| |NOVEMBER 20208Consultants ReviewTHE BALANCING ACT: BIODIVERSITY LAW AND EASE OF DOING BUSINESSSunita K Sreedharan is a lawyer and a patent agent licensed to practice law in India. A seasoned lawyer with 20 year's practice, Sunita commenced her practice as a litigation lawyer and then moved into practice of IP Law with a Delhi based premier law firm where she was elevated to Partnership.By Sunita K Sreedharan, CEO, SKS Law Associatesvery aspect of life today including businesses are governed by a set of laws. However busi-nesses involved in research and / or commer-cialization of products having Indian biologi-cal resources as their ingredient are facing many challenges due to lack of clarity in the interpretation of the Biological Diversity Act 2002. It governs the access of Indian bioresources by Indian and non-Indian entities. BRIEF NOTE ON BIOLOGICAL DIVERSITY ACTThe access to Indian bioresources are governed by the Bio-diversity Laws which comprise of the Biodiversity Act 2002 (the Act), the Biological Diversity Rules 2004 and the Regu-lations of 2014 (Guidelines on Access to Biological Resourc-es and Associated Knowledge and Benefits Sharing Regula-tions, 2014) at the federal level and the State Biodiversity Rules in each of the 29 states. The Act, in compliance with the United Nations Con-vention on Biological Diversity,recognizes that India has sovereign rights over its bioresources and demarcates the persons who access these bioresources into Indian entity (S.7) and non-Indian entity (S.3) depending on whether they have any foreign management or shareholding. The prime objective of the Act is to prevent biopiracy and to ensure sustainable use of bioresources, conservation of bio-resources and equitable sharing of benefits. Accordingly, the Regulations of 2014 notified by the NBA on 21st No-vember 2014 in compliance with the Nagoya Protocol, sets up a mechanism of access and equitable sharing of benefits as per S.21 of the BD Act. The Act also establishes a three-tier administrative sys-tem with the National Biodiversity Authority (NBA) at Chen-nai as the apex body, the State Biodiversity Boards (SBBs) in each state and the Biodiversity Management Committee (BMC) at the local panchayat level. The NBA governs access of bioresources by non-Indian entities by granting prior ap-proval for using them for research or commercialization. The NBA also governs all collaborative research that is not sanctioned by the government and those instances where results of research are transferred to non-Indian entities. Accordingly, the NBA requires all persons including Indian entities to obtain prior approval before filing intellectual property rights on research using Indian bioresources.The State Biodiversity Rules are implemented in each state where the SBBs monitor bioresources accessed by Indians. There are many hiccups in the implementation and administration of this law that is adversely impacting the industry. THE ISSUES IN IMPLEMENTATION:The interpretation and the implementation of the Act is flawed and has impacted research work as well as com-mercial business spanning a variety of industries nutra-ceuticals, pharmaceuticals, traditional medicine systems, agriculture and animal husbandry, biotechnology, biophar-maceuticals, cosmetics, paper industry, mining industry, waste management systems, cottage industry.There are a large number of issues, but let us look at just two of them:(a) The definition of non-Indian entity, (b) Levying of benefit sharing fee on Indian entities, and(c) The definition of value added products.The Indian / non-Indian entity :The definition under S.3(2) BD Act is not harmonious with either the Income Tax laws nor the Companies Act and has created tremendous inequities. The Section 3(2)(c)(ii) of the BD Act states that any company registered in India `which has any non Indian participation in its share capi-tal or management' is an non Indian company. Thus com-monly perceived Indian Companies such as the Tata Group of Companies, Reliance Life Sciences and more. are non-EIN MY OPINION
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