Accessing Biological Resources in Karnataka: Why Should Entites Comply?

Sairam Bhat , Raghav Parthasarathy and Rohith Kamath [1]

Ignorantia juris non excusat’ is a Latin maxim, which translates to ‘ignorance of law is no excuse’. This maxim is not only an ancient brocard but also imbibes one of the fundamental principles developed in the legal system. Reference to this maxim is relevant in reflecting the implementation of Access and Benefit Sharing (ABS) provisions under the Biological Diversity Act, 2002 [BDA].

Availability of immense resources along with the knowledge of its usage makes India a potential hub for businesses to prosper. Popular alternative medicinal systems including Ayurveda, Unani, Naturopathy, Siddha and Homeopathy utilize some or the other forms of bioresources in its preparation. Products of these medicinal systems have been developed by the commercial entities and are manufactured in large quantities. Such large-scale manufacturing has jeopardised these resources, inviting the intervention by Government. In order to curb illegitimate and unfettered use of bioresources for commercial utilization, the BDA provides for a mechanism. The objective is to conserve Biodiversity, to ensure sustainable use of its components and equitable sharing of benefits arising out of the usage of the bioresources and the knowledge connected with its usage. After a period of twelve years, the Guidelines on Access to Biological Resources and Associated Knowledge and Benefit Sharing Regulations were notified. BDA declares that all bioresources arising in India are the sovereign property of the State and the State under the Public trust doctrine will manage the use, trade, exploitation, any bio-tech research of the said resources, Intellectual property rights that are applied based on the such resources, publications of such research results and such other activities under the BDA.

Under the prevailing framework, the National Biodiversity Authority (NBA) and the respective State Biodiversity Boards (SBBs) are empowered to grant ‘Prior Approval’ for accessing bioresources within their jurisdiction. BDA is a penal legislation and any violations under this law may lead to imposition of fine and imprisonment for a maximum period up to five years. Despite the legislation being in force for nearly two decades its implementation has not been any encouraging as the entities utilising bioresources have rarely approached the NBA or the SBBs to ensure compliance. The BDA has particularly strict compliance requirement in cases of foreign entities and Indian entities with foreign participation.

Pursuant to Section 7 of the BDA, all Indian entities, including AYUSH traders, biotech, agricultural Institutes, Pharma Companies shall make application to the relevant SBBs, prior to accessing the biological resource. Such entities will then enter into an agreement for ABS with the SBBs and will be liable to contribute ABS fee, either on a monetary or non-monetary basis. Indian entities operating within the state of Karnataka, referred under section 7 of the BDA, read-with Rule 15 of the Karnataka Biological Diversity Rules, 2005, are mandated to submit prior intimation in Form-I to the KBB for obtaining any bioresources for commercial utilization. Regulation 3 and 4 of the ABS Regulations, 2014 mandate sharing of benefits based on purchase price or annual gross ex-factory sales. Despite the legal mandate and the best efforts by Karnataka Biodiversity Board (KBB), until 2019, hardly 13 entities executed ABS agreements with KBB, while a few companies paid upfront ABS on use of Red Sanders on a monetary basis.

Amidst the growing vigour for Make in India, several Indian Entities, including Divya Pharmacy (Patanjali group) challenged the power of SBBs to impose ABS, where the Uttarakhand High Court held that such entities are mandated to apply before the relevant SBBs. The Karnataka High Court too dismissed a similar challenge brought forth by nearly 40 AYUSH related entities and leaving them to comply with the provisions of the Act. It is now abundantly clear that the SBBs have jurisdiction over all Indian entities which are accessing the biological resource within the State either through traders or under cultivation or in the wild to comply and apply to the SBBs. The power of the SBBs is also extended to transfer of research results through licensing or otherwise.

Government of Karnataka recently issued an Order providing a window opportunity for Companies to make compliances under the BDA. The Government could have chosen to initiate criminal proceedings against defaulting entities but instead, an opportunity by way of Ex post facto clearance is provided to the defaulting entities to make compliances without disturbing the business of the defaulters, with a view to increase the awareness of the law. The window period commencing from 15th September, 2020 will be open till 15th November, 2020, for a total period of 60 days.

The ex post facto clearance provided by the State of Karnataka is not a new affair. This concept has garnered lot of attention from legal experts when it was brought out in the draft Environment Impact Assessment (EIA) Notification 2020, which garnered extensive criticism, resulting in a national outrage. However, one should note that the proposal in the draft EIA notification 2020 is not the first or the only case. In March 2017, the Ministry of Environment, Forests & Climate Change (MoEF&CC) vide Notification dated 14th March 2017, has granted Environmental Clearance for projects which started the work on site, expanded the production beyond the limit of environmental clearance or changed the product mix without obtaining prior environmental clearance.

In like nature in reference to the BDA, the MoEF&CC on September 10, 2018, issued an office memorandum, whereby the NBA was directed to hear all such cases where prior approval under Sections 3, 4, 6 or 20 of the BDA was required but the person/entity has not obtained the same, and pass appropriate orders with respect to acts that may have occurred in past, with an objective of ensuring conservation and sustainable use of biodiversity and fair and equitable sharing of benefits arising from its use. It is to be noted that the Supreme Court and the various High Courts have not refrained from allowing the usage of ex-post facto approvals, on ground that it would otherwise affect the livelihood of hundreds of people employed in that industry, if such approval were to be refused.

Despite there being contrary views against exercise of such a power to grant clearances of the past acts, the Government has not shied away from exercising the same. Regularization in the form of “Akrama-Sakrama” or “post-facto approval” has been akin to the policy of governance.   However, to be cautious, this power cannot and should not be invoked time and again to rectify/regularise the mistakes of the past which may set a precedent for the defaulting companies to continue their acts unabatedly.

[1] Prof. (Dr.) Sairam Bhat is the Professor of Law and Coordinator of CEERA, NLSIU is an Expert Member in the Karnataka Biodiversity Board. Raghav Parthasarathy is a Teaching Associate, CEERA, NLSIU and Advocate Empaneled with the Karnataka Biodiversity Board. Rohith Kamath is a Consultant with CEERA, NLSIU and Advocate Empaneled with the Karnataka Biodiversity Board.

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