Introduction
The Biological Diversity (Amendment) Act, 2023 stands as a pivotal milestone in India’s commitment to preserving its rich natural heritage. The present article comprehensively explores the revisions made to this legislative framework and their implications on biodiversity management in the country. The Biological Diversity (Amendment) Act, 2023, (“Amendment Act”) began its legislative journey in December 2021, when the Bill was first tabled in Lok Sabha and solicited public feedback before being referred to a Joint Parliamentary Committee. The committee’s recommendations, which were submitted by December 2022, were incorporated into the Bill. It was subsequently reintroduced in Parliament and received presidential assent on August 3, 2023.
This amended Act brought forth notable alterations to the Biological Diversity Act, 2003 (“Act”), some of which have been discussed here. Firstly, it revised the definition of “biological resources”. Secondly, it delineated distinct approval, registration processes for Indian entities and foreign entities seeking intellectual property rights. Thirdly, it has also decriminalised the penal provision.
Legal Scope and Definition of Biological Resources
The Act defined “Biological resources” as “plants, animals, and micro-organisms or parts thereof, their genetic material, and by-products (excluding value-added products) with actual or potential use or value, but does not include human genetic material.” The Amended Act revised the definition of “Biological resources” to encompass “plants, animals, micro-organisms, or parts of their genetic material and derivatives (excluding value-added products), with actual or potential use or value for humanity, but does not include human genetic material“. The inclusion of derivatives instead of of by-products faced opposition from the Maharashtra, Assam, Uttarakhand, and Madhya Pradesh Biodiversity Boards.[1] Nevertheless, the term ‘by-product’ has been replaced with ‘derivatives’. The Joint Parliamentary Committee’s justification for this alteration underscores the distinction between by-products that are utilised as raw materials for deriving specific molecules or unrecognisable derivatives that trigger the Access and Benefit Sharing Mechanism, and those that do not.[2]
The term ‘derivative’ is defined in Section 2(fa) as a “naturally occurring biochemical compound or metabolism of biological resources, even if it does not contain functional units of heredity.” The incorporation of the term ‘derivative’ seems to draw inspiration from its usage in Article 2[3] of The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity, 2014 and may provide some guidance in interpretation of the expression. However, the exclusion of the phrase “resulting from the genetic expression or metabolism of biological or genetic resources” from the Amended Act diverges from the Nagoya Protocol’s definition.
Furthermore, the Act excludes value-added products from its purview, defining them in Section 2(p) as “products containing portions or extracts of plants and animals in unrecognizable and physically inseparable form“. The interpretation of biological resources, the determination of whether a specific commodity falls within its ambit or not, interpretation of value-added products have long been contentious subjects c and may persist even after the 2023 amendments. For instance, in the case of Mr. Asim Sarode vs State of Maharashtra, the National Green Tribunal (west zone) deliberated whether castor oil would qualify as a biological resource necessitating approval from the national biodiversity authority.[4] Similarly, in Vishwanath Paper and Boards Ltd. & another v. State of Uttarakhand & others, the petitioner company engaged in the manufacturing of various types of papers using raw materials such as bagasse, rice husk, waste paper, and wheat waste contended that their product would not attract the Act’s provisions since it does not fall within the ambit of biological resource.[5] The High Court refrained from opining on whether ‘wastepaper’ falls under the definition of ‘biological resources’, but mandated prior intimation to the State Biodiversity Board for utilising biological resources commercially.
There exists a significant degree of complexity and overlap in how different regulatory bodies classify and interpret biological resources. This complexity often becomes apparent in cases brought before the Controller of Patents (CoP), particularly when inventions involve the utilisation of biological resources that trigger the requirement for approval under the relevant legislation. In such cases, the perspective and understanding of the National Biodiversity Authority (NBA) regarding the definition of value-added products and biological resources become crucial. For instance, in a patent application relating to the use of essential oils, Delhi Patents Office deemed it necessary for the applicant to obtain approval from the competent authority under the Act. This requirement stemmed from the understanding that essential oils did not fall within the category of value-added products. However, in response, the Applicant contended that the essential oils, as constituents of the composition, represented portions or extracts of plants in an unrecognisable and physically inseparable form, thereby meeting the definition of value-added products. This argument found favour with the CoP, leading to the acceptance of the patent application.[6] Similarly, the CoP approved a patent application for an invention utilising oils from plant sources and eggshells of animal origin.[7]
Additionally, the Ministry of Environment, Forests, and Climate Change, through a notification dated April 7, 2016, curated a list of biological resources exempted from the Act, comprising 384 goods.[8] Moreover, the Department of Agriculture and Corporation, by a notification dated December 17, 2014, is authorised to specify crops exempted from Sections 3 and 4 of the Act for research, breeding, and training purposes in food and agriculture.[9]
Approval Processes for Intellectual Property Rights (IPR) Acquisition.
According to the newly-introduced Section 6(1A)[10], Indian entities falling within the scope of Section 7 must register with the NBA for inventions based on research or information pertaining to Indian biological resources, including those deposited in repositories outside India or associated with traditional knowledge. Consequently, Indian nationals and entities falling under Section 7 only need to register with the NBA before patent issuance, eliminating the need for prior approval (expediting the grant process). However, signing access and benefit-sharing agreements with the NBA remain necessary for the commercial utilisation of IPR.
Additionally, prior intimation to the State Biodiversity Board (SBB) and NBA approval are still required for Indian nationals seeking access to biological resources for commercial utilization of IPR, in addition to the standard approvals mandated under Sections 23 and 24 of the Act. Furthermore, under the new provisions, certain categories covered under Sections 3(2) and 7 are obligated to obtain prior approval from the NBA for IPR involving biological resources. These categories include non-citizens, non-resident citizens, organisations not registered in India, and organisations registered in India with any non-Indian shareholding or management. Additionally, Indian-controlled companies are exempted from being classified as “body corporate, association, or organisation” under Section 3(2)(c)(ii)[11], with only companies under foreign control falling within the purview of this section.
Decriminalisation
The amended legislation heralds a significant transformation by revamping Section 55 of the Act, which previously stipulated imprisonment of up to five years as a penalty for breaching Sections 3, 4, or 6, alternatively accompanied by a fine of INR 10 lakh or more, or both. However, the amended provision dispenses with the imprisonment clause, opting instead for a more substantial fine. Under the amended Act, violations of Sections 3, 4, 6, or 7 may incur fines of up to INR 50 lakh. Additionally, an adjudicating officer, not below the rank of Joint Secretary to the Government of India or a Secretary to the State Government, appointed by the Central Government under Section 55A, may impose an additional penalty of up to INR 1 crore in certain cases.
The rationale behind this decriminalization, as articulated by the Honorable Union Minister for Environment, Forest, and Climate Change, Bhupender Yadav, is to allay stakeholder apprehensions and foster more effective compliance.[12]
[1] https://prsindia.org/files/bills_acts/bills_parliament/2021/Joint_Committee_Reoert%20on_the_Biological_Diversity_(Amendment)_Bill_2021.pdf.
[2] Ibid.
[3] Derivative means a naturally occurring biochemical compound resulting from the genetic expression or metabolism of biological or genetic resources, even if it does not contain functional units of heredity.
[4] Original Application No. 25/2015 the National Green Tribunal (west zone).
[5] AIR 2016 Utt 87.
[6] Patent Application 1859/DEL/2015.
[7] Patent Application 4228/KOLNP/2008.
[8] http://nbaindia.org/uploaded/pdf/Notification_of_Normally_Tradeded_Commidities_dt_7_April_2016.pdf
[9] http://nbaindia.org/uploaded/pdf/Gazette_Notificaiton_on_exemption_of_crops_listed_in%20the_Annex-I_of_the_ITPGRFA.pdf
[10] Section 6(1A) Any person covered under section 7 applying for any intellectual property right, by whatever name called, in or outside India, for any invention based on any research or information on a biological resource which is accessed from India, including those deposited in repositories outside India, or traditional knowledge associated thereto, shall register with the National Biodiversity Authority before grant of such intellectual property rights.
[11] Section 3(2)(c)(ii) incorporated or registered in India under any law for the time being in force, which is controlled by a foreigner within the meaning of clause (27) of section 2 of the Companies Act, 2013.
[12] https://www.business-standard.com/politics/parliament-passes-amendment-bill-to-decriminalise-biodiversity-offences-123080100922_1.html
