Monetary benefit sharing

Background information on monetary benefit associated with the utilization of marine genetic resources

One of the most contentious issues during the BBNJ Treaty's negotiations was the question on mandatory sharing of monetary benefits associated with the utilization of marine genetic resources (MGRs) of areas beyond national jurisdiction (ABNJ) and associated digital sequence information. Developing countries made clear that mandatory monetary benefit sharing must be included in the BBNJ Treaty for the negotiations to successfully conclude. The negotiating countries were able to reach consensus on certain mandatory monetary sharing benefit requirements, while other aspects of monetary benefit sharing will be decided at the Conference of the Parties (COP) meetings. 

MGRs and the associated digital sequence information may have applications not only in medicine but also in other commercial products, such as cosmetics, food, and products to remediate contamination. However, while genetic resources may hold great promise, development of commercial application have been rare and almost all have been accomplished utilizing MGRs within national jurisdiction so far. Further, significant investment in resources is required for research and development. In particular, for medical application, years, if not decades of development and clinical trials are required. For that reason, even if monetary benefits are generated, they are likely to be rare and the timing of distributing monetary benefits will be decades away. 

Does the BBNJ Treaty have monetary benefit sharing requirements?

Yes. The BBNJ Treaty has certain monetary benefit-sharing requirements from the utilization of MGRs of ABNJ and the associated digital sequence information. The BBNJ Treaty specifies that monetary benefits must be shared fairly and equitably, through the Treaty’s financial mechanism (Art. 52) for the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction (ABNJ).

The BBNJ Treaty provides a two-phase monetary benefit sharing process for the developed countries that are Parties: assessed contributions and set modalities for monetary benefit-sharing. Note that the term “developed Parties” is not defined.

First phase

This phase involves assessed contributions and adoption of the monetary benefit-sharing modalities as follows:

  • After the entry into force of the BBNJ Treaty, the developed Parties must make annual contributions to the special fund created as part of the Treaty’s financial mechanism. A Party’s rate of contribution must be 50 per cent of that Party’s assessed contribution to the budget adopted by the Conference of the Parties (COP). 
  • The payment of the assessed contribution will be in place until a decision is taken by the COP on the modalities for monetary benefit-sharing from the utilization of MGRs of ABNJ and associated digital sequence information, taking into account the recommendations of the access and benefit- sharing committee. If all efforts to reach consensus have been exhausted, a decision must be adopted by a three-fourths majority of the Parties present and voting. 
  • The modalities may include the following:
    • Milestone payments;
    • Payments or contributions related to the commercialization of products, including payment of a percentage of the revenue from sales of products;
    • A tiered fee, paid on a periodic basis, based on a diversified set of indicators measuring the aggregate level of activities by a Party;
    • Other forms as decided by the COP, taking into account recommendations of the access and benefit-sharing committee.
  • A Party may make a declaration at the time the COP adopts the modalities stating that those modalities shall not take effect for that Party for a period of up to four years, to allow time for necessary national implementation. A Party that makes such a declaration must continue to make the assessed contribution until the country’s national requirements take effect.
  • In deciding on the modalities for the monetary benefits sharing from the use of digital sequence information on MGRs of ABNJ, the COP must take into account the recommendations of the access and benefit-sharing committee, recognizing that such modalities should be mutually supportive of and adaptable to other access and benefit-sharing instruments.

Second Phase

This phase is after the COP adopts the new monetary benefit-sharing modalities. It involves review and assessment of the monetary benefit-sharing progress:

Once the monetary benefit-sharing modalities have been adopted at the COP, the payments must be made through the BBNJ Treaty’s special fund (Art. 52). The COP, taking into account recommendations of the access and benefit-sharing committee, must review and assess, on a biennial basis, the monetary benefits from the utilization of MGRs and associated digital sequence information. The first review must take place no later than five years after the entry into force of the BBNJ Treaty. The review must include consideration of the annual contributions.

Ref. BBNJ Treaty Art. 14.5 through 14.10 and 15.

For specific information on the outcome of the COP meetings, visit the page here. For specific information about a Party, visit the page here. 

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