2009 Guest Article: Shifting Sands of ABS Best Practice
Shifting Sands of ABS Best Practice: Hoodia from the Community Perspective
Kabir Bavikatte, Harry Jonas & Johanna von Braun (1)
Published 31 March 2009
Following the filing of international patents by the state-owned Council for Scientific and Industrial Research (CSIR) and subsequent claims of biopiracy regarding the San’s traditional knowledge (TK) about the natural appetite suppressant in Hoodia, a benefit-sharing agreement was reached between the CSIR and the San in 2003. The San-Hoodia case is perhaps the most well known case of access and benefit-sharing (ABS) in the world. Having firsthand experience of working with the San, the authors conclude that ABS is a double-edged sword for communities. On the one hand it provided the San an opportunity to generate livelihoods and be rewarded for biodiversity stewardship. On the other, it presented them with conceptual and practical challenges relating to granting access to their TK according to prior informed consent (PIC); difficulties in negotiating the benefit-sharing agreement; and subsequent governance upheaval. The authors propose that by developing bio-cultural protocols communities are better placed to make informed decisions about whether or not to engage with ABS, and when they do, to ensure that their interests are best served. Bio-cultural protocols, the authors argue, provide communities an opportunity to articulate for themselves their understanding of their bio-cultural heritage and views on ABS, and communicate them to outside interests.
Contents: Introduction | Brief Review of the San-Hoodia Case | Prior Informed Consent | Benefit-Sharing | Governance | Emerging Best Practice | Conclusions
The San-Hoodia case is perhaps the most well known case of access and benefit-sharing (ABS) in the world. Following claims of biopiracy by a state-owned research outfit of the knowledge of a marginalized indigenous community, the Hoodia case resulted in the development of one of the very first benefit-sharing agreements. This paper neither retells the twists and turns of that remarkable story, nor does it assess the details of the deal. Instead, as lawyers who have worked with the San on the governance side of the Hoodia case, we present the conceptual and practical challenges the San faced granting access to their traditional knowledge (TK) according to prior informed consent (PIC); the difficulties involved in negotiating the benefit-sharing agreement; the market uncertainties that have characterized the post-agreement period; and the governance upheaval the various San communities have faced.
At a time when the San are assessing the ramifications of Unilever’s withdrawal from a licensing agreement to commercialize Hoodia products, we look at the Hoodia deal from the community perspective. In doing so we highlight some of the inherent challenges the incumbent international regime on ABS will impose on indigenous and local communities and set out a possible means by which they can best engage the framework: the bio-cultural approach.
Brief review of the San-Hoodia case
The use of the Hoodia by the San when hunting was discovered by anthropologists in 1937. Until 2001, the San remained oblivious to the fact that their knowledge of Hoodia containing a natural appetite suppressant had commercial application, and that this knowledge had led to research, scientific validation, and the filing of international patents by the state-owned Council for Scientific and Industrial Research (CSIR). They had been excluded from a licence granted to Phytopharm (UK) to develop the drug in 1997 and when questioned by journalists from The Observer (newspaper), the Director of Phytopharm said he believed that the San were extinct. CSIR in its defence stated that they had always intended to share benefits derived from indigenous knowledge and this was their official organizational policy on bioprospecting. CSIR also argued that it is difficult if not impossible to identify who the owners of indigenous knowledge were when it was widely shared between different communities - an interesting point we pick up below.
In June 2001 as a result of an outcry by the South African NGO, Biowatch, CSIR entered into negotiations with the San. This was undertaken despite the fact that South Africa had yet to promulgate ABS regulations. In 2003, a benefit-sharing agreement was reached between the CSIR and the San, to share with the San a portion of the royalties from potential drug sales. (2) The fact that the San decided not to challenge the patent rights remains controversial, as well as, to a lesser extent, the amount the San decided to settle for.
Commercial research and development of the Hoodia extract was advanced in the UK by Phytopharm; after successful clinical trials Phytopharm sub-licensed its rights to Pfizer and later to Unilever for further development up to the product stage. In December 2008, Unilever suspended its development, stating that “data suggests using the extract would not meet (…) [their] safety and efficacy standards”. (3)
Prior informed Consent
The San of southern Africa are the original inhabitants of the region, having lived off the land for over 20,000 years. They now number about 100,000 people and live predominantly in Botswana, as well as in Namibia, South Africa and Angola (in descending order of inhabitants). Waves of Bantu herders from the North, European immigration and private appropriation of their lands led to their increasing marginalization. By the end of the colonial and apartheid era, they ranked among the most impoverished communities in Africa.
There are notable variations in the various San communities’ current lives and future prospects. To take an example, some of the Khwe communities living in and around the Okavango Panhandle in Angola, Namibia and Northern Botswana live rural lives, as compared to the Khomani San that live in urban and semi-urban environments in South Africa’s Northern Cape, 2,000 kilometers away. “The San” are in fact many communities, and their cultural heritage and TK is non-uniform.
Prior to the Hoodia issue, San communities had neither considered ABS, nor mandated a particular body to manage and protect their TK. Thus the lawyer working on behalf of the San on the Hoodia case, Roger Chennells, held community consultation and, based on those discussions, assembled a negotiating team. Notably, at those consultations, the San decided to share the benefits with all San, regardless of whether they live in a Hoodia-growing region or not: a groundbreaking decision.
Mr. Chennells had intended that the negotiations would be workshopped in the communities, but for reasons of logistics and expenses, this was foregone and the team negotiated without any further community input. The team had to rapidly get to grips with intellectual property (IP) rights, including the ramifications of patents, and negotiate future benefit-sharing arrangements that dealt with issues such as milestone payments and royalties. These were huge demands for community members selected for the task and the net result is that they relied almost completely on expert advice. In turn, the greater San communities awaited the outcome of the deal. When it came, despite widespread workshops, many neither understood its details, nor its implications. This is partly due to the number of San, the technicalities of the deal and the communities’ low levels of literacy.
Four points are notable. First, the San had never thought through how they wanted to manage their TK and because of the suddenness of the negotiation, were denied an opportunity for this type of deliberation. Such a process is critical to assessing any request of TK within the community’s larger ethical and developmental frameworks. Second, communities are heterogeneous, dispersed and if it their first experience of ABS, they will most likely not have institutions prepared to be engaged by users’ intent on accessing their TK. Third, the likelihood of widespread community involvement in a negotiation is inversely proportionate to the size of the community and distances between members. Fourth, ABS issues are complex and it takes time for community leaders to understand the legal framework and the interstices of a benefit-sharing agreement; generally expert advice is their lifeline.
Equally significant in terms of the San providing informed consent (4) was the fact that the San at the time did not address the Nama’s (5) prior knowledge about Hoodia’s properties. By recognizing the CSIR patent, the San harmed the prospects of the Nama entering into ABS agreements with other companies who would not want to violate the CSIR patent. Because the San made the agreement, the Nama forfeited any benefits from their TK. Thus a fifth issue is raised: TK is often shared across communities and borders, and as such raises fundamental questions about the nature of “ownership” and concomitantly what constitutes PIC from the community and user perspective.
The above points highlight the practical difficulties involved in a widely dispersed community with no overarching institutions negotiating PIC and mutually agreed terms (MATs) for shared TK. While it is acknowledged that the Hoodia deal was reactive due to the fact that CSIR had already registered a patent based on the San’s TK, all communities approached by a TK user for the first time will face similar challenges of understanding the conceptual aspect of ABS as well as negotiating the details of any agreement.
The benefits of the agreement are primarily financial. The monetary benefits are 8% of milestone payments received by CSIR from Phytopharm during the product development period and 6% of the royalty income received by CSIR from Phytopharm as a result of the successful exploitation of products arising from the patent’s licensing income or sales anywhere in the world. Non-monetary benefits are limited to CSIR collaborating with the San Council to make existing CSIR study bursaries and scholarships available to members of the San community.
As non-lawyers with no experience of IP-related agreements, the negotiating team relied heavily on expert advice to determine the best terms. This put them at a disadvantage in terms of making independent assessments of the most appropriate types of benefits for their communities. Whilst non-monetary benefits were offered, the community negotiators had no frame of reference in order to decide what would best provide for their communities in the long run. This is not to say that if they had more experience they would not also have opted for the same types of benefits, but it further highlights the comparative disadvantages of communities in negotiations.
Another area the community lacked knowledge about is the nature market. Whilst they opted for financial benefits based on future profits, they could not have foreseen the vagaries of the Hoodia’s commercial development process. In fact, the Hoodia Trust (discussed more fully below) has only received to date 587,305 South African Rands. (6)
At a multi-stakeholder Hoodia meeting held on 20-21 January 2009 at the San Cultural Centre near Cape Town, Nama representatives explained how they have begun to benefit from the Hoodia market by becoming small-scale Hoodia growers. (7) This highlights the fact that the San opted for potentially large sums that a royalty arrangement offered, over indirect benefits, which in the end are contributing to the Nama’s sustainable livelihoods. It adds to the growing call for attention to be focused on how ABS can generate bio-trade opportunities for communities.
As part of the post-agreement arrangements, the South African government required a Trust to be established to manage the Hoodia monies, and the San decided to set up San Councils in each country as their representative bodies. In the nascent system, the Hoodia Trust receives monies from CSIR as and when they accrue, manages and disburses those funds to the San Councils. San Councils are formed of elected members, representing the various groups in each country, who among their other political and advocacy-related duties, decide on the best use of the Hoodia funds available to them.
Diagram A: The Hoodia Governance Framework
At a 2006 meeting near the Molopo River, Northern Cape, South Africa, San from Botswana, Namibia and South Africa met to assess the governance challenges presented by Hoodia. The Molopo Declaration states:
All structures should respect San values, including respect for culture and consensus decision making.
San structure must strive to make sure the majority of funds are used to benefit San communities.
Administrative costs of all funds should be kept to a bare minimum, being around 20% of total funds, depending on the level of income.
Corruption in any form is totally unacceptable. Good management of funds, transparency and accountability will be required.
Priorities will be different in Namibia, Botswana and South Africa. San Councils must strive to accommodate differences in the three countries.
Projects that are environmentally sustainable and economically viable will be prioritized.
Through our work, we have witnessed the institutional and community capacity challenges the San have faced in living up to the Molopo Declaration. Managing the funds has been a problem for the San community, partly because of a lack of institutional capacity, partly because of the way the institutions have been set up.
The institutional challenges are varied, and compound each other. They include factors such as: Hoodia Trustees and San Council members have little or no financial management capabilities; members of both bodies lack experience of conducting public office; and terms of reference for the bodies’ members, codes of conduct, dispute resolution mechanisms, either do not exist, or are not applied. Because the San Councils are established as Voluntary Associations under South African law, they are not required to submit audited accounts to any governmental agencies. The result is that representatives are accountable only to their constituencies who have little ability to either demand or fully comprehend financial accounts. These factors are intensified by the fact that many of the members are unemployed, increasing the pressure to misappropriate funds where the internal monitoring systems are weak.
More significantly perhaps is the question of legitimacy of the new institutions. Because of the large number of San and huge distances between communities, community based-NGOs have only been able to reach community leaders working with the San, and there is a widespread and lack of detailed knowledge about the various institutions, their roles and responsibilities. These details include: the institutions’ membership; the levels of funding that has been / has yet to be disbursed; and how community members should approach the Councils to contribute to the formation of their development plans. Transparency, accountability, representativeness, cultural legitimacy and authority of the Hoodia governance system remain in question.
The Hoodia deal has had a significant and lasting change on the San’s traditionally horizontal and localized form of governance. It has provided the leadership with significant capacity challenges and opened up a gap between them and the communities on whose behalf they manage the Hoodia funds. Governance reform is being undertaken, but it remains to be seen whether the Hoodia governance structures will contribute to the welfare of San communities. Moreover, benefit-sharing is a positive intervention only when communities’ livelihoods are improved. When community structures are weak and unrepresentative, it makes for good practice to focus on more direct forms of benefits haring, such as harvesting or primary processing that generate livelihoods. Thus the types of benefits selected should be considered by the community according to their overall capacity to manage the future benefits.
Emerging best practice
The ABS regime is a double-edged sword for communities. On the one hand it provides an opportunity to generate livelihoods and be rewarded for stewardship of the biological diversity within their landscape. On the other, it establishes a neutral trade framework characterized by great disparities in bargaining power between parties, in which communities are by far the weakest players. The Hoodia case attests to this.
From Natural Justice’s work on the Hoodia case, we have witnessed firsthand the potential of ABS, as well as its pitfalls. It was pioneering in its nature, and in its scope to include community members from across the region. Yet the San’s leadership has come under strain because of the governance challenges they have faced, and communities have yet to receive significant benefits. Whilst the Hoodia case is an idiosyncratic ABS case, it highlights many of the challenges any community facing ABS for the first time will encounter.
Drawing on our work, Natural Justice has developed a bio-cultural approach to ABS to assist communities to engage the ABS framework in such a way that best protects and promotes their interests. By developing bio-cultural (8) protocols, communities are better placed to make informed decisions about whether or not to engage with ABS, and when they do, to ensure that their interests are best served.
Bio-cultural protocols provide communities an opportunity to focus on their development aspirations vis-a-vis ABS and to articulate for themselves and for users their understanding of their bio-cultural heritage, and therefore on what basis they will or will not engage with potential users of their TK.
Communities consistently affirm that whilst users of genetic resources are interested in the value of their TK, it is their culture and landscape that has given TK its worth. Thus, by considering the interconnections of their land rights, current socio-economic situation, environmental concerns, customary laws and TK, they are able to counter the present trend that treats TK as an abstraction, relocating TK in the landscape of their environment and their culture. The process provides communities an opportunity to look at examples of bio-trade and bio-prospecting so as to determine for themselves how those processes may contribute to their development, including the conservation and sustainable use of their natural resources. It also allows for time to think through the process(es) of PIC, as well as how the community’s bio-cultural ethics should inform MATs and what benefits will provide most use.
If used effectively, ABS may provide livelihood-generating opportunities, and contribute to communities’ larger development and identity challenges.
B. Bio-cultural Protocols
The resultant protocol helps communities articulate their views on ABS and communicate them to outside interests. It serves a number of purposes. First, it establishes a high watermark of a community’s understanding of its rights according to international, national and customary law, and of the regime by which it can engage users. It enables communities to establish their TK’s bio-cultural foundations and to set out the ethical framework of any ABS negotiations. Second, it provides users with the information required for approaching a community, including specifics such as who governs the use of TK, what will constitute PIC, possible formulations of MATs and types of benefits a community may be looking for, providing a higher degree of legal certainty. Third, it can set out the status of TK that is shared between communities of the same ethnicity, across national borders and/or between tribal groups. Fourth, it provides an advocacy instrument for capacity assistance to manage its natural resources and TK, including dealing with outside interests who want to access those resources. Fifth, it sets out the requirements for social, cultural and environmental impact assessments, as set out in the Akwé: Kon Guidelines (9).
The Hoodia case highlights the significant challenges communities are increasingly facing from users of TK and associated genetic resources. The incumbent international ABS regime will intensify these pressures. The Hoodia deal and every African ABS case after it, such as regarding Prunus Africana, Pelargonium, Teff, Vernonia, highlight that there is no such thing as a textbook ABS case. Invariably, resources traverse borders, TK transcends communities and traditional leaders are unprepared to deal with requests to access their (shared) TK. The better engaged communities are in ascertaining for themselves the extent of their TK or the resources, and the more knowledge communities have about the details and ramification of ABS, the better they will be able to decide the merits of the request to access their TK and to negotiate benefits that improve their livelihoods.
(1) Kabir Bavikatte and Harry Jonas are Co-Directors of Natural Justice, an NGO providing legal services to communities to promote the full implementation of the CBD. Johanna von Braun is a Post-Doctoral Fellow at the University of Cape Town’s Unit on IPR Research and Policy.
(2) See Wynberg, Rachel, “Rhetoric, Realism and Benefit-sharing: The Use of Traditional Knowledge of the Hoodia Species in the Development of an Appetite Suppressant”
(3) See Starling, Shane, "Hoodia finds life after Unilever". The San also entered into a subsequent deal with the South African Hoodia Growers’ Association for a percentage of profits from Hoodia exported from South Africa. The SAHGA agreement has yet to yield any significant income to the San. For the purpose of this piece, we focus on the CSIR deal.
(4) They could not provide prior informed consent because their TK had already been used.
(5) The Nama are an indigenous group that lives predominantly on the coast in North West South Africa and in southern Namibia.
(6) This is about USD58,000 at March 2009’s exchange rate.
(7) Email Natural Justice (Hoodiafirstname.lastname@example.org) for a copy of the report.
(8) The term bio-cultural was used by the International Institute of Environment and Development to highlight the links between biodiversity and culture.
(9) Akwé: Kon Voluntary Guidelines for the Conduct of Cultural, Environmental and Social Impact Assessment regarding Developments Proposed to Take Place on, or which are Likely to Impact on, Sacred Sites and on Lands and Waters Traditionally Occupied or Used by Indigenous and Local Communities, adopted by the CBD Conference of the Parties in 2004.
Access and benefit-sharing (ABS)
Convention on Biological Diversity (CBD)
Council for Scientific and Industrial Research (CSIR)
Intellectual property (IP)
Intellectual property rights (IPR)
Mutually-agreed terms (MATs)
Non-government organisation (NGO)
South African Hoodia Growers’ Association (SAHGA)
Prior informed consent (PIC)
Traditional knowledge (TK)
United States Dollar (USD)