New York, 25 October 1994
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--- If royalty payments were made to developing countries and indigenous peoples for their plant varieties and local knowledge used by big multinational food and drug companies, those providers would be getting $5.4 billion a year that they do not see today, says a report commissioned by the United Nations Development Programme (UNDP). 

The value of Third World plant species to the pharmaceutical industry alone is estimated at more than $30 billion a year. But while more than 90 per cent of the earth's remaining biological diversity is located in Africa, Asia and South America, indigenous communities which have developed and nurtured such diversity are not acknowledged --much less compensated -- for the material and local knowledge that is taken from them, says the report. This inequity is exacerbated by the growing use of patents which grant exclusive protection to Northern corporations and researchers for material or knowledge which originated in the South.

"Our aim is to ensure that indigenous communities will, on their own terms, benefit from any commercialization of products of their knowledge, and avoid becoming trapped in a system of exploitation," says Sarah L. Timpson, Deputy Assistant Administrator of UNDP for Policy and Programme Support. Ms. Timpson says that UNDP has already begun consulting with indigenous people's organizations in the developing world to "seek their view of the most appropriate strategies for preserving traditional knowledge and gaining acknowledgement for their innovations and contributions."

The report, which was prepared by the Rural Advancement Foundation International (RAFI), cites the need for changes in the rules governing the ownership of biological materials and indigenous knowledge about them in developing countries. In the area of agriculture, for example, "Industrialized countries patent material wholly or partially derived from farmers' varieties," says the report. "As private companies move into the developing countries' seed markets, indigenous farmers are finding themselves paying for the end product of their own genius."

As important as biological diversity and related indigenous knowledge are to the developed world, they are even more important to developing countries. RAFI estimates that "80 per cent of the world's people continue to rely upon indigenous knowledge for their medical needs and possibly two- thirds of the world's people could not survive without the foods provided through indigenous knowledge of plants, animals, microbes and farming systems."

"Because it is a matter of survival, indigenous people have carefully nurtured and developed diversity," say the report authors. "Unfortunately, they have seldom received the benefits from its commercial application. Even when it comes from developing countries, genetic material tends to be stored in, and controlled by, developed-country scientists." Evidence includes the following:
-- 68 per cent of all crop seed collected in the South is stored in gene banks in industrial countries or at international agricultural research centres;
-- 85 per cent of all fetal populations of livestock breeds, all originally domesticated in the South -- is banked in industrialized countries, and,
-- 86 per cent of global microbial culture collections (yeasts, fungi, bacteria) is also held in industrialized countries.

The report contains a number of specific examples of large agricultural and drug companies making large sums on products derived wholly from plant, fungus or bacteria derived from -- but not publicly recognized as originating in -- developing country indigenous communities (pages 4-9 and an appendix with 100 examples, pages 45 to 54). Even the patent claims over the DNA of indigenous peoples themselves has become the focus of debate and law suits.

In calculating the cost of "bio-piracy" to developing countries, the authors acknowledge that there has also been uncompensated pirating of agricultural chemicals and pharmaceutical compounds from industrial countries by developing countries, amounting to as much as $2.7 billion a year in losses to the North. However, if developing countries were compensated a mere 2 per cent in royalties for global seed industry sales of $15 billion and 20 per cent for pharmaceutical products derived from Southern plants, the South would be owed an estimated $5.4 billion.

"Assuming access to legal support, indigenous communities could claim most (or all) of the biodiversity within their traditional lands," says the report, adding that in fact, "this is not likely to happen." There is little international machinery to assist indigenous peoples in this way. Whatever approach is taken by the South, it should be on a national, and cooperative basis, rather than trying to compete entrepreneurially, urges the report.

To help ensure acknowledgement and some form of compensation, whether royalties or some other benefit to a nation or indigenous community, the report calls for a new "intellectual integrity framework." Proposed steps include:
-- Consultation with indigenous communities to learn what steps they wish to take to preserve biodiversity and to properly acknowledge their contributions.
-- New deposit rules that would identify biological "inventions" as to their origin, including names of individuals or communities in developing countries, when they are deposited in gene banks or when patent application is made. Failure to provide such "passport data" could nullify a patent.
-- A rule that would make any material in gene banks and cell libraries which has been collected from indigenous communities off bounds for patent claims by others.
-- Appointment of ombudspersons in industrial-country patent offices to investigate complaints from indigenous communities and their national governments. This person would have authority to delay patent approvals and require review of patent applications.
-- Tribunals that could resolve disputes between indigenous communities and patent claimants.
-- The creation of a fee structure in each patent jurisdiction that would pay for expenses incurred by indigenous communities for deposits, tribunals and legal representation. 

Conserving Indigenous Knowledge: Integrating two systems of innovation. An independent study by the Rural Advancement Foundation International. Commissioned by the United Nations Development Programme. 63 pages.
Contact on 24 & 25 October: Peter Gall, UNDP Washington, DC, (202) 331-9130
Contacts after 25 October: Peter Gall, UNDP New York, (212) 906-5312 Ms. Jean Christie, RAFI Ottawa, (613) 567-6880 PR9430 .
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