Biological Diversity Bill, which facilitates commercial use of traditional resources, passed in Lok Sabha

The Lok Sabha passed the Biological Diversity (Amendment) Bill, which proposes to fast-track the patent application process and encourage foreign investment when it comes to the use of India’s biological resources, thus facilitating the commercial use of traditional resources.

The Bill was passed on July 25, nearly two years after it was first introduced in the Lok Sabha and subsequently sent to a Joint Parliamentary Committee for deliberation. The Committee submitted a report of its recommendations earlier this year which have been incorporated in the Bill that was passed.

“Based on two decades of implementation of the Act, a need has been felt to review and re-visit the provisions of the Act, in terms of achieving its objectives,” said Environment Minister Bhupender Yadav in Parliament. “This has eventually resulted in the drafting of the Biological Diversity (Amendment) Bill which I believe would balance both in achieving the aforementioned objectives and also facilitating ease of doing business,” he said.

The objectives of the Biological Diversity Act, which was first enacted in 2002, is to provide for conservation of biological diversity, sustainable use of its components and fair and equitable sharing of the benefits arising out of the use and knowledge of biological resources. These objectives are in line with the international Convention on Biological Diversity – a global treaty for the conservation and sustainable use of biodiversity, of which India is part.

The latest Bill makes significant changes to the Act in its original form, by changing the circumstances under which benefits are shared and making it easier for companies to access resources.

The Bill comes at a time when India recently signed the Global Biodiversity Framework – an agreement to “halt and reverse” the decline in global biodiversity. Among the framework’s 23 targets is to “take effective legal, policy, administrative and capacity-building measures at all levels, as appropriate, to ensure the fair and equitable sharing of benefits that arise from the utilization of genetic resources.”

“At a time when a Post-2020 Global Biodiversity Framework (GBF) has been agreed too, a megadiverse country like India must choose to mainstream the Biological Diversity Act in a whole-of-government and whole-of-society approach and not dilute its provisions and principles, as the world needs to urgently conserve and protect biodiversity,” said Shalini Bhutani, an independent legal researcher and policy analyst.

Compliance eased for traditional Indian medicine

Among the most contentious changes in the 2021 version of the Bill was the exclusion of “codified traditional knowledge” from its purview. Because the Bill, earlier, did not define what codified traditional knowledge meant, experts and state biodiversity boards pointed out that it risked excluding a vast number of traditional knowledge holders and keepers from benefiting from the use of their resources.

Indian pharmaceuticals are supposed to pay between 3 percent and 5 percent on the extracted bioresources or between 0.01 percent and 0.05 percent on the annual gross ex-factory sales as part of access benefit sharing. Traders and manufacturers of herbs and herbal products must pay either between 1 percent and 5 percent of the purchase price or between 0.1 percent and 0.5 percent of the sale price, depending on the scale of their commercial operations.

Speaking in the Parliament when the Bill was passed, Yadav said the new Bill defined codified traditional knowledge as that which is included in Ayurvedic books listed in Drugs and Cosmetics Act 1940. Apart from this, the Bill also excludes cultivated medicinal plants and their products, as well as AYUSH practitioners, from complying with it, said Yadav.

“This, I believe, would encourage foreign investments in the AYUSH Drug industry and popularise the medicines used in the Indian systems of treatment, thereby earning more foreign exchange and providing better employment in our country,” Yadav said.

Read more: Parliamentary panel endorses controversial changes in biodiversity law

In a 2018 landmark judgment, known as the Divya Pharmacy case, the Uttarakhand High Court ruled that all Indian companies extracting biological resources were mandated to seek permission from the State Biodiversity Boards to do so as well as pay for access benefit sharing, crediting a “long history of the movement for conservation” and the “long struggle, by and on behalf of the local and indigenous communities,” for this right.

The Bill also decriminalises offences by charging a penalty between Rs. one lakh and Rs. 50 lakhs. “In case of continuing contravention, there may be an additional penalty of up to one crore rupees,” Yadav said. Previously, offences were punishable with a jail term of up to 5 years, apart from a penalty of up to Rs. 10 lakhs.

These changes “would attract more foreign investments in the chain of biological resources including research, patent and commercial utilization, without compromising the National interest,” said Yadav.

Unlike the 2021 version, the latest version of the Bill refines the definition of a foreign-controlled company seeking to access resources, by harmonising the definition of “control” with that which is defined under the Companies Act of 2013. Companies incorporated outside India or Indian companies with foreign “control”, as defined by the Companies Act, must take permission form the National Biodiversity Authority before accessing resources and knowledge, according to the latest Bill.

“This is a welcome clarification. The previous Bill gave foreign companies an ambiguous definition which could have been misinterpreted and misused. This definition makes it clear that they still need to take requisite permissions, and makes it less ambiguous,” said Debadityo Sinha, lead for the Climate and Ecosystems team at the Vidhi Centre for Legal Policy.

The reason the original Act is strict with foreign entities is because the origins of the law lie in preventing biopiracy, explained Bhutani.

“The idea was to prevent foreign persons from using biological resources and people’s knowledge without informed consent, due acknowledgement and sharing benefits, whether monetary or otherwise. Whether it is a domestic entity or a foreign one, the net effect of using traditional resources without recognising and sharing benefits is the same for the local communities, who are the real custodians/stewards of biodiversity and legally recognised as ‘benefit claimers’,” she said.

The government has said changes in the Act were needed to facilitate the ease of doing business. Data from an investigation by the Down to Earth magazine in 2022 shows, however, that most states in India don’t have data on money collected through access benefit sharing, and that none of the states interviewed by the publication had disbursed this money to benefit claimers. “It is not clear if all companies have paid for the use of resources and knowledge, or on what basis and how much,” said the investigation.

“It is critical that India continue raising the issue of biopiracy on international platforms, but it must also walk the talk when it comes to its own domestic players in this area. Else the country would lose its moral, ethical and legal grounds to demand access benefit sharing from foreigners,” Bhutani said.

Read more: What is the significance of the biodiversity amendment bill?

Banner image: Ayurvedic plant materials. The latest Biological Diversity (Amendment) Bill facilitates the commercial use of traditional resources. Photo by Vis M/Wikimedia Commons.