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This piece has been authored by Raja Reeshav Roy & Ankit Shubham, third year students of B.A.LL.B (Hons.) at the National Law University, Jodhpur.
The Uttarakhand High Court recently directed Divya Pharmacy, a firm run by Baba Ramdev and his associate Acharya Balkrishna to share a particular percentage of its profits with the indigenous and local communities as a part of Fair and Equitable benefit sharing (FEBS) objectives of the Biodiversity Act of 2002.[i] The petitioners had claimed that the requirement for sharing revenue with the local and indigenous communities only arises for entities with some kind of “foreign element” attached to them. However, the honourable High Court dismissed the suit and ordered the petitioners to share the benefits with the local and indigenous communities. This judgement on the intra state sharing under FEBS is a first of its kind judgement in Indian context. This article will be looking at concept of Fair and Equitable Benefit sharing and why it is important in the era of rapid industrial growth.
Current stance on intra-state sharing in india
Plant genetic resources were considered to be heritage of mankind and were shared freely among nations, till the concerns for conservation of biological diversity were raised by the Convention of Biological Diversity (CBD), 1993. Being a signatory of the CBD, India enacted the Biodiversity (BD) Act in 2002. For the effective implementation of the Act, a three-tier system was established with a National Biodiversity Authority (NBA) at the Centre, State Biodiversity Boards (SBBs) in each of the Indian states and local-level Biodiversity Management Committees (BMCs).
The Biological Diversity Act, 2002 has some basic objectives, Fair and Equitable sharing of the benefits arising out of the use of biological resources being one of them. The main aim of the act is conservation and sustainability of Biodiversity, and FEBS has been identified as an important aspect of it. Section 2(g)[ii] of the Act gives the power to determine Fair and Equitable benefit sharing to National Biodiversity Authority read with section 21.[iii] Section 3 of the Biodiversity Act states that only entities with a foreign element require permission from the National Biodiversity Authority for undertaking biodiversity-related activities. Thus, one aspect of reading section 3 could draw the conclusion that since only foreign entities are required to seek permission for biodiversity-related activities, only they are required to share the benefits arising from the related activities. Nowhere is the concept of intra state sharing has been expressly mentioned in the Biodiversity Act.
Intra-state sharing under convention of biological diversity
The activities that generally trigger intra-state benefit sharing are the exploitation of natural resources which affects the lands of indigenous peoples and local communities and the use of their traditional knowledge.[iv] The inherent difficulties in attaining fair and equitable benefit sharing become more apparent in situations where indigenous and local communities are directly involved. Although many of the CBD benefit sharing provisions have relevance for indigenous and local communities, it is in Article 8 (j) that they are explicitly referenced. It lays down a duty for each contracting party to respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge innovations and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations and practices.
While Sections 2 and 15 also talk about genetic resources, it is the article 8(j) which refer to equitable sharing of the benefits arising from the utilisation of knowledge, innovations and practices for the conservation and sustainable use of biological diversity. Under the Nayoga protocol, there is an obligation to share benefits with indigenous and local communities when benefits derive from genetic resources held by these communities under Article 5(2).[v] Article 5(2) does not deal with ‘inter-State’ benefit-sharing, but with an internal situation, it creates an obligation for each party to share benefits with indigenous and local communities ‘holding’ genetic resources. Article 5(2) arguably presupposes that each Party identifies indigenous and local communities in its territory in order to clarify whether these communities hold genetic resources. The ground-breaking nature of Article 5(2) should be highlighted from the outset: it is first of its kind of international environmental law where a treaty creates an obligation for States to establish measures to reward indigenous and local communities responsible for the stewardship of genetic resources and their resulting contribution to scientific progress for the benefit of the global community.
Uttrakhand High Court on Intra State sharing
The contention on behalf of Divya Pharmacy was that the Uttarakhand biodiversity board has no power to impose FEBS on it as it is an Indian firm and as per the requirements of the Act only foreign firms are bound to share its profits. Thus the issue before the court over there was whether the context required a plain and textual interpretation. The court while rejecting the arguments of the petitioners took to the purposive interpretation of the legislation and said that as far as FEBS is concerned there is no difference between a foreign entity and an Indian entity since the purpose of the act was to ensure that whoever is using the biological resources for commercial purpose should be sharing a part of its profits with the indigenous communities who are the actual reason behind the growth and sustainability of the eco system. The court also observed that it is because of their traditional knowledge which passes from generation to generation the herbs in the Himalayan ecosystem are maintained and cultivated. The Court also wondered that can it be said that on the one hand Parliament recognised the valuable right of the local communities, but will still fail to protect it from the hands of an “Indian entity”.
The Court also relied on the fact that India is a signatory to international treaties Such as Rio (1992), Johannesburg declaration (2002) Nagoya Protocol (2010). The Act which came in 2002, was a follow up of Rio Convention, while the 2014 regulations was that of the Nagoya Protocol. The Protocol, makes absolutely no distinction between a foreign and a local entity as regards to their obligation towards indigenous communities.
Conclusion
It is right to say that if the hon’ble High Court would have taken the literal rule of interpretation while dealing with the present case then the judgement would have been very different, it would have been decided in the favour of petitioners, however the single judge bench very smartly looked into the purpose of the act for which it created and went on to say that there should be no distinction between Indian firm and foreign firm for the matter of FEBS. The judgement is a landmark in the regard that it will pave up a way for many indigenous communities to raise their voices and to ensure that companies either Indian or Foreign are sharing the benefits as per the FEBS rules.
It is very likely that Divya Pharmacy will challenge the judgement in the Supreme Court and then it will be very exciting to see what instance the Supreme Court takes while deciding this matter, since the decision can be seen to have far reaching consequences.
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[i] Divya Pharmacy v. Union of India 2018 SCC OnLine Utt 1035
[ii] The Biological Diversity Act, 2002, No.18, Acts of Parliament, 2003, Section 2(g).
[iii] The Biological Diversity Act, 2002, No.18, Acts of Parliament, 2003, Section 21.
[iv] Elisa Morgera, The Need for an International Legal Concept of Fair and Equitable Benefit Sharing, European Journal of International Law, Volume 27, Issue 2, 1 May 2016, p 353–383, https://doi.org/10.1093/ejil/chw014
[v] Convention on Biological Diversity Act, Article 5(2).