No Agreement Yet on Liability Regarding GMOs

[South-North Development Monitor (SUNS), Issue #6445, 1 April 2008]

UN: No agreement on liability regarding GMOs, another meeting planned

Geneva, 28 Mar (Lim Li Lin) — Negotiations under the UN Cartagena Protocol on Biosafety to establish an international regime for liability and redress for damage caused by genetically modified organisms (GMOs) failed to conclude as mandated. The fifth meeting of the Working Group on the liability regime was held in Cartagena on 12-19 March, in the city in Colombia that gave its name to the Biosafety Protocol.

Following the failure of the group to reach an agreement, a decision was taken for another meeting in Bonn in May, aimed at reaching agreement.

Under the Biosafety Protocol, an international regime on liability and redress addressing damage from the transboundary movement of living modified organisms (LMOs) (as GMOs are known under the Biosafety Protocol) should be agreed upon and concluded by 2008.

“Liability and redress” has been a very contentious issue. In 2000, towards the end of negotiations to establish the Biosafety Protocol, countries could not agree to include liability provisions in the protocol. Instead, an enabling clause was put in place, which specified that the first Meeting of the Parties (MOP) to the protocol should start a process to elaborate liability rules and procedures, and complete this process within four years.

Most developing countries wanted the liability and redress provisions as they are mainly importing GMOs or subject to their illegal or unintentional transboundary movements. Countries producing and exporting GMOs as well as the biotechnology industry were very opposed to including such provisions in the protocol.

Indeed, they were opposed to the entire notion of a Biosafety Protocol in the first place. The protocol sets out international rules and procedures for regulating mainly the import and export in GMOs for environmental and health safety reasons. Socioeconomic concerns were also of particular importance for developing countries, and the Biosafety Protocol also addresses this.

Developing countries had always argued that if GMOs are as safe as industry and the producing countries claimed they were, then they need not have to be concerned about strong liability and redress provisions, which would give more confidence in their products. In fact, the inclusion of substantive liability and redress provisions in the Biosafety Protocol was seen as critical to its success, and during the negotiations, many delegates supported the NGO campaign, “No Liability, No Protocol” and later, “No Liability, No Biosafety”.

At the first MOP to the Biosafety Protocol in 2004, a decision setting out the process to elaborate the international regime on liability and redress was adopted. This decision specified that a Working Group would meet five times to undertake this work, and shall complete its work in 2007 in order to enable the MOP in 2008 to adopt the final report from the Working Group, as well as the proposed international rules and procedures on liability and redress, in order to the fulfill the mandate of the Biosafety Protocol. The Fourth MOP will be held in May 2008 in Bonn.

Prior and during the fifth meeting of the Working Group in Cartagena, the two Co-Chairs of the process, Rene Lefeber from the Netherlands and Jimena Nieto from Colombia conducted informal consultations with individual delegations, regional groupings and observers. The Co-Chairs presented four options for the consultations, each dealing with the nature and form of the proposed international liability and redress regime.

The options were: (a) a legally binding instrument on private international law in combination with a non-legally binding instrument on substantive rules and procedures relating to civil liability; (b) a legally binding instrument on the administrative approach in combination with a non-legally binding instrument on civil liability; ( c) domestic law requirements on the importer to establish, at the time of import of a LMO, and to maintain thereafter financial security to cover any damage to the conservation and sustainable use of biological diversity that such LMO may cause; and (d) a non-legally binding instrument on the administrative approach and/or civil liability in combination with a supplementary collective compensation arrangement which is open to states that have implemented the non-legally binding instrument.

In a plenary, Malaysia emphasized that all these options contain various elements which are useful to the international liability and redress regime, but that all of these elements need to be included in a legally-binding regime for it to be effective.

In the meeting’s first three days, the Working Group discussed options and operational text on settlement of claims, damage, the primary and supplementary compensation schemes, scope and complementary capacity-building measures. State responsibility had already been decided on at an earlier meeting, and the choice of instrument was an issue that the Co-Chairs were intending to address in a “Core Elements” paper that they announced would be made available on the fourth day of the meeting.

Sub-working groups were established to further narrow down the various options. Sub-working group 1 worked on settlement of claims (excluding the section on administrative procedures), damage and scope. Sub-working group 1 was co-chaired by Jurg Bally from Switzerland and Reynaldo Ebora from the Philippines.

Sub-working group 2 worked on the primary and supplementary compensation scheme, administrative procedures under the settlement of claims, and complementary capacity-building measures. The co-chairs for this sub-working group were Jane Bulmer from the United Kingdom and Dire Tladi from South Africa.

On Saturday (15 March), new working documents with further streamlined options for nearly all the elements were made available. The Co-Chairs of the Working Group also presented their much awaited “Core Elements” paper, which was an attempt to marry substantive elements in the liability and redress regime with the nature and form of the instrument in various pieces.

The paper’s main components included a legally-binding administrative approach and guidelines to civil liability as the primary compensation scheme. The administrative approach applied to damage to biological diversity, and placed obligations on the person in operational control of GMOs to inform the competent authority in the event of damage or imminent threat of damage, and to take response and restoration measures.

Discretion is left to the competent authorities to take such measures and recover the costs. Exemptions to and mitigation of liability would be up to domestic discretion based on an internationally agreed exhaustive list. Minimum amounts to the limitation in time (to bring a claim) and amount (of redress) would be agreed to at the international level. It would be left to domestic discretion to require evidence of financial security upon import of GMOs, and the issue of causation would be left to domestic law.

The civil liability guidelines would apply to any type of damage resulting from the transboundary movement of GMOs, when not redressed through the administrative approach. The standard of liability would be fault-based unless the approval of an import was made subject to strict liability.

The channelling of strict liability (where applicable) would be to the importer or to the person in operational control of GMOs (on a subsidiary basis). In the case of strict liability, the provisions for exemptions and mitigation, limitations in time and amount, and the financial coverage were the same as in the administrative approach.

The issue of causation was also left to domestic law, and there would be an enabling clause on private international law and an encouragement to recognize and enforce foreign judgments when they are based on domestic law that is compatible with the civil liability guidelines.

The supplementary compensation scheme would be for reimbursement of costs of response and restoration measures to redress damage to biological diversity. It envisaged a contractual compensation scheme by the private sector, and a collective compensation mechanism of the MOP if damage has not been redressed through the administrative approach or the contractual compensation scheme by the private sector.

Access to the collective compensation mechanism is also conditional upon the implementation of the administrative approach in domestic law. No residual state liability was envisaged. The collective compensation mechanism was based on a proposal by Switzerland.

The final piece of the “Core Elements” paper was on complementary capacity building measures which included an institutional arrangement to provide advice to Parties on the compatibility of draft domestic legislation with the legally-binding administrative approach and the civil liability guidelines, and to the MOP on access to the collective compensation mechanism, as well as to the domestic public entities of State in which recognition and enforcement of a judgment is sought, on the compatibility with the domestic law implementing the administrative approach and civil liability where judgment was rendered.

The Co-Chairs presented the meeting with three options: to accept the core elements as presented as a package and negotiate operational text within this framework, to reject the whole package, or to make amendments to the package and use it as a basis for further work. They stressed that not every issue had been addressed in the “Core Elements” paper, and that those issues were still open for negotiation. The meeting then adjourned for the weekend.

On Monday (17 March), a representative of the Global Industry Coalition was given the floor by the Co-Chairs at the beginning of the plenary session, before the floor was opened to government delegations to present their views on the “Core Elements” paper. The representative of industry spoke on behalf of six biotechnology companies – BASF, Bayer CropScience, Dow AgroSciences, DuPont/Pioneer, Monsanto and Syngenta – and presented a proposal.

They proposed a binding contractual obligation among the six companies and other companies that also want to be part of it, to remediate “actual damage to biological diversity” caused by their products, as a form of self insurance.

This “compact” would mean that only the responsible company would remediate or pay a claim after the actual damage to biological diversity had been “proven pursuant to the claim procedure detailed in the compact”. The conditions for a Party to submit a claim and for the approval of such a claim would be set out. The Party whose claim was allowed would be a third party beneficiary.

Rene Lefeber, the Co-Chair from the Netherlands, then thanked industry and warmly welcomed their proposal. He stressed that this was a “monumental, historic step”, a “first historic moment” and that the multinational corporations were reaching out and offering to become part of the biosafety community. His request to the plenary to applaud the initiative of industry was however greeted with lukewarm applause.

Many delegations were uncomfortable with the Co-Chair’s championing of the industry initiative. This surfaced in the final plenary when adopting the report of the meeting. Very detailed paragraphs on the statement by industry had been included in the report of the meeting, including claims about the safety of their products, when the meeting report normally just states that a statement had been made and by whom.

Norway, Bolivia and Palau questioned the necessity of such detail in the report, and the imbalance in highlighting so prominently the industry statement as compared to other statements. Palau also questioned the need to reflect the Co-Chair’s response to the statement as this was not the case with regards to other statements.

Many delegations cautiously welcomed the industry initiative and said that it remains to be seen what the details are. Palau noted that the industry proposal was based on strict liability. Most delegations felt that a framework within which to negotiate the various operational text was helpful, but nearly all articulated their dissatisfaction with the “Core Elements” paper as it was, and outlined the changes that they would like to see if the paper were to be accepted as a basis for further work.

Only Japan, which has been the most resistant to an international instrument on liability and redress, cautioned against making any changes to the package deal. The European Commission were agreeable to most parts of the “Core Elements” paper, except for the legally-binding nature of the administrative approach, as they had placed a proposal on the table for a “two-step” approach, which envisaged domestic action with a view to reviewing this after six years.

A statement by Ecoropa on behalf of NGOs firmly rejected the “Core Elements” paper. The NGOs criticized the paper as being “counterproductive to liability and redress on the ground”. They voiced many concerns with the paper. The administrative approach simply placed a burden on importing countries to take action, while there was no corresponding financial burden on exporting countries to bear the costs in case of damage.

Any civil liability regime must be legally binding, and be based on strict liability, said the NGOs. If not, it could be counterproductive for developing countries that have or intend to put in place strict liability regimes, as they will be subject to heavy pressures to establish the lowest common denominator (fault based liability) which is already the status quo in most countries under existing legislation.

The NGOs also voiced their dissatisfaction with the privatization of the supplementary compensation scheme, as the conditions would likely result in a mechanism in name only.

They stressed the importance of including damage to human health, socioeconomic damage, and damage arising from unintentional and illegal transboundary movements. The importance of reversing the burden of proof at the international level was also stressed.

The Co-Chairs then placed two options before the meeting – to use the “Core Elements” paper as a package, and as a basis for further work, or to return to working on the operational text options that had emerged from the sub-working groups.

Faced with these options, when all delegations had expressed wanting to refine and amend the “Core Elements” paper, most delegations unhappily chose to revert back to working on the operational text options. Switzerland however proposed forming a “Friends of the Co-Chairs” group, to exchange views on the core elements and to discuss possible ways to move forward.

This proposal was accepted and a “Friends of the Co-Chairs” group was formed with four representatives each, at any one time, from Africa and the Latin American and Caribbean Group (GRULAC), four representatives from Asia-Pacific which were named as Malaysia, China, India, and the Philippines, two representatives from the European Union, and Switzerland, Japan, Norway and New Zealand.

The meeting was initially open to all other Parties, non-Parties (the US, Canada, Australia, Argentina, Chile and Uruguay – the original “Miami Group” countries that opposed the Biosafety Protocol – are not Parties) and observers, without speaking rights.

The “Friends of the Co-Chairs” group met from 8 am on Tuesday till 4 am on Wednesday, the last day of the meeting. By the end of the meeting, some headway had been made in agreeing the core elements that would be the basis on which to work on the operational text options. It was agreed that all elements dealing with the nature and form of the liability and redress regime would be deleted, and that this would be decided at the MOP in May.

The core elements that were agreed to in the “Friends of the Co-Chairs” meetings were incorporated with the corresponding operational text options. This document was adopted by the Working Group and will be forwarded to the MOP.

It was decided that the “Friends of the Co-Chairs” should meet in Bonn, prior to the MOP, from 7 to 9 May to continue its work. The meeting would be preceded by regional group meetings on 6 May.

This time, the “Friends of the Co-Chairs” meeting would comprise six representatives each from Africa and GRULAC, six representatives from Asia-Pacific region which were named as Bangladesh, China, India, Malaysia, Palau and the Philippines, two representatives each from the European Union, and Central and Eastern Europe, and New Zealand, Norway, Switzerland and Japan. The meeting would be open to advisors from Parties as selected by the Friends.

The outcome of the meeting will also be presented to the MOP. The MOP will then decide on how to proceed with the rest of the negotiations. It is expected that a Contact Group will be formed early in the week to negotiate substantively on liability and redress, in order to reach a final outcome by the end of the MOP.

Many doubts have been expressed about the feasibility and desirability of continuing this work beyond the MOP because of financial constraints. The momentum and good faith of most Parties currently exists to reach agreement by May on an international liability and redress regime for GMOs. +

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