Dou­ble stan­dards

Ayush com­pa­nies claim the laws on bio­di­ver­sity re­quire only for­eign en­ti­ties to share ben­e­fits of com­mer­cial­i­sa­tion


Firms mak­ing prod­ucts based on tra­di­tional In­dian sys­tems of medicine refuse to pay royalties, while in­sist­ing their for­eign coun­ter­parts do so

FOUR­TEEN YEARS af­ter In­dia passed the Bi­o­log­i­cal Di­ver­sity Act ( bda), the rules on pro­mot­ing sus­tain­able use of bio re­sources are still in dis­pute. The bda was passed in 2002 but it took an­other 12 years for the gov­ern­ment to spell out the guide­lines on ac­cess and ben­e­fit shar­ing ( abs) of bio re­sources. But even then, do­mes­tic com­pa­nies us­ing plant re­sources for com­mer­cial ben­e­fit have been re­fus­ing to pay the re­quired roy­alty fees for use of bio re­sources, claim­ing that the roy­alty rule does not ap­ply to them.

ABS guide­lines are in­tended to pro­mote con­ser­va­tion and eq­ui­table use of re­sources that also ben­e­fit lo­cal com­mu­ni­ties who have been the guardians of such nat­u­ral wealth by pay­ment of a fixed roy­alty rate. The rates and other rules are gov­erned by state bio­di­ver­sity boards ( SBBS) who were only too de­lighted when the guide­lines were fi­nally is­sued in Novem­ber 2014 af­ter ayush com­pa­nies man­aged to stall these for over a decade. The boards promptly sought the long-de­layed roy­alty from thou­sands of ayush com­pa­nies that have been mak­ing free with bio re­sources while en­joy­ing a surg­ing de­mand for their prod­ucts.

AYUSH is an acro­nym for the tra­di­tional In­dian med­i­cal sys­tems of Ayurveda, Yoga, Unani, Sid­dha and Homeopa­thy and com­pa­nies in this seg­ment make use of a vast range of bio re­sources for pharma, cos­metic and health prod­ucts. Last year, it was es­ti­mated that ayush firms had avoided pay­ing roy­alty to the tune of 10,000 crore an­nu­ally just to Ker­ala. sbbs have been meet­ing with stub­born re­sis­tance from these com­pa­nies who have now mounted a le­gal chal­lenge to the abs guide­lines af­ter they were asked to cough up the roy­alty fees for use of herbal and plant re­sources.

The fees are nom­i­nal, rang­ing from 0.1 to 0.5 per cent. Ben­e­fit shar­ing rules kick in when bio re­sources are ac­cessed for com­mer­cial pur­poses and are ap­plied in a graded way on the an­nual gross ex-fac­tory sale of the prod­uct. But with a pow­er­ful lobby, the in­dus­try has avoided pay­ing this nom­i­nal fee. The pe­ti­tion chal­leng­ing the in­clu­sion of In­dian com­pa­nies in the abs guide­lines, in­ter­est­ingly, has been filed as a pub­lic in­ter­est lit­i­ga­tion or pil by the Cen­tral In­dia Ayush Drug Man­u­fac­tur­ers As­so­ci­a­tion ( CIDMA), be­fore the Nag­pur bench of the Mum­bai High Court and is sched­uled to be heard on Au­gust 24. The writ pe­ti­tion, seek­ing clar­ity on abs com­pli­ance, was filed in re­sponse to the Ma­ha­rash­tra SBB’s no­tice to sev­eral hun­dred firms seek­ing pay­ment of roy­alty. CIDMA con­tends that abs guide­lines are not ap­pli­ca­ble to In­dian en­ti­ties since there is no leg­is­la­tion in place to en­able com­pli­ance. As such, only for­eign en­ti­ties and those com­pa­nies that have for­eign eq­uity are li­able to pay roy­alty ac­cord­ing to bda.

That seems an odd claim to make since the guide­lines are clear that the abs rules ap­ply to both do­mes­tic and for­eign firms. It is also clear that sbbs, the cen­tral Na­tional Bio­di­ver­sity Author­ity ( NBA) and the Union Min­istry of En­vi­ron­ment, For­est and Cli­mate Change are all em­pow­ered to im­pose penal­ties for non-com­pli­ance on SBB. The Mum­bai High Court though, ap­pears to have asked the Ma­ha­rash­tra sbb, and the state for­est min­istry and cen­tral au­thor­i­ties to stay their hand and not take co­er­cive ac­tion against these com­pa­nies.

SBBS have been is­su­ing no­tices thick and fast to ayush firms ever since the guide­lines were no­ti­fied. The main rea­son for this en­thu­si­asm is that boards are hop­ing the royalties will cover their bud­getary gap since many state gov­ern­ments have been tight-fisted in fund­ing them. Which is why an im­pa­tient Ma­ha­rash­tra sbb has been press­ing its claims and seek­ing pay­ments from those firms that are not part of CIDMA. That may not help mat­ters but, hope­fully, the is­sue will be re­solved soon by the court, putting an end to what has been, an ex­traor­di­nar­ily long stand­off.

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