How can territories be rewarded for the commercial exploitation of plant and animal biodiversity in the fields of medicine, chemistry, food or materials, using these economic resources to protect biodiversity itself? Within the negotiations on biodiversity (COP-biodiversity), there has been discussion for years on how to compensate for the use of digital sequence information of genetic resources and how this can contribute to the need to mobilise at least USD 200 billion per year to 2030, as stipulated in the UN Montreal-Kunming Agreement.

A breakthrough was made over in mid-August during the Convention on Biological Diversity (CBD) interim negotiations in Montreal, Canada. Negotiators agreed that COP16 (from October 21st to November 1st 2024) in Cali, Colombia, will have to adopt a decision on how the multilateral mechanism for the fair and equitable sharing of benefits arising from the use of digital sequence information (DSI) of genetic resources should operate, including the creation of a dedicated fund to collect and disburse the generated resources.

The DSI mechanism is expected to mobilise new and additional funding streams for biodiversity actions worldwide in support of the three overarching objectives of the Convention: the conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising from the use of genetic resources.

Although it is yet to be unequivocally defined what DSI is (some controversy persists, due to diverging economic interests) and how it can be accounted for, in the Montreal negotiations, it was clearly defined which sectors and sub-sectors are highly dependent on the use of ISD on genetic resources to which the operational modalities of the multilateral mechanism and associated fund should be applied. These include pharmaceuticals, cosmetics, plant and animal breeding and agricultural biotechnology, industrial biotechnology, laboratory equipment associated with the sequencing and use of digital sequence information on genetic resources, and information, scientific and technical services related to digital sequence information on genetic resources. It should be mentioned: United States, the world's leading biogenetic powerhouse for DSI use, is not a party of the CBD, although it is listed as a 'non-party' in the negotiations.

The structure of the DSI agreement

The negotiators reiterated some cornerstones of the Multilateral Mechanism: it should generate more benefits, both monetary and non-monetary, than costs; provide legal certainty and clarity for providers and users of information; and not hinder research and innovation (a theme much supported by industry, e.g. the Japanese coalition of bioeconomy companies); ensure open access to data; be complementary to other access and benefit-sharing instruments; and finally, take into account the rights of indigenous peoples and local communities, including traditional knowledge associated with the genetic resources they possess.

The negotiations held in Montreal narrowed down a wide spectrum of technical and policy options pertaining to crucial operational modalities of the Multilateral Mechanism, including the associated global fund: who will pay for using digital sequence information on genetic resources, how much they will pay, what would trigger such payments, how the collected payments will be disbursed and how the entire set-up would be managed and governed. The draft Recommendation on the operationalization of the Multilateral Mechanism provides four options on contribution to the fund by the users of digital sequence information on genetic resources and two options for disbursement and indicates potential factors for allocation of resources from the global fund. The outstanding issue will be addressed at the COP16-Biodiversity negotiations in October in Cali.

"We will have a success at COP16 if the fund is made operational immediately upon conclusion of the negotiations," William Lockhart of the United Kingdom, co-chair of the negotiations, commented at a press conference, indicating the parties' intention to reach a satisfactory agreement as soon as possible.

The draft Recommendation on the operation of the Multilateral Mechanism provides four options for contribution to the economic fund by users of digital sequence information of genetic resources and two options for disbursement, and indicates potential factors for the allocation of resources of the global fund.

"It will be necessary to define whether it will be the industries that use the DSI that contribute to the fund, or the revenue generated from the sale of the products," commented the other co-chair Martha Mphatso Kalemba of Malawi.

Towards COP16-Biodiversity in Cali

The draft Decision that will be considered by COP 16 will require further consensus-building in Cali, but we clearly have come a long way. The negotiators tirelessly worked their way through a bulky set of technical and policy options in a great show of compromise and consensus-building. We are proud of what this group has achieved,” said the Co-Chairs of the negotiations, Mphatso Kalemba and William Lockhart.

At COP 16 in Cali, Parties will need to finalise agreement on outstanding issues, including data governance issues, the formula to be used for the allocation of Global Fund resources, and the share to be allocated to indigenous peoples and local communities, including women and youth, as custodians of biodiversity and holders of the valuable traditional knowledge associated with genetic resources. Other areas where compromise will be sought include how national circumstances and the level of development of the Montreal-Kunming Agreement signatory states will be considered in allocation decisions to ensure equity and justice.

"I am confident that in Cali the Parties will find the way and the courage to compromise to operationalise a simple, efficient and cost-effective solution," said Astrid Schomaker, Executive Secretary of the CBD. "What we saw in Montreal this week is an impressive demonstration of environmental multilateralism at its best."

DSI is key

DNA contains the genetic information that 'instructs' living things how to grow and function. By analysing the digital versions of the DNA of plants, animals and microbes (such as bacteria), scientists identify genes to help create or improve drugs, skin care products, food and food supplements, animal feed, bioplastics and textiles, among other products, generating a turnover of hundreds of billions of euros.

Once a useful gene is found, the sequence is digitised (i.e. an DSI is created) and scientists can create a version of it in the laboratory and insert it into microbes such as bacteria or yeasts, which act like small factories, using the new genetic instructions to produce the desired compounds. In short, by reading and understanding DNA, scientists discover and produce new ingredients and compounds to create or improve valuable products. Not only that, but today artificial intelligence can also be used to process and commercialise information by creating new genetic sequences from DSI.

Leaving this patrimony in the hands of multinational corporations means de facto privatising a common good, such as nature and biodiversity, to the detriment of those megadiverse territories often inhabited by indigenous peoples or developing communities, who do not profit from the marketing of processed products from their forests or savannahs. The Multi-Stakeholder Mechanism for the Management of DSI could be a real game-changer and accelerate the collection of economic resources for nature conservation.

This article is also available in Italian / Questo articolo è disponibile anche in italiano

Cover image: Martha Mphatso Kalemba, Malawi, being congratulated for her work as a Co-Chair. Photo by Mike Muzurakis © IISD/ENB