence of the implications of
biotechnology, they continue to work towards keeping any biotech-related
products from entering Ecuador as a requirement to preserve this
country's mega-biodiversity.

There is no specific information related to the market acceptance of
biotech foods. However, our perspective is that if biotech products are
required special labels "alerting" of presumable harmful
characteristics, the majority of Ecuadorian consumers will certainly
reject them. On this point, the Principle of Precaution embodied in rule
proposals and in the constitution may cause major issues of concern if
lawmakers interpret it erroneously.

Another concern arises when Ecuador currently imports --basically from
the United States and Argentina- almost 60 percent of its corn demand,
99 percent of cotton, 98 percent of wheat, and 90 percent of soybean
meal without any specific restrictions related to biotechnology. The
animal feed as well as the poultry, pork and snacks industries currently
use these products in their formulations, and it is unlikely that
Ecuador would have the capacity to supply this demand in the near
future. Therefore, the possible issuance of restrictive rules not only
would hurt U.S. export interests, but would also complicate the survival
of these local industries.

In addition, Ecuador does not have either the resources or the
scientific capacity to conduct high-level research on agricultural
biotechnology, so it must rely on foreign technologies and research
results. Also, Ecuador is not capable of submitting enough scientific
evidence about the possible risks of the use of biotechnology as a way
to justify restrictive trade measures against biotech foods. However, it
is clear that Ecuadorian authorities are worried about the issue of
"dependence" from foreign technologies for certain products, such as
planting seeds. There is an increased fear from farmers that allowing
biotech seeds will hurt their plantations, and that using these products
will turn their production capacity into a dependency relationship with
multinational corporations.

Even with the generalized misinformation about biotechnology among
consumers and policymakers in Ecuador, few activities related to biotech
capacity building and outreach have been carried out by government
institutions. The largest program constitutes the National Biosafety
Framework, which is a project co-financed by the United Nations Fund for
the Environment and the World Environmental Fund that will end in August
of 2005. By that time, a final product must be seen on Ecuador's
policies and application rules for biotech. As explained above, those
documents are currently out for public opinion, but very little outreach
and zero capacity building have been undertaken due to limited
availability of funds.

The U.S. Agricultural Affairs Office in Quito has been active in the
past four years on issues related towards promoting biotechnology and
agricultural research. In November of 2001, post organized an EMO-funded
conference on Agricultural Biotechnology presented by U.S. scientists
and experts, and which was directed towards local government officials
involved in biotechnology and environmental issues on agriculture. Post
has also made use of Cochran resources to have policy makers, key
players and journalists participate in short training courses on
biotechnology issues in Hawaii and Michigan. Further efforts are being
made to continue with this type of assistance by using USDA's food aid
programs to improve Ecuador's trade capacity by providing funds for
international agricultural training and in-country research.