‘Swadeshi firms don’t need to share revenue with farmers’
Should ‘Swadeshi’ companies have to share with farmers the huge profits and benefits they derive from selling India’s bioresources as their ‘herbal’ and ‘ayurvedic’ products? Or are only ‘foreign companies’ required to provide monetary and non-monetary benefits to the people who grow, protect and conserve India’s biodiversity?
Baba Ramdev’s Patanjali conglomerate, with a selfdeclared annual revenue of more than ~100 billion, contends that state authorities do not have the power to collect such a levy from it because it is a wholly Indian entity.
Only foreign nationals and entities, according to the group, are required to share benefits derived from exploiting natural resources for commercial gains.
Patanjali has moved the Uttarakhand High Court with this plea to challenge the Union and Uttarakhand governments’ demands. If it wins the case, the favourable ruling could potentially save the group from similar demands in other parts of the country where it has been expanding for raw material collection. It could also provide several other Indian brands like Dabur and Himalaya which sell ‘ayurvedic’ and ‘herbal’ medicines and cosmetics with an additional legally sanctioned business advantage over multinational brands. Many other Indian firms that use biological resources as raw inputs, such as the paper and pulp industry, could also stand to benefit if Patanjali group wins the case.
The Uttarakhand HC case, filed in 2016 by Ramdev’s Hardiwar-based Divya Yoga Mandir Trust when the state government asked its pharma unit Divya Pharmacy to share ~20.4 million of its ~4.21-billion revenue in 2014-15 with farmers as part of a legal obligation, has now reached the hearing stage. The state contended that under the Biodiversity Act all entities, whether foreign or Indian, are required to share a part of the revenue made from exploiting biodiversity with people who live in the villages from where biological resources were extracted for raw material.
The Patanjali group has challenged central government’s regulations requiring this sharing of revenue with villagers and taken the Union government, the National Biodiversity Board, the Uttarakhand state government and the Uttarakhand state biodiversity board to court over the issue. Business Standard reviewed the petition filed by Ramdev’s trust and the original orders of the Uttarakhand government telling the company to pay up.
Ramdev’s trust has said in its plea that the regulations permitting state authorities to collect this levy from ‘Indians and Indian organisations for commercial utilisation of biological resources occurring in India’ are against the law. Interestingly, the trust has contended that sharing of such benefits with local people is against the right to equality enshrined in Article 14 of the Constitution. It has also said that the regulations levying this charge tantamount to imposition of ‘unreasonable restrictions over fundamental rights to livelihood and business enshrined under Article 19(1)(g) of the Constitution.
On the other hand, in case Patanjali’s plea for throwing out of the regulations in entirety as illegal fail, the trust has also pleaded as a secondary option that in the specific state government orders, the figure of ~20.4 million asked to be paid was arrived at in an arbitrary fashion, was devoid of sufficient reasoning, and violated the trust’s right to equality and its right to livelihood and business, by raising an ‘exorbitant, unreasonable demand of money’ which is not based in law. Kanchi Kohli, an independent legal expert who has extensively researched on the subject, says: “The idea of regulating access and operationalising benefit sharing for both Indian and foreign entities is within the framework of the law. Several Indian firms are using biological material and people’s knowledge primarily for profitbased commercial applications. It is critical that provisions for sharing benefits are not watered down.”
To ensure a more equitable sharing of benefits arising from exploitation of natural resources, the the ‘Access and Benefit Sharing or ABS’ regulations under the Biodiversity Act, 2002 were put in place.
Patanjali has moved the Uttarakhand High Court with this plea to challenge the Union and Uttarakhand governments’ demands
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