1After examining and drawing initial conclusions from the existing ways in which natural substances are utilised in French Polynesia, the expert group review has identified further potential resources. This brings us to the central question the panel was asked: how is the potential identified to be turned into new economic uses that are consistent with and appropriate to local capabilities – in other words, a strategy? This is the issue addressed in this Section.

2This is an important issue. It is a question of properly using the resources allocated to policy design and implementation, and consequently the “return on investment” that may be expected – financial investment as well as human investment of many kinds.

3We shall first present a few guidelines for defining the principles and legal framework required to protect French Polynesia’s ecological and economic interests while encouraging economic use of its natural substances to develop.

4We will then set out the economic and technical conditions for developing new productive industries, including the specific regulatory constraints in particular sectors in the French and European markets.

5Finally, we will suggest guidelines for industrial use, under two headings: Group 1 natural substances; and Group 2 and marine substances, indicating in each case the legal framework required to implement the guidelines.

LEGAL APPROACH

The CBD and the new legal status of biodiversity

6Biological resources, and their components, are of increasing economic interest and, rather than acquiring value in proportion to their degree of technological processing, have a value in themselves. Biodiversity as a whole has become potentially utilisable and consequently strategic.

7With the development of biotechnology, the legal status of biological resources has radically altered. Up until the late 1980s, their status was roughly governed by two legal concepts: national sovereignty for their direct and immediate exploitation; and the concept of “common heritage of humanity” for research or indirect and deferred use based on the chemical or genetic potential of a resource that might lead to a new product.

8In the mid-1980s, this status was undermined by statutory developments first in the United States, then in Europe and finally at global level, that established the patentability of living resources. Following these developments, any living resource (or component thereof, such as a cell, gene or molecule) may now be protected by an invention patent if, when it is reprocessed, it is considered to be new, inventive and applicable in an industrial process. This has caused a discrepancy between the common heritage of humanity, which postulates the absence of property rights, with collection free of restriction or charge, and patents, which justify exclusive exploitation, for profit, of substances collected free of restriction or charge.

9In order to avoid the conflicts of interest that might arise, the Convention on Biological Diversity (CBD) of 5 June 1992 established a new legal status for biological resources. The concept of a common heritage of humanity has been dropped, and the Convention brings biological resources under the principle of States’ sovereignty over their natural resources, which entitles States to regulate as they think fit any type of access to biological materials located within their territory. The aim is to enable States to control their use more closely, organise trade, and benefit from any wealth based on them following any chemical or biotechnological research and development process.

10The crucial clause of the Convention is Article 15, excerpted below:

11“1 – Recognizing the sovereign rights of States over their natural resources, the authority to determine access to genetic resources rests with the national governments and is subject to national legislation. […]

125 – Access to genetic resources shall be subject to prior informed consent of the Contracting Party providing such resources, unless otherwise determined by that Party. […]

137 – Each Contracting Party shall take legislative, administrative or policy measures, as appropriate… with the aim of sharing in a fair and equitable way the results of research and development and the benefits arising from the commercial and other utilization of genetic resources with the Contracting Party providing such resources. Such sharing shall be upon mutually agreed terms.”

14Thus the three interrelated principles governing access to natural substances under the Convention are State sovereignty, prior informed consent of the public authorities before collection, and sharing of the benefits arising from utilisation of the resources supplied. The system based on these principles is known by the acronym ABS (Access to genetic resources and Benefit-Sharing).

French Polynesia and the new legal situation

15Although many States have seized the opportunity offered by Article 15 of the CBD, French Polynesia has not as yet adopted any specific regulations for access to genetic resources. A draft bill is being prepared in French Polynesia; we would stress that this is a timely step, and perfectly within the competence of the French Polynesian government.

16The lack until now of any specific ABS regulations is not due to its being beyond the competence of French Polynesia’s government. The CBD clearly states that the authority to determine access belongs to States. Under French institutional law n° 2004-192 of 27 February 2004 on the autonomous status of French Polynesia, Polynesian institutions have increased autonomy and enjoy considerable delegated competence in a range of areas including the environment and marine resources. Since access to and circulation of biological resources fall primarily within the area of environment (marine and terrestrial), French Polynesia is indeed competent to establish a legal framework regulating access to its biological resources.

17The value of having regulations can be seen from what happens when there are none. The CBD is applicable to French Polynesia under Law n° 94477 of 10 June 1994, by which France ratified the CBD. However, like many other developed countries, France saw no reason to transpose it into specific regulations. Consequently, there are no rules organising access to biodiversity and the sharing of resulting benefits, no rules specifically regulating the conditions for harvesting biological resources (except for protected species and areas) or sharing any resulting benefits. It follows that operators who wish to seek biological resources in Polynesia for their actual or potential usefulness in developing drugs or other new products do not need to ask for prior agreement or commit themselves to any compensation.

18Applying existing law, therefore, does not give French Polynesia the means to benefit from opportunities for utilisation of its natural substances. Neither the standard rules of civil law, environmental law, the law of the sea, nor the rules produced at international level in recent years in the spirit of the CBD (the Bonn Guidelines, the future international system for access and benefit-sharing1) fully meet these needs. The current legal situation is inadequate in a number of ways:

• Ecologically, the utilisation of biological resources must be designed in such a way as to ensure their sustainability. Means are therefore needed to prevent negative impact on Polynesia’s rich but vulnerable environment.

• Economically, even without the spectre of bio-piracy (pillage of biological resources), failure to specify the conditions for biological prospecting will at the very least prevent Polynesia from drawing proper benefits from the exploitation of its biodiversity. It is simply a matter of giving oneself the means to take advantage of a type of operation that in practice, where the rights and obligations of each side have been legally specified in advance, has been shown to benefit country and prospectors alike. Such a framework is also a key element for the legal security of future industrial users of biological resources, who may hesitate to invest in countries that have no clear legal framework for access to biodiversity (access allowed or not? what conditions? which administration to apply to?, etc.).

• Politically, any failure to specify the conditions for biological prospecting would expose countries to the risk of having such operations contested by local communities. More on this below. Generally speaking, devising a legal framework goes “in the direction of history”. In the South Pacific as a whole, a series of actions is being taken to that end. One example is the early-stage work begun by the Secretariat of the Pacific Community (SPC), a key regional development player that is emerging as a guardian of Pacific resources, traditional knowledge and the expression of regional cultures.

19All in all, a combination of factors – current interest in natural substances from the research community and industry, the new legal status of biodiversity, changing concepts and practices in this field – means that it is in French Polynesia’s best interest to adopt an adequate and effective legal framework.

20It remains to define its broad features:

• In the following section we set out the foundations for such a framework: prior consent, forms of contract, control, industrial property rights, etc. These are the key points to consider if French Polynesia wishes to adopt regulations for access to its biodiversity.

• French Polynesia might decide to develop service activities in connection with natural substances, establishing collections, biobanks and extract banks, allocating some of the work of extracting natural substances to its research institutes and companies. We therefore examine the legal aspects of such issues as the status of collections and biobanks, their contractual activities, etc. (see “Prospects for utilisation”, p. 234)

• Finally, we address the inevitable question raised by Article 8 (j) of the CBD, namely the rights of native or local communities to benefits from the exploitation of biological resources (see “Rights of local communities and collective interest”, p. 241).

Basic legal framework: the ABS principle

21Here we examine the two key elements for framing a text on ABS: the principle of prior informed consent (PIC), and its transposition into contract form. The purpose is to highlight the points essential for preserving French Polynesia’s interests as a supplier of natural substances.

Prior informed consent (PIC)

22This principle, enshrined in Article 15 of the CBD, states that collection may only be carried out once agreement has been secured from public authorities which have already had the information that will enable them to preserve their rights over the resources and any benefits that may arise from them.

23The prior consent formality must satisfy two requirements: clarity (which administration to apply to? in what circumstances?, etc.) and flexibility, so that the procedure is not so slow as to dissuade applicants, which would defeat the object of the exercise.

Who should grant PIC?

24It must be specified which authority is to receive applications or give its consent to authorise collection. Some general points:

• The prior consent of the Research Delegation must be required;

• The authorities in charge of the environment and protected areas should also be involved;

• For the administrations concerned to be really “informed”, capacitybuilding is essential (as per the Bonn Guidelines). To that end, they should appoint auxiliary scientific committees drawn from competent scientific bodies, on a case-by-case basis.

Which types of collection are subject to PIC?

25Although the need for authorisation extends the scope of existing legislation, which applies only to protected species, it is not sufficient to apply it to endemic species. This might prevent French Polynesia from taking full advantage of the rights conferred by the CBD. In Polynesia’s island environments, evolution has segregated some highly specific taxa. Although these taxa are not strictly speaking endemic, they do possess potentially valuable characteristics. To make a distinction between endemic and non-endemic would allow operations that might develop products over which Polynesia had not established any rights.

26This leads to a more general point. No discriminating criterion of any sort should be established to distinguish between collecting that requires authorisation and collecting that does not: neither the type of resource that may be extracted, nor the people who may do so, nor the purpose of their operations. The reasons for this are as follows:

• Since any resource, whether in situ or ex situ (for there are collections in Polynesia), endemic or otherwise, marine or land-based, whole or part (cell, DNA, etc.), unused or known already to have therapeutic or insecticidal qualities, may be economically used by some chemical or biotechnological industrial process, they must all be subject to the PIC principle.

• The same goes for the applicants, whether foreign or French, private companies or public research institutes, because there is no clear dividing line in this field between public and private, between basic research and applied research for commercial markets. Standard inventorying activities can always lead to applied research. Most research institutes, public and private, invest in applied research and file for patents. They are also in direct relation with private companies, not only when the companies use their patents, but also upstream, when the research institute undertakes prospecting on their behalf. Indeed, in some cases a public research institute may be used as a “front” to avoid applying for PIC. It would be artificial and counterproductive to attempt to draw lines. It follows that PIC must be sought in all cases.

27However, to avoid needless red tape, once the PIC principle is stated in these terms, exemptions might be made for the traditional economic use of biological resources (coastal fishing, food industry use of noni juice and kava, cut flowers, etc.) as long as it is direct use. Any transfer of the resource, whether or not for payment, or any transfer of other resources caught or extracted as by-products, to a third person intending to make indirect economic use of it, will be prohibited without PIC from the relevant authority. Consequently, with no PIC, a drug company could not obtain from fishermen the incidental resources – seaweed, micro-organisms, etc. – brought in with their catch. The same should be true for a company wanting to engage in highly technological research (using, say, a plant gene or synthesising a molecule) on a marketed resource such as noni.

28Defined in these terms and with its scope specified, the principle of prior consent would give French Polynesia the means to gain most benefit from its biological resources, either as reward for providing the material basis for innovation, or as compensation for the loss incurred when a natural substrate is replaced using such processes as synthetic chemistry and genetic engineering.

Material transfer agreement

29Where the collection of biological material is authorised, the conditions need to be specified. The best way is to sign a material transfer agreement or MTA. These contracts stipulate the rights and obligations of each party.

Statute versus contract

30A contract theoretically implies that the contracting parties are free to commit themselves to “mutually agreed” terms. However, as regards biological resources, statute law needs to provide a framework for this freedom, for at least the following reason. Public interests are at stake in this field and this requires that the law lay down provisions that contracts may not waive. This is not specific to biodiversity; medical and consumer contracts must also comply with rules such as the obligation to inform the patient, the consumer’s cooling-off period, etc.

What type of contract?

31Should the contract restrict itself to organising prospecting operations for research or should it anticipate possible commercial developments from the outset? The choice is between a research contract and a commercial contract.

32In the case of deferred utilisation, as with most bioprospecting programmes, benefit-sharing often involves long, hard and expensive negotiations. It is more expedient initially just to sign a research contract, provided it explicitly contains the obligation for the user to renegotiate a new contract with the supplier if industrial or commercial use is made of the material. To avoid any misunderstanding, it needs to be specified that this obligation comes into effect if any patent is filed, or a product marketed without patent. At all events, no collection licence for scientific research purposes should be delivered without the explicit condition that a benefit-sharing agreement must be negotiated if an innovation is developed.

Public interest provisions

33Many clauses of an MTA are freely negotiated between the parties: the place of collection, exclusive rights and their duration, etc. But these contracts will also include provisions required by law and which the parties may not waive. These concern:

• access on condition of sustainable use;

• benefit-sharing.

• Benefit sharing may take a number of forms – immediate or long-term benefits, financial or in kind. Without entering into the details (which need to be considered case by case), three general remarks may be made:

• The principle of benefit-sharing must be mentioned in the statute text as a public interest principle that prospectors may not infringe.

• For short-term benefits, for a number of reasons it is better to consider choosing services in kind, such as the user undertaking to provide technical assistance.

• It must be borne in mind that any promised long-term sharing is likely to remain a dead letter unless there are additional clauses organising the monitoring of the various operations.

Monitoring

34Monitoring the application of contractual undertakings is one of the hardest features to implement. The supplier of material must be able to monitor each stage from extraction to the development of a product, otherwise the chances of fair benefit-sharing are uncertain:

• Monitoring the actual prospecting work as such, to identify exactly what is being collected and measure the environmental impact.

• Monitoring subsequent transfers of the specimens collected. A clause in the contract should lay down the means to be used for this monitoring. The best way is simply for the prospector to undertake not to transfer the specimens to partners not mentioned in the contract. Prospectors are unlikely to be discouraged by this type of clause. Research institutes are getting used to this practice. Many companies want to retain de jure or de facto exclusive rights over the specimens, and they will be favourably disposed, although others are starting to relinquish these rights in order to increase the opportunities for utilisation.

• Monitoring the work of the partner in the contract. Pending some international agreement on subsequent monitoring of patents, the monitoring of R&D work needs to be laid down in the contract. The provision most likely to ensure feedback on research progress is one that specifies agreements involving local or regional scientific institutions (universities, research centres) in the research.

35Although it would be illusory to seek to monitor every detail, the above set of clauses is essential to enable French Polynesia to retain control over the development of research using its resources.

TECHNICAL AND ECONOMIC APPROACH

36With a view to developing effective new uses for French Polynesia’s natural substances, what aspects must be considered to give upstream production chains to be launched or supported the greatest chance of being economically viable? We examine two main aspects:

• the economic, technical, and regulatory parameters these industries must meet;

• principles of product protection. Note that

• environmental parameters, the very basis for sustainable development, will be the foremost criteria in the guidelines for resource utilisation proposed below.

• the question of technical support for product chains (from the specialised central services e.g. ONIPPAM and ITEIPMAI) is beyond the scope of the expert group review. However, because these questions are so crucial for local decision makers, we sought the views of experts from industry with responsibility for technology scanning and supply chains.

Basic conditions for viable upstream product chains2

Stable resources, quality production, and competitive prices

37To be viable and to fulfil their economic role, the upstream industries must meet certain conditions. Money or resources should not be injected unless there is a reasonable chance of success or progress. Poorly managed development programmes usually lead to failures that discourage later attempts (examples abound, not least in France itself). Three basic conditions are essential.

Stability

38The sine qua non for developing utilisation is the availability of a natural, cultivated or collected raw material in stable quantities. This may mean establishing suitable logistics to allow for seasonal and climatic variation: crop dispersion, storage, pre-processing, etc.

Quality

39Since the aim is not to produce a natural resource but to provide processing industries, these industries must be supplied with products that meet specific pre-defined quality criteria.

Price

40The price of the raw material must be set at a sufficiently attractive level for a viable upstream product chain to be established. In French Polynesia, this is probably one of the most critical points. The higher costs due to its island geography and the French welfare system make the competitiveness of some productions uncertain. This is particularly true of resources widely available globally, such as tamanu. Competition from cheap labour countries can only be resisted if economic use can be made of some markedly local feature based on quality or image.

Setting up new upstream product chains

Start from market need

41A productive industry can only develop if there is a real market need for the product. Any other approach is more about welfare than economics. In general, the development projects that have been shown to fail say, “We have a product we can produce in quantity. We are going to market it and at the end of the day we shall see if there are any customers for it.” Similarly, asking an industrial entrepreneur, “What plant or source organism do you need? We can produce it or harvest it for you” is also a recipe for failure. If there is a proven industrial need, users will long since have devised their supply chain.

42Consequently, market needs must be identified before any human or material investment is made. This is particularly true for the cosmetics market, which is both attractive and hard to penetrate. The brief on the cosmetics industry in Annex 2 reflects a debate that clearly illustrates the complexity and unpredictability of this market.

43At this stage, it may be useful to call on the temporary or long-term help of official bodies such as ONIPPAM (National industry board for perfume, aromatic and medicinal plants), whose knowledge of the national and international markets for plants in terms of production and outlets can be invaluable.

44Occasionally it is only later, at the research and development phase, that market need turns out to be greater than originally predicted. It can then be valuable to have anticipated conditions for production in the partnership with the user. Generally speaking, this strategy requires close contact with users and can be highly profitable, for two reasons:

• frequent contacts engender trust, which is essential for any mediumor long-term project;

• studying a project at the R&D phase is a way of keeping ahead of competitors.

45The above remarks concern new products. For a finished or semi-finished product that already has a traditional local market, a more institutional approach is to study its potential for introduction into export markets. This involves a reasonable initial investment in research on economic and regulatory aspects, which can be commissioned from specialist consultancies. This takes us to the next point.

Closely examine the regulatory environment

46For natural substances and products made from them, a crucial point in assessing economic potential, market size or even marketability, is the regulatory environment. Numerous complex laws cover the methods and conditions of use of plants in all spheres. Especially in areas where there is high demand and high returns, and which are sensitive: foodstuffs, healthcare and cosmetics.

47Special care must be taken to comply with legislation on plant-based medicinal products and food supplements (two fast-growing sectors) so as to choose the product chains that are most accessible and potentially profitable for French Polynesia.

Medicinal products

48There are three types of situation:

• General case: the plant-based medicinal product is treated like any other medicine. It must comply with all the requirements of a standardised 5-part application for a marketing licence (French AMM). This process is notorious for its lengthy and complex protocols, not least for clinical trials.

• Products with a “well-established medical use”: on condition they comply with the defining criteria, they are entitled to a specially simplified marketing licence application procedure, relating to toxicological, pharmacological and clinical studies.

• “Traditionally used” products: for the moment these are subject only to French legislation. But this is the sector where the greatest change is expected, with the adoption or revision of major reference laws. The new European directive adopted in December 2003 and published in 2004 is due to come into force as from 30 October 2005. By that date, Cahier n° 3 of the French Health Products Safety Agency (Afssaps) is due to be withdrawn. Note too the current revision of the “Alphabetical list of medicinal plants in the French pharmacopoeia”, expected to be published soon.

Food products

49Here there are two possible cases:

• Foods regarded as “traditional”: provided they meet certain conditions (e.g. that no claim is made for them other than as food, hence no therapeutic claims), no marketing license is required.

• Innovative products making one or more health-related claims: in this case a full product file must be submitted to AFSSA. This is a complicated file, very similar to the marketing license application file required for medicines.

Food supplements

50These are listed (along with nutrients) and defined in European directive 2002/46/EC as: “concentrated sources of nutrients or other substances with a nutritional or physiological effect” (the Directive defines “nutrients” as “(i) vitamins, (ii) minerals”). Food supplements are marketed in doses, e.g. capsules, pills, sachets of powder. However, the concept of a “physiological effect” has yet to be clarified, not only in the definition of food supplements but also for medicinal products. An EU regulation is being drawn up on foodstuffs for which health claims are made; this should make a more precise dividing line between the “health” and “food” spheres. By July 2007 at latest, the Commission will present a report and appropriate measures for other classes of nutrient (with a nutritional or physiological effect) used in food supplements, such as essential fatty acids, fibres, plants, aromatic herbs and their extracts, which are not covered by Directive 2002/46/EC. This question should be monitored closely over the next three years, since as that Directive sets 2007 as the deadline for harmonising legislation on these products, and the exploitable plant resources the experts identified are candidates for this fast-growing business sector.

Cosmetics

51All products meeting the definition in EC Directive 76/768 must comply with the legislation introduced in that directive. For example, cosmetics labels must include a full list of ingredients. All plants are permitted in cosmetology with the exception of those listed as reputedly toxic (Annex II of the directive). However, for natural and synthetic colourings only those on the “positive” list are authorised.

52In brief, 2003 and 2004 marked a decisive turning point in industrial use of plant-based products, as the relevant basic laws were rethought or updated. A winning strategy would be to pre-empt forthcoming legislation. For the Territory and the trade organisations of the sectors concerned, this would mean creating a surveillance system to monitor changes in these fields and keep stakeholders informed.

Organise conditions for obtaining the resource

53To create an upstream product chain in French Polynesia certain material conditions must be met with regard to resource availability.

• If the resource is sufficiently available in the wild, a structure must be organised for harvesting it in a way that ensures its sustainability. This would require resource management plans that take account of the impact of harvesting.

• The necessary labour must be available.

• It must be possible to cultivate the plant. For wild plants, this depends on the success of domestication programmes.

• The necessary land must be available. In this regard the Territory’s small land area, divided among many small islands, and its land tenure structure, are real obstacles – not necessarily insurmountable, but to be taken into account.

Put together an adequate technical environment

54A structured product chain is not an autonomous entity entirely independent of its surroundings. To set up and develop a product chain, the necessary synergies and interconnections with the local economic fabric need to be established.

55One important asset is the presence of basic and applied research structures that can provide the necessary scientific and technical support. For utilising natural substances, the competencies required are mainly to be found in:

• chemistry and biochemistry laboratories, which will do the basic research on the composition of the plant (or other resource) but will also, for example, develop the necessary analytical methods for monitoring plant breeding programmes or assessing wild resources. While the basic research can be handled by geographically distant laboratories, the analysis side must necessarily be handled locally. Here the laboratories’ speed of response and involvement in breeding programmes would be key factors for success.

• biology laboratories more generally. Here again the basic research part (botany, ecology etc.) can be handled by distant laboratories. But applied research, particularly agricultural research and related fields, need not only local laboratories but also local trial plots or experimental farms.

56Another asset is the presence in French Polynesia of similar product chains whose technical resources, infrastructure and know-how could be used on a cooperative basis.

57Horticulture is a good example here. Its technical resources and know-how are needed for mass production of seed and nursery plants, for plant multiplication, in vitro propagation and conservation of useful genetic material.

58For the industrial processing phase, the presence of a local food industry may prove useful in providing possibilities of on-site first-stage processing (as with the noni juice produced by Jus de Fruits de Moorea for Morinda Inc.). Similarly, the drying ovens used in the food industry could be very useful for dehydrating plant materials and preserving them for subsequent use. The lack of such technological resources is often an obstacle for developing a product chain. Because of the technological similarity between the food industry and first-stage processing of natural substances, synergy is possible. It should be exploited by systematically recording locally available technological resources.

59Sound knowledge of the local technical and industrial environment is generally an important precondition. The work of inventorying and networking with local potential will save considerable time and resources.

60As well as this local work, support must be sought from specialist organisations in the medicinal and aromatic plants sector. We have already mentioned ONIPPAM; there are also technical centres like ITEIPMAI (Institut technique interprofessionnel des plantes à parfums, aromatiques et médicinales) and others, specialising in agricultural research. Their economic and technical experience of the sector and its myriad micro-markets will be of great value.

Assess the “psychological” environment

61The willingness of potential natural resource producers to work in this sector is an essential factor for success. Without that, the enterprise is condemned sooner or later, however keen the political and administrative authorities may be to promote this option. The example of the noni industry and the creation of the monoi GIE partnership are encouraging signs in this connection. When producers organise themselves in cooperatives or partnerships with official support, this is a good sign of their commitment and suggests that subsequent introduction of a market regulation instrument may be worth considering, for crisis management.

Conditions for product chain sustainability

62Once the product chain is set up, its future must be ensured. This requires action on several fronts.

63Communication drives are among the first steps to consider. Any raw or processed natural product needs to be promoted.

• With a raw or only slightly processed material intended for use as an ingredient in a formulation in whatever economic sector, it is best to work with a distributor, preferably an international one, who has good contact with potential users. The distributor will be best placed to perform the long and exacting task of canvassing for customers. Direct marketing actions (international trade fairs, a Website, press advertising etc.) can be used, possibly sharing costs with the distributor.

• With a finished product, communication will depend on the marketing strategy envisaged. But in all cases, with a new product from a geographically isolated territory like French Polynesia, an Internet strategy is a required minimum.

64Predictive R&D must also be planned for. This may be managed by the producers’ industry federations, and would involve the following:

• forecasting (if possible) trends in the technology for the product and planning development work;

• launching genetic and/or agricultural improvement programmes;

• conducting programmes to characterise and assess the biological activity of the natural resources produced;

• setting up research programmes to defend the product against any imputation of harmfulness. This would mean, for example, toxicological studies on the model of the clinical studies run by French growers of lavender and lavandin. Kava is a case in point: toxicology research to establish its harmlessness or the conditions for possible toxicity could be performed by a scientific structure under a French Polynesian or regional industry federation.

65Once production has started, economic forecasting should be continued with a different focus. Trends in existing markets must be assessed, new markets identified and the competition examined. This economic surveillance will also be a guide for identifying the necessary scientific programmes and decision making in resource allocation.

66To conclude, although it is difficult to give more precise guidelines for setting up product chains that are as yet only potential, the following points should be noted:

• These development actions should be conducted on the basis of market demand.

• There will always be a chance element; one cannot guarantee a product’s market success.

• Given the size and remoteness of the territory and the type of product involved, it would seem best for French Polynesia to work within the framework of the Secretariat of the Pacific Community.

• To try to ensure the lasting commercial success of products derived from French Polynesia’s biodiversity, and hence the success of their product chains, effective legal protection appropriate to the products themselves and their target markets must be set up.

Principles and methods of product protection

67Below we examine some ways to profitably and sustainably commercialise products derived from French Polynesia’s biodiversity and optimise their utilisation. Giving a product a recognised legal identity protects its material and intellectual characteristics (authenticity of the compound, original features of know-how) from competition, adulteration and fraud.

68First some general points:

• Protection is only justified if there is a market, a real demand for the product, or at least local outlets, and some competition.

• Protection has a cost, and a cost-benefit assessment must be made.

• Protection measures cannot substitute for the necessary investment to promote the quality of the product.

Two main types of protection should be distinguished:

• Geographical indication (GI), which covers both the simple “designation of origin” (DO) and the “controlled designation of origin (CDO–AOC in France). This establishes a strong link between a product and a local area. To obtain this label, producers and product chain must be well organised and must have the help of the authorities.

• A registered trademark. This provides good legal protection internationally. It is the main system used in most of the world, particularly the United States.

69Both trademarks and geographical indications protect a product’s reputation rather than innovation, are suitable for agricultural produce, and apply to segmented markets where competition is based on differentiating products rather than on price. But they differ in nature and extent (see box below), and therefore cannot both be used on the same market. A geographical indication cannot be imposed on a market where a trademark of the same name exists. A choice must therefore be made between the two systems, depending on the product concerned and its target market and on the basis of precise data.

70For the same reasons, any proposal to organise or reorient a product chain must be based on a wide range of detailed data. It would be especially useful for future initiatives to assess experience with the “Monoi de Tahiti”

71DO and other attempts to develop product chains, and to closely monitor initiatives elsewhere in the region involving biodiversity, its utilisation and the protection of the resources deriving from it.

Geographical indications (GIs)

72These apply to a particular area for a particular product, and all producers of that product in the protected area can benefit provided they comply with the specifications. These are thus collective, inalienable rights.

73These rights concern not innovation but the reputation of a product known by the public for its particularities and requiring specific technical know-how for its production. A GI thus helps to develop a market among customers attuned to the local area/product connection, environmental issues and socio-cultural traditions. A GI is not suitable for a “new product” or for raw materials. A GI can only be obtained for an application that is the same as the traditional use. There are various forms of GI in the European Union: “designation of origin” (AOC in France), “protected geographical indication” and “guaranteed traditional speciality”. For the European market, producers can thus choose the formula best suited to their product.

74GI applications need considerable institutional and organisational backing, technical advice, legal assistance, training etc. However, there are few technological requirements.

75Geographical indications as such have enjoyed international protection since the Lisbon agreement of 1958 on “Protection of designations of origin and their international registration”. For admission to the international register, run by the WIPO3, a geographical indication must first be protected in its home country. It provides very strong protection, and the criteria are so strict that only 20 countries have signed the agreement, which considerably reduces its range. The GI system, reworked by the TRIPS4 agreement, mainly benefits European countries, which account for 95% of registered appellations.

76International protection of geographical indications is explicitly guaranteed by Articles 22 to 24 of the TRIPS agreement. Products already protected by a geographical indication in their home country are protected in all member countries, and the name protected by a geographical appellation cannot be used as a trademark. However, there are exceptions to this protection:

• if the name is considered generic and is already widely used without reference to the product’s initial home area;

• if the name was already a registered trademark before the geographical indication was applied for. In other words, if a foreign firm has already registered the name of a product associated with a geographical origin or place-name, it is too late to apply for a geographical indication.

• if the product is no longer made in its original home region or is not protected in its home country.

77To sum up, GIs are mainly suitable for finished products on the consumer market. If applied to intermediate goods used by manufacturers in formulations, there are additional limitations (e.g. percentage of the finished product) which can make it difficult to develop its market. One example is an essential oil of lavender whose AOC nearly failed for lack of commercial utilisation. At present, this AOC is mainly used for small quantities sold via retail outlets for aromatherapy rather than high-volume industrial production. Similarly, this type of certification is of little use in the pharmaceuticals sector.

Trademarks

78Unlike a geographical indication, a trademark is the property of an individual or group, who may sell, bequeath or otherwise dispose of it. The owner retains the right to the trademark if they delocalise production. The company may choose to evoke tradition or a particular link with a local area in its advertising, but is under no obligation to provide evidence in support of such a claim. A trademark can protect a new product, or a new use of a plant already used in traditional practices, or a preparation in which the traditional product is only a minor ingredient.

79The greatest limitation on this form of protection is probably its high cost, e.g. for trademark registration procedures, continual marketing expenses, the indispensable legal services to monitor and sue counterfeit imitations and other breaches of trademark law, etc.

80Two types of trademark may be of interest for natural substances in French Polynesia: collective trademarks and certified trademarks.

• Collective trademarks may be held and managed by a group of producers, an industry federation, a non-profit body, etc. Since a producers’ group owning a collective trademark decides on the conditions of its use, this system makes it possible to establish a similar framework to that of a geographical indication, but is less restrictive. For example, there is no obligation to show that the activity is a traditional one, or that all inputs are of local origin.

• Collective trademarks can be certified, which involves an outside organisation certifying that the arguments put forward by the owners of the trademark (origin of the product, production method, etc.) are authentic. This form of protection is used particularly by Native American communities for marketing their handicrafts. Extensively used in North America, it is beginning to spread to South America: certification is provided by indigenous organisations or the administrative bodies in charge of indigenous groups. In those cases it it is being used to earn profits from traditional knowledge rather than raw materials.

Trademark versus GI

81Trade names referring to a geographical origin are common in the United States and Japan. Registration of Amazonian place names as trade names in Japan has recently caused a stir in Brazil, where it has been denounced as a form of biopiracy. In the event of conflict between a trademark and a GI, the GI cannot be used in a market where there is already a trademark of the same name (e.g. “Tahitian noni” and the many similar names registered by Morinda Inc. in the USA and Europe). It is therefore pointless to invest in a GI if one is targeting the US or Japanese markets. A trademark, or a trademark with a geographical reference, is more appropriate.

82Dual protection is possible. If some producers in an area covered by a GI marketed their produce under a trade name, they would be able to take all the benefits of investment in more closely targeted advertising, communication and marketing strategies.

Other quality labelling options

83“Organic” certification under current European directives is one possibility. On the face of it, this solution seems well suited to the local context:

• It is suitable for small-scale farming.

• It requires more labour than the dominant mode of farm production.

• It has a good image among consumers in developed countries.

• It offers more attractive prices.

• Organic production is now recognised for cosmetics ingredients.

84Organic farming certification is suitable for foodstuffs and now also for cosmetics, though the regulations on this latter are very recent and the situation needs to be studied. Organic farming is of almost no interest in the pharmaceutics sector; medicinal products are excluded from organic certification and organically-produced raw materials are more expensive.

85Another possibility would be to discuss with users, case by case, the possibility of an exclusive contract for local products. This way of working can be a strong incentive to the user as it enables him to develop exclusive marketing.

86In this case:

• To prevent a manufacturer acting simply to keep a competitor out of the market, they must commit to buying a certain volume and/or to a certain value.

• The contract must be a long-term one.

• The territory concerned must retain the rights over the use of its image.

87To conclude our examination of protection methods, a clear and permanent distinction must be made between two issues that were combined in the questions the panel of experts was asked to address. Studying possibilities for sustainable, profitable marketing of products based on natural substances is a quite different issue from that of identifying promising active compounds. The first step towards commercial use of natural substances is to advance from the substance identified as potentially of value to a product. In this regard the endemism of the plant or the originality of the compound are not sufficient criteria for defining the distinctiveness or uniqueness of the product. Other determining factors would be the methods or technical knowledge required to process the raw material into a marketable product, its differences compared to similar products, the corresponding costs, etc. A product can be unique without being made from unique substances, and the uniqueness of a substance will not necessarily be recognised as such by the market. The very purpose of a trademark is to give products a strong identity to differentiate them from others of the same type.

88Nor need one necessarily aim for differentiation, extreme specialisation or niche market. Most resources identified by the experts are already found, or could be cultivated, throughout the South Pacific. The question is whether it is opportune to differentiate these competitively from similar products; a cooperative regional approach might prove more advantageous for all concerned.

SHORT-TERM UTILISATION OPPORTUNITIES

89This is where the two types of work conducted for the review meet up. Table 6 takes the reader from the species whose properties are given in the corresponding data sheets to the products made from them and the business sector in which they can be used (column 1).

90Correlating the data in the specialist chapters, columns 2 to 5 give indicators for identifying opportunities for developing Polynesia’s main products: the state of R&D work, environmental and socio-economic impacts, strong and weak points (taking account of regulatory constraints particularly). Column 6 gives comments and recommendations with a view to identifying the most important actions to take.

91Extending the field covered in Table 4 to all Group 1 substances, this chart provides a scorecard for their utilisation and a matrix of the experts’ conclusions on plant-based substances.

PROSPECTS FOR UTILISATION

Natural marine substances

92In view of the vast biological diversity of French Polynesia’s marine organisms, the current state of knowledge about them and the number of potential applications, it is obviously difficult to design a single strategy for bringing them into cfommercial use. Different strategies will be required for different organisms and markets.

93The table below illustrates the diversity of the marine organisms and of their application sectors, justifying the adoption of a range of strategies.

94The following points clarify the table:

• Because of its extensive north-south territorial spread, French Polynesia has a valuable range of biological diversity from tropical organisms in the north to temperate ones in the Austral islands.

• Because the Polynesian island groups are widely scattered, the taxonomic inventory is still limited to the main islands of the Society, Tuamotu and Austral archipelagos (Rapa biodiversity workshop, 2002).

• Only the major groups – corals, fish, molluscs, echinoderms and algae – have received particular attention; knowledge of the other invertebrate groups is still fragmentary.

95In this situation, the experts see no reason for considering one channel for utilisation rather than another. The uses found for micro- and macroorganisms will also necessarily differ according to the method by which extracts are obtained, both at the pre-screening stage and at the development stage.

96However, as stated in the conclusion to our presentation of the marine resource potential, the most appropriate line of action towards utilisation in the short and medium terms seems to be to build up collections. As a rule, this approach should include the following strands:

• sampling;

• establishing collections;

• establishing and managing a molecule bank;

• improving knowledge of these molecules’ chemical and physico-chemical properties and biological activity by specific studies and/or directed screening;

• developing screened molecules (choice of strategies);

• producing molecules and/or extracts at pre-industrial and industrial level prior to marketing.

97Further details on this will be found in the paper by Guézennec and Débitus (on CD-ROM); here we will simply point out that the questions of intellectual property, depositing micro-organisms, patenting (including coownership), licensing out (patents, exploitation) and industrial property, should be considered at a very early stage.

Bioprospecting and collections: establishing a technology hub in French Polynesia

General remarks

98In the 1990s there was a veritable revolution in the bioprospecting field, with the introduction of robotics for pharmaceutical screening and the development of high-throughput screening (HTS). To date, the main sectors concerned are health/therapeutic drugs, cosmetics and agrochemistry.

99To run their HTS equipment, firms purchase entire collections of products or extracts. Supplying marine or land plant or animal extracts has thus become an economically viable prospect for a local institution, community or company.

100Under the CBD system, bioprospecting programmes are negotiated in the legal form of agreements between the States, resource suppliers seeking to benefit from their resources, and user firms or scientific organisations.

101Benefits to be expected from this new activity are:

• Financial returns from the sale of samples or extracts, from screening work and identification of bioactive compounds, royalties on industrial applications of the active principles supplied or derived from samples sold, etc.;

• Resulting scientific and socio-environmental impact, employment particularly.

102The challenge for French Polynesia is to develop these activities on its own territory as far as possible, to draw maximum benefit from all their impacts.

For a “natural substances” technology hub in French Polynesia

103The expert group review does not cover the 80 to 90% of endemic plants for which there are no bibliographical references to scientific research. It is therefore fair to say that the situation is comparable to that for marine substances. We suggest creating a technology hub to develop both marine substances and bioprospecting in French Polynesia. It would do the work of prospecting and collecting substances and organisms, conservation, and characterising and extracting potentially useful compounds in place of and on behalf of scientific organisations or industrial firms.

104The technology hub would set up and manage banks of

• marine micro-organism strains;

• extracts: herbaria, samples and extracts of plants and marine organisms (to estimate the number of harvestable samples);

• laboratory-isolated compounds.

105It would thus play a more diversified and strategic role than simply supplying biological material, and could be in a position to stimulate or even initiate utilisation projects in collaboration with the research community and industry. Until now, the initiative in this field has been left to private enterprise, but other options are open which, with public-private partnership, would leave room for the interests and development of both parties. A State-owned body or other structure geared to the public interest, managing collections and directing the entire system, could be considered.

106To design and implement such a project,

• It would be advisable to consult with the managers of the national Chimiothèque programme, a federation of collections run by the CNRS.

• Given the wide scatter of the islands and the high rate of endemism, sampling surveys would have to be organised under strict control, with conservation measures including cultivation and in vitro conservation of the most endangered species.

107The facilities and equipment required are as follows:

• Sampling facilities including a herbarium and properly managed and updated collections, and equipment for in situ conservation of marine or plant samples.

• Facilities for extracting and formatting extracts, including:

• Fractioning and placing on standard plates called “mother plates”, establishing a stock of samples available for subsequent pharmacological testing;

• Isolation and dereplication, for rapid identification of common compounds of little interest. The basic equipment for this is a dilution robot suitable for high or medium throughput; on the face of it, medium throughput seems sufficient. This could be done in French Polynesia, as it has several efficient chemistry teams.

• Specific biological screening, for selecting active extracts from targets chosen by biological tests. Local teams could develop and use easy, reliable tests in collaboration with medical biology research teams such as those at the Institut Louis-Malardé.

108Automated (randomised) biological screening: this stage requires costly equipment and specialists in pharmacology and engineering (miniaturisation of tests, automation, then confirmation tests). Both conditions seem difficult to fulfil locally.

Value and feasibility of the technology hub

109One major conclusion can be drawn from this brief overview of potential bioprospecting in French Polynesia. While the robotised biological screening stage seems to be beyond the reach of French Polynesia, all the other activities mentioned could be developed to advantage. Production of test plates for subsequent biological screening would also be a way of diversifying partners. These are directly economically useful activities, productive activities that generate income and employment, not to mention higher training for young Polynesians and the benefits that would bring them.

110Biotechnology companies are interested in a development of this kind. The existence of biobanks and extract banks would free them of the need to go through the formalities of PIC themselves, and of having to conduct “blind” prospecting operations. In other situations, firms such as Servier, Astra Zeneca, Pharmamar and Pierre Fabre have in practice favoured such a system providing them with pre-selected samples. Establishing collections and extract banks also makes it possible to initiate R&D projects and closely involve local stakeholders in those projects. Extract banks also provide a way to partly overcome the delicate problem of control (see legal approach section). Because the extract collections provide extracts rather than strains, companies wishing to develop a product must apply to the collection for further supplies (unless they intend to synthesise the compound). Accessibility can thus be controlled at source, at least during the initial phase of development.

111Establishing micro-organism collections seems to be a particularly promising prospect, for a number of reasons. Furthermore several ventures of this kind, either public sector or private, in French Polynesia and elsewhere, have been successful. The Australian Institute of Marine Science (AIMS), for example, has been in operation since 1972. The Instituto Nacional de Biodiversidad in Costa Rica (INBIO), a private scientific institution of public interest, specialises in collection, processing, production and sharing information on biodiversity. In the Indian Ocean, in La Réunion, ARVAM (Agence pour la recherche et la valorisation marines) provides liaison between research and decision makers in the environment and development fields5. The private company Pharmamar in Spain is a leader in this sector. And in Tahiti itself, the firm Biolib makes and screens extracts from its collection of bacteria and cyanobacteria.

112There are four particularly important factors for a technology hub project of this kind to succeed:

• Given that in French Polynesia there are few private structures with adequate resources to start such a venture, the authorities will have a decisive part to play in supporting project initiators, many of which would be State-owned institutions such as EPICs. The authorities could even trigger the process by creating business incubators. As no major investment is required to set up a strain bank, this does not seem to be beyond the reach of the French Polynesian authorities.

• French Polynesia has one valuable asset: a local scientific and technical infrastructure, including the University of French Polynesia, IFREMER and the Institut Louis-Malardé, capable of supporting the creation of strain banks. With more staff and technical resources, the Institut Louis-Malardé in particular could take charge of part of these service provision operations. It has had a natural substance research laboratory since 1991. Since 1998, this laboratory has concentrated on certain species used by traditional healers in the Pacific region, analysing the chemical composition associated with their biological properties. One of the key functions of the GEPSUN biotechnology facility could be to co-ordinate and stimulate these institutions.

• If the idea is adopted, it will undoubtedly be in the interests of the French Polynesian technology hub to join the network of Biological Resource Centres (BRCs) now being formed. This is an OECD initiative to network plant, animal, microbial and human material collections under the name of BRCs. Its goals are to encourage rationalisation of the content of the miscellaneous, scattered collections that now exist, promote quality in these collections, and transform them into a strategic instrument by developing their service activities (storage, supply etc.), so improving the utilisation of their content under scientific cooperation arrangements. Headed by the French Research Ministry, a network of collections is being formed, which the administration intends to institute a kind of “BRC label”, with financial aid for BRCs that adopt a “charter” of rules. The rules cover conservation and processing of biological resources, declaration of this activity to the Research Ministry, release of the credits needed for staff and equipment, etc. Linking the French Polynesian initiative to the BRC system would improve quality assurance in the eyes of partners, researchers and manufacturers and also make it possible to obtain public funding. This could even include aid to develop scientific co-operation, since one of the missions of France’s Consultative Committee on Biological Resources set up in February 2001 is to develop links between French BRCs and biotechnology companies.

• To take this option, the project’s legal implications must first be thoroughly assessed. To build a collection, the legal status of the extracts supplied must be established. Bilateral legal relations between supplier organisations and their partners are generally clearly set out in the contract. As a rule, this is an MTA (material transfer agreement), but a service provision contract may be suitable if the partner sub-contracts some research to the supplier organisation. Whatever the type of contract, it sets out the rights and obligations of each party. But it does not determine the question of legal relations between the parties and the country or territory where the specimens were taken. Particular points to clarify are (a) whether the organisation holding the collections owns them or merely manages them, and (b) in either case, who will receive possible benefits. Broadly speaking, there is no reason why these organisations, public or private, aided or not by the authorities, should not fall under the future PIC – in the first place because the authorities must be able to properly assess the ecological impact of their systematic prospecting activities, and in the second place the collections’ resources will mostly have been acquired on publicly-owned land, sometimes on the recommendation of local communities or using their information. These communities might oppose utilisation if, in the long run, the use of inventions developed from them may harm their collective interests; this is why the ABS system takes the question of collective interest into account.

RIGHTS OF LOCAL COMMUNITIES AND COLLECTIVE INTEREST

The collective interests in question

113The law on access to biodiversity under the CBD has been designed to meet two goals regarded as intrinsically linked: equitable transactions, and sustainable use of biodiversity. In the long run local communities will oppose bioprospecting unless the system allows for some of the profits from bioprospecting to be allocated to their benefit and to conserving biodiversity. In other words the system has no scientific, technical and political future unless some of the benefits are genuinely reallocated rather than being entirely absorbed by the institutions of the State.

114As regards conservation, reallocation can take many forms, from allocation of funds to the institutions responsible for environmental protection to the creation of a trust fund (on the Indian model, for example). What is important is that the ABS rules should explicitly incorporate the principle.

115The question with regard to local communities is more complex. Article 8 (j) of the CBD states that

116“Each contracting Party shall, as far as possible and as appropriate, (…) subject to national legislation, respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilisation of such knowledge, innovations and practices.”

117This provision acknowledges that, among the inventions based on biological resources, some rely on input from local or indigenous communities. It is therefore logical that these communities should be involved in the system established by the CBD – consent for collecting, sharing the resultant benefits – especially as these communities and their practices are an essential factor in managing sustainable use of biodiversity. On these grounds, some States, in line with the work of international institutions, have planned for indigenous and local communities to participate in the ABS system. The Secretariat of the Pacific Community has recently drawn up a “Regional Framework for the Legal Protection of Traditional Knowledge and Expressions of Cultures in the Pacific Islands”. This document examines the question of protecting and remunerating knowledge. It has done this in response to demand from the region, where people consider that traditional knowledge and cultural expressions are being increasingly exploited and inappropriately marketed (see the paper by Noiville for an examination of this document and its relevance to the French Polynesian situation).

Is Polynesia a special case?

118Polynesia has a strong cultural identity, but it is sometimes said that it does not have a marked sense of aboriginality. It is also said that the French institutional architecture prevents recognition of the indigenous communities’ specific rights. This is not the place for an in-depth discussion of these assertions, but two points should be noted:

• A legal point: whatever the facts about a sense of aboriginality in French Polynesia, the territory has local communities that take part, and will take part, in supplying resources. Given that the CBD puts village communities and indigenous populations on an equal footing (see Article 8-j), the right to “equitable sharing” concerns all local communities. Furthermore, legally, there is nothing to prevent a State that does not recognise the existence of indigenous communities in law from recognising their particular features and allowing them certain benefits.

• A social and economic point: in Polynesia as elsewhere, villagers or traditional healers are liable to divulge knowledge (of various types and usefulness). This knowledge has, or is likely to have, commercial implications. One way or another, they will make a contribution, if only a passive contribution, to the development of future innovations. Therefore the rights of all – State, prospectors, local and indigenous communities – should be clearly decided. Otherwise, transactions may be seen as unfair or unjust and conflicts of interest may arise.