The Hindu Business Line : Bio-safety protocol and international regulation

GIVEN that there is a degree of environmental uncertainly associated with the products of biotechnology along with the possibility of negative externalities arising from trans-boundary movement of those products, the need for an international agreement to regulate trade in genetically-modified organisms (GMOs) was recognised.

Having an international agreement is particularly important because of differences in both the content of domestic regulations and the pace at which they were being put in place in different countries.

These differences in regulatory regimes were bound to arise given the complexity surrounding the design of appropriate environmental policies and differences in the weightage given to environmental benefits among societies.

It was recognised that an international regulation was required to protect the environment, but equally important to prevent environmental regulations from being used as technical barriers to international trade. It is important to find the correct balance between environmental and trade concerns.

Cartagena Protocol

The Biosafety protocol (or the Cartagena Protocol) was negotiated under the auspices of the Convention on Biological Diversity (CBD). In June 1992, the CBD was concluded after 10 years of negotiations as Agenda 21 of the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro (the Earth Summit).

The Convention entered in to force on December 29, 1993, 90 days after the 30th ratification. The US did not ratify the CBD. Under Article 32.1 of the CBD, "a state or a regional economic integration organisation may not become a party to a protocol unless it is, or becomes at the same time, a contracting party to this Convention."

Hence, the US, the largest commercial producer of GMOs, was relegated to observer status in the negotiations for the Bio-Safety Protocol (BSP) and is not formally bound by the terms of the protocol.

The BSP is an MEA (multinational environmental agreement) that is charged with devising a comprehensive international regulatory approach to protecting biodiversity. The protocol sets rules to manage the environmental risks of trans-boundary movement of genetically modified living organisms.

The framers of the Protocol have attempted to focus it tightly on environmental risks. To that end, trans-boundary movements of GMOs intended for food, feed and processing (for example, commodities) will be exempt from the Advanced Informed Agreement (AIA) provisions. Nevertheless, exporters must label shipments with GM varieties as they `may contain' GMOs and countries can decide whether to import those commodities based on a scientific risk assessment. Furthermore, GMOs intended for `contained use' (for example, national breeding programmes and research) and GMOs in transit through other countries will not require AlAs.

Successful completion of the Protocol has the potential to influence positively trade in three significant ways. First, increased trade transparency by the use of the AIA principle should remove friction in the market. Second, the Protocol should overcome the lack of domestic regulations in those countries with little or no experience with regulating GMOs.

Third, the scientific risk assessment procedures should increase trade fairness by ensuring that risks to biodiversity from GMOs, whether domestic or foreign, are assessed consistently using credible scientific risk assessment procedures. The effectiveness of this provision, however, is problematic due to the inclusion of the `precautionary principle'.

Win-win outcome

The successful negotiation of the BSP can be interpreted as a potential win-win outcome. The global benefit, shared by all countries, is the overall conservation and protection of biodiversity.

From the perspective of the biotechnology industry, successful completion of the BSP has potential benefits for further research on and development, adoption and commercial use of GM products because it would potentially increase predictability of market access.

After the agreement was reached, almost all those with an interest in the talks expressed optimism that the protocol will protect the environment without unduly impeding international trade.

The EU and the Third World Network point to the `precautionary principle' as a key innovation. Producers and biotechnology companies cautiously support the narrow focus on varieties for intended release. Public interest groups are pleased with the `precautionary principle' and provisions for socio-economic factors being taken in to account in the decisions.

Concerns unanswered

Despite this apparent widespread approval of the Protocol, it will not resolve all the concerns in the marketplace.

First, as suggested above, the US, which is the single largest producer of GM crops, will not be a party to it. Secondly most developing countries have little or no experience with domestic bio safety regulation and the bio safety protocol provides only limited protection against any adverse impact of agricultural biotechnology.

The Protocol does not cover R&D, transfer, handling, testing, use and disposal of GM products, those responsibilities will continue to fall on national governments.

Third, the Protocol has not handled all the socio economic, ethical and consumer concerns as many hoped. Those concerns remain unanswered in any existing international agreement.

Finally, there are likely to be disputes that arise from the agreement but it is not clear from the information available how the Protocol will resolve them.

The economic and trade impact of the Protocol depends on how it is implemented. While the BSP may be reasonably well designed to deal with issues related to trade in GMOs that will enter agronomic or aquaculture production, they seem poorly designed for regulating trade in GM products that will not directly enter the environmental through agricultural production.

While the biodiversity mandate of the BSP makes it the appropriate forum for the regulation of the former, it is not even clear that it should have jurisdiction over the latter.

Regulations in these areas would appear to relate primarily to trade in goods and food safety, which have customarily been with in the mandate of the WTO.

The BSP is inconsistent with the WTO in a number of areas. While it is a well-established principle that a country can voluntary give up its recourse to WTO disciplines, one suspects, that this will not always be the case for the issue of trade in GM products.

Hence, it is imperative that jurisdictional issues be sorted out quickly because there are many interested parties that have a large stake in the outcome.

(The author is a Chennai-based management consultant.)