India’s Biological Diversity Act: Beware the Regulatory Maze

For life sciences industries and research organizations that utilize any biological resource from India for research, commercial or other purposes, awareness and regulatory compliance with India’s Biological Diversity (BD) Act, 2002 could mean the difference between success and failure.

India became a party to the Convention on Biological Diversity (CBD), a multilateral treaty, in 1994. In order to comply with the CBD’s provisions on conservation and sustainable use of biological diversity with fair and equitable benefit sharing arising from utilization of genetic resources, the country enacted the BD Act in 2002, and the corresponding Rules in 2004. In 2012, India ratified the Nagoya Protocol, a supplementary agreement to the CBD that mainly focused on strengthening the implementation of benefit sharing, and subsequently issued the Guidelines on Access and Benefit Sharing (ABS) in 2014.

Under the Ministry of Environment and Forests (MoEF), the implementing system of the BD Act is three-tiered. The National Biodiversity Authority (NBA) is at the central level, the State Biodiversity Boards (SBBs) are at the state level, and the Biodiversity Management Committees (BMCs) are at the local level, with each authority performing specified functions.

The Biological Diversity Act 

The BD Act defines biological resources broadly as:

“plants, animals and micro-organisms or parts thereof, their genetic material and by-products (excluding value added products) with actual or potential use or value, but does not include human genetic material.”

Accessing any biological resource or associated knowledge for Research, Commercial utilization, Bio-survey and Bio-utilization, transfer of biological resources, transfer of research results or obtaining intellectual property (IP) rights requires approval under the BD Act from the NBA or respective SBBs. Regulatory requirements vary based on the nature of the applicant and the activities. The users, upon obtaining approval for access, should enter into a benefit sharing agreement with the NBA or SBB. Benefit sharing arrangements (monetary and/or non-monetary options) are decided on a case-by-case basis after due consultation with the local bodies and the benefit claimers.

Some exemptions under this Act include value-added products, conventional breeding, certain government approved collaborative research work and about 400 normally traded commodities under certain conditions. Local communities, traditional healers and farmers are also exempted from the Act’s purview. Exchange of designated accession of genetic resources of food crops and forages listed in Annex I of International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) are also exempted for research, breeding and training for Food and Agriculture.

Contravention of the Act or abetment thereof is a cognizable and non-bailable offense punishable with imprisonment and/or fine. A supposed offender could be arrested without a warrant and bail would be granted only upon the court’s discretion.

Distinction Between Indian and Foreign Users

The Act distinguishes between Indian and foreign users in that foreign users of Indian bioresources (foreign individuals/entities including non-resident Indians or Indian companies having foreign shareholders) need to get prior approval from the NBA before accessing the bioresources. On the other hand, Indian users need not get prior permission for accessing the resources for research, biosurvey and bioutilization purposes, but they need to get prior approval from the respective authorities if the resources are being utilized for commercial purposes or other activities.

Linkage to Patents and Plant Variety Protection

Regarding IP rights, the BD Act mandates prior approval from the NBA before applying for any IP rights within or outside India if the invention is based on any research or information on a biological resource obtained from India. But it provides a breather to patents in that the approval may be obtained after filing the patent application, but before grant of patents. Monetary options under benefit sharing include joint ownership of IPRs with the NBA or the benefit claimers, if they are identified. Though the NBA should ideally dispose of the application for approval within 90 days, the timeline can be extended due to issues such as incomplete applications and procedural delays resulting from the need to consult other authorities at the state and local levels or expert committees for ABS arrangements.

The Patents Act

The Patents Act (1970) is implicitly linked with the BD Act in that it is mandatory to mention the source and geographical origin of the biological resource obtained from India or elsewhere. If the patent applicant uses biological material from India, a declaration should be given during filing of the patent application that the necessary permission from the NBA would be submitted before the grant of the patent. In case the resource is not from India, the same should be mentioned in the specification along with the foreign source and geographical origin. Also, traditional knowledge per se is not patentable subject matter in India. The Patents Act further complements the BD Act in that non-disclosure or wrong disclosure of the source and geographical origin of biological material and claiming traditional knowledge (including oral knowledge) are grounds for pre and post grant oppositions and revocation as well.

Mandating proper disclosure of source and geographical origin of the biological material obtained from other countries and including claiming of traditional knowledge of other countries as a ground for opposition and revocation are user country checkpoints to prevent misappropriation of foreign biological resources. Requiring source and origin disclosure in patent applications is only an information based checkpoint in that there is no verification if a provider country’s access requirements have been met. India’s user country compliance measures need to evolve to provide designated checkpoints for biological resources obtained from foreign countries that are utilized for non-patent purposes as well.

The BD Act exempts applicants for plant variety protection under the Protection of Plant Varieties and Farmers’ Rights Act (PPV&FR), 2001 other than the requirement of an endorsed copy of the registration certificate from the concerned authority to NBA. This might be due to an overlap of the BD Act with the PPVFR Act on agrobiodiversity conservation and that the PPV&FR Act itself has a distinct benefit sharing mechanism.

Implementation and Challenges

Implementation of the BD Act gathered momentum in 2013 after issuance of show cause notices to several Indian industries by the Madhya Pradesh (MP) SBB on commercial utilization of biological resources without prior notice. Many of these industries appealed to the National Green Tribunal (NGT), the designated authority for appeals against any order of NBA or SBB, which spearheaded issuance of the 2014 ABS Guidelines. Several industries, such as sugar, oil, paper, ayurvedic drugs, cosmetics, flavors, enzymes, distilleries etc. that used biological resources as raw materials, fell within the purview of the Act. The ignorance of the Act only added to the woes with many ongoing litigations at different forums. A few important cases involving foreign and Indian users are highlighted below.

Two Czech entomologists were convicted in 2008 with imprisonment under the BD Act for accessing insects in West Bengal without prior approval. In 2015, the BD Act was invoked against two Japanese nationals for illegally accessing animals like snakes, lizards etc. from Western Ghats, a biodiversity hotspot in Kerala. The Bt brinjal case, considered the first criminal biopiracy case in India, is another instance of violation of the BD Act, where brinjal germplasm was transferred by public research institutions to MAHYCO (an Indian company with foreign stakes) for development of genetically modified brinjal without prior permission from the authorities, leading to initiation of criminal proceedings against those involved.

Another notable case was filed in 2013 by a local BMC against coal companies mining in their area for declaring coal as a biological resource and for sharing the benefits arising out of mining. The NGT ruled that fossil fuels such as coal do not fall under the definition of Biological resources as per the BD Act and hence no benefit sharing could be claimed.

A bone of contention between the Indian industries and the regulatory bodies is whether Indian users fall under ABS obligations like foreign users. This issue was settled by a recent 2018 judgment delivered by the Uttarakhand High Court in the case of Divya Pharmacy vs. Union of India & Others. Though the BD Act does not explicitly mention benefit sharing obligations for Indian users, the court observed that purposive interpretation of the Act is warranted in this case and the Act should be seen in the light of CBD and NP. The court ruled that Indian users also have benefit sharing obligations, and the SBB has the regulatory powers to impose the same as mentioned in the 2014 Guidelines.

Challenges with Compliance

Considering the lack of awareness and the sheer volume of non-compliant cases, the Ministry of Environment issued an office memorandum in September 2018 giving an opportunity to certain categories of users, including foreign users, for correcting irregularities under the BD Act. In a recent memorandum issued in March 2019, that opportunity has been extended through May 17, 2019.

In spite of such efforts from the implementing authorities, this regulatory compliance is turning out to be an ordeal for industries and researchers for many reasons. There could be thousands of non-compliant users who are genuinely unaware that they are violating the provisions of the Act. While ignorance is no excuse for breaking the law, severe penal provisions that turn clueless researchers and regular businesses into criminal offenders are outright unfair.

The dearth of case law pertaining to the BD Act has paved the way for confusion in interpreting many critical terms. “Commercial utilization” is interpreted by SBBs to include many conventional industries (such as liquor industries that use grains and molasses as raw materials, paper industries that use bagasse, rice husk, waste paper, wheat straw etc. as raw materials) into the benefit sharing regimen, which does not bode well for these industries. There should be a clear cut distinction based on the type of end product, for example, on whether the bioresource is utilized for making a food product or a drug product. Also, attempts by the MP SBB to broaden the definition of “biological resources” to include coal, limestone etc. points more to the direction of revenue generation than conservation purposes. There is also confusion in interpreting the term “value added products” as seen in the case of paper industries, where the industries argued that the raw materials (bagasse, rice husk, waste paper, wheat straw, etc.) used for producing paper do not fall under the definition of “biological resources” but should be considered as “value added products,” but the court did not interpret these terms in this case.

Though Indian researchers do not need prior permission for research, collaborative research activities between Indian and foreign users has taken a major hit, as put forward in this article in Science Magazine by Prathapan K. D., with  more than 170 co-signatories from 35 countries. The article, which is about CBD’s implications on biodiversity research, has taken a strong view that CBD and the corresponding national legislations, especially those of biodiversity rich nations, have negatively impacted biodiversity research by prohibiting access and thwarting collaborations amongst biodiversity researchers across borders, thereby weakening its very own objective of conservation of biodiversity. It calls for the CBD parties to distinguish and enable basic conservation oriented research meant for public domain from profit based research aiming for proprietary rights.

In spite of the difficulties in implementing the Act, the regulators, the providers and the users of biological resources should come together and make consistent efforts to render the Act practical without diluting the essence of sustainable development, as we all have a stake in it for the sake of our future generations. Meanwhile, the best possible way out of this regulatory maze is to use the present opportunity provided by the Indian government to bring non-compliant activities for which permission has not been requested into compliance, and to include this compliance requirement as part of the business or research plan before initiating any project that utilizes biological resources from India.