Ambassador for the Environment

30 November 2001

Dear Sir/Madam

I am writing to advise of the main outcomes of the second meeting of the Intergovernmental Committee for the Cartagena Protocol on Biosafety (ICCP2), held in Nairobi, Kenya on 1-5 October 2001.

ICCP2 was attended by delegations from 117 countries, including all of Australia’s major trading partners, and 47 inter-governmental, non-governmental and industry organisations.  Australia was represented at the meeting by officials from the Department of Foreign Affairs and Trade; Agriculture, Forestry and Fisheries Australia; and Environment Australia.

The purpose of ICCP2 was to continue work on a number of important implementation issues left outstanding under the Protocol, which must be decided after entry into force.  These included the documentation regime for commodities, liability and redress, and compliance.  The final resolution of these issues will affect the shape of the international regime for trade in living (genetically) modified organisms (LMOs) and have consequences for Australian industry.

The actual timing of implementation decisions will depend upon the timing of entry into force of the Protocol.   It is clear from ICCP2 that this is likely to be later than the Secretariat  had anticipated.  Entry into force requires 50 countries to have agreed through domestic Parliamentary processes to take on the legal obligations of the Protocol (ratify).  At the time of writing, only eight countries have ratified (Bulgaria, Trinidad and Tobago, St Kitts and Nevis, Fiji, Lesotho, Norway, the Czech Republic and Nauru).  Due to an internal legal dispute within the European Commission about competency (the Commission or EU Member States), EU ratifications could be 12 to 24 months away.  A number of countries will not ratify before the EU.   Some other countries, such as New Zealand, Brazil, Argentina and Japan are taking time as they recognize that domestic implementation of the Protocol will be complex.  Entry into force is unlikely before 2003.  Nevertheless, the general level of commitment to implementation of the Protocol remains high.

Throughout ICCP2, Governments continued to express divergent views as they dealt with the issues.  Major commodity exporting countries (the US, Australia, Argentina, Brazil and Canada) sought outcomes that would achieve the Protocol’s objectives without causing trade restrictive outcomes or encroaching on the competency of the WTO and FAO.  In general, the EU and the Africa Group sought detailed requirements and highly regulated arrangements to take effect as soon as possible, in some case in advance of the timeframes set out in the Protocol.

ICCP2 agreed to a program of intersessional work and to the need for a third intergovernmental meeting (ICCP3) in the likely event that the Protocol has not entered into force by April 2002.  This is expected to be held back-to-back with the Sixth Conference of Parties (COP6) of the parent Convention on Biological Diversity (CBD) at The Hague in April 2002.  

The main outcomes of ICCP2 were:

1.      Handling, Transport, Packaging and Identification (Article 18):  Article 18.2a provides that on entry into force LMO commodities must be accompanied by documentation that clearly identifies that they “may contain” LMOs and are not intended for intentional introduction into the environment as well as a contact point for further information.  It further provides that a detailed decision on identification of LMO commodity shipments must be made within two years of entry into force.  18.2b and c set out documentation requirements for LMOs intended for ‘contained use’ (e.g. research) and intentional introduction into the ‘environment’ (e.g. seeds).  

ICCP2 debate focused on the scope of two proposed experts meetings to consider how to implement Article 18 identification requirements.  Australia, with the US, Argentina and Brazil, sought to limit their mandate to the requirements upon entry into force (i.e. “may contain”), but the EU and African countries promoted early finalisation of detailed identification requirements for commodities, ignoring the Protocol’s explicit two year lead time.  This goes against the hard won compromise reached in Montreal when the Protocol was adopted.  The EU advocated the use of unique identifiers and clearly sees the Protocol playing a role in traceability for its domestic food labelling regime, which is beyond the agreed scope of the Protocol.   Disagreement about prioritising the Protocol’s requirements led to Australia and the US recording reservations on the mandate for a meeting on 18.2a.  A mandate was agreed for a meeting on 18.2b and 18.2c, to follow up work undertaken by an expert meeting in Paris in June 2001. 

Governments agreed that:

2.      Compliance:  Article 34 of the Protocol states that the first meeting of Parties (MOP1) is to consider and approve cooperative procedures and institutional mechanisms to promote compliance and address cases of non-compliance.

Approximately 80 experts, including from Australia, participated in a meeting on compliance from 26-28 September 2001, immediately prior to ICCP2.  The experts generally supported facilitative rather than punitive procedures and mechanisms.  However many argued that some punitive elements were needed, including strong measures to deal with non-compliance.   The EU, Africa Group and ROK argued that measures such as the suspension of rights would be appropriate.  Argentina, Japan, US, New Zealand and Australia argued that such measures would be contrary to a facilitative mechanism. Australia, with Japan, argued for an arrangement where governments would advise if they were having difficulty meeting the Protocol’s requirements, with a view to receiving assistance.  The majority of countries, however, supported a Party to Party trigger (where one Party could complain against another for failure to comply with the Protocol).  Australia argued that this would tread a fine line with bilateral dispute settlement and that complaints should be dealt with under the dispute settlement mechanism, not compliance provisions.  The ROK pushed strongly for inclusion of the concept of differentiated treatment for developing and developed countries.  Its objective was to deliver more lenient treatment to developing countries in the event of their non-compliance.  While acknowledging that a number of developing countries would need technical assistance to help them meet their obligations, Australia, Argentina, Brazil, Japan, New Zealand, US and India did not accept that legal distinctions could be made amongst Parties in respect of their general obligation to comply with the Protocol.

The experts produced a draft text of a compliance mechanism, with brackets around particularly problematic elements such as the party-party trigger and differentiated treatment.  It was agreed at the insistence of Australia and the US that domestic consultations needed to occur before further negotiation of the draft text could take place.   As a result, there was no discussion on compliance at ICCP2.  It is expected to be on the ICCP3 agenda.

3.      Liability and Redress:  Unlike compliance, there is a long timeframe for a decision on the substance of a liability and redress regime under the Protocol.  Article 27 provides that the first meeting of Parties should agree on a process for taking the issue forward, and  endeavour to complete that process of consideration within four years of entry into force.

Despite the wish of some countries (notably the African Group and ROK) for early resolution of liability and redress issues, there was no substantive discussion on the nature of a possible regime at ICCP2.  Japan was particularly insistent upon the need to keep to a process agenda and the EU kept a low profile (probably due to its current internal deliberations on liability issues).   

It was agreed that work would focus on information gathering prior to entry into force of the Protocol and that an open-ended group of legal and technical experts would be established (by MOP1) after entry into force.  The terms of reference of this experts’ group is likely to be discussed at ICCP3.

It was also agreed that governments and international organisations be invited to submit information to the Secretariat on relevant national, regional and international measures and agreements in the field of liability and redress for damage resulting from transboundary movements of LMOs.  As much information provided is likely to be reasonably general (there being very few existing liability measures and agreements relating specifically to LMOs), it will need to be carefully assessed for its application to the Protocol.  A synthesis report is to be prepared by the Secretariat for consideration by MOP1 and made available no later than three months prior to MOP1. 

Governments (at their own expense) may convene workshops to: a) consider case studies relating to damage caused by trade in LMOs; b) analyse information gathered the Secretariat; and c) consider any other issues that may be relevant to the process provided for in Article 27, taking into account principles of international law.  his was agreed largely in response to developing country calls for information.   There is no agreement that the outputs of such workshops would set parameters for subsequent negotiations on liability under the Protocol, although some countries may push for this.

4.      Budget:   Governments discussed a Secretariat proposal to have non-parties to the Protocol who are CBD members contribute to the administrative costs of the Protocol after its entry into force until the Protocol is ratified by an agreed number of developed and developing country Parties.  This is contrary to explicit Protocol provisions on ‘entry into force’ (Article 37) and ‘Secretariat’ (Article 31), which make no distinction between developed and developing country ratifications and state that distinct costs for the Protocol shall be met by Protocol members.  The Secretariat is concerned that the first 50 countries to ratify the Protocol may for the most part be countries with little ability to provide funding.  (Norway is the only developed country ratifier to date.)  Australia, together with Japan and Brazil, recorded a reservation on the proposal.  However, Norway, the EU, and most developing countries support the Proposal.  This issue will be decided at the CBD COP6 in April 2002 when the Protocol’s budget is discussed.

5.      Information Sharing:  Preliminary development of the pilot phase for the Biosafety Clearing House was showcased at the meeting and governments agreed it should continue to be implemented.  There was little substantive discussion.  Governments recommended that an independent and transparent review of the pilot phase be undertaken prior to CBD COP6 in April 2002.  Governments were urged to register and retrieve information and submit comments on their experiences to the Executive Secretary.  Relevant international organisations were invited to make available to the Executive Secretary harmonised unique identification systems in relation to LMO databases.

6.      Decision-Making Procedures:  Article 10.7 provides that the MOP1  must decide upon appropriate procedures and mechanisms to facilitate decision-making by Parties of import. 

The most controversial aspect of the discussion was an EU proposal to establish a set of step-by-step procedures to respond importers’ failures to meet deadlines for  response to export notifications.  These procedures involved the exporter referring the importer to the Protocol’s roster of (risk assessment and management) experts, raising independence issues.  There was also an envisaged linkage between the procedures and compliance mechanism.  The EU proposals were not accepted.   Governments instead agreed on non prescriptive draft procedures and mechanisms which they recommended be considered for adoption by MOP1 and kept under review.  These are to be demand driven by Parties of import and separate from and without prejudice to procedures and mechanisms on compliance (Article 34 of the Protocol) and dispute settlement (Article 27 of the CBD).  They refer to the need for priority to be given to building the capacity of developing country Parties, the importance of cooperating to ensure full access to the Biosafety Clearing House, and the possibility of seeking assistance through, among other mechanisms, a roster of experts.

7.      Other Issues:  The medium term plan for the Protocol’s meeting of Parties and inclusion of the Protocol in the CBD’s draft strategic plan were discussed under this item.  It was also debated whether issues arising during ratification and implementation of the Protocol need clarification.   Japan and the EU, supported by a number of developing countries, argued for intergovernmental work on, interalia: categorisation of LMOs (proposed by Japan); risk assessment and risk management (proposed by the EU); establishment of harmonised rules for unique identification systems (EU); and transboundary movements with non-parties (EU).  These suggestions are included in a list of possible issues for clarification in the ICCP2 recommendation for government comment.  Australia recorded an objection to the list (which remains bracketed in the recommendation).  There is a risk that such work could duplicate or conflict with the work of other international organisations and reopen debate on negotiated Protocol text.  Australian concerns were shared by the US, Argentina, Brazil and Uruguay. 

During closing statements, Australia emphasised the need to concentrate on priority issues for future work. A rush to deliver a range of complex outcomes, without establishing the necessary capacities and ensuring consistency with WTO provisions, would lead to a false start.  With such a start the Protocol would fail to deliver effectively on its objective and create confusion and uncertainty for exporters, importers and regulators of trade in LMOs.  The statement noted that it was critical, in particular, to address the Article 18.2a ‘may contain’ requirement for LMO commodities before undertaking work on decisions that do not need to be made until well after entry into force.  It also identified capacity building, the Biosafety Clearing House and the budget as appropriate items for inclusion on the agenda of an ICCP3. 

Industry groups (biotech firms and a new coalition of US, Canadian and EC grain growers and distributors) were active at ICCP2.  Their primary concern was to encourage governments to give them adequate notice of and clear direction about requirements they will have to implement by entry into force of the Protocol, particularly the documentation requirements for commodities under Article 18.2a.  They consider entry into force inevitable and wish now to influence the resolution of outstanding issues.  For this reason they supported convening experts meetings on Article 18.2.   The Grain Growers coalition indicated its intention to approach Australian and Argentine industry groups and encourage their input.  

Attached for your information is a DFAT document outlining the forward program of intergovernmental intersessional activity on the Biosafety Protocol identified by ICCP2.  The complete list and the full report of ICCP2 is available on the CBD’s website (www.biodiv.org/biosafety).  I encourage your continued input on Protocol issues. Written comments should be sent to Ms Rhonda Piggott, Director, Environment Strategies Section, Department of Foreign Affairs and Trade, John McEwan Cres, Barton ACT 0221 (email: rhonda.piggott@dfat.gov.au).

 

Yours sincerely

 

 

Ralph Hillman