Bioprospection : from economics of contracts to reflexive governance

1. Bioprospection : from economics of contracts to reflexive governance Tom Dedeurwaerdere Centre for Philosophy of Law www.cpdr.ucl.ac.be Research funded through Belgian Federal Government (IAPV) European Union (FP5-IHP-KA1-2001-1) National Foundation for Scientific Research, Belgium (FNRS)

2. Tom Dedeurwaerdere Bioprospection and reflexive governance Theme Economic tools for biodiversity conservation

3. Tom Dedeurwaerdere Bioprospection and reflexive governance Context From the definition of an ethics of sustainable development to the Rio Convention 1992 • Ronald Engel, Ethics Working Group, IUCN, 1986 5 criteria of an ethics of sustainable development : • Integration of conservation and development ; • satisfaction of basic human needs ; • achievement of equity and social justice ; • provision for self-determination and cultural diversity ; • maintenance of ecological integrity • Rio Convention 1992 The objectives of the convention : • The conservation of biological diversity • The sustainable use of its components • The fair and equitable sharing of the benefits arising out the utilisation of genetic resources including appropriate access to genetic resources.

4. Tom Dedeurwaerdere Bioprospection and reflexive governance The economic basis of the sustainable use idea : environmental services provided by biodiversity (Source : Robert Barbault, 2003) • Biodiversity and medecine • 80 % of the population of the planet regularly has recourse to traditional medicine based on plants (WHO) • 40 % of the used medicaments have as their active component a natural substance, which is extracted in 75 % of the cases of a plant • 1 / 125 of the studied natural plants give rise to a major medical substance, only 1 / 10000 in the case of tested synthetic molecules through random screening • Problems • Potential profits are significantly lower with natural products than with synthetically made products, because natural products can’t be patented ; as a result pharmaceutical companies continue to rely massively on random screening • If we suppose that 1 species of tree currently disappears a day, the one can evaluate the loss of medical plants at 3 or 4 a year, which is a potential loss of a market of 600 million dollar a year

5. Tom Dedeurwaerdere Bioprospection and reflexive governance • Other timber, tourism, water purification • The issue at stake How to define access and use of these environmental services in order to promote an ethics of sustainable development ?

6. Tom Dedeurwaerdere Bioprospection and reflexive governance Bio-prospection as an example of sustainable use of biodiversity • The market and contractual approach to Bio-prospection 1.1.Regulation through Access and Benefit Sharing Agreements Definition : “Access and Benefit-Sharing Agreements” are bilateral contractual arrangements between ecologically-rich states or communities and private corporations and are based on the principles of “prior informed consent” and “equitable sharing of the benefits” Example : Merck-InBio / ICBG 1.2. Problems ; incompleteness of the contracts • Uncertainty of the benefits • Definition of property rights controversial • Controversy on the level of scientific assessment of biodiversity So : low confidence, opportunistic behaviour

7. Bioprospection and reflexive governance Tom Dedeurwaerdere • Propositions for amelioration from new-institutional and evolutionary economics 2. 1. Reducing opportunistic behaviour through an appropriate institutional environment (Oliver Williamson, Douglas North) Governance attributes Incentive Intensity Administrative Control Contract Law Regime Governance Structures (Direct incentives) (Indirect incentives) (Indirect incentives) Spot Market ++ 0 ++ Hybrid + + + Hierarchy 0 ++ 0 Example of Merck-InBIO (Costa Rica) • (-) low direct financial incentives • (-) high transaction costs establishing the InBIO research agency • (+) helps building dynamics of confidence and reputation, within a nexus of agreements : bio- prospecting, dept-for nature swaps, reform of park agency in conformity with UNESCO’s man and biosphere program • (+) centralisation of information (InBIO), which facilitates definition of the contractual relation

8. Bioprospection and reflexive governance Tom Dedeurwaerdere 2. 2. Taking into account a plurality of action logics Bioprospecting contracts (market dynamics) Learning in the institutional environment Plurality of social dynamics : • Cooperative behavior : Genetic Recognition Fund, Seed exchange between farmers • Public policies : agricultural research institutions, etc.

9. Bioprospection and reflexive governance Tom Dedeurwaerdere • Evaluation of its contribution to sustainable development • The missing link Connecting the decision mechanism of the economic and political actors and the evaluation of the contribution of the bio-prospection practices to sustainable development • Connection evaluation mechanisms to the double improvement proposed by economics • On the level of learning Functionalist learning : evolution to a common representation between the different interest groups Reflexive learning : reconstruction of one’s own representations in a public space where collective identities can emerge e.g. social policy program IUCN 1992-1998

10. Bioprospection and reflexive governance Tom Dedeurwaerdere • On the level of the selection processes Selection process : translation of issues of sustainable development in terms of current social logics (economic, scientific, etc.) Selection of the selected issues: normative ambitions of indicator studies, stake of future generations in the valuation of biodiversity e.g. threshold studies for irreversible damage to ecosystems