Bioprospecting and biotrade requirements

Background
Scope of act
Exclusions
Required permits
Access and benefit sharing for bioprospecting
Confidential information
Identifying traditional knowledge holders
Duration of permit processing
Amnesty
Comment

Background

South Africa hosts an incredible 10% of the world's plants, 7% of the world's reptiles, birds and mammals, 15% of known coastal marine species and an entire floral kingdom and is considered to be the most mega-diverse country after Indonesia and Brazil. Further, South African communities have a wealth of traditional knowledge relating to the use of indigenous biological resources (IBRs), including for medicinal, nutritional and cosmetic purposes.

The Department of Environmental Affairs (DEA) oversees compliance with the National Environmental Management Biodiversity Act (10/2004) (the Biodiversity Act) and its regulations, as amended in 2015, in order to:

• conserve South African biodiversity;
• provide for the sustainable utilisation of IBRs; and
• provide for the fair and equitable sharing of benefits among stakeholders (in compliance with South Africa's obligations under the Nagoya Protocol).

Other legislative amendments have been introduced to support the Biodiversity Act's objectives – for example, 2005 amendments to the Patents Act require patent applicants to:

• disclose the origin of IBRs, indigenous genetic resources (IGRs) and traditional knowledge; and
• show that they have obtained prior informed consent and shared benefits with providers.

The early years of regulation under the Biodiversity Act were stormy and there was much confusion over who needed to apply for permits and what was required from applicants. However, with experience garnered over time by DEA officials, stakeholder education and the publication of various guidelines – such as the Bioprospecting, Access and Benefit-Sharing Regulatory Framework published by the DEA in 2012 – there is now more certainty as to what is required. As at July 2018, 85 permits of various types had been issued.

Scope of act

The act regulates bioprospecting on and biotrade with IBRs and IGRs and the use of traditional knowledge. It defines 'IBRs' quite broadly to include any living or dead organism of an indigenous species in South Africa, as well as the use of their genes or biochemicals. 'Traditional use or knowledge' refers to the customary utilisation or knowledge of IBRs and IGRs by an indigenous community or individual, in accordance with written or unwritten rules, uses, customs or practices traditionally observed, accepted and recognised by them. This includes discoveries about the relevant IBRs or IGRs by that community or individual. 'Bioprospecting' is defined as any research, development or application of IBRs for commercial or industrial exploitation. 'Biotrade' means the buying and selling of milled, powdered, dried, sliced or extracted IBRs and IGRs for further commercial exploitation.

Exclusions

The following resources and activities are excluded from the Biodiversity Act's scope:

• human genetic resources;
• exotic organisms;
• International Treaty on Plant Genetic Resources for Food and Agriculture resources;
• South African-performed research not for bioprospecting;
• the export of ex situ IBRs not for bioprospecting, provided that an export agreement exists and the relevant provisional authority has been notified;
• artificial propagation or cultivation for the cut flower or ornamental plant markets; and
• aquaculture and mariculture activities for consumption.

Required permits

No bioprospecting permit is required for basic research into IBRs or IGRs or in relation to traditional knowledge which has no commercial intent. However, a permit from the relevant provincial authority is needed to export material that is not from an ex situ collection, such as a museum, herbarium, gene bank or registered culture collection.

No bioprospecting permit is necessary:

• for screening or discovery; or
• to conduct further research:
  • into the commercial potential of IBRs or IGRs; or
  • in relation to traditional knowledge (the discovery phase).

However, the minister of environmental affairs must be notified.

A bioprospecting permit must be obtained for research and development on IBRs or IGRs or with regard to traditional knowledge for commercial or industrial exploitation (the commercialisation phase). A biotrade permit must be obtained in order to engage in biotrade relating to IBRs, IGRs or traditional knowledge.

A permit is also necessary to export IBRs or IGRs from South Africa in either the discovery or commercialisation phase or for biotrade. The permit will be granted only if it can be shown that the export is in the public interest.

Foreign applicants must apply for a permit jointly with a South African applicant.

Multiple species can be included in one application.

Access and benefit sharing for bioprospecting

Together with a bioprospecting or biotrade permit, applicants must submit a material transfer agreement (MTA) and a benefit sharing agreement (BSA) that has been entered into with:

• an IBR access provider (eg, a land owner); or
• traditional knowledge holders whose knowledge has contributed to the bioprospecting or biotrade.

The mere fact that traditional knowledge is in the 'public domain' does not preclude the need to enter into a BSA with the indigenous community which developed or discovered it.

The benefits provided may include monetary or non-monetary benefits. The Biodiversity Act also provides for a review of MTAs and BSAs over time and for the amendment of permits and agreements.

Confidential information

Confidential information in an application will remain confidential, but will be subject to the Promotion of Access to Information Act.

Under the act, the following information can be withheld:

• trade secrets;
• financial, commercial, scientific or technical information, if disclosure would be likely to cause commercial or financial harm to a party;
• information, including regarding research, that may reasonably place a party at a commercial disadvantage or commercially prejudice them.

Identifying traditional knowledge holders

The identification of traditional knowledge holders can be complex. It would be prudent to do some research online or via archival material, and a notice may be published in the media asking any person or group with traditional knowledge about the IBR to come forward. Local municipalities and non-governmental organisations may also be able to assist in this regard.

In difficult or complex cases, the DEA may be approached for assistance and advice.

Duration of permit processing

The duration of processing a permit varies widely depending on the quality of the application and the complexity of the circumstances. At a minimum, permits can be issued in four months if:

• all of the application requirements are met;
• sufficient information is provided; and
• the DEA has no queries.

Amnesty

The punishment for non-compliance with the Biodiversity Act includes up to 10 years' imprisonment, a fine of up to R10 million or both.

On 1 November 2017 the minister of environmental affairs gave notice of an intention to declare a period of amnesty to facilitate compliance with the Biodiversity Act. Amnesty would apply only to natural or juristic persons engaging in the commercialisation phase of bioprospecting or biotrade in IBRs. Unfortunately, no amnesty period has been provided to date.

Comment

The process of obtaining permits for bioprospecting and biotrade is complex. However, companies are advised to at least start engaging with the DEA where discovery phase research, bioprospecting or biotrade is being undertaken or planned.

For further information on this topic please contact Joanne van Harmelen at Edward Nathan Sonnenbergs Inc by telephone (+27 21 410 2500) or email (jvanharmelen@ensafrica.com). The Edward Nathan Sonnenbergs Inc website can be accessed at www.ensafrica.com.