By approaching of the fatal date for the regularization of access to the use of Brazilian genetic patrimony in the period between 2000 and 2015, the Academy, represented by universities, research institutes and other entities of society and Industry, represented by the National Council of Industry – CNI, through its representatives in the Genetic Heritage Management Council  – CGEN, have sought, especially in recent weeks, a dialogue with the Ministry of the Environment to extend the deadline of November 6 to adjust and avoid tax assessments heavy.

To better understand the situation of thousands of companies that use Brazilian genetic heritage, it is worth recalling that the development of regulatory legislation, noting that Brazil is a signatory to the Convention on Biological Diversity (CBD), an international treaty that governs the main conservation guidelines of global biodiversity. The main objectives defined by it and which became internal law in Brazil (Decree 2,519 / 98) were: conservation of biological diversity, sustainable use of biodiversity, fair and equitable sharing of benefits, access to genetic resources and transfer of technology. With it, Brazil, like the other signatory countries, committed itself to creating an internal law that would discipline access to genetic heritage in the country, in addition to the other objectives already outlined by the CBD.

It was then that was born the first legislation in the country that defined the access to the genetic patrimony, repartition of benefits and other similar legal obligations. Provisional Measure 2,186-16 / 2001, a law that was admittedly very confusing and was repealed 14 years later by the current Brazilian Biodiversity Law (Law 13,123 / 15), regulated by Decree 8.772 / 16.

The new legal framework established the general rules for access to genetic heritage, access to associated traditional knowledge, economic exploitation of finished product, Benefit Breakdown and the difference between referral and sample shipment abroad.

According to  legal adviser of ABC – Brazilian Association of Cosmetology, Luiz Ricardo Marinello, professor of Inova / Unicamp in Intangible Property, MP 2.186-16 / 2001 was so bad that it scared off investing in R & D and innovation with species of brazilian biodiversity during almost two decades. A disaster for the country’s growth. “There was undeniably a good intention on the part of the legislator to reduce the bureaucracy of the process. Even so, the current Law 13,123 / 15 could have been more objective in certain aspects, it evaluates. ” One of his problems, according to Marinello, is the complexity on regularizing of the past.

The regularization takes place through the signing of a Term of Commitment between the user and the Ministry of Environment, where the user (who is a manufacturer of finished products, such as cosmetics and pharmaceutical industries) declares how much he has earned in the last 5 years and collects the amount of 1% on its earned income. Users who manufacture intermediate products (fragrance houses, for example), are required to sign the same Term of Commitment, but without obligation to distribute benefits.

The greatest difficulty in this process has been the survey until next November 6 of all the necessary information regarding the origin of the species, considering that the raw material suppliers do not always have clear information as to the origin of the species. In addition, users also face problems in getting all necessary financial information for each product that contained species of Brazilian biodiversity, for the purposes of sharing benefits.

After the signed Term of Commitment, it is still necessary to register in SISGEN – National System of Management of Genetic Heritage and Associated Traditional Knowledge – which is the operating system for access cadastre, still without all the necessary tools and in need of adjustments. The Law is 2015 and the Regulatory Decree of 2016. In it is expressed the term of 01 year after the beginning of the operation of SISGEN, which began to run on November 06, 2017.

In view of these new discussions, the deadline – November 06, 2018 – so that companies can regulate , just one year from the availability of SISGEN, electronic service, where there are several applications, one for each type of product, plus a term of commitment, with several options to be fit and regulate the company – turns out being very restricted.

The deadline is a critic matter, admits Marinello: “The law is complex and in practice all users would need at least another year of deadline in order to be able to gather the necessary information to prepare the Term of Commitment with a little more of calm. In this aspect,  the Government was not sensitive and did not relent with a further extension of time, justifying that this could be done just with a change on the Law.

Good News

The good news is that after this whirlwind that users have faced in order to regularize the past uses and with the correction of SISGEN’s course, the life of the user that makes R & D with Brazilian biodiversity tends to be calmer. “The good management of this very important asset will be very relevant for the conservation of the biological diversity of Brazilian biome and also for the way of life of communities that have traditional knowledge,” says ABC’s legal adviser.

It also brings the news that there will be the possibility of registration being carried out after the signing by the Ministry of the Environment that through Ordinance 378 of October 1, 2018, made available new models of Terms of Commitment that deal of benefit distribution, where there are clauses that make some deadlines more flexible. For the Terms that deal with the regularization of access, it were born with the said Ordinance other possibilities that in practice help the user to organize himself  better. “It was not a complete victory, but it already helped a lot, because the registrations stayed for a second moment, although the Terms remain with the deadline of November 6,” evaluates Marinello.

The great modification of the new Law, according to Marinello, is lack of needing of  previous registration. “The general rule is that the researcher can register his research only when it is fit to go to the market.”

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Widening Benefit Sharing

Specifically with respect to benefit sharing – a  counterpart  due to the one who economically exploit the finished product due to access to genetic heritage or associated traditional knowledge – the legislator offered the user the option of realizing it in a monetary and non-monetary way. As a rule, respecting the ration of 1% on the net revenue earned from the production of finished or non-monetary products, through projects aiming at environmental conservation or research aimed at species of Brazilian biodiversity, among other possibilities.

The law has stated that only the manufacturer of the finished product or the producer of the reproductive material will be subject to benefit sharing, regardless of who has previously accessed, contrary to MP 2.186-16 / 2001 (which lacked clarity responsible for benefits partition).

What has not been duly divulged is that the Law provides, that is, it gives the user the possibility of a wider distribution of benefits, not only focused on conservation aspects. For example, universities may receive benefits-related values to be invested in scientific studies: both for traditional communities and for species of biodiversity for benefits in pharmaceuticals, cosmetics or pesticides, among other surveys.

Law and Industry

Some areas of the market, especially the foreign market that makes use of Brazilian biodiversity assets, will be able to see in the new Law and on the gathering of 1% on the income earned, an obstacle to the creation of new products with such actives, and sees with a a certain mistrust the correct distribution of this payment into benefits.

“What is causing diverse opinions regarding the Law is in terms of the Benefit Sharing, because according to the law today, who is responsible for the partition of benefits is the end product manufacturer. It is neither the company that develops the raw material, which makes the extractivism, but the final product company, which generated a situation in which most of the end product companies gave up using the assets of Brazilian biodiversity, “says João Hansen , president of ABC – Brazilian Cosmetology Association.

“It is logical that when it comes to increasing costs, the impact is usually negative, because it reduces competitiveness from the point of view of exports,” says Daniel Sabará, CEO of Beraca, a company of Brazilian origin, which invests in the development of sustainable ingredients and technologies. “One of the concerns of the class associations is to protect and represent their members in the interests of competitiveness, so the discussion is legitimate,” he says.

He compares the discussion to the emergence of REACH (Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals). “Everyone knew that to enter the European market there would be a cost – a consultancy, a department, a control and so on – for suitability to a market. So Brazil raises a major discussion for having the largest source of biodiversity on the planet, whose use will also generate costs. ”

Another issue, based on the political news that Brazil has generated, is the distrust that the management of this Fund for the Benefit Division is generating. “The corruption that plagues the country has caused many doubts about the use of the resource,” admits Hansen.

“I have closely followed the CGEN discussions in plenary meetings before the new legislation comes into force, and I can state how a majority of Council members are struggling to address issues of access to genetic heritage, targeting the best scenario for all users (representatives of industries, various ministries and representatives of traditional peoples and communities). With all the complexity of the legislation, Brazil is one of the pioneers in the discussion on the subject, “ponders Marinello.

“In fact, this benefit is not a cost but, as the consumer determines the market, the use of biodiversity and the consequent sharing of benefits aimed at maintaining its protection is something totally legitimate, valid and necessary”, says Sabará.

For Natura, a company that has been investing in forest actives collectors communities since 2002 when it launched its Ekos line, of products for body care and perfumery that include assets of Brazilian biodiversity, the main positive impact of this new law is the greater freedom for access to genetic heritage. “The challenge is how to identify the existence of a tradition of secondary source use, since the SisGen system is not parameterized to meet the contracts signed under the MP,” company told to cosmeticos br.

Company notes that the Benefits Sharing is a positive social impact, since they are financial values that can be used in projects to build sustainable chains, income generation, workers fixation  in the field and in the forest, valuing traditional knowledge. ”

“As for the contracts signed along the MP, the law establishes that the benefit-sharing agreements entered into before the entry into force of this Law will be valid, therefore, Natura defined the strategy of keeping the Benefit Sharing negotiated with the providers and / or holders of traditional knowledge that were part of that process. ”

According to Chemyunion, actives development and manufacturing company, conventional and functional excipients and traditional and natural preservatives for the health and personal care areas, international cosmetic companies are still in the understanding phase. “There is a lack of international actors that clearly disclose the rules, allowing companies to position themselves on the distribution of benefits,” says Sérgio Gonçalves – Director of Marketing and International Business, noting that the company has done its part publicizing the possibilities of the law so that the client understand better how to proceed.

“There are even possibilities that by adopting the law, companies can benefit, because there are clear market indicators that society is sensitive to companies that are more connected with transparency and reducing the environmental impacts of their activities,” he says.

“The distribution of benefits in a non-monetary way can contribute greatly in stimulating communities to exploit non-timber forest resources, amplifying income alternatives and, in this way, seeking to reduce deforestation. Other derivations of non-monetary benefit sharing may relate to the protection and maintenance of knowledge, innovation or practices of indigenous peoples, traditional communities or traditional farmers and producers; stimulating projects aimed at the conservation and sustainable use of biodiversity; training of human resources in matters related to the conservation and sustainable use of genetic resources and associated traditional knowledge, as well as technology transfer, ” explains Sérgio Gonçalves.

“It’s important to look at other countries as well: France already has legislation, Canada and Vietnam as well.” Some countries are moving to create legislation, like Colombia and some Asian countries, “recalls Daniel Sabará.

“It all begins with the understanding that any cost will have to be returned, either by the consumer who will have to pay for it or by good practices, whatever it is,” he concludes.