14

Accessing Genetic Resources by Japanese Private Industry
under the Convention on Biological Diversity Regime
with Particular Reference to Australia
Invited Researcher: Kamal Puri(*)

The preservation, protection and sustainable use of genetic resources including traditional
knowledge (TK), innovations and practices of indigenous peoples are of key significance to all
humanity.
However, this valuable asset is at risk in many parts of the world. In order to protect thecultural and intellectual property rights of the holders of such rights, the CBD brought genetic
resources formally under national sovereignty and invited member nations to act on the threeobjectives of conservation, sustainable use and fair and equitable sharing of the benefits arisingfrom the use of genetic resources. Further, it made access to genetic resources subject to the priorinformed consent (PIC) of the State.
Instead of perpetuating the rhetoric of PIC, mutually agreed terms, self-determination,
active protection of cultural systems, and equitable benefit sharing, this paper confronts theseperennial issues head on to examine the procedures, if any, which have been devised for gaining
PIC. Further, the differences between the common law concept of free consent and the PIC and
the interface between the CBD and the patent law are assessed.
Next, the developments in Australia, especially in Queensland, dealing with access tobiological resources are considered to inform the Japanese private industry of practical ways toaccess biological resources in Queensland. By enacting the Biodiscovery Act 2004, the State ofQueensland, which is the richest state in biological resources in Australia, has taken a lead role inenacting the principles and procedures for facilitating access to biological material in a
responsible and systematic way.

shared with the legitimate stakeholders. It isfurther alleged that either no agreements areentered into with the traditional owners or
such agreements do not fulfil the Convention
on Biological Diversity’s (CBD) criteria ofprior informed consent and sharing of
benefits in a fair and equitable manner.
The CBD brought genetic resources
formally under national sovereignty. Its threeobjectives are:(i)conservationofbiologicaldiversity,(ii)
sustainable use of its components,
and
(iii)
fair and equitable sharing of thebenefits arising from the use ofgenetic resources.

1

Introduction
The
preservation,
protection
andsustainable use of genetic resources including
traditional knowledge, innovations andpractices of indigenous peoples are of key
significance to all people. The sustainable
and responsible use of genetic resources playsa critical role in our health care, food security,
culture, religion, identity, environment,sustainable development and trade.
However, this valuable asset is at serious
risk in many parts of the world. It isfrequently alleged that biological diversity
and traditional knowledge are being abused
and patented by commercial interest withscant regard to the long-term consequences
and with few or none of the benefits being(*)Director, Intellectual Property Commercialisation Unit, Queensland Department of Primary Industries & Fisheries, Professor of Law,
Queensland University of Technology, Brisbane, Australia

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short form of, and synonymous with,“biological diversity.” The Convention on
Biological Diversity(*1) is about life onearth.(*2) The Convention entered into force on
29 December 1993.(*3)
Until the CBD came into effect, genetic
resources were generally treated as the“common heritage of mankind” and their use
for new products was largely undertakenwith scant regard to the communities from
where the materials were sourced. Major
discoveries based on natural resources (often
involving the use of indigenous traditional
knowledge) resulted in no benefits flowing
back to the country or community providingthat material.
With the ratification of the CBD in 1993
came the end of the “common heritage ofmankind” doctrine. The CBD affirmed
member nations' sovereign rights over theirnatural biological resources, including
genetic resources.(*4) In return for facilitating
access to biological material, member nations
are entitled to a fair and equitable share of
the benefits that flow from the commercial
exploitation of those resources. This is thethird of the three objectives of the Convention,
the other two being the conservation of
biological resources and the sustainable useof biological resources. It is the third
objective that has proved to be the mosttricky to implement.(*5)

The Convention calls for member nations
to act on these objectives. Further, it makes
access to genetic resources subject to theprior informed consent of the State.
Is the prior informed consent ofindigenous peoples and local communities alegal requirement for use of genetic resources
and/or associated traditional knowledge?
Putting the rhetoric of prior informed consent,
mutually agreed terms, self-determination,
active protection of cultural systems, andequitable benefit sharing on one side, thefirst part of this paper attempts to examine
the procedures, if any, which have beendevised for gaining prior informed consent. It
also examines the differences between thecommon law concept of free consent and the
CBD concept of prior informed consent.
Further, it comments on the interface
between the CBD and the patent law.
The second part of the paper covers, ininevitably
descriptive
manner,thedevelopments in Australia, especially in
Queensland, dealing with access to biologicalresources. By enacting the Biodiscovery Act
2004, the State of Queensland, which is therichest state in biological resources inAustralia, has taken a lead role in laying
down the principles and procedures forfacilitating access to biological material in a
responsible and systematic way. This part isprimarily intended to inform the Japanese
private industry of practical ways to conduct
operations in Queensland in its quest forunique biological materials for scientific R&D
and eventual commercial use for the benefitof Japanese people and the international
community.

3

Bonn Guidelines
Although the CBD came into effect late in
1993, its provisions did not become operational
until the adoption of the Bonn Guidelines on
Access to Genetic Resources and the fair andequitable sharing of benefits arising out of
their utilization.(*6) The Bonn Guidelines are amost important step to assist all parties toprepare access and benefit-sharing strategies,
and to understand the steps involved in

2

Key tenets of the Convention on
Biological Diversity
The expression “biodiversity” means thevariety of life. It was coined in 1986 and is a(*1) The full text of the Convention is available at http://www.biodiv.org/convention/convention.shtml (hereinafter referred to as the “CBD”).
(*2) Message of Dr Ahmed Djoghlaf, Executive Secretary of the CBD dated 3 January 2006 accessible fromhttp://www.biodiv.org/doc/press/2006/pr-2006-01-2010-en.pdf.
(*3) The CBD opened for signature on 5 June 1992 at the UN Conference on Environment and Development (the Rio de Janeiro “Earth Summit”).
(*4) See Article 3 of the CBD that relevantly states: “States have, in accordance with the Charter of the United Nations and the principles ofinternational law, the sovereign right to exploit their own resources ….” This principle is reinforced by Article 15.1 which provides: “Recognizing thesovereign rights of States over their natural resources, the authority to determine access to genetic resources rests with the national governments
and is subject to national legislation.” See above Note 2.
(*5) Article 1 of the CBD states the objectives thus: “the conservation of biological diversity, the sustainable use of its components and the fair andequitable sharing of the benefits arising out of the utilization of genetic resources” – see above Note 2.
(*6) Available at http://www.biodiv.org/doc/publications/cbd-bonn-gdls-en.pdf.

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had appreciation of the CBD and even a
fewer (10%) had knowledge of Bonn
Guidelines. Of the companies surveyed,
about 30% had the experience of using
foreign genetic resources. The types ofgenetic resources that had been used were:plants and materials derived from them(80%), microorganisms (47%), animals (27%),and others (2%).
The survey report also highlighted thereasons that had contributed to the failings of
the CBD. Reasons included absence of
reliableframework,lackofcentraladministrative
body,
long
delays,misconceptions among some holders ofgenetic material and associated traditional
knowledge, the intrinsically slow andtortuous process from discovery through to
R&D and eventually to commercialisation as
well as difficulties in fixing the rate of royalty
at an early stage.(*10)

gaining access to genetic resources and sharing
benefits. However, as the title indicates, they
are guidelines of voluntary nature. Bonn
Guidelines therefore lack legal enforcement,
although they do carry considerable weight, atleast in the moral sense, because 180 countries
unanimously adopted them.
One of the major contributions of the Bonn
Guidelines is that they establish a clear
framework for accessing genetic resources toensure fair and equitable sharing of benefits.
In particular, the Guidelines contain detailed
andpractical
information
relating
toprocedures for obtaining prior informed
consent. Furthermore, the Guidelines makeexplicit reference to the need to obtain theprior informed consent of the holders ofindigenous
and
local
communities
inaccordance with their traditional practices, etc.,
in situations involving access to traditional
knowledge associated with the relevant genetic
resources.

5

Australia's Response to the CBD
The Commonwealth of Australia enacted
the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act).(*11) The
EPBC
Act
protects
theenvironment,
particularly in matters of national significance.
A significant portion of Australia’s biodiversity
is found on publicly owned lands or waters, andis often represented within its system ofprotected areas. The EPBC Act streamlines
environmental assessment and approvals
process, protects biodiversity and integrates
management of important natural and culturalplaces. The Act came into force on 17 July 2000.
The Commonwealth of Australia’s Departmentof Environment and Heritage is the leadagency for the CBD implementation.

4

Japan
Bioindustry
Association’s
Survey Report(*7)
In 2004, the Japan Bioindustry
Association(JBA)
conductedacomprehensive survey of 215 companies
engaged in R&D and commercialisation workin the burgeoning field of biotechnology(*8) inorder to determine in a precise manner how
well they appreciated the influence of the
CBD on Japanese businesses.
The survey clearly demonstrated theimportance that the Japanese government
and the JBA attach to Japan’s adherence to
the CBD.(*9) However, it also revealed anurgent need to raise awareness and educate
private industry about the CBD so thataccess can be gained to genetic resources in
an appropriate and expeditious manner.
One of the striking findings of the survey
was that only 22% of Japanese companies

6

Indigenous Biodiversity Knowledge
There is a common perception that inmost cases knowledge of traditional medicine(*7) Program for the Promotion of Access to Genetic Resources based on the Convention on Biological Diversity in FY 2005 (Unpublished) Japan
Bioindustry Association, March 2006.
(*8) Companies involving practical use of biological processes or living microorganisms in industrial production.
(*9) This is also evident from a useful publication produced by the Ministry of Economy, Trade and Industry (METI) and Japan Bioindustry
Association (JBA) entitled, Guidelines on Access to Genetic Resources for Users in Japan (February 2006).
(*10) The author acknowledges with gratitude the tremendous help given to him by Dr Seizo Sumida, Managing Director, JBA, in explaining thechallenges that are presently being faced by Japanese industry in gaining access to genetic resources.
(*11) Available at
http://www.frli.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/E169E81913E19C6ACA25726B001C7FA4/$file/EnvProtBioDivCons99Vol1WD0
2.doc.

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communities, as appropriate, after having
received the requisite information, consent toallow access to their biological resources or toassociated intangible components under
mutually agreed conditions. (*13)
Researchers and commercial entities
desirous of accessing the knowledge ofindigenous peoples or a local community must
therefore previously seek approval of theknowledge holders or owners and pay for it. In
order to authorise access, enough information
should be provided to indigenous communities
about the purposes, risks and implications of
the activities that are intended to be carriedout.
Authorisation for research is different
from authorization for commercial exploitation.
For the former, prior informed consent isrequired, for the latter, in addition to priorinformed consent, a licensing agreement mustalso be obtained. (*14)

originates in developing countries and isappropriated, adapted, utilised and patented
by scientists and industry in developed
countries, with little or no compensation to
the custodians of this knowledge and without
their prior informed consent.
In recent years, the protection of
traditional knowledge, the innovations andpractices of indigenous and traditional
medicine and the equitable sharing of
benefits have received increasing attention,and they are being discussed in many
international forums, e.g., WIPO andregional organisations such as the South
Pacific Communities (SPC).
Australia’s
Aborigines
have
close
association with biological diversity. No one
doubts that benefits from innovative use of
traditional knowledge should be sharedequitably. In order to achieve this, it isimperative that traditional knowledge isused with the cooperation and express
approval of the holders of that knowledge andon mutually agreed terms which are judged
as fair and equitable.
The CBD’s doctrine of “prior informed
consent” is of vital relevance in the context of
Aboriginal peoples’ vast resources of
traditional knowledge because of grossdisparity in their capability to negotiate abenefit sharing agreement with R&D andcommercial entities. Regrettably, however,examples abound across the globe ofcommercial exploitation of traditional,
indigenous knowledge which are totallydevoid of prior informed consent, e.g.,commercialisation of Smokebush’s anti-HIV
properties, Basmati rice, Neem, Kava, toname a few. Few or none of the benefits has
been shared with traditional knowledge
holders. (*12)

8

Two questions
The concept of “prior informed consent”
raises two tricky questions: what constitutes“informed” consent and whose consent theabove CBD’s provisions envisage? The firstquestion is discussed in the paragraphs below.
As regards the second question, a strictreading of the CBD provisions suggests that itis the “Contracting Party” whose consent iscounted on, which means the consent of themember state. However, that is unlikely to be
the intent of the provisions because there is noapparent need to provide the extra safeguard of“informed” consent to a contracting member
state. The latter is presumably well informed
and well resourced to obtain independent legal
advice before giving out consent!
In stark contrast to the indigenous andlocal communities, member states do not holdthe position of a party with weaker bargaining
position. As regards the indigenous and local
communities, there is a great disparity in theircapacity to negotiate an agreement to share

7

Prior Informed Consent
Prior informed consent is a process. The
state, private owners, or local and indigenous(*12) See generally, K. Puri, “The Aboriginal Peoples of Australia” in Intérêt culturel et mondialialisation (L’Harmattan, Paris, 2004) 249 and“Indigenous Knowledge and Intellectual Property Rights – the interface” in P.N. Thomas & J. Servaes (eds.), Intellectual Property Rights andCommunications in Asia: Conflicting Traditions (Sage, 2006) 116.
(*13) M. Umaña, “A Sui Generis system for protecting traditional knowledge under the CBD: The official position of the Government of Costa Rica”
at 213, 214, see at http://www.unctad.org/en/docs/ditcted10_en.pdf.
(*14) See A.M. Pacon, “The Peruvian Proposal for protection Traditional Knowledge at 177 at http://www.unctad.org/en/docs/ditcted10_en.pdf.

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be carried out by the entity seeking consent

benefits on mutually agreed terms. It isbecause of this ambivalence that there isfrequent reference made to the consent ofholders/owners of genetic resources andassociatedtraditional
knowledge.
The
AustralianandQueensland
legislation
discussed in this paper are important examplesof removing this ambivalence. It is submitted
that there is an urgent need for this issue to beclarified worldwide.
It is probably because of this uncertainty
that the concept of “prior informed consent”
has not been analyzed effectively in academic
writings and international fora. Nor has itachieved its intended, albeit unarticulated,
purpose.
Unfortunately,
the
WTO’s
Trade-related Aspects of Intellectual Property
Rights (TRIPS) (*15) Agreement is silent on thissubject. It is not surprising, therefore, thatdeveloping countries are frequently putting
forward proposals to introduce a requirementin patent applications regarding disclosure of
the source of origin of genetic resources andtraditional knowledge as well as evidence ofprior informed consent and benefit sharing.
The above aside, the concept has threeconstituents that are independent of each other,viz., “prior”, “informed” and “consent.” Before
turning to the analysis of the latter two
constituents, we may quickly deal with themodifier “prior.”
In the present author’s view, the word“prior” entails two things: (i) the informed
consent must be obtained before the genetic
resources are collected and used; and (ii) the
consent must be recorded in writing.
It is submitted that the CBD does notmake an explicit reference to the writing
requirement through a legislative oversight.
Otherwise, it will be most difficult, if not
impossible, to prove that the consent was
informed without there being a written record.
A written record should be about the purpose,risks and implications of the R&D andcommercialisation activity that is intended to

9Informed Consent vs. Free Consent
under Contract Law
The doctrine of informed consent should
be distinguished from the general doctrine ofcontractual free consent, which applies toagreements. The consent standard in acontract is only that the person understands,
in general terms, the nature of and purposeof the intended transaction and the consent is
not affected by any of the vitiating factors,
viz., coercion, undue influence, fraud,
mistake and misrepresentation.
It is suggested that in the case of
informed consent, however, a higher
standard of consent is intended. Otherwise,
thequalifier“informed”
wouldbe
meaningless. To satisfy the existence of
informed consent, causation must be
shown—that, had the party been made awareof the risk, they would not have proceededwith the transaction.
10 Disclosure of source of origin inpatent applications
At present, the Japan Patent Office (JPO)
does not require the country of origin to bedisclosed in patent applications. Nor has thisidea found much support from JPO, academic
writings (*16) or Japanese industry.(*17) However,
it is noteworthy that the JPO, in cooperation
with private sector is actively engaged indebating this issue not only from theperspective of pure patent law but also toensure that the CBD provisions are followed
both in letter and in spirit.
In July 2004, JPO sent a questionnaire toseveral companies to solicit their comments on
the “disclosure of the country of origin ofgenetic resources in patent applications.” Thesurvey results, compiled by the Japan
Bioindustry Association (JBA), revealed strong
opposition to the idea of requiring applicants
for patents to provide information regarding(*15) Available at http://www.wto.org/english/docs_e/legal_e/27-trips.doc.
(*16) For seminal discussion on this issue, see Dr Hajimu Morioka’s paper entitled, “Approach of Corporations to Convention on Biological Diversity”(Unpublished, 2006) and Dr Maiko Tanoue’s paper on “Study on Disclosure Requirements Related to Genetic Resources and Traditional Knowledge”(2005) 8 Intellectual Property Law and Policy Journal 59.
(*17) Program for the Promotion of Access to Genetic Resources based on the Convention on Biological Diversity, Report in FY 2004 (Unpublishedreport compiled by the Japan Bioindustry Association, March 2005).

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quantities of living or dead native biologicalmaterial, including plants, algae, animals,
fungi and microorganisms, to identify
bioactive compounds that may be used forcommercial
applications
such
as
(*20)
pharmaceuticals and insecticides.
The Act develops a streamlined anduniform approach regarding access to the
Queensland's
biologicalresourcesforbiodiscovery, in a way that will benefit State's
community, economy and environment. The
need for new legislation stemmed from theinconsistencies and inadequacies of existinglaws governing access to Queensland'ssignificant and unique biodiversity.
The Act establishes an administrative
machinery to comprehensively regulate thecollection of native biological material on all
Queensland land(*21) and waters(*22) used forthe purpose of biodiscovery.
The Act makes it mandatory forcommercial entities to enter into benefit
sharing agreements with the State before
embarking on biodiscovery research andcommercialisation in relation to thoseresources. A single State regime isestablished to grant permission to use native
biologicalresources
sourcedfromQueensland.
The Act establishes a regulatory
framework for identifying and using Statenativebiologicalresources
in
a
(*23)
sustainable
way for biodiscovery. It also
stipulates a contractual framework forbenefit sharing agreements to be entered into
for the use of native biological resources. The
Act further creates a compliance code andcollection protocols for using native biologicalresourcesandensures
appropriatemonitoring and enforcement of compliancewith the Act.
The
Act
requiresany
person,the country of origin of genetic resources.
The main objection was that protection ofgenetic resources and sharing of profits withholders/owners of such resources andassociated traditional knowledge are mattersthat are unrelated to patentability. It wasargued that the prior informed consent
requirement under the CBD should be a
sufficient safeguard and it is not the function of
the patent law to guarantee proof of country oforigin.
The present author respectfully advocatesa broader approach. Assuming, though not
admitting, that the patent law and the CBD
have different goals,(*18) it is submitted that all
member nations parties to the CBD should
seriously consider requiring all patentapplicants to sign a statutory declaration or asworn statement at the time of submitting apatent application to the effect that theinvention claimed in the application was truly
and exclusively their own and that they had
not made use of any genetic resources andassociated traditional knowledge. It is hopedthat this simple requirement will not only
safeguard the integrity of the powerful patentmonopoly and keep the patent system honest
but would also help to achieve the two goals
that are endorsed by both Dr Morioka and Dr
Tanoue, viz., prevention of biopiracy and fairand equitable sharing of profits.

11 Queensland’s Biodiscovery Act 2004(*19)
In 2004, the State of Queensland enacted
the Biodiscovery Act in order to fulfil its
responsibilities under the CBD and to givelegislative effect to those responsibilities.
Biodiscovery is the search for active
compoundsinplants,animalsandmicro-organisms that can be developed into
commercial products. Biodiscovery involves
the collection and screening of small(*18) Arguably, paragraph 5 of Article 16 of the CBD dismisses this notion, see above Note 2.
(*19) Available at http://www.findlaw.com.au/Legislation/docs/55412.pdf.
(*20) See http://www.epa.qld.gov.au/ecoaccess/biodiscovery/. Section 5 of the Compliance Code for Taking Native Biological Material under aCollection Authority (the Code) specifies what can be collected. Taxa that cannot be taken are listed as restricted in Section 3.5 of the Code.
(*21) State land is all land in Queensland other than freehold land, free holding leases or land subject to a native title determination granting rights
of exclusive possession. It includes national parks, road reserves and state forests.
(*22) Queensland waters are all waters within the limits of the State or coastal waters including water reserves and marine parks.
(*23) “Sustainability” is not defined in the Schedule to the Act, but the concept has been derived from the World Commission on Environment andDevelopment’s Report entitled, “Our Common Future” (1987), also known as the “Brundtland Report,” where it was stated that “Sustainable
development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
See further http://www.oecdobserver.org/news/fullstory.php/aid/780/Sustainable_development:_Our_common_future.html.

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order to ensure that biodiscovery entities
comply with the terms of the Biodiscovery
Plan, severe financial penalties are imposed
for any acts/omissions that are not inaccordance with the Biodiscovery Plan.

organisation or institute seeking toundertakebiodiscovery
using
nativebiological material sourced from State lands
or waters to agree to share any benefits with
the State.
The Act does not alter any access rights oflandowners or alter existing intellectual
property rights that may be generated in thecourse of biodiscovery. The State will not be aparty to, nor will it broker such agreements.
The Act establishes a detailed procedurefor granting a licence (referred to as “collection
authority”) to a commercial entity(*24) to collectand use native biological material forbiodiscovery purposes. The prescribed formshould be accompanied by the applicant’s
proposed or approved biodiscovery plan andshould contain precise description of the type ofmaterial to be used together with the period forwhich the licence or collection authority issought. The maximum period for which alicence can be granted is three years. The
Biodiscovery
Collection
Authorityisadministered by the Environmental Protection
Authority (EPA).

13 Conclusion and Recommendations
Gaining access to genetic resources is ofparticular interest to biotechnology andpharmaceutical companies, biological andtaxonomic research organisations, venture
capital and investment funds, conservation,and environment groups. Japanese private
industry, with its advanced technology has astrong interest in accessing genetic resourcesin harmony with the provisions of the CBD.
The JBA’s survey pointed to the Japanese
private industry’s lack of clear appreciationof the workings of the CBD and theassociated Bonn Guidelines while at thesame time maintaining a strong desire toaccess genetic resources in an appropriatemanner as per the letter and spirit of the
CBD.
There is undoubtedly an urgent need fora structured education and awarenessprogram covering the CBD, Bonn Guidelines
and the interface between the CBD and thepatent law. Fortunately, JBA is alreadyengaged in this exercise by convening regularseminars and discussions. It is recommended
that at least one additional national
symposium should be organised jointly by
JBA and IIP annually to debate the issues
and challenges facing the Japanese industry
in accessing genetic resources. Consideration
should also be given to reform the patent law
by requiring applicants to file a statutory
declaration regarding the source of invention.
One of the major difficulties confronting
Japanese private industry is the lack of acentral agency and practical framework inorder to access genetic diversity. The
situation is exacerbated when one takes into
account the fact that the chance of a new
product based on natural genetic resources
reaching the market is extremely low:
about 1 to 10,000 to 100,000 samples.

12 Benefit sharing agreement(*25)
The Queensland Department of State
Development administers and executes thebenefit sharing arrangements and approves
the biodiscovery plans required by the Act. All
benefit sharing agreements must include a
Biodiscovery Plan outlining the commercial
entity’s approach to biodiscovery research andcommercialisation, protection of intellectual
property and benefits to be delivered. Benefit
sharing agreements are legally binding
contracts with recourse to the Queensland
Courts if disputes were to arise.
Taking of native biological material forbiodiscovery from State land or waters
without a licence or collection authority is
prohibited under the Act and is punishable
by severe fine and imprisonment. The
conductofbiodiscovery
researchorcommercialisation without a benefits sharing
agreement in place is a criminal offence
punishable by a penalty of $375,000. Also, in(*24) “Entity” includes a person and an unincorporated body, as defined in the Acts Interpretation Act 1954 (Qld).
(*25) See section 33 of the Biodiscovery Act 2004.

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Furthermore, the progression from researchand development to commercialisation isoften very expensive and dilatory.
It is submitted that Queensland's
Biodiscovery legislation highlights options
for other jurisdictions, including theCommonwealth of Australia, in theregulation of biological resources under theircontrol.(*26) Importantly, the Queensland’s
new licensing regime provides a viable
avenue for Japanese industry to accessbiological material from a bounteous resource
without having to confront burdensome
regulatory impediments such as cost, delay,
uncertainty, duplication and complexity.

(*26) See A. Rush’s comment on the Queensland’s Act (14 September 2004) where reference is also made to the present author’s views:
http://www.aar.com.au/pubs/bt/14sep04/bio02.htm.

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