Cali COP16 takeaways: Pharma, cosmetic, biotech giants to pay share of profits
The Cali Fund aims to finance biodiversity conservation and reward those who are frontline protectors of biodiversity such as indigenous people and forest dwellers
Big pharma, cosmetics, nutraceutical, and biotechnology industries that use digital sequence information (DSI) on genetic resources will have to share a minuscule share of their profits to raise money for biodiversity conservation globally. This was among the key decisions taken at the Convention on Biological Diversity’s annual negotiations (COP16) at Colombia’s Cali, which concluded on November 2.
Though the Cali talks had to be suspended as many delegates had left on the day it was due to conclude, the multilateral benefit-sharing mechanism for using DSI and establishment of the Cali Fund was adopted.
Companies to pay for digital data
The Cali Fund aims to finance biodiversity conservation and reward those who are frontline protectors of biodiversity such as indigenous people and forest dwellers. The decision in this regard acknowledges the major role of digital sequence information on genetic resources and open access to such information. It recognises the importance of the fair and equitable sharing of benefits from the use of digital sequence information on genetic resources to achieving Target 13 of the Kunming-Montreal Global Biodiversity Framework.
Of the 23 global biodiversity targets, Target 13 focuses on increasing equitable benefit sharing of profits/income from the use of biological resources, a key pillar of the framework.
Access and benefit sharing from biological resources as per national legislation will also continue.
India’s Biological Diversity (Amendment) Act, 2023, covers access and benefit sharing. The amendment exempts AYUSH practitioners and users of traditional knowledge from sharing benefits with local communities. It also decriminalises all offences for the Ayush sector, prescribing penalties instead.
The Cali Fund agreement says that users of DSI on genetic resources in sectors that directly or indirectly benefit from its use in their commercial activities should contribute a proportion of their profits or revenue to the global fund according to their size.
Entities that on their balance sheet dates exceed at least two out of three of these thresholds (total assets: $20 million sales, $50 million, profit: $5 million) averaged over the preceding three years, should contribute to the global fund 1% of their profits or 0.1% of their revenue, as an indicative rate, the agreement said.
The allocation of funds will be based on capacity needs for the conservation and sustainable use of biodiversity—especially least developed countries, small island developing states, economies in transition, and indigenous peoples and local communities. Biodiversity richness will also be a criterion.
All users of DSI on genetic resources should share non-monetary benefits (capacity building for a generation of DSI) in a fair and equitable manner, as appropriate, the agreement said.
“While the disbursement details are still being finalised, it has been agreed that 50% of the fund will be allocated to Indigenous peoples and local communities, either directly or through governments. This will enable these communities, including women and youth to finally share in the profits,” the World Wide Fund for Nature said on Sunday.
Most importantly, the text on DSI acknowledges that in some world views, all-natural genetic information belongs to Mother Earth.
WWF International director general Kirsten Schuijt said the new Cali Fund although imperfect and with many details still to be ironed out, is an important step forward. “It ensures that companies profiting from nature contribute fairly to biodiversity conservation and directs critical funding to the people and places that need it most.”
Independent legal and policy researcher Kanchi Kohli said fairness and equity benefit-sharing arrangements have been one of the most challenging aspects of regulating access to biological material and knowledge. “While there have been attempts to demonstrate benefit-sharing models, the preoccupation has been towards allowing seamless access. DSI, while being an important mechanism, can limit the ABS conversation between DSI hosts, national governments, and accessors. Such a risk can be mitigated only if there is an institutionalised process that ensures original custodians of knowledge stewards of community-led conservation are not left behind. This logic will apply to fund collection and disbursement as well.”
Big role for forest communities
The agreement on an expanded role for Indigenous people and forest-dwelling communities in saving biodiversity is an important outcome of COP16. In its summary of COP16, think tank International Institute for Sustainable Development (IISD) said in a historic moment, participants celebrated the decision to establish a subsidiary body on Article 8(j) of the Convention on matters related to Indigenous Peoples and Local Communities, as well as the decision on the role of people of African descent in the implementation of the Convention.
There was also a high-level ministerial on “Peace with Nature” during COP16.
IISD Earth Negotiation Bulletin said several parties underscored the links between resource scarcity and conflict, emphasising the need for restorative action towards living in harmony with nature. Some noted that successful biodiversity protection can only occur in a peaceful environment and that peace relies on a healthy planet. It was also highlighted that a healthy environment is essential for food security and nutrition, which in turn are prerequisites for peace.
Big misses
The key agenda of COP16 was to make progress on implementing the Kunming-Montreal Global Biodiversity Framework and on critical targets such as protecting at least 30% of terrestrial and marine biodiversity-rich areas by 2030. To make progress on these, there was a decision proposal on resource mobilisation by establishing a dedicated global financing instrument for global biodiversity. This was not accepted by developed countries, according to IISD. COP16 also failed to adopt a strategy for raising $200 billion a year by 2030 to implement the Global Biodiversity Framework.
Developed countries are lagging on their commitments to provide $20 billion annually in international biodiversity financing by 2025. Pledges to the interim funding mechanism, the Global Biodiversity Framework Fund in Cali, was also meager. The fund currently totals $407 million, as per WWF.