9 Jan 2015

Comments of Japan Bioindustry Association (JBA)
on “the Discussion paper for the stakeholder meeting of 9 December 2014”
for implementing provisions in relation to Articles 5, 7 and 8 ofRegulation (EU) No. 511/2014

Japan Bioindustry Association (JBA) greatly appreciated the opportunities fordiscussions at the stakeholder meeting of 9 December 2014 held in Brussels,Belgium.
As a stakeholder in relation to Regulation (EU) No. 511/2014, Japan Bioindustry
Association (JBA) would like to offer our comments on the Discussion paper for thestakeholder meeting of 9 December 2014.
We would be most grateful if the European Commission would take our comments
into consideration in the process of drafting the implementing acts in relation toArticles 5, 7 and 8 of Regulation (EU) No. 511/2014.
Comments on the Substance of the Discussion paper of 9 December 2014:
Comment 1:

Article 7 of the basic Regulation – monitoring user complianceDue diligence declaration at the stage of research fundingLine 3 (page 5):
The meaning of “research funding” needs to be clearly defined to avoid confusion in
an international perspective. For example, in our language, “financial investment
by a large enterprise to a biotech start-up company for R&D purposes” is sometimes
loosely referred to as “research funding”. However, in the context of the basicRegulation, we assume that “research funding” is clearly different from “financialinvestment” in the above-mentioned case.

In order to eliminate any ambiguity,“research funding” needs to be clearly defined in a written form.

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Recommendation:
The difference between “research funding” and “financial investment” should beexplicitly clarified in a written form.

Comment 2:

Article 7 of the basic Regulation – monitoring user complianceDue diligence declaration at the stage of final development of a productLine 2 and 18（page6）
In accordance with the Article 2 of the basic Regulation, we understand that thestatement of “a product developed via the utilization of genetic resources and/ortraditional knowledge associated with genetic resources” means “a productdeveloped via the utilization of genetic resources and/or traditional knowledge
associated with such resources that have been accessed within a Party to theNagoya Protocol after the entry into force of the Nagoya Protocol for the Union.” In
this context, “genetic resources and/or traditional knowledge associated with suchresources” to be reported in a declaration should be only “genetic resources and/ortraditional knowledge associated with such resources that have been accessed
within a Party to the Nagoya Protocol after the entry into force of the Nagoya
Protocol for the Union,” if that product have been developed via utilization ofseveral kinds of genetic resources and/or traditional knowledge associated withsuch resources.
Recommendation‘Genetic resources or traditional knowledge associated with such resources’ to bereported in a declaration should be explicitly clarified in a written form as ‘genetic
resources or traditional knowledge associated with such resources that have beenaccessed within a Party to the Nagoya Protocol after the entry into force of theNagoya Protocol for the Union.’

Comment 3:

Article 7 of the basic Regulation – monitoring user complianceDue diligence declaration at the stage of final development of a product2Lines 24 and 25 (page 6):“Where the utilization has taken place outside the Union, the declaration is to bemade to the competent authority of the Member State through which the productenters the Union”, means that obligations of users based on Article 4 of the basicRegulation are to be imposed on users in countries beyond the EU jurisdiction. This
would become serious international barriers to the trade of a wide range ofproducts.
Recommendation:
This provision in lines 24-25 should be deleted.

Comment 4:

Article 7 of the basic Regulation – monitoring user complianceDue diligence declaration at the stage of final development of a productLines 30 and 33 (page 6):
The intention of the statement in lines 30-33 seems to provide rigorous legal
clarification. Ｉn our view, demerits of this legal clarification are greater than its
merits at the current infancy stage of the Protocol implementation. We must add
that, due diligence declarations to be made at the events of (c), (d) and (e) (refer tolines 16-23) are much easier said than done, particularly for those SMEs ormicro-enterprises (e.g. biotech start-up companies) that are weak both financiallyand in manpower. The rigorous legal clarification given in lines 30-33 has legal
meaning for lawyers, but, practically, it does not tell those SMEs or
micro-enterprises about anything concrete as to what to do on their part. They
would simply be confused, and as a result, would likely be pushed out of business.
In light of the present circumstances at the infancy of the Protocol implementation,a pragmatic “step-by-step approach” will be more effective and appropriate thanenforcement based on rigorous legal clarification which is too abstract for weakenterprises to comprehend and cope with.
Recommendation:Lines 30-33 should be deleted. A pragmatic step-by-step approach (e.g. by guideline)
should be given a priority, until more experiences accumulate with implementationof Nagoya Protocol in both providing and user countries.

3Comment 5:

Article 8 of the basic Regulation – best practiceApplication for recognition of a best practiceLine 9 and 13 (page 7):“Other interested parties” do not represent users and, therefore, they are not legallybound by “due diligence obligations” that are stipulated by Article 4 of the basicRegulation. Testing a system of recognizing a best practice of “other interestedparties” is certainly a good idea to explore a way of enabling (but not necessarilyensuring) users to comply with their obligations under Articles 4 and 7 of the basicRegulation. However, it is premature to judge whether this approach effectively
works or not. Furthermore, not all the “other interested parties” will opt for arecognized best practice in the first place. We have concerns that it would be too
risky to enforce a regulation on users prematurely, based on an untested
assumption.
Recommendation:
Users’ obligations to seek, keep and transfer information and relevant documents(as stipulated by Article 4(3)(b) of the basic Regulation) need to be explained

concretely from a practical perspective. We are of the view that
implementation of these provisions within the EU should be postponed until
sufficient experiences of the Protocol implementation accumulate in bothproviding and user countries worldwide

Comment 6:

Need for guidance
Meaning of “utilization (R&D)”:
The terms “research and development” are not defined in the Nagoya Protocol.
According to “the Minutes of ABS Stakeholders’ Meeting of 9 December 2014” thatwas prepared by the European Commission”, the Commission informed that there
will be no declaration at the time of collection of the genetic resource, as thetriggering moment will be the utilization. In case of simple analysis of genetic
resources without subsequent utilization, no declaration will be needed”.
Therefore, we understand that “research and development” in the basic Regulation4

refer to the process intended to create new products. Accordingly, meaning of“utilization” becomes quite clear.
Recommendation:
Meaning of “research and development” and “utilization” in the context of in thebasic Regulation should be elaborated in a guidance document, based on theinformation provided by the Commission at the Stakeholder meeting of 9 December
2014.

Comment 7:

Need for guidance
Elaboration of “commodity trades”
The term “commodity” is referred to neither in the Nagoya Protocol nor in the basicRegulation. According to a presentation that was made by a Commission official at
the Workshop entitled “Working Out ABS” organized by ICC in Paris on 24-25
November 2014, the EU ABS Regulation concerns “utilization” of genetic resources,
but not commodity trade. It was a useful clarification.
Recommendation:
Treatment of “commodity trade” in the context of the basic Regulation should beelaborated in a guidance document.

Comments on Annexes
Annex A
Comment 8:(1) Pages 1-2, Part A, 3
The current template assumes a case where only one kind of genetic resource isutilized in one funded project. However, in actual situations, there are cases wheremultiple kinds of genetic resources are used on a funded project. Therefore, thetemplate’s wording should be modified to accommodate such cases by a single
declaration in a cost-effective manner.

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Recommendation:
For example, it would be useful if “Part A, 3. Information on exercise of due
diligence” is annotated by, e.g. footnote saying “attach a list of genetic resources andtheir relevant information for each item if a multiple number of different genetic
resources are used on a single funded project”.

Comment 9:(2) Page 2, Part A, 3 (d)The statements in this section (given below) are not consistent with the principles ofprotecting confidentiality as stipulated in the Nagoya Protocol, and therefore should
be changed.
Reason: the principles of protecting confidential information are stipulated in
Nagoya Protocol (e.g. Art. 14(2), 17(1) (a) (iii) and 17(4)). Caution must therefore beexercised to prevent any chances of disclosing confidential information without theapplicant’s consent. The EU authority should not transmit confidential information,
without the applicant’s consent, to the process where it cannot directly control.
Recommended changes:a) Lines 1-2,
The statement: “If the information provided is confidential, please provide theinformation nonetheless, but tick the respective box to mark it, and provide thejustification for confidentiality” should be changed to the following statement:“Please provide information under items given below.”b) (i) through (viii)
Delete all the ticking boxes and accompanying words “confidentiality”.
c) (viii) line 3
The statement “If ‘Yes’ was selected, please indicate the name of the subsequent
user:” should be changed to “If ‘Yes’ was selected and the information is
non-confidential, please indicate the name of the subsequent user”

Annex B

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Comment 10:(1) Page 5, Part A, 3(b)The statements in this section (given below) are not consistent with the principles ofprotecting confidentiality as stipulated in the Nagoya Protocol, and therefore should
be changed. Reason: the same as that given above for Annex A, Part A, 3(d).
Recommended changes:a) lines 2-3,The statement: “If the information provided is confidential, please provide theinformation nonetheless, but tick the respective box to mark it, and provide thejustification for confidentiality” should be changed to “Please provide information
under items given below.”b) (i) through (viii)
Delete all the ticking boxes and accompanying words “confidentiality”.
c) (viii) Line 3
The statement “If ‘Yes’ was selected, please indicate the name of the subsequent
user:” should be changed to “If ‘Yes’ was selected and the information is
non-confidential, please indicate the name of the subsequent user”.

Annex C
Comment 11:(1) Pages 7-8, Part A, 4
The current template assumes a case where only one kind of genetic resource isutilized in one product. However, in actual situations, there are cases wheremultiple kinds of genetic resources are used in a single product. Therefore, thetemplate’s wording should be modified to accommodate such cases by a singledeclaration in a cost-effective manner.
Recommendation:
For example, it would be useful if “Part A, 4. Information on exercise of due
diligence” is annotated by, e.g., footnote saying “attach a list of genetic resources
and their relevant information for each item if a multiple number of different
genetic resources are used on a single product”.

7Comment 12:(2) Pages 8-9, Part A, 4(d)The statements in this section (given below) are not consistent with the principles ofprotecting confidentiality as stipulated in the Nagoya Protocol, and therefore should
be changed. Reason: the same as that given above for Annex A, Part A, 3 (d).
Recommended changes:a) Page 8, (d), lines 2-3
The statement: “If the information provided is confidential, please provide theinformation nonetheless, but tick the respective box to mark it, and provide thejustification for confidentiality” should be changed to “Please provide information
under items given below.”b）4(d), (i) through (viii)
Delete all the ticking boxes and accompanying words “confidentiality”.
c) Page 9, line 3
The statement: “If ‘Yes’ was selected, please indicate the name of the subsequentuser” should be deleted and replaced by the following statement: “If ‘Yes’ wasselected and the information is non-confidential, please indicate the name of thesubsequent user”.

Annex D
Comment 13:(1) Pages 12-13, Part A, 4(b)The statements in this section are not consistent with the principles of protecting
confidentiality as stipulated in the Nagoya Protocol, and therefore should bechanged. Reason: the same as that given above for Annex A, Part A, 3 (d).
Recommended changes:a) 4(b), lines 2-3
The statement: “If the information provided is confidential, please provide theinformation nonetheless, but tick the respective box to mark it, and provide the8justification for confidentiality” should be changed to the following statement:“Please provide information under items given below.”b) 4(b), (i) through (viii)
Delete all the ticking boxes and accompanying words “confidentiality”.
c) Page 13, lines 2-5
The statement: “If ‘Yes’ was selected, please indicate the name of the subsequentuser” should be deleted and replaced by the following statement: “If ‘Yes’ wasselected and the information is non-confidential, please indicate the name of thesubsequent user”.

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