Follow Us:
Monday, July 23, 2018

Centre sits on royalty slabs for bio resources, loses Rs 25,000 cr a year

Still to notify what firms need to pay, pressure from industry lobbies holds back guidelines.

Written by Jay Mazoomdaar | New Delhi | Published: November 17, 2014 2:21:41 am

It took the National Biodiversity Authority (NBA) six years, 18 drafts and a prod from the National Green Tribunal (NGT) to finalise the Guidelines for Access and Benefit Sharing (ABS) this August. Three months on, it is yet to notify the rules that would allow it to collect from domestic and foreign companies 0.1-1 per cent of their ex-factory gross sales of products using biological resources and traditional knowledge.

A conservative estimate by the industry and Ministry of Environment and Forests (MoEF) sources puts this loss at Rs 20-25,000 crore annually. This money would go to the National Biodiversity Fund and to communities from whom such resources or knowledge have been accessed by the companies.

A wide range of industries — biotech, pharma, forestry, herbal, sugar, distilleries, food processing, soya, textile, fisheries, sericulture etc — use biological resources. Globally, the potential value of biological diversity and genetic resources is pegged at around US $1 trillion.

Fair and equitable sharing of benefits accrued from utilisation of genetic resources is a key objective of the Convention on Biological Diversity (CBD), adopted in June 1992 and ratified by 194 countries, including India. In compliance of the CBD, the Biological Diversity Act was passed in 2002 and the Biological Diversity Rules followed in 2004. But, a decade later, India is still to notify the quantum of revenue companies need to share, under the Act, with local communities and for biodiversity conservation.

The Indian Express accessed the ABS Guidelines prepared by the NBA’s core expert group and vetted by the Law Ministry. Providing for benefit-sharing in both monetary and non-monetary modes, the guidelines have slabs that should encourage small companies.

Subject to last-minute modifications by Environment Minister Prakash Javadekar, whose nod is awaited for the much-delayed notification, the benefit-sharing slabs for domestic companies are 0.1 per cent, 0.2 per cent and 0.5 per cent on annual ex-factory gross sales of a product, depending on if the sales are less than Rs 1 crore, between Rs 1-5 crore and above Rs 5 crore, respectively. Foreign companies have to pay double the rate — so between 0.2 per cent and 1 per cent — in the three slabs.

For bulk exports, benefit-sharing will be 3-5 per cent of the total Free on Board value of resources. For different categories of transfer of research and Intellectual Property Rights, benefit-sharing ranges from 0.5-5 per cent.

“The thrust is on a sectoral approach. For example, it allows lowest rates for innovations based on research in agro-bio resources that are likely to benefit the farmer. Also, we have been liberal in interpreting the provisions of access, because benefits can only be generated through greater but sustainable use,” said a member of the NBA panel that worked on the guidelines.

Once notified, the guidelines will be reviewed periodically, at least once in five years. The monetary benefits will go to the National Biodiversity Fund for sharing with 28 state biodiversity boards, more than 32,000 local biodiversity management committees and specific individuals or communities from whom biological resources or traditional knowledge were accessed.

Under the Biodiversity Act, foreign companies require the NBA’s prior approval to access India’s biological resources and traditional knowledge. Domestic companies do not need prior approval but must intimate the state biodiversity board concerned. In the absence of notified guidelines, few companies, or even state biodiversity boards, have complied with these provisions. The NBA itself has collected only Rs 42 lakh under benefit-sharing since it was set up in 2003.

Last year, several companies had approached the NGT against the Madhya Pradesh biodiversity board that issued notices for benefit-sharing, arguing that no other state was implementing the ABS provisions of the Biodiversity Act. On August 29, the NGT gave the NBA six weeks to notify the ABS Guidelines. Even though the draft was cleared by the Law Ministry on time, the MoEF and NBA missed the deadline.

According to sources, successive governments have been under pressure from powerful industry lobbies to hold the guidelines back. “It saves both Indian and foreign companies thousands of crores that they would have to shell out as royalties every year,” noted an MoEF official. Repeated attempts to issue notices to companies dealing in genetically modified seeds without prior approval were stonewalled within the ministry, the official added.

Both Javadekar and Hem Pande, MoEF additional secretary who holds temporary charge as NBA chairman, refused to explain the delay. The NBA is without a full-time chairman since Balakrishna Pasupati was forced to resign in February, six months before his term as NBA chairman ended.

As reported by The Indian Express in August, then MoEF secretary V Rajagopalan had got himself selected for the post, a move subsequently scrapped by the Appointments Committee of the Cabinet, comprising the PM and Home Minister. Neither Javadekar nor Pande responded to queries on if the selection process would be reinitiated and if the absence of a full-time chairman was affecting the NBA’s functions.

For all the latest India News, download Indian Express App