There is much alarm among environmentalists and others at the rapid rate at which plant and animal species are becoming extinct. In large part, the cause of such extinction is the destruction of habitats vital to the survival of these species. The destruction of habitats is in turn the result of stresses placed upon nature by human population growth and uncontrolled economic development.(1) In the United States, the continuing controversy over the cutting down of old growth forests, the home of the spotted owl, is illustrative of this concept. It is merely illustrative, however, and cannot even suggest the universality or scale of the problem. It has been estimated that at least 50 species of plants and animals are lost every day,(2) and that one million have disappeared in the last 20 years.(3) Since the vast majority of these species have not even been discovered by modern science, there is no way to assess the loss in qualitative terms.
Nor is it possible to measure the adverse effects of this phenomenon on the earth's human population, whose welfare is tied inextricably to biological resources.(4) Eighty percent of the people in the Third World depend upon folk treatments derived from plants for their primary health care.(5) One-quarter of all the pharmaceuticals in the United States are made from plants,(6) and the next wonder drug may well lie undiscovered in the genetic material of some rare tropical plant.(7) In addition, wild species of plants and animals have been of tremendous importance as the precursors of valuable food crops and livestock. They are also the sources of new genetic material which makes those strains more resistant to insects, disease and drought and increases crop yields. The erosion of biological diversity reduces the range of genes available for these purposes. Unfortunately, selective breeding for agricultural applications can itself cause this erosion.(8) While in relative terms we know very little about what the earth's genetic resources hold, we have enough evidence to suspect that such wealth is great but dwindling quickly.
As mentioned above, the primary cause of species loss is the destruction of habitats. Many of the richest of these in terms of biological diversity---for example the tropical rainforests---are located in the developing nations of the world. This has put them in a particularly precarious situation. The economic predicament of developing nations places insidious pressures on these critical ecosystems.(9) The pressure to develop, to feed starving populations, and to stem the depletion of foreign currency reserves forces these nations to give priority to short-term cash generation over long-term conservation objectives.(10) Furthermore, even if the priorities were reversed, these countries would not have the scientific capability to allocate appropriately what are in any event scarce and insufficient resources in furtherance of conservation.(11)
In response to this predicament, the United Nations Conference on the Human Environment (UNCHE) convened in Stockholm in 1972.(12) The debate at that time was whether environmental protection and economic development were consistent with each other or antithetical. That question seemed to have an answer by 1987, when the Brundtland Report of the World Commission on Environment and Development enunciated the principle of "sustainable development." The report defined the term as development "meeting the needs of the present generation without compromising the needs of future generations," that is, economic development that does not consume natural resources at a rate that would lead to the long-term decline of those resources.(14) "Sustainable development" became the theme of the United Nations Conference on Environment and Development (UNCED), held at Rio de Janeiro in June 1992.(15) In the 20 years between the Stockholm and Rio summits, various international conventions were promulgated to deal with the conservation of the earth's species, but all have been fundamentally flawed in one respect or another.(16) Consequently, it became apparent that a global agreement specifically addressing the problem of ecosystem destruction was needed.(17)
In November 1990, the United Nations Environment Programme (UNEP) began the first of seven negotiating sessions whose objective was to produce an international treaty on the conservation of biological diversity.(18) After going through six drafts,(19) the Convention on Biological Diversity was presented at the Earth Summit in Rio de Janeiro in June 1992, where it was signed by 153 nations and the European Community.(20) The United States drew considerable criticism at that time for being the only nation attending the Rio Conference not to sign.(21) The Bush Administration cited dissatisfaction over the vague and ambiguous wording of some of the treaty's major provisions, wording which it felt left the U.S. biotechnology industry without adequate intellectual property protection and the government without control over its financial contributions to the cause of conservation.(22)
Although the Clinton Administration eventually did sign the Convention on the last day it was open for signature, almost a year after the Rio Conference, these issues remain unresolved.(23)
This Note looks to a private agreement between Merck Pharmaceuticals and the government of Costa Rica for a practical approach to the contested issues of the Convention on Biological Diversity. Part I of this Note will discuss the basic objectives of the Convention and the provisions which seek to further those goals. Part I will also examine the provisions on technology transfer and management of financial resources in order to elucidate the textual sources of U.S. dissatisfaction. Part II introduces the terms of the Merck-Costa Rica agreement, which the U.S. biotechnology industry has in the past urged as an alternative to a binding international treaty. Part III considers whether that agreement might be used as a model to lend more specificity to the vague and ambiguous language of the Convention.
I. THE CONVENTION ON BIOLOGICAL DIVERSITY
A. Objectives and Theory of the Convention
The objectives of the Convention are "the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding."(24) The Convention seeks to promote the conservation of biological diversity by providing for "national monitoring of biological diversity, the development of national strategies, plans and programs for conserving biological diversity, national in situ and ex situ conservation measures, environmental impact assessments of projects for adverse effects on biological diversity, and national reports from parties on measures taken to implement the convention and the effectiveness of these measures."(25) The Convention also contains a provision which gives the relatively new Global Environment Fund (GEF)(26) the responsibility for financing these national and international measures, at least until the parties to the Convention can decide on another financing organ.
Given the preoccupation in developing nations with economic development,(28) and, more specifically, the eradication of poverty, it is difficult to motivate such countries to undertake substantial efforts to conserve biological diversity.(29) The Convention reflects one approach to overcoming this problem. Implicit in the Convention is the notion that developing countries will undertake conservation measures more enthusiastically where economic benefits inure to them as a result. Thus, there emerges an effort to give nations a right to share in the profits of products made using the genetic materials native to their territories.(30) In furtherance of this policy, the Convention vests in developing nations the right to exclude nationals of foreign countries from access to biological organisms found in their territory.(31) Many developing nations argue that certain provisions of the Convention should and do go even further in providing such incentives, and in fact mandate the transfer of technology that will enable developing nations to manufacture and market directly the commercially valuable end-products of genetic materials.(32)
B. Problems With the Convention
Of the 154 countries at Rio, the United States was the only nation that refused to sign the Convention on Biological Diversity during the Summit itself. In the face of criticism from many quarters, the U.S. delegation justified its refusal to sign on several grounds. In particular, it stated that it found the Convention's treatment of intellectual property rights, technology transfer, and the financing mechanism unsatisfactory.(33) The United States also was "disappointed with the development of issues related to environmental impact assessments, the legal relationship between this Convention and other international agreements, and the scope of obligations with respect to the marine environment."(34) In large measure, the failure of the Convention to satisfy the U.S. delegation arises from ambiguities in the text, which, as the U.S. delegation put it, may have resulted either from pressure to hastily conclude negotiations or from substantive disagreement.(35)
These issues remain problematic for both the Clinton Administration and the U.S. biotechnology industry. The Administration authorized its United Nations ambassador, Madeleine Albright, to sign the treaty at the eleventh hour, apparently because it wanted to ensure that the United States would be able to participate in negotiations among the Parties to the Convention.(36) However, the signing was accompanied by an announcement that an interpretive statement would be forthcoming.(37) The contents of this statement have not yet been finalized,(38) but are expected to address the issues of intellectual property rights protection, technology transfer, and biotechnology safety.(39) At least one insider indicated that the issue of financing was not addressed in either of two draft statements submitted to the White House for consideration.(40)
The biotechnology industry, for its part, seems also ready to acknowledge the importance of the United States having input into future developments,(41) and has "softened its stance" on the United States becoming a signatory.(42) The industry seems content to wait for the interpretive statement before deciding whether it will support ratification of the Convention.(43) Thus the concerns remain the same, and whether the forthcoming interpretive statement can satisfactorily resolve them remains to be seen.
1. Intellectual Property Protection and Technology Transfer
One area of critical concern for the U.S. negotiators at Rio was the Convention's handling of intellectual property protection and technology transfer.(44) The Bush administration, under pressure from the U.S. biotechnology lobby,(45) argued that Article 16 of the Convention contains language which is, in effect, code for forced transfer of technology and which relieves developing countries of the burden of protecting the intellectual property rights of U.S. biotechnology companies. The Bush Administration felt that signing such a treaty would weaken the position of the United States with respect to international intellectual property protection in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), and hurt the competitiveness of its own biotechnology industry by allowing firms in developing nations to copy U.S. inventions and market them at cut-rate prices. Even the Convention's goal of encouraging U.S. biotechnology firms to conduct research in the developing nations is anathema to some members of that industry who fear that those countries would expropriate the fruits of such research, just as some Middle East oil states expropriated American oil wells.
The United States was not alone in its sentiments. Debate over technology transfer routinely pits developing nations against industrialized nations. Indeed, this debate has intensified as experts become increasingly aware of the important role of technological change in economic development.(48) The industrial nations, of course, want strong international protection of intellectual property rights (IPRs),(49) and would leave technology transfer to the free market.(50) They argue that this combination of strong IPR protection and free market transfer is the best way to promote development for a couple of reasons. First, it creates the requisite incentives for technological innovation,(51) and second, only with such assurances against unauthorized appropriation of technology will the high technology firms of the industrial nations grant licenses to and enter into joint ventures with the firms of developing nations.(52)
The developing nations, for their part, are opposed to strong IPR protection, and seek to thwart it (within their borders, at least) both passively, by refusing to grant the inventions of the industrial nations protection from unauthorized copying, and actively, by effectuating compulsory licensing of such inventions.(53) They argue that IPR protection hinders the introduction of new technologies by granting the firms of the industrial nations excessive monopoly power, which allows multinational firms to out-compete developing countries in their own markets.(54) In addition, they contend that the industrialized countries' argument that IPR protection is a necessary stimulus for innovation applies only to industrialized countries.(55) This issue has been amplified by the fact that the same battle lines have been drawn in the Uruguay Round of the GATT.(56)
The developing nations support their position in both arenas by pointing out the injustice of the current system under which they must pay royalties on products derived from genetic resources originating within their own territories.(57) India and Malaysia have led the charge in this direction by arguing for an interpretation of Article 16 that justifies exceptions to IPR protection in the interest of conservation of biological diversity.(58) The United States gave the appearance of tacitly acknowledging this interpretation by citing the adverse effects of such an interpretation as grounds for refusing to sign the Convention. In particular, U.S. officials are concerned that developing nations might go so far as to claim that the Convention overrides intellectual property rights established by other international agreements such as the GATT.(59)
2. Financial Mechanism
The United States also cited, as grounds for refusing to sign the Convention, its provisions on funding the conservation of biological diversity. The issue was primarily one of control over financial resources. Article 21 sets out the requirements of a "mechanism for the provision of financial resources to developing country Parties for purposes of this Convention on a grant or concessional basis."(60) The industrial nations will be required to "provide...financial resources to enable developing country Parties to meet the agreed full incremental costs to them of implementing measures which fulfill the obligations of this Convention and to benefit from its provisions and which costs are agreed between a developing country Party and the institutional structure referred to in Article 21."(61) Developing countries are not required to contribute to this fund, although they are invited to do so. Countries which are not yet industrialized may voluntarily assume the obligations of the industrialized nations.(62) All countries are expected to fund domestic conservation programs to the extent that they are able.(63)
Article 39 provides that until the Conference of the Parties to the Convention decides on a permanent financial mechanism,(64) the Global Environment Facility (GEF) of the United Nations Development Programme (UNEP) will serve in that capacity.(65) Under the current regime of the GEF, nations which donate more than $5.7 million have, in effect, a veto power over the use of such funds.(66) The United States, as well as other such donor nations (notably the United Kingdom and Japan), is concerned that the structure designated by the Conference to succeed the GEF will not follow this procedure. Thus the United States is concerned that such a body might become dominated by developing nations, and would no longer allow the United States to control the use of its contributed funds.(67) That there might be reason for concern is suggested by the fact that the GEF itself has come under criticism from numerous non-governmental organizations (NGOs).(68)
The United States is not alone in voicing such concerns. The United Kingdom and Japan both felt that the financial mechanism was a stumbling block. They managed to overcome their reluctance, however, by signing a "side interpretation" stating their understanding that decisions about the structure of the financing mechanism could only be effected by "consensus," by which they meant "unanimity."(69) With this leverage, the industrial nations could insist on terms no more onerous than those of the GEF.(70) It has been argued that the United States could retain control over its contributions to the fund by making a similar statement,(71) perhaps in the interpretive document that it plans to issue. The immediate result, however, would be yet another area in which both sides, though accepting the same literal terms, disagree sharply over their implementation. It is unclear how effective the Convention can be until the parties come to some agreement over the functioning of the financial mechanism.
C. The Importance of and Prospects for U.S. Participation
The United States continues to call for further clarification of the Convention's terms and intends to issue a statement of its interpretation of certain disputed provisions.(72) Some commentators have argued, however, that the United States has no choice but to become a party to the Convention.(73) They argue that since so many other countries have signed it, and, presumably, will ratify it, the United States will have to play by the rules of the Convention because the developing nations which harbor the world's genetic diversity will simply refuse to deal with U.S. biotechnology companies, denying them access to the critical wealth of genetic resources within their territories.(74)
This argument, however, is not without its weaknesses. For example, one could question the assumption that developing nations will deal only with the firms of nations which are party to the Convention. This assumption is particularly tenuous with respect to the U.S. industry which, due to its unique size,(75) might well have enough clout to open these doors.(76) In addition, the Convention's financing provisions, as enacted,(77) require that the funding for conservation measures worldwide come from the industrialized nations.(78) Without U.S. participation, these coffers will be significantly lighter than they would be otherwise. Finally, regardless of which industrialized nations do become parties to the Convention, there must still be enough of a consensus among developed and developing nations to achieve a common understanding of the terms of that document. Without such understanding, ratification, not to mention implementation, by industrialized nations is not guaranteed.
As stated before, even the other industrialized nations of the world who signed the Convention during the Summit did so with some reluctance.(80) In large part, however, there seemed to be a feeling that while there were unresolved disagreements, including those over patent rights and royalties, the Convention was too vague to have any adverse impact.(81) This lack of vigorous opposition among industrialized nations other than the United States, however, may also be explained by the fact that no other country's biotechnology industry is nearly as advanced as that of the United States.(82) Some of these industrialized nations, notably the United Kingdom and Japan, submitted "side interpretations" contemporaneously with their acceptances of the Convention, which stated their understanding of the financing provision.(83)
The United States has decided to follow a similar course, at least with respect to intellectual property rights and technology transfer.(84) One commentator likely to have some input into the interpretation statement now being discussed maintains that the conclusions of the U.S. delegation were based on a misreading of the text of Article 16, and that the U.S. biotechnology industry faces no danger regarding IPR protection and forced technology transfer under the literal terms of the Convention.(85) Indeed, that commentator has criticized the United States for tacitly accepting an interpretation of Article 16 espoused by a group of developing nations, led by India and Malaysia. He has instead put forward a textual analysis which demonstrates that the literal terms of the Convention support an interpretation of Article 16 which does not subordinate conservation to intellectual property rights.(86) In addition, with respect to the financing issue, he recommends taking the position enunciated by the United Kingdom.(87)
While such a maneuver might allow the United States to become a party to the Convention without losing control over its financial contributions or putting its biotechnology industry at risk, the result would merely be a Convention whose key provisions mean at least two different things to various signatories. Lack of consensus and cooperation would undermine the Convention's effectiveness as a global approach to the threats facing the world's biological diversity. While artful ambiguity is often necessary in many treaties to induce at least a commitment by nations to cooperate--an admittedly worthy goal---it is difficult to see how either side can benefit from this deadlock. What is necessary is a more specific articulation of many of the Convention's provisions, perhaps in a protocol or an amendment to the Convention.(88) An interpretation that is mutually acceptable must be reached before the Convention can have any real effect.
II. THE DEAL BETWEEN MERCK AND INBio
One logical place to look for guidance in resolving the ambiguities of the Convention would be any agreements between developing nations (or their private sectors) and industrialized nations (or their private sectors) which relate to the preservation of and access to genetic resources. One such agreement that has been widely hailed as an "example of what the Convention would do"(89) was struck between the U.S. pharmaceutical firm, Merck, and the government of Costa Rica, in late 1991.(90)
Under the terms of the agreement, the National Biodiversity Institute (INBio), a non-profit scientific organization created by the government of Costa Rica, will provide 10,000 samples of plants, animals, and soil to Merck. Merck will have the exclusive rights to study these samples for two years, and will retain the patents to any drugs developed using the samples. In return, Merck will pay INBio $1 million up front,(91) and will give the institute an additional $130,000 worth of laboratory equipment. Perhaps the most interesting part of the deal, at least from Costa Rica's perspective, is Merck's promise to pay royalties to INBio for any drugs developed from the biological samples provided. These royalties would be paid on all sales and not just sales in the United States or Costa Rica. As part of the deal, half of these royalties will go to the Costa Rican government's Ministry of Natural Resources, which Costa Rica says will use all of those proceeds for the conservation of biological diversity.(92) INBio refuses to disclose the precise percentage amount of the royalties, but its director Rodrigo Gomez has stated, by way of illustration, that "if we had something like 2 or 3 percent of the shares of 10 good products coming out of Costa Rica, Costa Rica would be receiving more external resources than what we are currently receiving from bananas and coffee put together."(93) Although ten good products out of 10,000 samples is unlikely,(94) and the time required to develop even a promising discovery can be ten years or more,(95) the payoff can be great. One example, in terms of dollars, of the kind of revenue that even one such discovery can generate is the anti-parasitic veterinary drug Ivermectin. First discovered in a soil micro-organism from Japan, it brought Merck more than $100 million in sales in 1991.(96)
One reason to consider the Merck-Costa Rica deal as a guide for specifying the somewhat vague provisions under the Convention is the intuitive notion that it is easier to get parties to do by treaty that which they already do by mutual agreement. The cooperative spirit which encompasses the Merck-Costa Rica transaction stands in stark contrast to the divisiveness between North and South which has characterized the negotiations on the Convention. Related to this is the fact that the kinds of practical arrangements that are reached in a deal like that between Merck and Costa Rica may be more indicative of the parties' real positions than those found in treaties, whose negotiations commonly, if not exclusively, involve a great deal of posturing for the benefit of political constituencies. Specifically, parties in real life may be willing to make concessions which, from an abstract perspective, seem intolerable. One might argue that it is the very concrete nature of the Merck-Costa Rica situation which makes agreement possible; since the Convention does not have that advantage, the real-world solutions of the deal are not applicable to the Convention. Whatever the force of this argument, it does not undermine the utility of the exercise at hand, the point of which is largely to make the Convention more concrete.
II. THE APPLICABILITY OF THE MERCK-INBio AGREEMENT TO PROBLEMS IN THE CONVENTION ON BIOLOGICAL DIVERSITY
A. Intellectual Property Protection and Technology Transfer
Several lessons might be drawn from the experience of Merck and INBio. First, the parties seem to be satisfied with the terms relating to technology transfer and the protection of intellectual property rights (IPRs). Costa Rica will avoid the injustice of paying royalties on products which originated in its own territory, a complaint often heard from developing nations with rich biological diversity. Moreover, Costa Rica will itself receive royalties on sales of those products, a condition which incorporates the notion, long held by the developing nations and embodied to some extent in the access provisions (97) of the Convention, that genetic resources are the property of the countries within which they are found. For its part, Merck will be the exclusive owner of the patents on any drugs derived from the use of these samples.
The question for present purposes is whether Article 16 can be read in such a way as to validate the terms of the Merck-Costa Rica deal. If it can, then this might lay the foundation for an interpretation which both developing countries and the United States can live with. Because the Convention allows for no reservations(98) and will not be reopened for renegotiation,(99) such consistency is necessary. Ideally, one might also hope for an interpretation which would resolve the ambiguity without causing either side to lose face politically.
One way in which the Merck-Costa Rica deal accomplishes these objectives is by implicitly distinguishing between different kinds of technology. For analytic purposes, three classes of technology can be identified. First, there is the technology which has a direct application to the conservation measures sought by the Convention. This would include, for example, scientific understanding of ecology and biology, economic theories which elucidate the pressures on the environment, techniques for surveying ecosystems, classifying organisms, and monitoring their disappearance,(100) techniques for preventing soil erosion and leaching of vital nutrients, replanting and other forest management techniques, pollution control strategies, and devices which clean water, air, and soil. Second, there is technology necessary to biotechnological research generally, but which does not entail the revelation of how to identify and produce a specific marketable drug. This would include genetic engineering laboratory techniques, tests for screening samples of genetic material for potentially useful characteristics, and laboratory equipment itself. Third, there is technology which enables one specifically to imitate existing biotechnological inventions, for example, drugs or agricultural products. Components of this type of technology might include information as to the specific source of the genetic material, the specific genetic engineering procedures for purifying it or synthesizing it in large quantities, and, if it has to be altered chemically to be effective, the genetic and chemical information needed to achieve that goal. In lay terms, this "product-specific technology" might be thought of as the "recipe" for a particular drug(101) or other biotechnological product.
The virtue of the Merck-Costa Rica deal is that it provides for the transfer of some very valuable technology without going beyond what the owner of that technology, Merck, would tolerate. While Costa Rica did not receive technology that would enable it directly to copy Merck's drugs, it did receive laboratory equipment, the ultimate value of which could well exceed several times its market value of the $130,000. In addition to having direct and immediate applications to conservation-related activities such as collection and monitoring (making it technology of the first class), this equipment could also serve as the cornerstone of a future biotechnology industry in Costa Rica (thus falling within the second class of technology). Moreover, if Merck performed the screening of the samples in Costa Rica, perhaps even as part of a joint venture, this would further augment the flow of know-how into the country, by informal means.(102) On the other hand, because Merck retains the patents, the deal did not entail the transfer of that most sensitive area of product-specific technology.(103)
The Convention, for its part, does not seem to distinguish clearly between these three classes of technology in its provisions on technology transfer. Rather, it uses the term "technology" too broadly. The result is that the negotiating parties end up in an all-or-nothing struggle for rights over the entire universe of technology and fail to see the possibilities for compromise that inhere in an approach which divides up the pie. Thus the parties to the negotiations, in effect, appear to have been contending for all three categories of technology when in actuality they might have settled for two out of three. Compromise is eminently more feasible if the negotiating parties can portray themselves as having initially bargained only for the class of technology that they will ultimately obtain.
A protocol clarifying this distinction might sufficiently reassure the U.S. biotechnology industry to allow the United States to ratify and implement the Convention in good faith. At the same time, the developing nations could get their hands on useful and valuable technology of the first and second kind.(104) The key is that if they have not publicly demanded the transfer of formulas for particular pharmaceuticals or agricultural products, they could accept the proposed arrangement without appearing to have conceded anything. If they have made such demands publicly, then they still gain something of value that they might not otherwise have received in such a forthright manner.
A solution which provides for the transfer of the first two classes of technology but not the third is consistent with the text of Article 16, the primary provision dealing with technology transfer. Nowhere does the mention of "technology" in that provision necessarily extend to the third class of technology. Paragraph 1 of Article 16 states that "technology includes biotechnology" and states that the Convention "undertakes...to provide and/or facilitate access for and transfer to other Contracting Parties of technologies that are relevant to the conservation and sustainable use of biological diversity or make use of genetic resources and do not cause significant damage to the environment."(105) Paragraph 3 mentions only "technology which makes use of those [genetic] resources."(106) Both the first and second classes of technology are technologies "relevant to the conservation and sustainable use of biological diversity," and the second class is also, strictly speaking, one that "makes use of" genetic resources, in that countries with such technology would have the capacity to conduct the same type of biotechnological research as U.S. biotechnology companies have been doing for years. The references to patents and IPR protection in paragraphs 2, 3 and 5 do not undermine this conclusion; there are certainly technologies within the first two classes which enjoy such protection. While technology of the third class---the "recipes" for specific marketable medicines---does fit the definitions of technologies mentioned in paragraphs 1 and 3, nothing in Article 16 requires the transfer of "all" or "any" technologies within those definitions. Thus, technology for the manufacture of particular drugs, as opposed to pharmaceutical research generally, may properly be excluded from transfer under Article 16. This interpretation is not defeated by the meaning given "technology" in Article 2, the Convention's section on definitions. "Technology" is stated there to include "biotechnology," which is "any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use."(107) While this definition does bring within the meaning of "technology" all product-specific biotechnology, it does not alter the fact that Article 16 does not expressly include "any" or "all" technologies that otherwise fit these various definitions.
Nor is this definition of biotechnology rendered pointless without a reading of Article 16 as including product-specific technology. Its reference to "specific use" need not exclusively embrace formulas for particular products; it also includes processes or products whose "specific uses" are general in the sense that they are not exclusively connected to a particular drug. An example might be a (specific) patented screening technique which uses a biological mechanism, but whose "specific use" relates to the general process of screening hundreds or thousands of biological samples. Indeed, "specific use" need not pertain to a drug at all, but rather to some other biotechnological product or process, for example, an agricultural use.(108)
This interpretation is also supported by the text of Article 17, which calls on parties to "facilitate the exchange of information, from all publicly available sources."(109) The use of the word "publicly" excludes by definition technology covered by IPRs owned by private entities. Paragraph 2 says that "[s]uch exchange of information shall include exchange of results of technical, scientific and socio-economic research, as well as information on training and surveying programmes, specialized knowledge, indigenous and traditional knowledge as such and in combination with the technologies referred to in Article 16, paragraph 1."(110) Article 17 authorizes only the transfer of publicly available technologies, and purports to include within this category "the technologies referred to in Article 16," and significantly, not "some" Article 16 technologies. Because Article 17 does not authorize the transfer of protected technologies, the Convention's internal consistency is preserved only if Article 16 also does not force such transfer.
Having found textual support in Article 17 for the interpretation urged by this Note, it is no less significant that this interpretation is not undermined by any other provisions of the Convention which refer or relate to "technology." Article 15, paragraph 7 and Article 19, paragraph 2 require parties to take measures for sharing the results of research and development as well as benefits from the commercial and other use of genetic resources.(111) While divulging the genetic formulas of profitable biotechnology products could literally be such "measures," the sharing of royalties only, as Merck has promised to do, would not only satisfy this provision, but would also further the goals of conservation tremendously. At the same time, there is simply nothing to suggest a requirement that the "sharing" take the form of divulging trade secrets or granting licenses on concessional or preferential terms, if at all. Article 18, for its part, is satisfied if technologies of only the first and second classes are transferred, and thus does not compel an interpretation that the transfer of the third class of technology is mandated under the Convention. Indeed, Article 18 nowhere mentions actual "transfer" of technology; rather, its focus is "joint development" of technology.(112) Article 19, paragraph 1 similarly emphasizes participation in research rather than outright transfer or sharing of benefits.(113) Finally, the reference to "technological advice" in Article 23, paragraph 4(b), incorporating Article 25, is diffused by the fact that the latter article deals with the "Subsidiary Body on Scientific, Technical and Technological Advice," a public international organization under the auspices of the Convention.(114) As a "think tank," it can identify technologies that might contribute either directly or indirectly to the conservation of biological diversity (paragraphs c and d);(115) however, it cannot itself mandate the transfer of any such technology.
Finally, there are some provisions indicating specific goals which would arguably be better served by recognizing a distinction between the various kinds of technology at issue. Articles 8, 14, and 19 reflect concerns about the release of organisms modified by biotechnology and the resulting adverse effects on biological diversity, as well as human health.(116) These provisions, therefore, mandate the regulation of such risks. It is at least arguable that strong IPR protection, by prohibiting unauthorized use of potentially harmful products, is an important element of successful regulation.(117)
Another important goal, mentioned in a 1992 UNEP resolution, is that of "national capacity-building" in the areas of "conservation of biological diversity and the sustainable use of its components."(118) The reference to "national capacity-building," while underscoring a major aim of the Convention, is ambiguous. If it is the mere capacity to copy, however, then conservation is advanced only insofar as this capacity induces countries to conserve the necessary raw materials for the biotechnological product in question, otherwise overharvesting will occur.(119) Moreover, the mere capacity to copy will provide little, if any, incentive to conserve genetic materials that can be synthesized more cheaply in laboratories. Finally, countries will have incentives only to protect known species,(120) thereby ignoring the Convention's goal of protecting the millions of species that are unknown but may someday have great utility.
Only capacity-building which induces a country to engage in exploratory sampling of species for valuable genetic resources will provide incentives to protect all ecosystems equally. Reliance on copying would defeat the incentive to engage in screening for valuable new species, because copying is much cheaper. In turn, while the technology to screen, identify, and catalog new species could still be transferred under this Note's proposal, there is less commercial incentive actually to use such technology if it is possible instead merely to copy products protected by IPRs.
One difficulty with this part of the analysis is that the developing nations achieve technology transfer not by relying on the physical transfer of such products from their creators, but rather by means of compulsory licensing or failure to crack down on outright pirating. It is not a question of what the industrial nations can "give" them; rather, it is a question of whether they can justify what they take. They argue that the Convention provides that justification. But the industrialized nations are not without their retaliatory capability. What this Note does is attempt to work out a solution which will clarify obligations under the Convention, and thereby distinguish the circumstances where retaliation is appropriate from those where it is not. Renouncing the Convention's supposed justification for compulsory licensing and unauthorized copying will gain the developing nations something valuable---the money and cooperation of the United States, as well as certainty. This Note merely seeks to make such renunciation possible under the terms of the Convention, and without loss of face.
The deal between Merck and the government of Costa Rica suggests an interpretation of the Convention which may help resolve the troubling issues of IPR protection and technology transfer. At the very least, it illustrates that the actual issues involved are not the same with respect to all kinds of technology. The value of recognizing this fact is that it suggests an approach to the problem, an approach already implemented in the real world in at least this one case. It is important to consider, however, whether this arrangement can be applied in other instances of conflict over technology transfer and IPR protection. There is some indication that it might not.
For one thing, neither party to the contract has achieved the best of all possible worlds; there is always room for each party to demand more and give less. It may well be that what Costa Rica has to accept in the absence of strong treaty provisions on technology transfer and what it would ultimately like are two different things. This agreement does indicate what Costa Rica believes will make itself better off, and as such, is a step in the right direction as far as conservation objectives are concerned. It may be, however, that Costa Rica cares less about pirating, imitation, and compulsory licensing than other developing nations because it is too small to make the necessary start-up investments,(121) or may not perceive a large enough market to make such investments worthwhile. Other developing nations may have a greater capacity to exploit chinks in the international IPR armor, and thus would argue more stridently in favor of weakened IPR protection than would Costa Rica. It is thus conceivable that what is acceptable to Costa Rica is not acceptable to countries such as Argentina, Brazil, Chile, Mexico, or India.
While it may be that larger developing nations have greater capacity to copy U.S. inventions and then market what they copy, such an argument at most leads to the conclusion that some nations are faced with greater temptation to steal inventions than others. Whether they would be free to do so in the absence of an interpretation of the Convention which would prohibit unauthorized copying of patented products is open to debate. There is a strong argument that retaliatory trade measures imposed by the industrialized nations would freeze the would-be copiers in their tracks.(122) Developing countries would thus lose nothing by signing a Convention which would forbid unauthorized copying, and would gain very much: the transfer of the other types of technology and technical assistance in a spirit of cooperation, as well as badly needed cash in the form of royalties on any new drugs. The latter receipts could in turn be used to purchase licenses on terms more acceptable to U.S. firms.
B. Financial Mechanism
The deal between Merck and INBio does not directly resolve the question of control over the allocation of financial resources by imposing or withholding a requirement of consensus. It may, however, provide a viable, if not preferable, alternative. It creates a structure under which Merck has already made a donation to Costa Rica, with far greater benefits to follow if Merck develops a marketable product from INBio's samples. This structure yields two results. First, the question of allocation is decided automatically, as the flow of financial resources redounds to the country making the conservation effort. Second, there is no danger of delay or deadlock due to the failure to reach a consensus, because neither party can profit-without the support of the other.
One of the arrangements that has been suggested adopts some of the logic of the Merck-INBio deal. This is the idea of a "use tax," which operates on the principle that those entities (states or firms) which profit from the utilization of a resource pay for its maintenance. It would have functioned by requiring firms like Merck to pay royalties on its sales of all products derived from genetic material discovered in any developing nations. Payment would be to a central financing mechanism, however, rather than the countries in question. This idea was embodied in early discussions of the Convention, but did not appear in the final draft.(123) As the financial mechanism has not yet been established, however, the parties could still consider it. While this approach has a certain appeal on moral, equitable, and theoretical grounds---requiring those who benefit financially to pay and rewarding compliance with the conservation requirements---there may be some question as to whether the United States would be willing to become a party to such an agreement since the United States still has not signed on to the only other use tax in operation on an international scale.(124)
The deal between Merck and INBio is superior to this kind of use tax in several respects. It avoids the need for political approval by the U.S. government with respect to the question of whether to donate, and it leaves to Costa Rica alone the discretion of how to spend that money (with the mutually agreed upon condition that all of it go to INBio and half of that to conservation). What is especially favorable from the point of view of a developing nation party to such an agreement is that it captures the total amount of the contribution; there is no central administrative mechanism to divide up the funds among all the competing developing nations (perhaps taking a "cut" for administrative expenses in the process), nor the problem of delays caused by deadlock over how to spend the money.
There are a few drawbacks to this arrangement, however. One is that it does not provide funding for conservation projects which involve more than one country. This disadvantage could be overcome, however, if several states bargained collectively with a biotechnology firm and agreed among themselves to spend the receipts on conservation projects which transcended their respective territories.(125) Another shortcoming is that bilateral agreements in the nature of the Merck-INBio deal, or even multilateral regional deals for that matter, do not prioritize on a global level among the many states whose biological diversity is threatened. The Convention recognizes that the needs of developing nations in this area are not all equally urgent, and that not all nations have as much at stake.(126) Resources from biotechnology firms will not necessarily be allocated on the basis of need; rather, such allocation is likely to depend on the relative genetic richness of the various countries. This could lead to the perverse result that the nations whose biological diversity is the most threatened, and therefore the most in need of support, will get the least aid.(127) Yet another drawback is that neither the Merck-INBio arrangement nor an international use tax achieves the Convention's goal of assuring a steady flow of funds.(128) Contributions consisting primarily of royalties, as these schemes envision, are contingent upon discoveries of commercially valuable species. Such events are highly uncertain. Finally, there is the possibility that the market approach might lead to the stripping of forests for valuable plants. The Merck deal mitigates this by modifying a strictly market-based approach to require the channeling of a substantial portion of the proceeds to conservation. Another response to these concerns is that where the compound, once isolated, can be synthesized, there will no longer be the need to harvest the plants.(129) The medicinal use of natural plant material, however, as in Europe and Asia, could well lead to overharvesting. Therefore, deals like that between Merck and INBio could at best only supplement a regime providing for international distribution of financial resources; at worst, they could be counterproductive.
One area in which the Merck-INBio approach offers advantages over that of the Convention is that of enforcement. Although enforcement problems were not cited in the U.S. declaration(130) as grounds for not signing the Convention, the mechanism incorporated in the Merck-INBio agreement bears a substantial relation to both the financing and technology transfer issues.
The Convention provides no effective enforcement mechanisms which ensure that the developing nations will comply with their obligations. Indeed, Article 20.4 tacitly acknowledges this: "The extent to which developing country Parties will effectively implement their commitments under this Convention will depend on the effective implementation by developed country Parties of their commitments under this Convention related to financial resources and transfer of technology...."(131) Notably, there is no corresponding provision conditioning the obligations of industrialized nations directly on the performance by developing nations of the conservation measures contained in the Convention. The provisions on the financial mechanism do allude to "criteria and guidelines for eligibility for access to and utilization of the financial resources including monitoring and evaluation on a regular basis of such utilization."(132) Nothing here, however, justifies the refusal of dissatisfied donor nations to contribute.(133) On the other hand, if a donor nation, in outrage, simply decided not to contribute funds, there would be no direct penalty under the Convention.(134)
With respect to the Merck-INBio deal, on the other hand, inducements for both parties to perform are built into the agreement. Consequently, there is no need for coercion by an international enforcement body. The initial million dollars paid by Merck to INBio is a token amount in contrast to the jackpot that the discovery of a new drug could bring. The real value is in the royalties. At least over the long term, Costa Rica would lose out on that possibility if it failed to preserve and even actively catalog and monitor its biological resources. Of course, having already provided Merck with its 10,000 samples, Costa Rica need do nothing further. Statistically speaking, however, this will yield only one profitable product.(135) It is therefore in Costa Rica's interest to increase the volume of such deals, either with Merck or with other biotechnology firms. If it allows its genetic resources to disappear through destruction of habitats, then Costa Rica will have nothing to offer. Indeed, such activity is not even mandated by the agreement, and it does not need to be. Of course, provisions in the Convention allowing the financial mechanism to set up criteria for developing nations to receive funding might provide some incentive. However, under the Merck-INBio deal such incentives are stronger. Since there is no diversion of financial resources to other projects, as the Convention would require, Costa Rica reaps the rewards of its efforts directly. In addition, such arrangements might impose fewer restrictions on the use of such funds. Terms allowing those countries to spend some of the money on economic development and the eradication of poverty, for example, would be more attractive to them.
For Merck's part, if it failed to pay royalties, it could well find itself denied access to specimens in the future, not only by Costa Rica, but by other developing nations as well. Furthermore, many substances, once discovered, still cannot be duplicated synthetically in the laboratory; they must be found in nature and then usually purified. Thus Merck would have to depend on good relations with Costa Rica for a continued supply of these critical raw materials. Indeed, it is unclear how the Convention would deal with this issue. While it speaks in terms of guaranteeing access to genetic resources, it cannot guarantee access to whatever quantities might be needed by industry, any more than it can guarantee industry access to whatever quantities of foreign oil it requires.
The other, perhaps more important area where there could be this type of linkage is the critical area of intellectual property protection. Not only would the threat of cutting off royalties induce Costa Rica to protect Merck's patents domestically, but since it has a stake in such royalties, it would naturally want strong IPR protection internationally.(136) Moreover, if Merck had such arrangements with several countries, it could induce IPR protection for all of its products on a much greater scale. It would, of course, be up to each of the various developing nations in question to weigh the initially uncertain benefits of royalties from biotechnology against the short-term benefits of pirating such products and receiving the profits on those directly. Such royalties, however, would not be the industrialized nations' only bargaining chip; they currently enjoy considerable leverage through trade measures, and are currently using such leverage in the IPR aspects of the Uruguay Round negotiations.(137) It seems only logical, however, that the tenor of negotiations on this issue might improve if the developing nations saw potential gain, and thus common ground with their industrial trading partners, instead of solely the threat of retaliation.
This Note has not considered in depth all of the concerns of the United States, or its biotechnology industry, with respect to the Convention. Certainly, the Merck-INBio deal does not suggest general solutions to all of those problems, either because it does not encounter them, because it is inapplicable, or because the necessary steps are beyond its reach. For example, the Merck-INBio approach is inapplicable to the marine environment because its central premise is that nations can own and control access to genetic material within their borders, whereas, by international agreement and custom, nobody owns the oceans. The issue of environmental impact statements is not addressed because those concerns do not arise. The nature of this project, limited as it is to gathering minute samples of organisms, is on such a small scale as to be environmentally insignificant.(138) In addition, the institution which is conducting such work is the one that would be concerned with approving such projects in the first place. Moreover, what this deal does not and cannot address at all is the problem of activity conducted in one nation which has environmentally destructive effects in another; examples are air pollution and acid rain, as well as the pollution of waterways.(139) Those aspects of the problem are beyond the reach of private deals. The issue of impact assessment is related to that of biotechnology safety regulations.(140) While the gravity of this issue as a reason for the initial U.S. refusal to sign is not clear,(141) the main concern of the U.S. biotechnology lobby seems to be regulation,(142) which also is beyond the reach of private deals to mitigate.
On the other hand, the Merck-INBio deal does suggest partial solutions in all of these areas. Coastal marine environments within the territorial waters of developing nations could be protected in this way. This is significant because they are among the most fertile regions of the ocean. In addition, the purposes of the Convention in the area of biotechnology safety would be furthered in a concrete way under such agreements as Merck-INBio. The Convention's approach to this problem in the international context is to promote communication and consultation between the party introducing the potentially harmful material and any countries which might be affected. Arguably, one of the best ways to promote communication is to set up an institutional basis for cooperation and joint research, which the Merck-INBio deal does. Finally, the U.S. objection to the legal relationship between this Convention and other international agreements(143) could be partially diminished by the lessons of the Merck-INBio deal; to the extent that the United States is concerned that the Convention might undermine its position on IPR protection in the TRIPs(144) negotiations of the GATT, the Merck-INBio deal has outlined the starting point of a potential compromise in that agreement as well as in the Convention.(145)
As this Note has demonstrated, the example of the Merck-INBio deal is most useful with respect to those areas of dispute which present the biggest obstacles to international consensus and cooperation--those relating to the financial mechanism and to technology transfer and IPR protection. If the Convention explicitly recognized that there are three distinct categories of technology, struggles about whether all technology potentially "relevant" to the conservation of biological diversity should be transferred under Article 16 would be properly seen as unnecessary. Breaking down the entire universe of relevant technology into subsets would make the questions more manageable and sow the seeds of compromise. This solution would allow the industrial nations to participate in the international effort to conserve biological diversity, confident in the continuation of a technology gap supporting the standard of living to which their citizens have become accustomed. It would allow the developing nations to win the voluntary transfer of some useful technology which could preserve not only the natural environment but also improve their standards of living. The payment of royalties would contribute at least as much to the wealth of the developing nations. While the Merck-INBio agreement fails to address the funding of conservation projects in a manner which is globally comprehensive and prioritized, it does highlight the attractiveness to a developing country of a system which compensates them according to the magnitude of their efforts. This approach thus provides incentives not fully developed in the Convention, which at the same time fails to institute in their place an effective enforcement mechanism.
The foregoing analysis points to the conclusion that the deal between Merck and INBio is a model not of a solution that will replace the Convention, but of one that should supplement it by filling in its gaps, resolving some of its ambiguities, and illuminating common ground where there was previously thought to be no room for compromise. No attempted solution for such a complex and imperfectly understood problem will be completely successful in every situation. Such is the case with the deal between Merck and INBio, whose harmonious creation is due itself to its specificity and concreteness. The Convention will have to be much more flexible than this, but it is hoped that the lessons learned from the success of this deal will enable the parties, and potential parties, to the Convention to better understand that both sides can benefit from each other even with limits on how far either is ultimately prepared to go. Indeed, because neither side can benefit without the other, it is critical that they be able to see the interests which are common rather than mutually exclusive.
Michael D. Coughlin, Jr.
J.D. Candidate, Columbia University School of Law, 1994.
1. For an excellent and detailed survey of the various ways in which human activity has caused or contributed to the loss of biological diversity, see generally Tracy Dobson, Loss of Biodiversity: An International Perspective, 17 N.C. J. Int'l L. & Com. Rec. 277, 277-99 (1992).
2. Delegates Pessimistic About Outlook for Finishing Work on Biodiversity Treaty, 15 Int'l Env't Rep. (BNA) 93, 93 (February 26, 1992). Another source puts the figure at 150 species per day. Dobson, supra note 1, at 279 (citing biologist E.O. Wilson).
3. This figure was the estimate of biologist E.O. Wilson. Susan Benesch, Rio Treaty Tries to Balance Development, Conservation, St. Petersburg Times, June 13, 1992, at A3.
4. For general discussion on the importance of preserving biological diversity, see Dobson, supra note 1, at 282-87; Kathryn Rackleff, Comment, Preservation of Biological Diversity: Toward a Global Convention, 3 Colo. J. Int'l Envtl. L. & Pol'y 405, 405-13 (1992); Rohini Acharya, Patenting of Biotechnology; GATT and the Erosion of the World's Biodiversity, J. World Trade, Dec. 1991, at 71, 80-81. For a discussion of the utility of biotechnology in the preservation of biological diversity, for example, by facilitating efforts by local farmers to breed new and diverse varieties of food crops and by increasing the rates of regeneration of deforested areas, see id at 83-84.
5. Graeme Browning, Biodiversity Battle, 24 Nat'l J. 1827, 1827 (1992).
6. Benesch, supra note 3, at A3; Rackleff, supra note 4, at 410 n.37. Natural substances provided all of the medicines until the middle of this century. Folk Remedies Cain Credibility as a Source for New Medicines, Warfield's Bus. Rec., Oct. 23, 1992, at 5, 5 [hereinafter Folk Remedies]. Even in an age when most pharmaceutical research was done by computer models and drugs synthesized in laboratories, natural substances have remained important because they are the source of the chemicals on which these drugs were based, and the source of the genes that are the raw materials for genetic engineering. See Rackleff, supra note 4, at 412-13. "Historically with almost no exceptions, new prototype pharmaceuticals have come out of natural products research." Pharmaceutical Companies Go 'Chemical Prospecting' for New Medicines, Pharmaceutical Bus. News, Aug. 21, 1992, available in LEXIS, Nexis library, Bus file [hereinafter Chemical Prospecting] (quoting Dr. James McChesney, director of a pharmaceutical research institute at the University of Mississippi).
Pharmaceutical research for many years relied on computer modeling techniques because it was felt that the screening of natural products for useful chemical structures was too tedious. Recent advances in scientific techniques, however, have made it possible to screen thousands of biological samples a week, and resulted in a resurgence of interest in screening natural products, a process also known as "chemical prospecting." For a discussion of this trend and the natural origins of some important drugs, see id; Mara Bovsun, Botanists Search Hurricane Wreckage for New Drug Clues, Biotechnology Newswatch, Sept. 21, 1992, at 1; Debra Beachy, Nature's Pharmacy: After Years of Developing Synthetic Drugs and Seeking Other Quick Cures, U.S. Scientists Are Once Again Making Plants Their Business, Houston Chron., Oct. 11, 1992, at Business 1 [hereinafter Nature's Pharmacy]; Folk Remedies, supra, at 5.
7. Only 1,100 of the world's 250,000 species of flowering plants have been investigated thoroughly for medicinal uses. "You don't have to be a rocket scientist to figure out that you may find something in the remaining 99.5 per cent." Marjorie Shaffer, Going Back to Basics, Fin. Times, Sept. 29, 1992, at 21 (quoting Michael Balick, director of the Institute of Economic Botany at the New York Botanical Gardens). Other sources have stated that as many as five (some 11,000) or ten per cent of flowering plant species have been screened. See Bovsun, supra note 6; Chemical Prospecting, supra note 6. These latter estimates may include plants that have been screened less than thoroughly.
8. As species are increasingly inbred to produce higher-response varieties, the genetic base of such plants and animals becomes increasingly narrow, leaving those species highly susceptible to new diseases and pests (or those that have evolved resistance to the plants' defenses). The attractiveness of such species to farmers in the short run, however, results in the displacement of the more heterogeneous local varieties of food crops. Acharya, supra note 4, at 80-84; Rackleff, supra note 4, at 411-13. This displacement leads to the condition known as "monoculture," an area sown with genetically identical crops. Id. at 412.
9. For discussion of the destructive impact of human population and economic development pressures on habitats in developing nations, see Dobson, supra note 1, at 287-97; Jon H. Goldstein, The Prospects for Using Market Incentives to Conserve Biological Diversity, 21 Envtl. L. 985, 986 n.3 (citing statistics observed in Brazil and Kenya).
10. See, e.g., Rackleff, supra note 4, at 413-14. The Preamble to the Convention on Biological Diversity itself recognizes "that economic and social development and poverty eradication are the first and overriding priorities of developing countries". Convention on Biological Diversity, June 5, 1992, Preamble, 31 I.L.M. 818, 823. All of these objectives contribute to the historical trend of substituting cash-crops (which tend to be genetically similar) for subsistence farming (which depends on genetic diversity). See Acharya, supra note 4, at 80-84.
11. The Convention on Biological Diversity acknowledges "that special provision is required to meet the needs of developing countries, including the provision of new and additional financial resources and appropriate access to relevant technologies" and that "substantial investments are required." Convention on Biological Diversity, supra note 10, Preamble, at 823.
12. Conference on the Human Environment, 11 I.L.M. 1416 (1972).
13. David Sive, Sustainable Development Was Rio Theme, Nat'l L.J., Sept. 21, 1992, at 16.
16. For example, the Convention on the International Trade in Endangered Species (CITES), focusing only on internationally traded endangered species, is flawed in two respects. First, it fails to address the major source of species loss, which is habitat destruction. Second, it covers only species which are known to be endangered, and thus overlooks species which are either unknown or not endangered. The Convention on Wetlands of International Importance Especially as Waterfowl Habitat correctly focuses on habitat preservation, but is limited to only one kind of habitat. Other treaties, such as the Convention Concerning the Protection of the World Cultural and Natural Heritage, the Convention on Conservation of Migratory Species of Wild Animals, the Whaling Convention, the Agreement on the Conservation of Polar Bears, and the Migratory Bird Treaty Act are similarly limited to either discrete species or aspects of the problem. See Rackleff, supra note 4, at 406-07; Dobson, supra note 1, at 301-02. For a brief discussion of habitat destruction as a result of human population pressures, see id; Goldstein, supra note 9, at 986.
17. See Rackleff, supra note 4, at 406-07. See also the Preamble to the Convention (expressing the desire "to enhance and complement existing international arrangements for the conservation of biological diversity and sustainable use of its components"). Convention on Biological Diversity, supra note 10, Preamble, at 823.
18. Gareth Porter, The United States and the Biodiversity Convention: The Case for Participation 4 (Nov. 4, 1992) (prepublication copy, available from Environmental and Energy Study Institute, Washington. D.C.).
20. Id. at 1.
22. See id at 2-3, 7-9.
23. See As It Signs Treaty, United States Calls For Global Patent Protection for Biotech, Nat'l Evn't Daily (BNA), June 8, 1993, available in Westlaw, BNA-NED file [hereinafter As It Signs Treaty].
24. Convention on Biological Diversity, supra note 10, art. 1, at 823.
25. Edith B. Weiss, Introductory Note to the Convention on Biological Diversity, 31 I.L.M. 814, 817 (1992).
26. The GEF is a financial institution set up in early 1991 and jointly run by the World Bank, the United Nations Development Programme, and the United Nations Environment Programme. All three of these organizations contribute money to the GEF, as do the countries which are participants in the fund. The GEF then acts as an outlet for the funding of environmental projects. It is currently the mechanism listed in both the Convention on Biological Diversity and the United Nations Framework Convention on Climate Change to administer financial resources needed under those treaties. It was also proposed as the funding mechanism for the Agenda 21 action plan, a broadly sweeping non-binding agreement negotiated at the Rio Summit. See GEF Officials Defend Performance at NGO Global Forum Press Conference, 15 Int'l Env't Rep. (BNA) 418, 418 (June 17, 1992) [hereinafter GEF Officials].
27. At the earliest, this would occur at the first Conference of the Parties, which is to take place within one year of the Convention's entry into force. Convention on Biological Diversity, supra note 10, art. 39, at 837-38 (addressing the interim financial arrangements); id art. 23, para. 1, at 832 (establishing a Conference of the Parties). Under the terms of Article 36, the Convention will enter into force ninety days after the thirtieth country ratifies, accepts, approves, or accedes to the Convention. Id. art. 36, para. 1, at 837.
28. See supra text accompanying note 10. See also Dobson, supra note 1, at 291. ("The need for development in Third World countries is beyond debate, and the right to develop is now formally embedded in United Nations policy").
29. Indeed, Article 20, paragraph 4 acknowledges this fact: "The extent to which developing country Parties will effectively implement their commitments under this Convention...will take fully into account the fact that economic and social development and eradication of poverty are the first and overriding priorities of the developing country Parties." Convention on Biological Diversity, supra note 10, art. 20, para. 4, at 831.
30. Convention on Biological Diversity, supra note 10, art. 15, para. 7, at 828. In economic terms, this principle reflects to some extent the environmental costs of the products, as that part of the profits which shall be redirected to the developing nations is earmarked for conservation-related projects. See, e.g., the statement of one conservation policy officer of the World Wildlife Fund of Brazil: "The price of all traded goods must incorporate their full environmental and social costs." Biodiversity Treaty Called Highlight of Summit by Southern Conservationist, Int'l Env't Daily (BNA), Aug. 6, 1992, available in Westlaw, BNA-IED file.
31. Convention on Biological Diversity, supra note 10, art. 15, at 828 (addressing the access to genetic materials); id. art. 19, at 830 (addressing the handling of biotechnology and the distribution of its benefits).
32. See id. art. 16, at 829 (addressing the access to and transfer of technology); id. art. 19, at 830 (addressing the handling of biotechnology and the distribution of its benefits).
33. United States: Declaration Made at the United Nations Environment Programme Conference for the Adoption of the Agreed Text of the Convention on Biological Diversity, 31 I.L.M. 848, 848 (1992) [hereinafter Declaration].
Significantly, these same issues, as well as the question of a protocol on biotechnology, were identified by experts at a recent international conference on biological diversity as the "main controversies that need to be solved" by the signatories of the Convention. Protocol to Biodiversity Treaty Said Needed on Biotechnology, Other Issues, Nat'l Env't Daily (BNA), June 2, 1993, available in Westlaw, BNA-NED file [hereinafter Protocol to Biodiversity Treaty].
34. Declaration, supra note 33, at 848.
36. See Wirth Predicts Biodiversity Treaty Will Be Ratified Within One Year, Nat'l Env't Daily (BNA), June 9, 1993, available in Westlaw, BNA-IED file [hereinafter Wirth Predicts]. This was especially true with respect to the issue of negotiating a protocol on the subject of the safe handling of genetically modified organisms. See id
37. See As It Signs Treaty, supra note 23.
38. See id; Wirth Predicts, supra note 36.
39. See Clinton Commits to Cut Greenhouse Gases, Sign Biodiversity Treaty, Expand TRI Reporting, Chem. Reg. Rep. (BNA), Apr. 23, 1993, available in Westlaw, BNA-CHEM file [hereinafter Clinton Commits]; Draft Statements to Interpret Treaty Said Under Examination by Administration, Int'l Env't Daily (BNA), Apr. 5, 1993, available in Westlaw, BNA-IED file [hereinafter Draft Statements].
40. That insider was Walt Reid, a vice president of the World Resources Institute. That organization joined Merck Pharmaceuticals, Genetech Inc., the World Wildlife Fund, and the Environment and Energy Study Institute in putting together one of the draft statements in early 1993. The other draft statement was drawn up by the biotechnology industry itself. See Draft Statements, supra note 39.
41. See Industry Wants U.S. to Sign Treaty by Deadline Even If Statement Is Unfinished, Nat'l Env't Daily (BNA), June 1, 1993, available in Westlaw, BNA-NED file; As It Signs Treaty, supra note 23 (with respect to biosafety protocol).
42. See Clinton Commits, supra note 39; see also As It Signs Treaty, supra note 23.
43. The industry "has said it is willing to wait for the statement of interpretation until the Senate takes up the treaty." U.N. Ambassador Albright Slated to Sign Biodiversity Treaty on June 4, Chem. Reg. Rep. (BNA), June 4, 1993, available in Westlaw, BNA-CHEM file.
44. Declaration, supra note 33, at 848.
45. See, e.g., Industry Trade Groups Laud President Bush for Decision Not to Sign Biodiversity Treaty, Int'l Bus. Daily (BNA), June 15, 1992, available in LEXIS, Nexis library, Bus file [hereinafter Industry Trade Groups]. One source says that although this pressure was intense before the final negotiating session, the biotechnology lobby relaxed its opposition considerably after it saw the draft had been altered such that "the one clause [on patent rights] that they didn't like would be qualified by succeeding clauses, [and] they decided it was something they could live with." Browning, supra note 5, at 1829 (quoting an unnamed Rio summit attendee). The Bush Administration, however--specifically the President's Council on Competitiveness and the State Department--maintained a hard-line attitude towards the Convention. Id. Some U.S. officials, however, blamed the failure to sign on the leak of a memo from EPA chief William Reilly to White House Domestic Policy Advisor Clayton Yeutter. That memo pertained to sensitive discussions with Brazil reportedly exploring possible changes to the Convention that would satisfy the United States. The leak of this information was said to have torpedoed the United States-Brazil discussions. See U.S. Officials Angered at Leak of Reilly Memo, Say Biodiversity Treaty a Casualty, Daily Rep. for Executives (BNA), June 8, 1992, available in Westlaw, BNA-DER file. The U.S. biotechnology industry, for its part, has since softened its stance on the treaty, and now supports signature, if not ratification, by the United States. See supra text accompanying note 42.
46. The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement set up to liberalize international trade by seeking the limitation of import restrictions, subsidies, and other protectionist measures.
47. Browning, supra note 5, at 1827 (quoting the executive director of the Association of Biotechnology Companies).
48. For a discussion of this link between technology and development, see Acharya, supra note 4, at 76-79.
49. Browning, supra note 5, at 1829 (quoting Louis De Gama, director of the Bio-Industry Association, which represents the major European biotechnology companies).
50. Statement of Jeff Kushan, a member of the U.S. delegation to the final negotiations on the draft proposal of the Convention. Biodiversity Treaty Risks Interfering with Patent Protections, Official Says, Int'l Trade Rep. (BNA), June 17, 1992, available in Westlaw, BNA-ITR file.
51. "Most of those who have studied the role played by patents in economic development agree that patents are essential incentives for innovation and enhance the rate of technological change." Acharya, supra note 4, at 78.
52. A spokesman for the Association of Biotechnology Companies (ABC) "warned that the treaty, if adopted, would be a disincentive to ABC member companies to participate in the economies of Third World countries." Biodiversity Treaty Risks Interfering with Patent Protections, Official Says, supra note 50. European Community Development Commissioner Manuel Marin believes that an interpretive statement by the EC declaring the sanctity of IPRs is essential to the cooperation of the private sector. Parliament Opposes ECC Plan to Link Action on U.N. Treaty to Property Rights Statement, Int'l Env't Daily (BNA), July 9, 1993, available in Westlaw, BNA-ED file [hereinafter Parliament Opposes ECC Plan].
One country that seems to understand the need for assurances against unauthorized appropriation is Costa Rica, which recently passed a Wildlife Conservation Law giving the Ministry, of National Resources the authority to negotiate with foreign firms wishing to have access to biological resources. According to the Minister of Natural Resources himself, Heman Bravo, the law is intended to guarantee that foreign companies which invest their technology in genetic research in Costa Rica will not be set upon by the government for additional claims for royalties not already specified at the time of the agreement. Costa Rica hopes that encouraging research within its territory will result in the voluntary transfer of technology and know-how from foreign biotechnology firms. New Measure Would Cover Extraction of Genetic Resources from Rain Forest, Int'l Env't Daily (BNA), July 21, 1992, available in Westlaw, BNA-ED file.
53. Ordinarily, a person who wishes to market a product covered by a patent belonging to someone else can do so only if the patent owner grants that person a license, usually for a freely negotiated price. Patent protection, however, only exists in a foreign country with the consent of that country's government. Accordingly, that government--perhaps because it desires that product to be available to its citizens at an economical price--can allow its nationals to market the patented product by paying the patent owner something less than the fee that otherwise would have been negotiated. This is called "compulsory licensing," because it is as if the patent owner had granted a license against its will on less than market terms. Compulsory licensing is allowed to some extent, but biotechnology industry officials say that the Convention "would permit compulsory arrangements that are far broader than those currently acceptable." Biodiversity Treaty Risks Interfering with Patent Protections, Official Says, supra note 50. Some countries, both developing and industrialized, also permit the unlicensed reproduction and sale of various goods. See Porter, supra note 18, at 6.
54. Acharya, supra note 4, at 73-74, 79.
55. Id at 79. Indeed, it has been argued that for a developing country to respect the patents of a U.S. inventor would be a disincentive for innovation by citizens of the developing country. The reasoning behind this statement is that even if an inventor in the developing country created an invention independently (i.e., without copying the U.S. invention), U.S. Law would still forbid that inventor to market that product. Id at 84.
56. The United States has pushed for the inclusion of the subject of IPR protection in the current round of GATT negotiations, the so-called Uruguay Round. Porter, supra note 18, at 6. The negotiations on this issue are referred to as TRIPs, which stands for "Trade-Related Aspects of Intellectual Property Protection, Including Trade in Counterfeit Goods." This U.S. initiative is motivated by the desire to bring IPR issues into an international forum which has a viable enforcement mechanism. Such issues were previously treated under the World Intellectual Property Organization (WIPO), but that institution has no enforcement abilities. Initially, its mandate was the prevention of trade in counterfeit goods, but industrialized nations are now expanding the discussion to include minimum standards for international IPR protection. See Acharya, supra note 4, at 73-74.
57. The developing nations previously have employed another tactic to escape the burden of paying royalties on some agricultural biotechnology products (regardless of where the raw genetic material originated), by attempting to place plant genetic resources developed by plant breeders on a plane with naturally occurring plant material, which has traditionally been considered the "common heritage of mankind." This assertion was embodied in the International Undertaking on Plant Genetic Resources, which was adopted by the U.N. Food and Agriculture Organization's Commission on Plant Genetic Resources in 1983. That agreement, however, was signed by industrialized countries only under a reservation which vitiated its essential purpose. See Porter, supra note 18, at 4.
58. The basic rationale is that compulsory licensing and relaxed protection of foreign inventions are justified because they achieve, in the Convention's words, the transfer of technologies which are "relevant to the conservation and sustainable use of biological diversity or make use of genetic resources" on "concessional and preferential terms." Convention on Biological Diversity, supra note 10, art. 16, paras. 1-2, at 829. For a discussion of the negotiating history as well as a summary of the Indian delegation's analysis of Article 16, see Porter, supra note 18, at 16-19.
59. U.N. Biodiversity Treaty Seen Likely to Affect U.S. Biotech Firms, 15 Int'l Env't Rep. (BNA) 636, 636 (1992). See Convention on Biological Diversity, supra note 10, art. 22, para. 1, at 832 ("The provisions of this Convention shall not affect the rights and obligations of any Contracting Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity").
60. Convention on Biological Diversity, supra note 10, art. 21, para. 1, at 831.
61. Id art. 20, para. 2, at 830-31.
63. Id art. 20, para. 1, at 830.
64. See supra note 27.
65. See supra note 26.
66. To participate in the GEF, a country must contribute a minimum of 4 million Standard Drawing Rights (SDRs), which is approximately US $5.7 million. Donald M. Goldberg, The Montreal Protocol Multilateral Fund: A Model for the Framework Convention on Climate Change, Int'l Env't Daily (BNA), Apr. 15, 1993, available in Westlaw, BNA-IED file. Voting in the GEF "is strictly by consensus, giving individual countries the opportunity to block projects they oppose." Id
67. Under the terms of the provisions, donor nations are required to meet the full incremental costs to developing nations, and such costs need be approved only by the "institutional structure" in control of these resources rather than by each contributing nation. See Convention on Biological Diversity, supra note 10, art. 20, para. 2, at 830-31. According to Clayton K. Yeutter, Domestic Policy Counselor to President Bush, the United States has never before signed a treaty which would require it to relinquish control over the funds it contributes. Browning, supra note 5, at 1830.
68. Some of these groups, including Greenpeace, Friends of the Earth, and the Sierra Club, were opposed to the GEF becoming the funding mechanism for Agenda 21 (one of the non-binding agreements of the Rio Summit, see supra note 26) because its pilot programs are too new to be evaluated, and also because they object to the fact that grants to NGOs under the GEF have to be approved by governments. GEF Officials, supra note 26, at 418. Oxfam was more specific in its criticism, saying that projects financed by the World Bank--one of the institutions charged with running the GEF--have been subject to corruption and mismanagement, and have often been detrimental to the people intended to benefit from such projects. Id at 419.
69. Article 23, paragraph 3 states that "[t]he Conference of the Parties shall by consensus agree upon and adopt rules of procedure for itself and for any subsidiary body it may establish, as well as financial rules governing the funding of the Secretariat. At each ordinary meeting, it shall adopt a budget for the financial period until the next ordinary meeting." The financial rules apply only to the Secretariat, not the funding mechanism. However, since that body is a "subsidiary body," any rules of procedure adopted for it would have to be agreed upon by consensus. Convention on Biological Diversity, supra note 10, art. 23, para. 3, at 832. See Porter, supra note 18, at 23-25; Strong Expresses Disappointment Over Summit's Treaties; Warns of Disaster, Int'l Env't Daily (BNA), June 16, 1992, available in Westlaw, BNA-IED file; U.K Officially Announces Major Will Sign Treaty in Rio, Int'l Env't Daily (BNA), June 10, 1992, available in Westlaw, BNA-IED file.
70. The participants are working to reform the GEF by December 1993. GEF Treasury Official Says U.S. Contributions to GEF Will Spur Technology Exports, Int'l Env't Daily (BNA), Aug. 5, 1993, available in Westlaw, BNA-IED file [hereinafter GEF Treasury Official]. One commentator has stated that, in any event, they will require more than a simple majority for decisions; they will, at the very least, require a majority of the industrialized nations. Porter, supra note 18, at 24.
The United States is also asking that the GEF become more transparent, accessible, and accountable. See GEF Treasury Official, supra. Congress is conditioning a $30 million contribution to the GEF on such reforms by September 30, 1993. Id.
71. See Porter, supra note 18, at 23-25. One source has indicated, however, that the statement will not address the financing issue. See Draft Statements, supra note 39.
Furthermore, the efficacy of that approach is questionable. One possible concern is the fact that Article 29, paragraph 3 allows amendments and protocols to be adopted, albeit only as a last resort, by a two-thirds majority. Convention on Biological Diversity, supra note 10, art. 29, para. 3, at 835. Thus the developing nations could conceivably do away with the consensus requirement as it applies to the financial mechanism. On the other hand, the fact that such amendments or protocols would only take effect with respect to the parties who accept them raises a conceptual question of how to apply such a policy in the case of a structure integral to the Convention's collective activities. Id art. 29, para. 4, at 835.
Another possible source of concern is the requirement in Article 39 that the GEF be "fully restructured in accordance with the requirements of Article 21." Id. art. 39, at 837-38. The clause in Article 21, paragraph 1 stating that the financing mechanism "shall function under the authority and guidance of, and be accountable to, the Conference of the Parties" is arguably one such requirement. Id art. 21, para. 1, at 831. This interpretation would, of course, place the GEF's autonomy in question from the day the Convention takes effect.
72. "The interpretive statement will set out 'what we think relatively ambiguous language in the treaty means,' the [State Department Counselor for Global Affairs, Timothy Wirth] said. 'We want to make sure...our position is absolutely clarified."' Wirth Predicts, supra note 36. The executive director of UNEP has stated that the Convention may not be reopened for negotiation, Treaty Wording Too Vague, Poses Risk to Biotech Firms, U.S. Industry Official Says, 15 Int'l Env't Rep. (BNA) 822, 822 (Dec. 16, 1992) [hereinafter, Treaty Wording Too Vague], and the Convention itself allows no reservations. Convention on Biological Diversity, supra note 10, art. 37, at 837. Furthermore, as Curtis Bohlen, Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs, has pointed out, there will not be an opportunity to amend the treaty for several years. U.S. Still Objects to Language in Treaty on Property Rights, Financing, Official Says, 15 Int'l Env't Rep. (BNA) 821, 822 (Dec. 16, 1992).
73. See, e.g., U.N. Biodiversity Treaty Seen Likely to Affect U.S. Biotech Firms, supra note 59, at 636.
74. Venezuela has already said that it will do so. Porter, supra note 18, at 2. In addition, on June 6, 1992, the presidents of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama "signed a non-binding resolution encouraging the passage of laws, to regulate the extraction of medicinal plants and other bio-genetic substances from the isthmus." Central American Presidents Resolve to Pass Laws Restricting Use of Resources, 15 Int'l Env't Rep. (BNA) 397, 397 (June 11, 1992). Costa Rica has followed up this resolution with reforms to its Wildlife Law which will ban the export of endangered wildlife and restrict the export of exotic plants. Costa Rica Strengthens Wildlife Protection Law, Bus. & Env't, Nov. 1992, available in LEXIS, Nexis library, Nwltrs file.
75. "The U.S. biotechnology industry is the acknowledged world leader in this new high-tech field." Porter, supra note 18, at 10. U.S. biotechnology firms expected $4 billion in sales for 1992 and the Commerce Department estimates that annual sales will be as high as $50 billion by the end of the decade. Browning, supra note 5, at 1828.
76. It has been suggested that there is a limit to the terms that a developing country can impose in return for access to genetic resources before biotechnology firms will go elsewhere. Biodiversity Treaty May Restrict Commercialization, Biotech. bus. News, July 3, 1992, available in LEXIS, Nexis library, Nwltrs file. This notion is supported by a recent statement by Bruce Nelson, an American botanist, that "the demand from companies looking to genetic engineering...drawing on genetic information of the Amazon...doesn't seem to be as large as the common man would suspect or the environmentalists...would desire." All Things Considered: Developing World's View on Biodiversity (National Public Radio broadcast, June 6, 1992). One factor conceivably dampening the demand by U.S. firms for plant material for direct use as pharmaceuticals is the fact that the FDA "has long shunned plant materials as medicines because they are not chemically well-defined." Chemical Prospecting, supra note 6. It would also suggest that European and Asian firms might have more at stake than U.S. firms would in deals of the sort between Merck and Costa Rica, because such "phytopharmaceuticals" are big business on those continents. See also Bovsun, supra note 6.
77. See Convention on Biological Diversity, supra note 10, art. 20, at 830-31.
78. It has been estimated that an international biological diversity plan could cost as much as $50 billion. Delegates Pessimistic About Outlook for Finishing Work on Biodiversity Treaty, supra note 2, at 93.
79. Among the industrialized nations, only Canada, whose biotechnology industry is quite limited, has so far ratified the Convention. EC Ministers Welcome Clinton's Signing of Rio Agreements as Spur to International Progress, Int'l Env't Daily (BNA), May 19, 1993, available in Westlaw BNA-IED file. Moreover, according to one biotech industry spokesperson, no signatories have yet taken moves to implement the treaty. Treaty Wording Too Vague, supra note 72, at 823 (indirectly quoting Lisa Raines, vice president of the Industrial Biotechnology Association).
Despite a report that Japan would ratify the Convention on June 5, 1993, see Foreign Minister Says Country to Ratify Climate Change, Biodiversity Pacts June 5, Int'l Env't Daily (BNA), June 4, 1993, available in Westlaw, BNA-IED file, that nation has yet to do so. Conference Reafirms Importance, but Protection, Funding Still Low Priority, Nat'l Env't Daily (BNA), June 18, 1993, available in Westlaw BNA-NED file.
The European Community Council on Environment decided June 29, 1993 that member states and the EC would deposit ratification instruments by the end of the year. Parliament Opposes ECC Plan, supra note 52. The proposal to do so included a draft declaration stating that "transfers of technology and access to biotechnology ...can only be carried out in compliance with the principles and rules' of protection of intellectual property...[and that such compliance] constitutes an essential precondition for the implementation of policies for technology transfer and co-investment." Id. This declaration was opposed by the European Parliament, while the proposal itself now goes to the EC Council of Ministers for final approval. Id The director of the Bio-Industry Association, which represents the major European biotechnology companies, had previously stated that such firms "want to make sure that the way the treaty is ratified doesn't hurt industry...[and] want to continue to have strong intellectual property protections." Browning, supra note 5, at 1829.
Sweden, Finland, Denmark and Norway are expected to ratify the Convention this autumn. Nordic Nations' Follow-Up to Earth Summit Includes Ratification of Key Treaties by Fall, Int'l Env't Daily (BNA), June 24, 1993, available in Westlaw, BNA-IED file. A spokeswoman for the Finnish Environment Ministry said, "Finland did not interpret the treaty in a way that would demand technology transfer to developing nations without compensation." Id
80. "Some of America's worries on the implications of the treaty for biotechnology are shared by Japan. Its alarm at the financial mechanisms in the treaty is shared by Britain, which has decided to sign first and work for alterations later." The Earth Conference: Biodivisive, Economist, June 13, 1992, at 93, 94. See also supra note 79.
81. See, e.g., Industry Calls Biodiversity Treaty Vague, Little Impact on Competitiveness Expected, Int'l Env't Daily (BNA), Aug. 5, 1992, available in Westlaw, BNA-IED file (describing responses of the French, German, Italian, and Japanese biotechnology industries). Apparently the various governments were more interested in the Convention than were their respective private sectors, some members of which expressed concerns but did not or could not lobby their governments away from their announced goal of early ratification. In most cases, firms had not yet evaluated the effects of the treaty in depth, if at all. See id But see supra note 79. For other countries, vagueness was a source not of reassurance, but rather, of dissatisfaction. Hans Liniger of Ecosens AG in Zurich, Switzerland, points out that Swiss citizens "don't care for the agreements [referring to the several Rio Summit documents]" because there was "no real commitment from developed countries" to address major environmental problems. U.N. Biodiversity Treaty Seen Likely to Affect U.S. Biotech Firms, supra note 59.
82. Indeed, U.S. officials and industry leaders are quick to characterize the United States' biotechnology industry as a keystone of the nation's competitiveness and economic health. See, e.g., Industry Trade Groups, supra note 45. For an estimate of industry sales, see Browning, supra note 5, at 1828.
83. See supra pp. 349-51 [discussion of problem with financing mechanism] The European Community is also debating the inclusion, with its proposal for ratification, of a declaration conditioning "the implementation of policies for technology transfers...and co-investment" on compliance with IPRs. See supra note 79.
84. It has been reported that, ironically, the interpretive statement will not address financing. See Clinton Commits, supra note 39; Draft Statements, supra note 39.
85. Porter, supra note 18, at 13-19. Mr. Porter is a director of the Environmental and Energy Study Institute, which was part of a coalition that prepared a draft interpretation for the Clinton Administration. See also supra note 40.
86. Porter, supra note 18, at 16-19.
87. Id. at 23-25.
88. It had been argued that unless it signed the Convention, the United States would not have any input concerning any protocols to the agreement. See, e.g., Treaty Wording Too Vague, supra note 72, at 823. Ratification, however, is not necessarily a precondition to U.S. participation in the negotiation of protocols. This is illustrated by the history of the relationship of the United States to a pair of treaties, the International Convention on Civil Liability for Oil Pollution Damage and the International Convention on the Establishment of an International Fund for the Compensation for Oil Pollution Damage. While the United States had signed both treaties, it had ratified neither. Nonetheless, the United States was allowed, indeed, encouraged, to participate in the negotiations of the 1984 Protocols to these treaties, where it had "tremendous influence" and was able to correct one of the shortcomings that it had seen with the original treaties. See Beth Van Hanswyk, The 1984 Protocols to the International Convention on Civil Liability for Oil Pollution Damages and the International Fund for Compensation for Oil Pollution Damages: An Option for Needed Reform in United States Law, 22 Int'l Law. 319, 323-24 (1988).
89. See, e.g., Biodiversity Treaty Called Highlight of Summit by Southern Conservationist, supra note 30; Russell A. Mittermeier and Peter Seligmann, U.S. Should Take a Stand on Biodiversity, Christian Sci. Monitor, July 17, 1992, at 19, 19; Browning, supra note 5, at 1828.
90. While this agreement has received the most press, numerous similar (though probably smaller) deals have been made. See Shaffer, supra note 7, at 21; Bovsun, supra note 6. Thomas Eisner, the Cornell professor who helped to arrange the Merck deal, for example, has been approached by several other firms, and there is a British company which has been arranging such deals for nine years. Biodiversity Treaty May Restrict Commercialization, supra note 76. Even the American National Institutes of Health "provide letters of agreement to countries where promising compounds originate." Folk Remedies, supra note 6, at 5. One factor that distinguishes the Merck-INBio deal is that Merck is paying up front for the right to test the samples. See Chemical Prospecting, supra note 6.
91. This sum is ten percent of the initial budget for other work being conducted at the Institute. New Measure Would Cover Extraction of Genetic Resources from Rain Forest, supra note 52.
92. Deal Between Drug Firm, Costa Rica Called Example of What Treaty Would Do, Int'l Env't Rep. (BNA) 398 (June 17, 1992).
93. All Things Considered: Merck Drug to Pay Royalties on Costa Rican Forest (National Public Radio, June 10, 1992) (interview with Rodrigo Gomez) [hereinafter Gomez Interview].
94. Gomez has said that the chances of a marketable medicine are about one in every 10,000 samples. Julia Preston, A Biodiversity Pact With a Premium, Wash. Post, June 9, 1992, at A16. One source at the National Cancer Institute places the odds of discovering another drug like taxol (derived from the bark of the Pacific yew tree, a promising anticancer compound) at one in 50,000. Chemical Prospecting, supra note 6. On the other hand, a representative of a U.S. pharmaceutical lobbying group says the ratio is more like one in 5,000. Browning, supra note 5, at 1828. One source says that by limiting the screening to plants known by indigenous traditional healers to have medicinal value, the ratio improves to one in two. Chemical Prospecting, supra note 6 (quoting Lisa Conte, the president of Shaman Pharmaceuticals, Inc.).
95. Chemical Prospecting, supra note 6.
96. Michael Unger, Firms Say Rio Treaty Strikes at Heart of Biotech Industry, Newsday, June 14, 1992, at 73 (Nassau & Suffolk ed.).
97. Convention on Biological Diversity, supra note 10, art. 15, para. 1, at 828.
98. Convention on Biological Diversity, supra note 10, art. 37, at 837.
99. See, e.g., Treaty Wording Too Vague, supra note 72, at 822 (quoting Mostafa Tolba, then president of UNEP).
100. NASA has signed an agreement with the Central American Commission on the Environment and Development (CCAD) that will "give the commission access to daily satellite images so that they can track the evolution of forests, agriculture, and pollution." Central American Presidents Resolve to Pass Laws Restricting the Use of Resources, supra note 74, at 398. NASA will spend $40,000 to $50,000 to provide the satellite data, as well as training and equipment to scientists in the member countries of CCAD--Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. NASA Helping Central American Nations Protect Rain Forests Using Satellite Data, Int'l Env't Daily (BNA), Mar. 18, 1993, available in Wesdaw, BNA-IED file.
101. It bears noting that only about 10% of all existing drugs are protected by patents, and that "off-patent pharmaceuticals have in actual practice a much greater market share than patented drugs." Dr. Otto A. Stamm, GATT Negotiations for the Protection of New Technologies, J. Pat. & Trademark Off. 680, 694-95 (1991). This means that even within this third class of technology, at least with respect to the pharmaceutical industry, only a minority is actually the subject of contention. This diminishes the claim of the developing nations that strong IPR protection denies them benefits, and also indicates that with respect to most drugs marketed by firms of industrial nations, extending patent protection overseas has no effect.
102. See Carneron Tyler, International Conservation of Plant Genetic Resources, 11 ILSA J. Int'l L. 41, 77 (1987).
103. For a discussion about how even this technology might find its way, informally, into Costa Rican hands, see id.
104. Developing nations might even get their hands on the third class of technology, especially if the relevant research is performed within the developing country. See Tyler, supra note 102, at 77. The United States has argued that the likelihood that such joint ventures will occur is proportional to the degree of IPR protection afforded by the host developing nation. Porter, supra note 18, at 7.
105. Convention on Biological Diversity, supra note 10, art. 16, para. 1, at 829. Paragraph 2 requires that this "shall be provided and/or facilitated under fair and most favourable terms, including on concessional and preferential terms where mutually agreed." Id art. 16, para 2, at 829.
106. Id. art. 16, para. 3, at 829.
107. Id art. 2, at 823-24.
108. This latter remark raises some other issues. Conceptually, the same conflict between developed and industrialized nations applies to the patenting of agricultural breeding activities; the industrialized nations have most of the patents for important crop varieties. This type of plant breeding, however, is covered by a scheme of intellectual property protection distinct from the patent system which applies to pharmaceuticals. For discussion of the system of protection afforded plants, known as "plant breeders rights," see generally Carlos M. Correa, Biological Resources and Intellectual Property Rights, 14 EUR. Intell. Prop. Rev. 154, 154-57 (1992); Roger A. Sedjo, Property Rights, Genetic Resources, and Biotechnological Change, 35 J.L. & Econ. 199, 206-07 (1992); Tyler, supra note 102, at 75-79.
There is also the problem of explaining why a term which applies in one sense to agricultural technology should not apply in the same sense to pharmaceutical technology, when there is no textual basis for this distinction. However, because it is not inconsistent with the Convention, nothing would prevent the Contracting Parties from agreeing to such an interpretation. Of course the industrial nations would want the same treatment for their agricultural biotechnological products as for their pharmaceutical inventions. On the other hand, this could be the line at which a compromise is made.
109. Convention on Biological Diversity, supra note 10, art. 17, para. 1, at 829.
110. Id art. 17, para. 2, at 829.
111. Id art. 15, para. 7, at 828 (addressing the access to genetic resources); id art. 19, para. 2, at 830 (addressing the handling of biotechnology and the distribution of its benefits).
112. Id art. 18, at 830.
113. Id art. 19, para. 1, at 830.
114. Id art. 23, para. 4(b), at 832; id. art. 25, at 833.
115. Id art. 25, para. 2(c)-(d), at 834.
116. Article 8(g) calls for "means to regulate, manage or control the risks associated with the use and release of living modified organisms resulting from biotechnology which are likely to have adverse environmental impacts that could affect the conservation and sustainable use of biological diversity, taking also into account the risks to human health." Id art. 8(g), at 826. Article 8(h) calls upon Contracting Parties to "[p]revent the introduction of, control or eradicate those alien species which threaten ecosystems, habitats or species." Id. art. 8(h), at 826. See also id art. 14, at 827-28 (addressing the need to minimize such harmful impacts); id art. 19, para. 3-4, at 830 (addressing the handling of biotechnology and the distribution of its benefits).
117. See. e.g., supra note 8 (suggesting that the converse may be true---that easier access to a limited number of high-response strains of food crops and livestock could be detrimental to genetic diversity in a given region).
118. The UNEP resolved "to consider requesting the Executive Director of the Programme to convene meetings of an Intergovernmental Committee on the Convention on Biological Diversity starting in 1993, to consider ... [m]odalities for the transfer of technologies, in particular to developing countries, relevant to the conservation of biological diversity and the sustainable use of its components, as well as technical cooperation in support of national capacity-building in those areas." See United Nations Environment Programme: Resolutions of the Conference for the Adoption of the Agreed Text of the Convention on Biological Diversity, Resolution 2, para. 2(d) 31 I.L.M. 842, 844-45 (1992).
119. One example of the way in which IPR protection can be important to the development of technology that would obviate the need for overharvesting genetic materials is the drug taxol. Found originally in the bark the Pacific yew tree, which is found in the old-growth forests of the Pacific Northwest, it shows promise for the treatment of ovarian and breast cancer. Shaffer, supra note 7, at 21; Beachy, supra note 6, at Business 1. Later, researchers found that a semi-synthetic version of taxol could be manufactured using the needles and twigs of European and Himalayan yew trees. Milt Freudenheim, Bristol-Myers Won't Renew Hauser Pact, N.Y. Times, Aug. 14, 1993. Bristol-Myers Squibb, which owns the exclusive right to market taxol in the Unites States, believes that this "renewable biomass" source will eliminate the need for the Pacific yew bark ingredient by late 1984. Id
According to the president of one young biotechnology company involved in this research, companies "won't have much incentive to conduct such research if the results aren't protected from competitors." Unger, supra note 96, at 73 (Nassau & Suffolk ed.). Another expert stated, "There is very little incentive to look into any type of medicinal plant research if that resulting research doesn't produce a patentable product." Beachy, supra note 6, at Business 1 (quoting writer Steven Foster).
120. This assumes that such incentives outweigh the incentives for short-run exploitation of such resources for industrial use. Of course, this is one of the essential premises of the Convention, and must be confronted equally whether the demand for the material is from domestic or foreign industry. The distinction could be significant, however, where the mechanism used by the developing nation's government to control exploitation is restrictions on the export of such material, because domestic use would of course evade such controls. For an example of such export restrictions, see supra note 74.
121. The cost of---of all the research that goes into the knowledge of one single product is between $200 million and $300 million. Merck is---s invest[ing] something like $2 billion in research per year. The national budget of Costa Rica, of the whole country, is $1 billion. We, as a country, are not in a position to do something like that. Maybe Mexico, maybe Brazil, maybe Argentina or Chile---I mean, the big---much richer---richer Latin American countries could possibly be in that position. Costa Rica is not in that position apparently." Gomez Interview, supra note 93.
122. Porter, supra note 18, at 19-21. See also Acharya, supra note 4, at 76 (stating that developing countries will have much greater power if they bargain collectively within the framework of a multilateral forum---in this case, the GAIT, but the same principle would apply to the Convention).
123. The idea was embodied in the Draft Articles Prepared by the International Union for the Conservation of Nature (IUCN, also known as the World Conservation Union) for Inclusion in a Proposed Convention on the Conservation of Biological Diversity and for the Establishment of a Fund for that Purpose with Explanatory Notes, Draft 6, June 1989 (unpublished), cited in Rackleff, supra note 4, at 406 n.7. See also Porter, supra note 18, at 28, for a chronology of the negotiations on the Convention.
124. This is the International Fund for the Compensation of Oil Pollution Damage, established under the International Maritime Organization. The United States has signed but not ratified the 1984 Protocol to that agreement. Moreover, with respect to those treaties, there may have been several motivating factors not present in the area of biological diversity. One is that the United States, with its extensive coastlines and heavy oil tanker traffic, may have foreseen a great benefit to its own environment by signing. Indeed, one of the reasons it refused to ratify the convention on which the protocol is based was that the limits on compensation were too low. It is possible that the United States may have considerably less urgent concern for its own biological diversity generally than for oil damage to its coastlines. See Van Hanswyk, supra note 88, at 323-24.
125. One limitation would be the fact that the more parties that are involved, the more difficult it becomes to reach agreement. This argument, however, would also apply to any proposed funding mechanism which requires consensus. More problematic is the possibility that a biotechnology firm might perceive diminishing returns in dealing with more than one country; it can only screen so many samples.
126. Convention on Biological Diversity, supra note 10, art. 20, paras. 6-7, at 831.
127. The other side of this coin is that under a Merck-INBio-type agreement, benefits will accrue to the developing nation even after the threat to biological diversity has passed. Funds are not conditioned on the existence (real or invented) of an environmental threat.
128. "The implementation of these [financial] commitments shall take into account the need for adequacy, predictability and timely flow of funds...." Convention on Biological Diversity, supra note 10, art. 20, para. 2, at 830-31.
129. For example, scientists have developed a semi-synthetic version of the drug taxol. See supra note 119.
130. See supra text accompanying notes 33-34.
131. Convention on Biological Diversity, supra note 10, art. 20, para. 4, at 831.
132. Id. art. 21, para. 2, at 831-32.
133. One might argue that it is incumbent upon such nations to voice their grievances in the forum of the, funding mechanism, but if it is decided that consensus is not a requirement for decisions, then such recourse is of little value.
134. It might be possible for developing countries party to the Convention to bring pressure by collectively denying the biotechnology firms of the offending nation access to their genetic resources. See supra note 74. One might, however, question the viability and force of such a maneuver. See supra notes 76, 125. Its effectiveness might be especially curtailed if the biotechnology firms in question already have access to sufficient genetic material under bilateral agreements such as the one under consideration. This might support an argument that bilateral agreements are antithetical to the Convention's effectiveness, at least in this respect.
135. See supra note 94.
136. Costa Rica's Minister of Foreign Trade has said, "Costa Rica is really starting to understand the need for protection of property rights, especially now with the biodiversity issue, and also since we are now exporting our own software." New Measure Would Cover Extraction of Genetic Resources from Rain Forest, supra note 52.
137. Porter, supra note 18, at 19-21.
138. Gomez Interview, supra note 93.
139. The Convention covers this in Article 14, although it does not go so far as to specify what procedures are appropriate or required. Convention on Biological Diversity, supra note 10, art. 14, at 827-28.
140. More specifically, this refers to safety requirements in the handling and release of exogenous or genetically engineered organisms. See Convention on Biological Diversity, supra note 10, art. 8(g)-(h), at 826 (addressing the issue in-situ conservation); id art. 19, paras. 3-4, at 830 (addressing the handling of biotechnology and the distributions of its benefits). A protocol on these questions has been proposed, although the U.S. biotechnology lobby takes the position that the need for such a protocol should not be presumed. See Draft Statements, supra note 39. The United States made it clear that this was its interpretation during the final negotiations of the text. Porter, supra note 18, at 22-23. The Industrial Biotechnology Association and the Association of Biotechnology does not believe such a protocol is necessary. See As It Signs, supra note 23. In any event, the industry insists that any such protocol be "scientifically based." Id
141. The Bush Administration issued only one statement on this issue, the State Department's May 29 press release announcing the decision not to sign, which said simply, "The convention does not treat biotechnology and biosafety appropriately." Porter, supra note 18, at 22-23.
142. The concern on the part of the biotechnology industry seems to be that regulation would hinder the development and introduction of new products. However, biotechnology firms have said that the provision on domestic regulation would not affect them; only the Convention's call for an international protocol was of concern. Porter, supra note 18, at 22-23. The biotechnology industry takes the position that the language of the treaty does not presume a need for such a protocol. See supra note 140. Moreover, the Convention does not say that a protocol is required, and in any case, a protocol only applies to the countries which sign it. The United States could certainly ratify the Convention without signing any subsequent protocol. See Porter, supra note 18, at 22-23. For their part, developing nations have voiced a concern that they could become "testing grounds" for new biotechnology products the effects of which are not fully known. See Interim Advisory Panel Sought for Scientific, Technical Issues, Int'l Env't Daily (BNA), May 27, 1993, available in Westlaw, BNA-IED file (quoting UNEP Director Elizabeth Dowdeswell); Protocol to Biodiversity Treaty, supra note 33.
143. See supra, text accompanying note 34.
144. See supra note 56.
145. See Convention on Biological Diversity, supra note 10, art. 22, para. 1, at 832. Article 22, paragraph 1 suggests that the Convention might affect the rights and obligations of nations under other international agreements where "the exercise of those rights and obligations would cause a serious damage or threat to biological diversity." Id The United States fears that this could subordinate any strong IPR protection regime obtained in the TRIPs negotiations to the goals of the Convention. U.N. Biodiversity Treaty Seen Likely to Affect U.S. Biotech Firms, supra note 59, at 636.
Paragraph 2 mentions specifically the collection between this Convention and those outlining the law of the sea. Convention on Biotechnology, supra note 10, art. 22, para. 2, at 832. The main obstacle to applying the principles of the Merck-INBio arrangement to the marine environment has been mentioned. See supra p. 372.