India’s Biodiversity Act is a ‘mystery’ to most biologists and startup founders, began Malathi Lakshmikumaran, a leading Indian law expert in the life sciences sector. She was addressing a seminar hall overflowing with young bio-preneurs and researchers at C‑CAMP Bangalore on February 3, 2017.
Researchers tend to “brush it away under the carpet” thinking they will deal with it later. Unfortunately, there is no later. Lakshmikumaran urged her audience to be “careful” of the act while also acknowledging there aren’t any awareness programs to help researchers and entrepreneurs understand the implications of the act.
The Biodiversity Act was laid down in 2002 to ensure conservation and sustainable use of India’s rich biodiversity. It lays out guidelines to ensure equitable sharing of benefits arising out of any commercial utilisation of a biological resource. Though the act’s objectives are noble and needed to stop bio-piracy, it has become a barrier for many.
Take for instance Section 3 of the act that requires all foreign nationals to obtain an approval from the National Biodiversity Authority (NBA) before using any biological resource. If you are a company using a biological resource — plants, microbes, animals or bio-products derived from it— this clause implies that you need to think twice before allowing any foreign investment or participation in your company. Any individual who has a citizenship of another country or is an Non-Resident Indian (NRI) is considered foreigner under the act and is not allowed to either fund or be part of the senior management without prior approval. Foreigners are not allowed to handle biological material, so they can’t even do lab work that directly deals with a biological resource.
Usually, scientists look forward to international collaborations. This is in stark contrast with what the government expects from companies stemming out of these research environments.
It is not just the startups who are facing the heat. Even established research organisations feel tied down because of the act. Lakshmikumaran cited the example of Indian Oil Corporation (IOC), a listed company, that has conducted research in collaboration with Department of Biotechnology (DBT) to create modified micro-organisms that feed on oil and can help cleanup oil spills. They now want to patent this technology and commercialise it. However, when they sought out NBA’s approval on this, they ran into trouble. Being a publicly listed company, some of IOC’s shareholders are foreigners or NRIs. As per the biodiversity act, this makes them a company with foreigners/NRIs in top management, and therefore, ineligible to use any kind of biological resource (microorganisms in this case) for a commercial purpose. The matter is yet be resolved.
If you are an all-Indian company, things are slightly easier for you. While you have free access to any bio-product, you must notify the State Biodiversity Board (SBB) before you plan to commercialise your product. The process of notifying the state board is fairly simple. However, if the board raises an objection, you land yourself in a judicial rigmarole. Lakshmikumaran shared the example of Ruchi Soya, a Madhya Pradesh (MP) based company that buys soybean (a biological resource) from the market and uses it to make soya oil and sell it (commercialisation of a bio-resource). When MP-SBB found out about Ruchi soya oil, they asked them pay royalty for having commercialised a bio-resource. The company owners eventually had to go to National Green Tribunal (NGT) and luckily the NGT ruled in their favour.
In 2016, the NBA came up a new guideline that lists 385 products which are exempted from the Biodiversity Act. Soybean is one of them.
Apart from commercialisation, Indian companies also need to be very cautious in patenting their product. Before filing any patent, international or national, they must notify the NBA. Failing to notify the NBA before a patent is granted can amount to criminal offence.
The reason behind this tussle between research organizations and the NBA stems from a discord: “the way legal people look at science and scientists look at it are very different”, says Lakshmikumaran. She insists that the Act needs to be modified to better suit the needs of researchers as well as those it hopes to protect. However, she doesn’t expect change to happen any time soon. Therefore it is absolutely necessary for everybody in the field to be cognizant of the act.