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

Access and benefit sharing from biological resources as per national legislation will also continue. (X)

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.”

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