by Nithin Ramakrishnan (Third World Network)
The Cali Fund is the financial arm of the CBD’s multilateral mechanism (MLM), established to address inequities in benefit-sharing from DSI. As per Decision 16/2, users contributing to the Cali Fund in accordance with the MLM modalities are deemed to have fairly and equitably shared monetary benefits from DSI used within the MLM’s scope for that year, and will receive a certificate exempting them from any expectation of further monetary benefit-sharing for that year within that scope.
Paragraph 13 of the Annex to the Decision 16/2 also invites Parties with DSI users in their jurisdiction to take measures to incentivize them to contribute to the Cali Fund. According to the COP16 President who developed the President’s text, which formed the basis of the decision, Parties may take incentives in the form of mandatory benefit sharing provisions prescribing DSI users to make contributions to Cali Fund as well.
However, the current COP17 draft decision promtoes the idea that a major incentive for DSI users to contri-bute to the Cali Fund would be the recognition that the certificate exempts contributors from further national monetary obligations.
In simple terms, the proposition is this: A company using DSI contributes money to the Cali Fund, gets a certificate, shows this certificate to a country providing DSI or genetic resource from which DSI is derived, and gets exempted from the monetary benefit sharing obligation under their national law, if any.
This proposition raises two main concerns:
Firstly, it does not distinguish between Parties with national ABS laws requiring monetary benefits from the use of DSI and Parties without such national ABS laws, resulting in an unfair imbalance for Parties with national ABS laws. Countries with national expectations of benefits (mostly developing countries) have to give up their claims for monetary benefits under their national laws to make the Cali Fund work. Meanwhile countries without such expectations (most, if not all, developed countries), give up nothing.
Secondly, it offers an interpretation of Paragraph 13 whereby Parties with DSI users (mostly developed countries, if not all), would not need to take effective mea-sures that would incentivise DSI users from their countries to contribute money to the Cali Fund. This is because incentives are now becoming increasingly perceived as measures taken by a country from where DSI is extracted and used. Incentives by provider countries is not merely a double cost for them (as they share DSI and waive national expectations), but also an ineffective incentive.
Many expensive biotechnology products are marketed exclusively in developed countries. A DSI user from a developed country could simply reside there, access DSI anonymously from so-called public databases, and operate businesses solely in developed countries, or even operate businesses remotely from such countries, without any pressure to contribute to the Cali Fund.
Certificates should only be used to certify that the monetary contribution is made at the expected rate to the Cali Fund. Its recognition by Parties expecting national monetary benefits gives legal certainty to the users about their contribution, but it would not moti-vate users to contribute to the Cali Fund, unless they already have business operations in those countries.
Real and effective measures to make the Cali Fund work should therefore be undertaken by Parties with users in their jurisdiction and should not discriminate against countries providing DSI or genetic resources from which DSI is derived.