Industry groups say Cali Fund for biodiversity 'not the right approach'

World leaders celebrated the launch of a new fund last week that is meant to collect money from corporations that use genetic data from animals and plants in their products and then disseminate those funds to biodiverse countries. The idea is a good one, experts say: Ask companies that benefit from biodiversity to pay for it — thereby sharing their profits with countries trying to conserve biodiversity. But challenges to getting companies to pay up are already coming to light. This fund — named the “Cali Fund” for the city in Colombia where it was conceived at the United Nations Biodiversity Conference, or COP16, last year — is voluntary for companies. Industry experts suggest it could see little support over the coming months due to a “lack of clarity” and potential bureaucracy. “The decision to create the Cali Fund at COP16 does not get the balance right between the intended benefits of such a mechanism and the significant costs to society and science that it has the potential to create,” David Reddy, director-general of the International Federation of Pharmaceutical Manufacturers and Associations, or IFPMA, told Devex. “More concretely, industry does not believe that the Cali Fund, as currently structured, is the right approach or will improve biodiversity.” Further details on just what industry groups find wrong with the Cali Fund are hard to come by. Devex reached out to 20 companies and associations that use genetic data for their products, including pharmaceutical, biotech, and cosmetics companies. IFPMA was one of the only ones to provide its stance. Only five others responded, largely declining to comment or referring to associations. The other companies that did respond to Devex’s requests were Eli Lilly and Company, an American multinational pharmaceutical company; Syngenta, a global agricultural technology company headquartered in Basel, Switzerland; Bayer, a German multinational pharmaceutical and biotechnology company; and Roche, a Swiss multinational health care company. Eli Lilly declined to comment, Syngenta deferred to the International Chamber of Commerce, or ICC, Roche referred to IFPMA, and Bayer said that “global biodiversity is an important issue” and that it was discussing potential “fixed payments” to the Cali Fund with “various stakeholders.” The Cali Fund asks participating companies to contribute 1% of their profits or 0.1% of their revenue. The fund will be managed by U.N. agencies and then disseminated to countries with high levels of biodiversity. The agencies have not yet provided details on how this would work, but they have said that at least 50% will go to Indigenous communities. Reddy said that the genetic data from nature, known as digital sequence information, or DSI, is essential for new medicines and vaccines and that a new system “should not introduce further conditions on how scientists access such data and add to a complex web of regulation, taxation and other obligations.” Though IFPMA represents the pharmaceutical industry, Reddy also said that these limitations should not be placed on academia or biotech. Instead, “new technologies that use DSI can contribute to conservation and sustainable use of biodiversity and should be encouraged.” ICC said that “business is very supportive of a multilateral approach to benefit sharing and welcomes the efforts made to move towards this,” according to Daphne Yong D'Herve, director of global network policy engagement at ICC, who added that ICC is planning to make sure the “necessary enabling conditions are in place” to incentivize companies. But, she added that more detail is needed. “It has only been a few months since the [U.N. Biodiversity Conference] decision in Cali on the mechanism and the fund,” she said. “And there are still many points to clarify, with different interpretations by CBD Parties on several key concepts that are necessary to implement this on the ground e.g. effect on related national obligations, and work yet to start on some important areas e.g. the methodology for allocating funds.” One business representative attending the continued COP16 negotiations last week in Rome who asked for anonymity because they were not yet ready to go on the record regarding the fund said that industries are still awaiting a lot of clarity — on “everything” related to the fund. They added that we are unlikely to see any ambitious commitments for a while. Yong D'Herve reiterated this. “Companies are waiting for modalities and details to become clearer before engaging, as the implications of contributing are still unclear,” she said. The United Nations Secretariat to the Convention on Biological Diversity, which helped launch the fund, insisted at a press conference that there was a lot of interest but declined to give company names. David Ainsworth, the spokesperson for the secretariat, told Devex that it would be providing a guide to the mechanism in the coming weeks and that the decision to operationalize the fund itself “indicates a strong political commitment of all Parties to the CBD.” Ainsworth also said that the U.N.’s Multi-Partner Trust Fund Office, which will host the Cali Fund in partnership with the U.N. Development Programme and U.N. Environment Programme, is going to make all contributions and contributors, along with disbursements and recipients, public on the website and through annual reports. A steering committee has been established by the Conference of Parties to help govern the fund. The secretariat said that “more information on who will make up the committee will be public shortly.” As of now, it’s difficult to see how the fund will receive meaningful contributions in the near future. “Ahead of COP17, it is critical that governments work to ensure the implementation of any new mechanism on digital sequence information does not stifle the medical research and innovation that can bring the next wave of medical progress to people around the world,” said Reddy.