Simplifying and Expediting the Approval Procedures of Access and Usage of Biological Resources: The Biological Diversity Rules, 2024

After extensive deliberations, the Biological Diversity Act, 2002 (hereinafter also referred to as “the BD Act”) was amended, and the Biological Diversity (Amendment) Act, 2023 (hereinafter referred to as “the BD (Amendment) Act”) was published on August 3, 2023. Further, the BD (Amendment) Act came into force on April 1, 2024, by way of a notification dated January 18, 2024.

To carry out the purposes of the BD Act and the BD (Amendment) Act, the Government of India has notified the Biological Diversity Rules, 2024 (hereinafter also referred to as “the BD Rules 2024” or “the new Rules”) on October 22, 2024, in supersession of the Biological Diversity Rules, 2004 (hereinafter also referred to as “the BD Rules 2004” or “the old Rules”). The notified new Rules shall come into force on expiry of 60 days from the date of their notification in the Official Gazette, i.e., from December 22, 2024.

The BD (Amendment) Act brought in significant changes, and the BD Rules 2024 are expected to bring ease of compliance with respect to access and usage of biological resources obtained from India.

The procedures have been simplified and clarified, and all the procedures are online, including payments. The forms have been simplified with various drop-downs to increase clarity while filing the forms. The salient features and specific changes in the Rules impacting the applicants are discussed hereafter.

Salient Features

1. The Chairperson of the National Biodiversity Authority (hereinafter also referred to as “NBA” or “Authority”) would have powers to expedite approvals in case of any emergencies like epidemics and pandemics.
2. The new Rules have differentiated between the procedures and prescribed forms and fees based on the purpose and usage of biological resources obtained from India.
3. An increase in fees for various approvals, including differential fees between individual applicants and entities.
4. All applications are to be made online on the NBA web portal, except where otherwise allowed for physical application.
5. All payments are to be made online to the National Biodiversity Fund.
6. Any person falling within the definition of Section 3(2) of the BD Act who was in possession of biological resources obtained from India before the commencement of the BD (Amendment) Act, 2023, i.e., even Indian entities having foreign shareholding (without actually having a foreign control), who were in possession biological resources before April 1, 2024, still need to obtain approval of the Authority for the purpose of research, commercial utilisation, bio-survey and bio-utilisation.
7. Faster procedures with defined timelines for various stages of approval.
8. There is no specific provision for seeking an extension of any timelines.
9. There is a provision to revive an application upon payment of half the prescribed fee for a new application within a defined period.
10. Registration and prior approval requirements have been imposed on transferees as well while sharing or transferring the results of research to foreign persons.
11. Different procedures are provided for Indian and foreign applicants with respect to any invention based on research or information, including digital sequence information on biological resources accessed from India, including those deposited in repositories outside India, or traditional knowledge associated thereto.
12. Applicants need to intimate the Authority within 45 days of the grant of the IPRs in India and abroad.
13. Even the Indian Applicant must obtain prior approval when commercialising intellectual property rights.
14. There is a provision for monitoring and regulating the use in India of biological resources or associated traditional knowledge obtained from any foreign country.
15. Provision for obtaining a certificate of origin for cultivated medicinal plants to claim an exemption.
16. Provision for conducting non-commercial research or research for emergency purposes outside India by an Indian researcher or institution.

Procedures in Detail

Prior Access of Biological Resources (BR) – Quicker & Simpler Procedures

An application for obtaining approval from the National Biodiversity Authority (NBA) prior to access to biological resources must be made by a foreign individual or entity or an Indian entity controlled by a foreigner. Although the BD Rules 2024 (new Rules) have prescribed different fees for individuals and an entity, the rules have also prescribed quicker timelines for disposing of such requests.

Under the BD Rules 2004 (old Rules), the fee for access permission was INR 10,000, irrespective of the status of the applicant. Under the new Rules, such a fee is INR 10,000 for an individual and INR 20,000 for an entity. The payment mode has been simplified, as now it can be done via electronic transfer or digital payment to the National Biodiversity Fund, while under the old Rules, it was the physical mode of cheque or demand draft in favour of NBA. The new Rules also prescribe different forms depending on the purpose of access, which is expected to further enhance the clarity of requests. While Form 1 must be filed to obtain prior permission before accessing the biological resources and knowledge associated with research or bio-survey and bio-utilisation, in the case of commercial utilisation, Form 2 must be filed.

The new Rules also prescribe specific shorter timelines for completing the procedures or disposing of the applications. While the old Rules prescribed that an application must be disposed of as far as possible within 6 months (180 days), the new Rules prescribe to grant approval or rejecting the application within 90 days from the receipt of the application in complete form. The old Rules did not prescribe timelines for the subsequent steps, resulting in long pendency; the new Rules specify such timelines, with an expectation that the approvals may be granted within defined periods.

An application for approval can be closed if the applicant does not provide the requisite information sought by the Authority within a period of 30 days from the date of seeking information. The approval to access would be in the form of an agreement on mutually agreed terms duly signed by the Authority and the Applicant. Again, the application would be deemed to be closed if the applicant does not sign the agreement within a period of 60 days from the date of communication of the draft agreement by the Authority. However, the closed application can be revived by making a payment of half of the fee specified for a fresh application within a period of 90 days. While specific provisions for the extension of various timelines are not provided, it is expected that the NBA will indeed allow an extension upon request made by the Applicants, as is done in the current practice.

Under the old Rules, only the granted approvals were to be published, but under the new Rules, both approvals that are granted and rejected are to be published. Such publications would be available on the NBA website, providing an easy reference for stakeholders. Hence, the new Rules provide better clarity on the procedure and timelines for seeking prior approval for access to biological resources.

The foreign individual/entities, or Indian entities controlled by foreigners who already had biological resources in their possession before April 1, 2024 (the date on which the BD (Amendment) Act, 2023 came into force), would have an opportunity to apply for approval for the purpose of research, commercial utilisation, bio-survey and bio-utilisation, without any penalty or adverse consequences. It is expected that such approvals would be processed under the old Rules.

Exception in Access Restriction

While the old rules prescribed certain conditions for putting a restriction or prohibition on activities related to access to biological resources, the new rules provide further clarification on such restrictions related to any threatened and/or endemic species or where the request for access may result in an adverse impact on the livelihood and/or socio-cultural aspects of the local communities; or the request for access may result in adverse environmental impact(s) which may be difficult to control and mitigate; or the request for access may cause genetic erosion or affect the ecosystem functions; or the request is for the use of resources for purposes contrary to national interest and other related international agreements entered into by India.

The new Rules also provide an exception under which the Authority may permit access to cultivated species depending on the merits of each case for a specific period. Hence, earlier, even for cultivated resources, such restrictions or prohibitions could be imposed if the resources would have been related to threatened and/or endemic species. However, now, if such threatened and/or endemic species are cultivated, then access to cultivated resources may be provided, which would definitely help the applicants.

Sharing or Transferring Results of Research to Foreign Persons

The new Rules have provided clarifications and different forms with respect to the purpose of transfer of results of research or traditional knowledge associated thereto to foreign individuals/entities covered under section 3(2) of the Act.

Under the old Rules, only the transferor had an obligation to seek approval, but the new Rules have put an obligation on the transferee as well, for further use of the results of research or traditional knowledge after receiving from the transferor.

The new Rules clarify that a foreign individual/entity would be required to seek prior approval for the research, commercial utilisation, or for obtaining IPR, even if they do not access the biological resource but obtain only the results of research or traditional knowledge. The fee to be paid for such approvals is INR 5,000 (Individual) and INR 10,000 (Entity) for both sharing or transferring the results of research and to use the results of research for obtaining IPRs. For registration to use the results of research for further research, the fee is INR 2,000 (Individual) and INR 5,000 (Entity), and to use the results of research for commercial utilisation by the transferee is INR 10,000 (Individual) and INR 20,000 (Entity). The payment mode has been simplified, as now it has to be done via electronic transfer or digital payment to the National Biodiversity Fund, while under the old Rules, it was the physical mode of cheque or demand draft in favour of NBA.

The new Rules also prescribe specific shorter timelines for completing the procedures or disposing of the applications. While the period prescribed under the old Rules and the new Rules to grant approval or reject the application is the same, i.e., within a period of 90 days from the receipt of the application in complete form, the old Rules did not prescribe timelines for the subsequent steps. The new Rules specify such timelines, which are expected to result in the completion of procedures within a defined period.

An application for approval can be closed if the applicant does not provide the requisite information sought by the Authority within a period of 30 days from the date of seeking information. The approval would be in the form of an agreement on mutually agreed terms duly signed by the Authority and the Applicant. Again, the application would be deemed to be closed if the applicant does not sign the agreement within a period of 60 days from the date of communication of the draft agreement by the Authority. However, the closed application can be revived by making a payment of half of the fee specified for a fresh application within a period of 90 days.

Registration and Obtaining Prior Approval from the Authority Before Granting Intellectual Property Rights

The new Rules have prescribed different procedures for foreign and Indian entities while obtaining IPR based on Indian biological resources or traditional knowledge. While foreign individuals/entities still need to obtain approval before granting IPR in India or outside, Indian entities only need to request registration before obtaining IPR in India or outside. Under the new Rules, digital sequence information on biological resources accessed from India, including those deposited in repositories outside India, is included within the purview of these provisions.

Here again, there is a differential fee between individual and foreign entities, as well as Indian applicants. The foreign applicants need to apply in Form 7 along with the prescribed fee (Individual – INR 5,000; Entity – INR 10,000) before the grant of intellectual property rights in or outside India, the Indian applicants need to apply in Form 8 for registration, along with the prescribed fee (Individual – INR 2,000; Entity – INR 5,000), before the grant of such IPR in India or abroad. Under the old Rules, the fee was INR 500, irrespective of the entity status.

The application for prior approval is to be decided for grant or rejection within a period of 180 days, while under the old Rules, the application was to be decided, as far as possible, within a period of 3 months (90 days). The new Rules provide defined timelines even for the subsequent actions, which were absent in the old Rules. The application for approval would be closed if the applicant does not provide the requisite information sought by the Authority within a period of 90 days from the date of seeking information.

The approval to access would be in the form of an agreement on mutually agreed terms duly signed by an authorised officer of the Authority and the applicant. Again, the application would be deemed to be closed if the applicant does not sign the agreement within a period of 90 days from the date of communication of the draft agreement by the Authority. However, the closed application can be revived by making a payment of half of the fee specified for a fresh application within a period of 90 days.

Indian Applicants only need to apply for registration before the grant of such IPR by the competent Authority in India or abroad. Additionally, at the time of registration, such applicants need to give an undertaking that prior approval from the Authority will be obtained before the commercialisation of the IPRs. The Applicants (both Indian and foreign) are also mandated to inform the Authority within 45 days of the grant of the IPRs.

Obtaining Prior Approval from the Authority Before the Commercialisation of Intellectual Property Rights by Indian Entities

While the old Rules did not specifically prescribe any procedure for seeking prior approval before the commercialisation of IPR by Indian entities, under Section 7 of the BD Act, such entities had to give a prior intimation to the concerned State Biodiversity Board (SBB) before the commercialisation of the accessed resources. Under the new Rules, the Indian Applicant need to obtain prior approval at the time of commercialisation by applying in Form 9 along with the prescribed fee (Individual – INR 5,000; Entity – INR 10,000).

The Authority needs to decide on granting approval or otherwise within a period of 180 days from the date of receipt of the application or on receipt of requisite information, whichever is later. The approval would be in the form of an agreement on mutually agreed terms duly signed by an authorised officer of the Authority and the applicant. The application will be deemed to be closed if the applicant does not sign the agreement within a period of 90 days from the date of communication of the draft agreement by the Authority. A closed application can be revived on receipt of payment of half of the fee specified for a fresh application within a period of 90 days.

Certificate of Origin for Cultivated Medicinal Plants

The BD (Amendment) Act, 2023 had broadened the exemption provision under Section 7(2) of the BD Act for prior intimation to the SBB and included ‘cultivated medicinal plants and its products” within its purview, in addition to the codified traditional knowledge, local people and communities of the area, including growers and cultivators of biodiversity and to vaids, hakims and registered AYUSH practitioners only who have been practising Indigenous medicines, including Indian systems of medicine as a profession for sustenance and livelihood. However, such an exemption could be available only if a certificate of origin is obtained from the Biodiversity Management Committee (BMC). The new Rules prescribe the procedure for obtaining such a certificate. A person who intends to claim such exemption needs to submit a self-declaration in physical or digital form to obtain a certificate of origin from the concerned BMC in Form 11 (INR 200). The self-declaration needs to contain details including the name and address of the applicant and the cu ltivator, geographical location including survey number, extent of area under cultivation along with the details of the species being cultivated and parts thereof, and approximate quantity of the biological resources being accessed.

Monitoring and Regulating the Use in India of Biological Resources or Associated Traditional Knowledge Obtained from any Foreign Country

The old Rules did not specifically prescribe the use in India of biological resources or associated traditional knowledge obtained from a foreign country. The new Rules prescribe the procedure for such use. Particularly, if a person intends to use in India the biological resource or traditional knowledge associated thereto obtained from any foreign country for research or commercial purposes or for obtaining IPRs, then he is required to submit a declaration in Form 10 (without fee), as per the provisions of Section 36(A) of the Act. On receipt of the relevant information from the user of such biological resource, the Authority shall notify the same on the Access and Benefit-Sharing Clearing-House of the Convention on Biological Diversity.

Conducting Non-Commercial Research or Research for Emergency Purposes Outside India by Indian Researchers or Institutions

The new Rules have also considered circumstances of conducting non-commercial research or research for emergency purposes, which might be carried out outside India by Indian researchers or institutions. In such cases, wherein any Indian researcher or institution intends to carry or send the biological resource outside India to undertake non-commercial research, including carrying out urgent studies to address certain present or imminent emergencies like epidemics, needs to apply in Form 13 along with the prescribed fee (INR 1,000), provided that in case the traditional knowledge associated thereto is also to be transferred or carried along with the biological resources, the approval of the Authority needs to be taken by the concerned foreign institution. Understanding the need for urgency, the new Rules prescribe to grant approval in such cases within 45 days. Upon receipt of approval, the applicant needs to deposit voucher specimens in the designated national repositories, wherever required, before carrying or sending the biological resource outside India, and a copy of proof of such deposits needs to be endorsed to the Authority.

Quantum of Penalty

The rules also list the factors to be considered while determining the quantum of the penalty and the deposition of the penalty amount. Factors like the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of contravention of the provisions of the Act are to be considered in determining the quantum of penalty. The penalty for contravention of the provisions referred to in section 55 of the Act would not be less than 1 lakh rupees and may extend to 50 lakh rupees.

Conclusion

With the BD Rules 2024, the procedures are expected to be clearer under the BD (Amendment) Act, 2023, with revised fees and new forms. The approvals are expected to be granted within shorter defined timelines. As the new Rules would be effective from December 22, 2024, the applications currently pending are expected to be processed under the old Rules. It would have to be seen how the NBA processes the applications made under the old Rules, but that still continue to be pending after December 22, 2024.

Authors: Manisha Singh and Rajeev Kumar

First Published by: Lexology here