Malaysia’s draft Biological Resources Access and Benefit Sharing Law

By Shawn Sullivan

The final draft of Malaysia’s Access to Biological Resources and Benefit Sharing Bill has been published.

In July 2013, Malaysia’s Ministry of Natural Resources and Environment (NRE) published the final draft of the Access to Biological Resources and Benefit Sharing Bill (the “Bill”) after undergoing a robust consultation process involving various stakeholders such as federal and state agencies, NGOs, indigenous and local communities and the private sector.

The Bill is intended to regulate bio-prospecting activities in Malaysia and implement the provisions of the Convention on Biological Diversity (CBD) to promote the fair and equitable sharing of benefits arising from the utilisation of biological resources. The Bill also contains provisions recognizing the role of indigenous and local communities with regard to biological resources and associated traditional knowledge.

Malaysia’s commitments regarding biological resources

Malaysia, identified by Conservation International as one of 17 “megadiverse” countries collectively containing 70% or more of the earth’s marine, freshwater, and terrestrial biological diversity, has huge potential in wealth creation through the sustainable use of its rich biodiversity. To realise this agenda, a clear and transparent legal framework for researchers and bio-prospectors needs to be put in place.

Malaysia ratified the CBD in 1994. Like most CBD signatories, to date it has not enacted comprehensive legislation to implement the convention. Malaysia also has not signed the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization, a supplementary agreement to the CBD, which is intended to provide greater legal certainty regarding the convention’s access and benefit sharing provisions. However, the Bill clearly draws upon much of the philosophy underlying the Nagoya Protocol. The proposed Malaysian access and benefit sharing law spans 60 pages. Some of its features are described below.

Scope and extent

The draft law applies to “biological resources” which are defined using almost the same definition that is contained in the CBD. In addition to the CBD definition, the term includes “derivatives” as defined in the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization, except that in the Malaysian draft law, “derivatives” also include “information in relation” chemical compounds that are subject to the law.

Regulation of access

The Bill regulates the obtaining of “access” to biological resources, which means taking them for research and development purposes from their natural habitat or a place where they are found, kept, or grown. For this purpose, “research and development” means “the study or systematic investigation or technological application by analyzing, sampling, bioassaying, and inventorising or other methods for any purpose including taxonomic research and potential commercial product development”.

One who wishes to obtain access to a biological resource must apply to a “Competent Authority”. The rules that govern applying for permission to access a biological resource differ, depending on whether the intended use of the resource is commercial or non-commercial.

In this context, “non-commercial” means “pure academic and non-profit oriented”. When the applicant seeks access for non-commercial research purposes, the law requires that the research be conducted “in collaboration with a public higher education institution, public research institution, or government agency,” unless the Competent Authority decides otherwise.

In any case, the applicant must have obtained the prior informed consent of any relevant indigenous and local community for access to:

  • Biological resources on land to which the community has a right as established by law; and
  • Traditional knowledge associated with the resource that is held by the community.

The applicant must also have entered into a benefit sharing agreement with the resource provider, which must be based upon mutually agreed terms and must provide for fair and equitable benefit sharing.

Exceptions to the access rules

The access rules do not apply to genetically modified organisms that are protected by intellectual property, to plant varieties that are protected by plant breeders’ rights, or to a small farmer that is exercising his right under the Malaysian Plant Varieties Act 2004 to save, use, exchange, and sell farm-saved seed or propagating material.

Grounds for refusal of access

The draft law requires the Competent Authority to refuse an application for access to a biological resource under certain enumerated circumstances, including when:

  • The application relates to threatened taxa or endemic and rare species;
  • The access is likely to cause adverse effects to the livelihood or cultural practices of indigenous and local communities;
  • The applicant seeks access to human genetic resources “for purposes contrary to ethical values”; or
  • The “use of the biological resource is for purposes associated with genetic use restriction technology”.

Consent required for application for intellectual property rights

Section 27 of the draft law provides that:

“No person shall apply for intellectual property rights, whether in or outside Malaysia, in relation to the biological resources or traditional knowledge associated with biological resources accessed without the written consent of the Competent Authority.”

Criminal penalties

Under the Bill, many violations would be punishable as crimes. For example, to access biological resources or traditional knowledge associated with the resource without a permit is designated as a serious offense. For individuals, the punishment is a fine of no less than MYR50,000 up to MYR200,000 (approx. US$16,270 to US$65,080 or €12,590 to €50,390) and/or a prison term of up to five years. Juridical entities that violate the access provisions are subject to a fine ranging between MYR100,000 and MYR400,000 (approx. US$32,540 to US$130,170 or €25,190 to €100,780).

Similarly, a violation of Section 27 regarding intellectual property rights would be punishable by up to four years in prison and a fine up to MYR100,000 (approx. US$32,600 or €25,190) for individuals, and a fine up to MYR200,000 (approx. US$65,220 or €50,390) for juridical entities.

About the author

Shawn Sullivan
Shawn is general counsel to the International Life Sciences Institute (ILSI), ILSI Research Foundation, ILSI North America, and the ILSI Health and Environmental Sciences Institute. Based in Washington, D.C., he also runs a limited private practice in areas that include nonprofit law, negotiations, contract law, international business, technology transactions, and corporate law. Shawn may be contacted at sullivan[at]sullivanlaw.net.