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Brainstorming Session and National Consultation on Issues related to Normally Traded Commodities On April 13 and14, 2012 At Hotel Residency Towers, Chennai

Proceedings of the Meeting

• Agenda appended • List of participants appended

The Brainstorming Session and National Consultation on Issues Related

to Normally Traded Commodities (hereafter referred to as NTC) began at 9:30

am on April 13, 2012 with the Secretary, National Biodiversity Authority

(hereafter referred to as NBA) Shri. Achalender Reddy, IFS welcoming the

participants on behalf of the NBA and the Ministry of Environment and Forests,

Government of India, and setting the context for the Consultation. He

emphasized the fact that the consultation was organized not only to facilitate a

comprehensive understanding of the topic, but also to ensure that concerns and

issues are flagged, discussed and reconciled on a brainstorming mode.

Dr Balakrishna Pisupati, Chairman, NBA in his opening remarks

highlighted the three tenets of the Biological Diversity Act, 2002 and Rules 2004

viz., conservation, sustainable use of biological resources and equitable sharing

of the benefits arising out of the use of resources. While elaborating on the

rather amorphous understanding of NTC that seems to pervade the situation in

India, Dr. B. Pisupati highlighted the ongoing efforts of the NBA in providing

clarity and understanding on the issue. A key issue that was highlighted in his

presentation was the importance of an inclusive approach and his appreciation

of the participation by key departments and organizations such as the DGFT,

MPEDA, CSIR and ADMA.

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Following a round of self introduction, the first session commenced with

the presentation of Shri. C. Achalender Reddy, Secretary, NBA on “Normally

Traded Commodities: Issues and Concerns”. The NBA, unlike many of its

counterpart Authorities, has three primary roles viz. regulation, facilitation and

advocacy. The three roles are ensured through a three tiered structure with the

NBA being the central and overarching body, the State Biodiversity Board

ensuring federal functioning and the Biodiversity Management Committee (BMC)

being the local unit of function.

Shri. C.A.Reddy highlighted the fact that a number of Ministries,

departments and organizations have the mandate of handling and biological

resources. For instance, the Ministries of Environment and Forests, Agriculture,

Commerce etc & Organizations/ Departments such as DGFT, DGCI&S, APEDA,

MPEDA, ICAR, ICFRE, CSIR, BSI, ZSI, NMPB, ADMA, Customs, Boards of

Tea, Coffee, Rubber, Spices etc and a host of Non-governmental organizations

are all involved in trading bio-resources. Likewise, a number of Acts, Policies,

Rules and Regulations govern the trade and use of biological resources; of

which the following are most relevant: the Biological Diversity Act, Seed Act,

Export – Import Policy, Customs Act, Indian Forest Act, Essential Commodities

Act, ITC (HS) Code, Plant Varieties Protection and Farmers’ Rights Act, Wildlife

(Protection) Act, International Conventions such as the CITES, Environment

(Protection) Act, Foreign Trade (Development and Regulation Act), Foreign

Trade Policy on Biodiversity, International Red Lists developed by the World

Conservation Union etc.

The Biological Diversity Act, 2002 is mandated to protect the sovereign

rights of India over its biological resources, by ensuring conservation and

sustainable use while playing a stellar role in preventing the misappropriation of

bio-resources. The Act, therefore, regulates the use of biological resources,

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ensures that traditional communities and their knowledge systems are rewarded

through the tenet of equitable benefit sharing.

As part of his presentation, Shri.C.A.Reddy elaborated on some of the

definitions in use: Biological resources are plants, animals and micro organisms,

or parts thereof, their genetic material and by products (excluding value added

products) with actual or potential use or value, but do not include human genetic

material. The term Normally Traded Commodity has not been defined in the BD

Act, although the literal meaning would be that it is an article of normal trade or

commerce especially agricultural or mining in its origin. Section 40 of the BD Act

refers to NTC as under: “Not withstanding anything contained in this Act, the

Central Government may, in consultation with the NBA, by notification in its

official gazette, declare that the provisions of the Act shall not apply to any

items, including biological resources, as normally traded commodities”. To

enable this identification and notification, the NBA has hitherto undertaken a

number of initiatives. For instance, an Expert Committee for the purpose was

constituted in November 2005. In the subsequent meeting, it was recommended

that the bioresources proposed by the Indian Institute of Spices Research, Spice

Board, Tobacco Board, Directorate of Cashew and Cocoa Development, Coffee

and Rubber Board, and Medicinal Plants be notified as NTC. The 3rd meeting in

March 2008 led to the development of the first list for issue of the notification

which was communicated to the MoEF. The list was authenticated for scientific

accuracy by the BSI, following which in November 2008, the MoEF forwarded

the list to the NBA, which in turn was communicated to the DGFT. By January

2009, the corrected version containing 1,040 species was received by NBA from

BSI, which was forwarded by MoEF to DGFT for comments. The DGFT

requested that the list be provided with ITC-HS codes for the species, which was

discussed for action at the Inter-Ministerial meeting at New Delhi. As the first

step, the 180 species identified by the Foundation for Revitalization of Local

Health Traditions (FRLHT), a Bangalore based NGO, were proposed to be

notified as NTCs. This draft notification was circulated widely for comments.

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This led to the conclusion that in the first instance, 46 species of plants that are

used for medicinal purposes, cultivated and consumed in quantum above 100

MT would be appropriate for issue of notification. In addition, all those plants that

are cultivated as food, spice, fruits and vegetables and in popular use could also

be notified. Concerned departments were consulted for the purpose and by

June 2009, a consolidated list was generated and approved by the NBA. This

list was submitted to the MoEF for taking forward the process of notification.

The list of 190 NTCs was notified vide S. O. 2726 (E) dated 26th October, 2009

by the MoEF; under the following heads viz. Medicinal plants, Spices and

Horticultural Crops. It is to be noted that cereals and pulses are yet to be

notified.

Shri. C.A. Reddy stated that consequent to the notification, certain issues

have emerged that need attention, and in a sense these issues and concerns

form the backdrop of the consultation. For instance, the NBA and MoEF have

been alerted about the inclusion of certain threatened species in the notification.

BSI, APEDA, DGCIS and DGFT have been consulted to verify this concern;

although it is to be stated that there is a difference of opinion between technical

institutions and those dealing with trade on the threatened status of species.

This was discussed in detail at the 17th meeting of Authority of NBA which

concluded that the issue could be resolved by widening the process of

consultation; and the specific involvement of the SBBs is in the process.

Other concerns include the non-mention of the term ‘species’ and the

specific mention of terms such as ‘Items and Biological Resources’ in Section 40

of the BDA. The question hence is, whether only parts / value added products

and derivatives are to be listed as NTC rather than the entire species. Similarly,

should there be a re-notification to usher in clarity especially on issues pertaining

to IPRs out of research, cultivation of rare, endangered and threatened (RET)

species by farmers, and synergy between the BDA and ITC (HS) code. Shri.

Reddy elucidated the divergence by highlighting examples from research in

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biotechnology. In conclusion, the potential Road Map to achieve the goal of the

BD Act would be: a) A multi institution collaboration to evolve guidelines for

inclusion/exclusion of items and bioresources. b) This dynamic exercise must

reconcile trade and conservation goals and interests of the country. c) Schedule

2 of the Export Policy could consider providing inputs for listing items in NTC

and d) The bio-resources of India to be showcased as “soft power” in the

country’s foreign policy and utilized for sustainable development.

Some of the points highlighted by the participants in response to the Secretary’s presentation are as follows:

• It was pointed out that Section 40 of the BD Act concerns itself with issues

far beyond NTCs, as it is often erroneously presumed. The Section resonates with Article 8 of the Nagoya Protocol.

• The purport of Section 40 is on identifying and defining the point of capturing value for enabling benefit sharing.

• It is to be recognized that sustainable use is a very critical component of the BDA, which needs to be furthered by mainstreaming the process across ministries and departments.

• It is also to be understood that the research privileges especially in domains related to affordable health care need to be accorded priority.

• The fact that much of the trade of medicinal plants remains in the domain of ‘unknown’ with the chain from the collector to the final user being rather complex. This is especially critical for indigenous cattle or sheep such as the Malabari Goat.

• Section 40 is to be read with Section 7 for issues pertaining to exemption and hence cannot be handled in isolation.

• Ground level experience has suggested that very often entities such as the SBB and BMC do not have the benchmarks or baseline data for cross verification.

• On the issue of utilizing parts of the plant, the issue is not critical as long as the use is limited to common species. But in the case of RET species, this assumes great significance. Similarly indiscriminate use of seeds and genetic material is also a matter of concern.

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• International implications need to be strongly considered while dealing with the issue of NTC.

• The term ‘items’ was considered rather than ‘species’ in view of the fact that the BDA exempts items that are already under trade from its purview and not the ‘species’.

• It was pointed out that while considering Section 7 and 40 of the BDA, attention needs to be accorded to Section 59 and the provisions of the Forest Rights Act.

TECHNICAL SESSION -1 Technical Session I - was devoted to presentations by invited experts. Dr. D K.

Ved, Advisor – FRLHT spoke on “Trade in Medicinal Plants: Overview on

Issues”. India has a veritable medical heritage, being one of the oldest living

traditions in the world (> 3000 years old), in which about 6200 plant species are

utilized. About 4000 endogamous groups are known to have possessed this

tradition. It is also to be realized that this heritage comprises of many systems of

medicine (codified and those in folk systems), and that there is a significant

overlap of use of plant species amongst the systems. A systematic analysis of

this use pattern has revealed that about 178 plant species are in high volume

trade i.e. > 100 MT/year.

While the biodiversity hot spots of Western Ghats and Eastern Himalayas

are well known for their medicinal plant diversity, a lesser yet more critical

aspect is the occurrence of significant diversity of plants that are used in health

systems across other bio-geographical zones of the country. For instance, the

Deccan plateau supports about 3000 medicinal plant species.

Based on studies undertaken in the year 2007 by FRLHT, it has been

estimated that the annual demand of botanical raw drugs is at 3,19,500 MT/

year. The 1289 botanical raw drugs in trade are correlated to about 960 species.

41 percent of these were herbs, 26 percent trees, 18 percent shrubs and 15

percent climbers. It is a matter of concern that 50 percent of the total volume

harvested is destructive involving the use of whole plants, barks, root, wood etc.

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Yet another analysis reveals that of the 960 such species, 780 are native to

India. 609 of these are collected only from the wild. Only 133 plant species of the

total number are obtained from cultivated sources and these are largely spices,

fruits vegetables and cereals that are in common trade. Similarly, about 66

percent of the 178 plant species that are in high demand are collected from the

tropical and temperate forests of India.

Elaborating on this, Dr. Ved listed the 21 species collected from the

Himalayan province and the 70 species collected from the. He also listed the five

species that are imported extensively for use in India. In conclusion, Dr. Ved

highlighted three species that need immediate conservation action viz.

1. Coscinum fenestratum (Gaertn.) Coleb., Critically Endangered

(Regionally), Sanskrit name: Darvi, Daruharidra :Tamil name: Maramanjal

2. Saraca asoca (Roxb.) Wilde, Endangered (Regionally), Sanskrit name:

Asoka, Tamil name: Asoka

3. Decalepis hamiltonii Wight & Arn., Endangered (Globally), Sanskrit name:

Sariva, Shweta sariva , Tamil name: Makali kilangu

It is hence imperative to systematically assess each Wild Indian Medicinal

Plant species in significant trade for its conservation status before being

included as NTC. The data on commercial utilization of medical plant species

needs to be periodically updated with accurate botanical names and the sources

of supply (cultivated/planted/wild- with details of regions/locations). This is

possible only with proper co-operation of user industries. For promoting

cultivation of wild medicinal plants of high conservation concern, appropriate

differentiation between the harvested materials (from cultivation) and the

collected materials (from the wild) is needed.

The discussion that followed Dr. Ved’s presentation is summarized as follows:

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1. Changing land use pattern and dynamics would have a bearing on the

conservation of medicinal plants.

2. Similarly, the import of certain plant species would also impact

cultivation trends.

3. There is not enough focus by the forestry sector on medicinal plants

4. There are not many studies on lichens; especially for their medicinal

use and harvest

5. Local names have not been synonymised.

6. Herbs and climbers do not receive attention from the forestry sector

7. ITC HS coding that is currently in place is not effective.

8. The multi use species often escape monitoring.

9. The Daily Trade List released by the GOI needs to be reconciled with

the data on medicinal plant dynamics.

10. There needs to be a well entrenched programme of orienting Customs

Department to medicinal plant trade.

11. Artificial demand generating scenarios need to be curtailed.

12. Focus needs to be accorded to finding alternate or substitute species

for those medicinal plants that are extensively traded.

Dr. S. K. Mohanty (along with Shri. Sachin Chaturvedi as the co-author) of

RIS spoke on “Global Trends in Trade in Traditional Medicine: What is India’s

Trade Interest?” The framework of his presentation included the following

aspects: Global trends in traditional medicine, Surge of bulk drugs, India’s

mechanisms for coping with the global trend, the need for a comprehensive

strategy for conservation and trade and Policy recommendations. Dr. Mohanty

began his presentation by highlighting the need to focus on Positive / Negative

Lists rather than be curtailed by limited versions while emphasizing on the need

to recognize that a reorganization of the list is normal and hence be

accommodated in the deliberation.

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Limiting his analysis to medicinal plants, Dr. Mohanty provided an overview

of trade dimensions of traditional medicine based on an empirical analysis of 59

products at 8 digit ITCHS drawn from 6 HS chapters. He highlighted the fact

that products covered under the current gazette notification of NTC are mostly

covered in chapter 12. Based on the nature of processing, the products are

further classified under five different categories. Key points as regards global

trends are as follows:

• Global exports in traditional medicine have increased from UD$55 billion

in 1996 to US$ 330 billion in 2010

• Global sectoral imports was US$ 35 billion in 1996 which has increased to

US$ 217 billion in 2010

• Global exports and imports in the sector grew at the CAGR of 13.7%

during 1996-2010

As regards traditional medicine trade in Asia in and around 2010, it is

evident that the region’s share in traditional medicine is low as compared to its

overall share in trade. India has a trade surplus with the rest of the world in this

sector, while East Asia continues to be the most important sub region with

substantial imports. West Asia is steadily emerging as a balanced market, while

South Asia is largely dormant. South East Asia and parts of South Asia continue

to function as the epicenter of growth for this sector.

Dr. Mohanty also highlighted the fact that the exports of the region is

evenly spread in comparison to imports, with India ranking high in exports of

traditional medicine, while Japan, China and South Korea being leading

importers. Global major players are the EU countries, while many developing

countries dedicating themselves to emerge as lead players.

Trade in traditional medicine sadly has been monopolized by the

industrialized countries with EU -16 and NAFTA sharing the bulk of the trade.

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Traditional medicines follow the route specified by the Regional Trade

Arrangement, and many of these are performing quite well as illustrated by the

ASEAN region. For instance, global exports have increased from US$ 36 bn in

1996 to US$ 330 mn in 2010, with the share of bulk products increased from

88% in 1996 to 95.9% in 2010.

• World import of the sector has increased from US$ 24.2 Bn in 1996 to

US$ 217.3 Bn in 2010 and the sectoral share of bulk drug increased

rapidly from 84.5% in 1996 to 92% in 2010.

• The relative position of raw materials in exports declined significantly from

4.7% in 1996 to 0.9% in 2010, while India’s exports increased from $

528.2 m in 1996 to $ 3.37 Bn in 2010. Trends also reveal that export

earnings in all segments have increased and that there is a relative

decline in import share -other segments including final sales. The share

of raw material imports declined by half from 10.2% in 1996 to 5.1% in

2010.

• India’s imports increased from $ 47m in 1996 to $ 678 m in 2010, with the

sectoral share of bulk drug increased from 57% in 1996 to 86.8% in 2010.

Relative position of raw materials - imports declined significantly from

10.2% in 1996 to 6% in 2010.

Issues that need to be focused upon to effect policy formulation that is conducive to conservation and trade include the following:

• Taxonomy of products needs to be elucidated.

• Coverage of Plants and animal species is essential.

• More ground work on production (ISIC) and trade classification (HS) is

essential

• Identification of new or niche markets where India has supply capabilities

needs to initiated. Relevance of ‘The Gujral Doctrine’- Exports of value

added products rather than exports of raw materials needs to be pursued

with vigour.

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• Mechanisms that facilitate states to produce for domestic consumption as

also exports need to be put in place, while deficient states need to be

improved upon.

• Stringent measures to ensure vigil on endangered species needs to be

evolved and implemented.

• A strategy that focuses on niche markets and niche products for

traditional medicine needs to be evolved.

• It is to be realized that product development is essential for promoting

exports in view of the fact that the system may be characterized with

sporadic bouts of inadequate supply of raw materials.

The third presentation of the session was by Shri. Arun Goyal of the

Academy of Business Studies, New Delhi on “Nationally Traded Commodities

and Biodiversity Goods – Plants, Animals, Micro-organisms: Classification,

Nomenclature and Coding Issues”. Shri. Goyal began his presentation by

defining the Harmonised System (hereafter referred to as HS). The Harmonized

Commodity Description and Coding System generally referred to as

"Harmonized System" or simply "HS" is a multipurpose international product

nomenclature developed by the World Customs Organization (WCO). The HS is

an objective system with a well defined universe. It comprises about 5,000

commodity groups; each identified by a six digit code, arranged in a legal and

logical structure and is supported by well-defined rules to achieve uniform

classification. The system is used by more than 200 countries and economies as

a basis for their customs tariffs and for the collection of international trade

statistics. Over 98 percent of the merchandise in international trade is classified

in terms of the HS.

The HS contributes to the harmonization of customs and trade

procedures, and the non-documentary trade data interchange in connection with

such procedures, thus reducing the costs related to international trade. It is also

extensively used by governments, international organizations and the private

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sector for many other purposes such as internal taxes, trade policies, monitoring

of controlled goods, rules of origin, freight tariffs, transport statistics, price

monitoring, quota controls, compilation of national accounts, and economic

research and analysis. The HS is thus a universal economic language and code

for goods, and an indispensable tool for international trade. The eight digit code

shows the HSN at 8 digit level under the name "Tariff Item". The first two digit of

the code provides chapter number, the next two digits gives the Customs Tariff

Head (CTH) grouping. The third set of two digits in the code gives the Customs

Tariff Sub-heading. This six digit code is aligned with Harmonized System of

Nomenclature adopted by World Customs Organization. The last two digits

provide customs tariff sub-sub-head for the entry. They are specific to India.

Thus the Code is the same as that in other countries only at six digits. HS is

backed by a detailed four volume set of Explanatory Notes with Alphabetical

Index and Classification Advices.

The use of HS in India is extensive notably by departments / entities such

as, a) the Customs for Import and Export Tariff, Determination of Origin etc. The

entries under the First Schedule of Customs Tariff has been amended, aligned

and updated in line with HSN 2012 b) DGFT for import licensing and export

licensing, c) EDI, EXCISE and DGCIS and DIPP. To elaborate Shri. Goyal

highlighted the existence and relevance of HS in the Agro Sector and provided

details of HS Chapters relating to Animal and Plant life, Timber, Scheduled Lists,

CITES lists etc.

Shri. Goyal elaborated on the 190 species that have been notified as NTC

in October 2009 and the rationale that determined the identification. He also

dealt in detail with aspects such as the 1040 species HS codes defined by MoEF

in November 2008 as well as the 46 medicinal plant species that are extensively

traded. Shri. Goyal brought to the notice of the participants the existence of

other systems that are of relevance to the brainstorming session such as the

APEDA code for New Trade Items, the DTR List of Bio Export and Import codes.

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In his suggestions to improve and define the way forward, Shri. Goyal elucidated

on the issues such as the standardization of nomenclature, especially in the

context of the existence of multiple nomenclature: such as scientific names, local

names, etc. A coding system that relies on the use of numerical is yet another

potential tool for the purpose of standardization. A synergetic system that

integrates numbers and nomenclature is imperative for database development,

computerization, EDI and other IT applications. In this context, it is also essential

to consider segregation of traded items and biodiversity items for enabling

control and administration. There is also a need to devote greater attention to

developing modular databases that can be morphed for multiple uses.

Shri. Goyal emphasized the fact that the adoption of HS will help in

accommodating the existing trade classification system within and outside India.

Shri. Goyal also elaborated on the possible three stage data design for this

purpose. He also suggested the establishment of a secretariat for the updation,

maintenance, classification, and dispute resolution; which could be also funded

through means such as user fee and grants. Detailing the action programme that

could address the issue Shri. Goyal highlighted the need to implement the

programme on a time bound, holistic and inclusive manner. One point that he

repeatedly stressed upon was the need to develop and utilize effective

communication systems to ensure that the issues and facts are disseminated far

and wide. He also stressed upon the need to support databases with validated

documentation – the Tariff book was cited as the example.

Shri. Goyal concluded his presentation by presenting a list of key

reference documents drawn from various programmes and countries.

In response to the presentation, the Chairman, NBA observed that the most

critical issue that needs considerable attention is the fact that the HS system in

India is not based on a scientific assessment.

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“Foreign Trade Policy in the context of Biodiversity Conservation” was the

fourth presentation of the session by Shri. R. Muthuraj from the Directorate

General of Foreign Trade, Government of India. Using the Foreign Trade

(Development and Regulation) Act, 1992 No. 22 of 1992 Section 5 FTP as the

basis for his presentation, Shri. Muthuraj highlighted the two most critical

mandates of the policy viz.

• To achieve US $ 500 billion by 2014 from the present level of US $267.409

• To double the share of India’s export from the present level of 1.64% by 2020

In the context of the brainstorming session, some of the key provisions of

the policy were elaborated upon by Shri. Muthuraj. The first of these is the issue

of Free Exportability which mandates that all goods other than the entries in the

export licensing schedule along with its appendices are freely exportable. The

free exportability is however subject to any other law for the time being in force.

Goods not listed in the Schedule are deemed to be freely exportable without

conditions under the Foreign Trade (Development and Regulations) Act, 1992

and the rules, notifications and other public notices and circulars issued there

under from time to time. The export licensing policy in the schedule and its

appendices does not preclude control by way of a Public Notice Notification

under the Foreign Trade (Development and Regulations) Act, 1992. Goods

listed as “Free” in the Export Licensing Schedule may also be exported without

an export license as such but they are subject to conditions laid out against the

respective entry. The fulfillment of these conditions can be checked by

authorized officers in the course of export.

Detailing the prevalent classes of export trade control, Shri. Muthuraj stated that

the following classes have a bearing on the issue under discussion.

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A. Prohibited Goods The prohibited items are not permitted to be exported. An

export license will not be given in the normal course for goods in the

prohibited category.

B. Restricted Goods: The restricted items can be permitted for export under

license. The procedures / conditionalities wherever specified against the

restricted items may be required to be complied with, in addition to the general

requirement of license in all cases of restricted items.

C. State Trading Enterprises : Export through STE(s) is permitted without an

Export License through designated STEs only as mentioned against an item and

is subject to conditions in para 2.11 of EXIM Policy 2009-14

D. Restrictions on Countries of Export: Countries of export subject to

conditions as specified in Para 2.2 of the Handbook of Procedures 2009-2014

(Vol. I) and other conditions which may be listed in the title ITC (HS)

Classification of Export and Import items.

While highlighting some of the schemes in operation such as the Export

Capital Goods Scheme, the FTP Schemes etc, Shri. Muthuraj detailed the

Vishesh Krishi Gram Udyog Yojana which has a direct bearing on NTC. The

Scheme is being implemented to promote the exports of

• Agricultural Produce and their value added products

• Minor Forest Produce and their value added variants

• Gram Udyog Products

• Forest Based Products; and

• Other Products as notified from time to time

The final presentation of the session was by Dr. Rajendra Dobriyal of

Ayurvedic Drug Manufacturer Association (ADMA). In his opening remarks, Dr.

Dobriyal reiterated the commitment of the industry and corporate bodies to

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conservation, but called for a measured and pragmatic approach to handle the

issue of NTC. He elaborated his point by citing examples where ad hoc and

emotive approaches led to artificial demands being created.

Dr. Dobriyal while endorsing the need to conserve endangered species

suggested that a blanket ban on the species would be detrimental, while a

revised approach of utilizing such species may prove beneficial, especially in the

case of herbs which are required in rather limited quantities. Dr. Dobriyal also

espoused the cause of developing viable, locally relevant models of benefit

sharing.

Following the last presentation, the technical session was opened for inputs from the participants which are summarized as follows:

1. The current methodology for assigning ITC – HS codes is not indicative of

plant species and hence failing in its purpose.

2. Local names need not be included in the ambit of coding since it is

typified with contradictions

3. Capacity building initiatives are needed immediately; especially in key

departments such as the Customs.

4. Handbooks and resource material that are user-friendly need to be

developed to enable monitoring

5. Harmonization of lists is need between and within Government

departments so that overlap and exclusions could be minimized.

6. The domain of stakeholders needs to be redefined to include entities

beyond government departments and NGOs.

7. The notified list of NTC need not be considered as absolute; revision of

the same must be accepted as normal and part of building increased

capacities.

8. The discord between the technical and operational aspects of bio-

resources export needs to be reconciled.

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In his concluding remarks, the Chairman – NBA stated that over 98

applications have been hitherto cleared by the NBA for Benefit Sharing by

examining each application on its merits and limitations. He assured the group

that the process would be streamlined in due course.

The Chairman reiterated the importance of involving the State

Biodiversity Boards and Biodiversity Management Committees in this process.

While agreeing that certain lacunae exist in the notification and the process of

handling the sensitive issue of benefit sharing, the Chairman sought to assure

the group that the commendable character of the Biological Diversity Act, 2002

would be translated into action that benefits conservation and livelihoods. He

assured the participants that the NBA views the deliberations and the outcome of

the current Consultation with utmost seriousness; and hopes that this would

pave the way for creating further linkages to take forward the process of

conserving India’s biological diversity.

TECHNICAL SESSION-2 The post lunch session was organized into a small-group discussion sessions to deliberate on the following topics:

1. The definition and listing process of NTCs – wherein the discussion

would focus on the possible options for a definition and process for

listing NTCs.

2. Linking trade, commodities with ABS issue and the Act – wherein the

issues of conservation, access and benefit sharing and provisions of

the Act would be discussed and;

3. Issues of classification, trade and links to NTCs under the Act –

wherein a review of classification related to HS coding trade in bio-

resources would be carried out.

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The deliberations of the groups was recorded and presented in the

plenary session on Day 2 of the Consultation. Dr Balakrishna Pisupati,

Chairman, NBA chaired the session.

Summary of discussions of Group 1 was presented by Shri. A. K. Goyal, who

organized the conclusions under three overlapping parts viz. definition, process

and listing.

As regards issues pertaining to definition, the group reiterated that the

term NTC does not find a mention in Section 40 of the BDA. The reference is as

follows: Normally Traded as Commodities. However, since the term is in use, it

needs greater articulation and elaboration.

The following characteristics of NTCs or NTACs may be clarified by way of a circular:

a) ‘Normal trading’ means that it is traded in significant quantities, the level

of significance will depend upon the type of commodity and should be

defined in the proposed database.

b) ‘Commodity’ means any goods which is of value and is traded on set

specification of lot size, quantity through market place. This term may

also refer to Intellectual Property Rights when future trading takes place

c) The scope of NTC or NTAS must be clearly listed since this concept

competes with the term ‘bio resource’ in the BD Act.

d) End use issues (for instance, tomato and tomato juice) need to be

addressed in the nomenclature of coding use.

e) Further, the interface of micro organisms and Genetically Modified

Organisms (GMOs), in relation to NTCs needs to be recognized and

incorporated.

f) It was also agreed that the term trading will include domestic trading as

well, whose procedures will be devised through a process of consultation

that protects the stakeholder groups.

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g) Endangered species may be excluded from the NTC definition; while

exotics need to be treated as NTCs.

h) Imports of biodiversity must be encouraged by establishing a facilitation

audit system.

i) IPR approvals should be delinked from NTCs.

Issues pertaining to ‘Process’ include the following agreements:

a) It was agreed that consultation and communication are the key and

defining processes to formulate policies and ensure horizontal and vertical

integration. Drafts and notifications, consultation or commissioned papers,

procedures, minutes of the meetings etc, should be posted on the NBA /

related websites well in advance.

b) It was stressed upon that SBBs and BMCs be formally associated with the

decision making and administrative process.

c) The use of ‘ordinary’ (easily understood) language as well as local

languages may be given importance so that issues are communicated

effectively.

d) Impact assessments must include consultations with SBBs and BMCs for

enabling holistic decision making.

e) The Parliament and other associated entities may be involved in the

consultation process.

Inputs pertaining to Listing Issues are summarized as follows:

a) The NTC notifications may be revised by including ITC-HS codes.

However, this needs to be preceded by identifying and defining a

comprehensive universe of biodiversity goods covering nomenclature and

codes.

20

b) Inclusions and exclusions as described in the definition section may be

given at the beginning of the tables in accordance with the practice

followed in the HS.

c) The regulatory frame may also be described in the notification.

d) Trade names of species along with popular or important local names may

be provided against each item for illustration and communication. The

scientific name will prevail over other names in the event of doubt. Each

item should mention the part of the plant/animal which can be traded as

NTC

e) Seeds as genetic material may be listed as a separate entity while listing

NTCs.

f) A comprehensive database that organizes the data needs to be

developed; with a specific provision for place of cultivation.

g) The onus of drafting the law and rules must be rested with NBA with the

MoEF entrusted with the responsibility of notification.

Summary of discussions of Group 2 was presented by Shri. D. K. Ved and are summarized as follows:

The three tenets of the BD Act viz. conservation, sustainable use and fair and

equitable benefit sharing arising out of the use were the guiding principles of the

deliberations. The deliberation of the groups fell within three broad streams of

thought which are as follows: Wording of Section 40 needs greater clarity. This

was especially in the context of clarifying NTC – whether to be considered only

when used as commodities, or is the exemption total. Further, there needs to be

clarity on the purpose of listing. The second stream of though emphasized the

need to define the point where value needs to be captured especially in the

context of the various stages that the biological resource such as the plant or

animal produces goes through before evolving into a commodity. The third

stream focused on the need to list commodities normally in trade through a

notification; which uses the nomenclature of commodities rather than of species.

21

The list needs to be fine tuned with aspects such as cultivars, land races, wild

relatives etc.

a) There is a lack of clarity on the status of the species once it is listed in the

notification; although there is a strong view that the listing does not entail

blanket exemption but is restricted only to being traded as commodities.

b) The Act seeks to cover ‘Utilisation’ rather the biological resource, so that

the benefits accrued could be ploughed back to the State or the

communities. Hence there is a need to clarify as to what constitutes

utilization of biological resources for the purpose of the Act.

c) Similarly the term commodity also needs to be defined in the Act, so that

the extent of exemption provided in the Act can be understood and

effected.

d) The issue of ABS is not frozen in time; periodic review and monitoring of

the process and the notification is essential.

e) There are viable models of sustainable use and equitable sharing (for

instance, the experiment of Dabur) that have been evolved and

established by the corporate sector. These need to be studied and the

findings be incorporated into the redefinition process of the notification

and listing.

f) The contents of the Section 40 and the Notification need to be examined

for imperfections vis a vis the issue of Patents. While biological resources

(read discoveries) cannot be patented, Value added products are entitled

to being patented.

g) Caution was raised on the possibility of the term commodity being

interpreted as ‘not being restricted only to the end product’ therefore

leading to the non recognition of the associated traditional knowledge.

That the biological resource and the associated traditional knowledge is

the sovereign property and right of the country needs to be reiterated.

22

h) There is a lack of transparency in supply chain of plant and animal

produce from point of collection to the point of end use. Ensuring

transparency will facilitate better benefit sharing.

i) If the species listed in Sect 40 are understood as being deregulated, there

is a possibility of over exploitation in the absence of regular monitoring of

the supply chain.

j) Utilisation of genetic resources is the key to define, specify and exempt

commodities that are normally traded. This needs to be nuanced in a

better manner. For instance, in the event the NTC is purchased and

utilized for the purposes of research or accessing genetic resources,

provisions of the ABS shall come into effect and the benefit needs to be

shared.

k) In this context, the Gazette Notification needs to be re-examined and

improved upon with the active participation of all the major sectors. Inputs

from major stakeholders such as ADMA need to be considered in the

process.

l) Further, the terms used in the notification need to be supported with

explanatory notes as appropriate.

m) The need to evolve a transparent formula and mechanism to define the

NTC and ABS was reiterated and the possibility of utilizing a matrix that

plots the ease of collection and regeneration against the difficulty in

improving the availability of the resource was mooted.

n) The possibility of a sustainability cess in the place of benefit sharing

needs to be examined.

Summary of discussions of Group 3 was presented by Dr.S.K.Mohanty and are summarized as follows:

The Emerging Issues in HS Classification for NTCs can be articulated to

include the following aspects:

23

• Coding needs to include multiple groups – medicinal plants, oil seeds and

leguminous fruits, etc.

• For a majority of medicinal plants, there is a single HS Sub-Heading (HS-

121190 - others), hence limiting the scope to use more tariff lines to

accommodate several species

• In case of certain species, some parts are allowed for trade, while others

are banned. (Neem seeds and leaves)

• The continued debate between APEDA and Botanical Survey of India on

Red-listed species versus cultivation of these species

Reconciliation of this complex, yet pressing issue of HS Classification for

NTCs can be addressed through the following questions:

• How are cultivated endangered species traced and treated in a trade

framework?

• What should be the provisions for endangered species collected from the

forest or wild?

• Major trade in 178 medicinal species vis-à-vis other species and

managing the information base for the medicinal plants on a regular basis

• What defines the size of trade of a species: Value or quantity

• How to settle the debate between positive versus negative list approach?

In defining the approach to the issue of trade classification, the group

recognized the complexities involved in new product classification. For instance,

the activities could begin with generating new HS code for medicinal species

(wild collected bio-resources?). At the level of HS sub-heading, single HS line

(121190) is already available for medicinal species under the category of

‘others’. The present approach should generate codes at ‘HS National Lines’

(HSNL) following which, India can take up in the matter with its pressure group

to WCO to make changes at the ‘HS Heading’ or ‘Sub-Heading’ level and create

more space.

24

As we embark on the mission to construct new HS codes, it needs to be

realized that the taxonomy of medicinal species is complex. The existing HSNL

classification at 8-digit HS does not accommodate the genus or species.

Experiences of countries such as South Korea, Germany, France, China, could

be considered.

It is also to be recognized that high trade value is required for generating

a new HSNL since departments such as the Customs is keen on the value

criterion. Just as the certificate of traceability is implemented, a certificate for

cultivation should also be made mandatory, with the Department of Forest being

designated as the enforcement agency.

The final structure of HSNL that address the above points is illustrated in the following example:

HS Components Digit Code Description

HS Sub-Heading 6 - Digit 121190

Genus 8 - Digit 12119001 Azadirachta

Species 10 - Digit 1211900101 indica

Parts 12 - Digit 121190010101 seeds

Parts 12 - Digit 121190010102 leaves

Parts 12 - Digit 121190010103 bark

Procurement 14 - Digit 12119001010101 Wild vs. Cultivated

25

PLENARY SESSION

The plenary session was devoted to brainstorming on the issues as well

as the presentations of the three groups. Key issues / points that emerged

during the session are summarized as follows:

1. The quantum of use of any species should not be the only deciding

factor for inclusion in the NTC list.

2. The issue of whether quantum of use or multiplicity of use is the

factor of consideration needs to be clarified by the NBA.

3. The need for revising the HS coding system was essential and

actions need to begin very soon on this.

4. Greater clarity needs to be provided on the issue of the kinds of

uses covered and excluded by the BD Act.

5. Whether a no-objection certificate is required when an NTC is

sought to be exempted needs to be considered

6. While normal use does not entail the issue of a no-objection

certificate, differential use of the same with a commercial

connotation does require the permission of the NBA.

7. It was suggested that the language used in the process of

identifying and defining NTCs be reconsidered especially in the use

of terms such as endangered, threatened etc.

8. Likewise, the term ‘significant trade’ needs to be articulated with

greater clarity.

9. It was suggested that State Lists of NTCs may also be developed.

10. Such lists should also include animals and animal products such as

processed meat

11. The issue needs to be examined on an incremental basis with the

BD Act functioning as the base.

26

12. Issues of trade should not deride or encroach upon spaces that

engage in conservation; the use of People’s Biodiversity Registers

in this regard needs to be enhanced.

13. The 2002 Rule on Import of Biological Material should be examined

vis a vis the NTC notification so that trans-boundary issues are

addressed.

14. The possibility of a standing paper on the afore-stated concerns

could be considered by the NBA for enabling wider participation

and inputs.

15. Issues of IPR, Disclosure Clause etc. need to be strengthened

through capacity building measures.

16. Seed industries need to be included in the discussion on NTCs

17. Of all the benefit sharing mechanisms, milestone payments have

emerged as a viable option and are being perceived as a win-win

situation.

18. The possibility of enforcing a sustainability cess as the first step

towards a benefit sharing mechanism could be tested in a few

BMCs.

19. Similarly, a few BMCs may consider forging a protocol and engage

business houses in trade of NTCs.

20. A Business model on the Best Practices Standards Mode could be

considered for the purpose.

21. Inconsistency amongst various notifications and policies need to be

reconciled.

CONCLUSION

The consultation concluded with Dr Balakrishna Pisupati, Chairman, NBA

summarizing the key points that were deliberated in the Consultation. By placing

on record his appreciation for the active participation of the invitees, Dr Pisupati

stated that the consultation resulted in better comprehension and broader

27

understanding of the issue. He assured the group that the concerns expressed

in the sessions would be accorded priority and efforts would be made to address

the same. Dr. Pisupati also agreed to the opinion that the current NTC listing did

include certain species that are perceived to be contentious and stated that

efforts were on to address the same. While stating that certain concepts are

clear with regard to NTC, many remain in the grey zone and need attention. He

suggested the need for a commissioned paper on Trade and Biodiversity could

be able to provide some directions in this regard. He stressed upon the

consultative and democratic approach that NBA seeks to engage in for the

purpose of ensuring greater clarity, objectivity and effectiveness with regard to

NTC. He requested the participants to continue providing their inputs through

email so that formal engagements could be initiated with the parent institutions

of the participants. He mentioned that based on the discussions during the

meeting and informed consultations the need for a small team of experts to

further take the discussions forward. In light of this, he welcomed the idea and

mentioned that soon a small group would meet to take forward the

recommendations.

Dr. Pisupati also requested the participants to share their experiences of

interesting Benefit Sharing experiments which when compiled, would emerge as

a great learning platform at the 11th Conference of Parties scheduled to be held

at Hyderabad in October, 2012.

The two day consultation ended with Shri. Achalender Reddy, Secretary,

NBA proposing the vote of thanks.

28

List of participants

Brainstorming session cum National Consultation on issues related to Normally Traded Commodities

Date: 13-14 April 2012 ,Venue: Hotel Residency Towers, Chennai S. No

Name & Address Phone no. /Mobile no./Fax

E-mail

1 Dr.Balakrishna Pisupati, Chairman, NBA

Tel: +91-044-2254 1805 Fax: +91-044-2254 1073

chairman@nbaindia.in

2 Shri. C. Achalender Reddy , Secretary, NBA

Tel: 91-044-2254 1071 Fax: 91-044-2254 1074

secretary@nbaindia.in

3 Dr.S.K.Mohanty, Senior fellow, RIS,Zone IV-B, Fourth Floor India Habitat Centre, Lodhi Road, New Delhi-110 003, India

Ph: 011-24682177-80 09971664577 Ext-149 011-24682173-74

skmohanty@ris.org.in

4 Shri. D.K.Ved, Former Director, FRLHT Institute of Ayurveda & Integrative Medicine, Foundation for Revitalisation of Local Health Traditions, # 74/2, JarkabandeKaval, Post Attur, Via Yelahanka, Bangalore-560106

Ph: 080 28568007 dk.ved@frlht.org

5 Mr.Kabir Sanjay Bavikatte, No.27, 2nd Main road, 5th block, Kumarapark West Bangalore- 560020

Mob: 09008965803 kabir@naturaljustice.org.za

6 Shri. Muthuraj ITS, Jt Director General of Foreign Trade,DGFT, Chennai office

Phone: (044)22628232 Fax: (044)28283403

29

7 Shri. A. Jeyabal, Deputy Director The MPEDA AH-125, 8th Main Road, IV Street, ShanthiColony,Anna Nagar ,Chennai

Telephone: 91 44 26269192 FAX: 91 44 26265152 9500449179

chempeda@dataone.in

8 Dr. D B A Narayana ADMA representative

9342582703/08026420775

dba.narayans@gmail.com

9 Ms.ShruthiRamakrishnan, Bengaluru, Representing Dr.Sudhirkrishnaswamy

09845029889 Shruthi.ramakrishnan@ckps.org.in

10 Shri. Leo F. Saldanha, Coordinator, Environment Support Group 1572, 36th Cross, 100 Feet Ring Road, Banashankari II Stage, Bangalore 560070 INDIA

Tel: 91-80-26713559 / 26713560 / 26713561 9448377403

leo@esgindia.org

11 Dr. M. Sanjappa, Former Director, Botanical Survey of India,Kolkatta

9972035160 sanjappam@ymail.com m_sanjappa@yahoo.co.in

12 Dr.D.K.Singh, Addl. Director Botanical Survey of India CGO Complex, 3rd MSO Building, Block F(5th & 6th Floor), DF Block, Sector I, Salt lake City, Kolkata – 700 064

(033) 23214050 033-23346040 / 23215631

Singh_drdk@rediffmail.com, dksingh1954@gmail.com

13 Shri. P. Bhasker, Advocate, 40, Kranthi towers, Parkathpur (near Reddy Women’s College), Hyderabad-27

Ph: 040 27560847 Mob: 9440063454

attorney@poluri.net

30

14 Shri. R.S.C. Jayaraj IFS Head of Forestry, Land Use and Climate Change division, Institute of Forest Genetics and Tree Breeding, Coimbatore- 641002, Tamil Nadu, India.

Ph: 044 2484103 Mob: 9442531990

jayaraj@icfre.org rscjayaraj@hotmail.com

15 Shri A.K.Goyal IFS, Addl. PCCF (IHRD), Govt. of Kerala. PTP Nagar, Vattiyoorkavu P.O., Thiruvananthapuram-695013

Ph: 0471 2362291 Mob:9447979010 Fax: 0472 2362291

apccf-ihrd@forest.kerala.gov.in / akg@nic.in

16 Dr.Dhumane, Sr.Joint controller of Patents, Mumbai

Ph: 022 -2412244 /09969488989

17 Dr. R. Venugopal Verma Chairman, Kerala Biodiversity Board, Pallimukku, Pettah P.O., Thiruvanathapuram – 695024.

0471 –2740240/0471 – 2740234 09446423655 Telefax:0471 2740234

varmarv@gmail.com keralabiodiversity@gmail.com

18 Dr.ManoranjanBhanja, IFS, AddlPrl Chief Conservator of Forests (Research), AranyaBhavan, Saifabad, Hyderabad 500 004. Andhra Pradesh

Mob: 9440810024 Ph: 040-23231679 Fax: 040-23350697

apccf_te_apfd@ap.gov.in mrbhanja@gmail.com

19 Dr. K. P. Srivasuki, IFS, CEO, Andhra Pradesh Medicinal & Aromatic Plant Board Deptt. Of Medical, Health & Family Welfare 6th Floor, APGLI Building, Tilak Road,Abids , Hyderabad – 500001.

Telfax:- 040 -66364094 res; 23554368 Cell No. 09440810648

srivasuki@yahoo.com

31

20 Dr. G.S. Goraya IFS Chief Conservator of Forests, Himachal Pradesh Forest Department, Talland, Shimla – 171002

09418025036 0190-7264113 (Tel Fax

gurinder9@hotmail.com

21 Shri. K.M.M. Alimalmigothi, Adviser, Ministry of Commerce and Industry, GoI, Tariff commission,Room No.706-L, Lok NayakBhavan, Khan Market, New Delhi 110003

Mob: 9968298971, 9868100942 Ph: 011 24698923 Fax: 011-24622961

manikfan@hotmail.com

22 Prof. A. David Ambrose, Professor (Legal Studies), Dept. of Legal studies, University of Madras, Chepauk, Chennai – 600 005

(Phone: 044 25399677(o), 044 22522535 (R), Mobile: 0944152826/ 9840070373

profambrose@yahoo.co.in profambrose@unom.ac.in

223 Mr.Sriram Gangadhar, Proprietor, Bio-India Biologicals (BIB) Corporation #406, Block-D, Shanti Gardens, Nacharam, Hyderabad, Andhra Pradesh 500076, India

Tel: +91-(40)-65505187 Fax: +91-(40)-40123187

info@bibcorporation.com

24 Mr. K. Satya Rao, Prroprietor, M /s Zennext Herbs International, #84, Navya Nagar, Jakkur,Bangalore – 560064

Phone : +91-80-22793530 +91 9740 068074 09740068074

satyarao184@gmail.com

25 Shri R.K. Gupta, Advisor, IPU, CSIR 14, SatsangViharMarg, Special Institutional Area, NISCAIR Building, New Delhi 110067

Phone: 011-26965613 Fax: 011-26968819 9868119082

e-mail: guptark04@yahoo.com

32

26 Shri. S. Narayanan, Regional Dy. Director (SR) Wildlife Crime Control Bureau C2A,RajajiBhavan,Besant Nagar,Chennai-600 090.

Telephone:044-24916747 Fax:044-24463477 9444072770

rddwccbsr@nic.in

27 Dr.Naresh Kumar, Professor of Research, Management National Institute of Pharmaceutical Education and Research, Sector 67, S.A.S. Nagar, Mohali- 160 062, Punjab

9779616899 naresh@niper.ac.in nareshsahajpal@gmail.com

28 Shri. Debal Ray IFS., Member Secretary, West Bengal Biodiversity Board, ParibeshBhawan, 3rd floor, 10A, Block-LA, Sector-III, Salt Lake City, Kolkata-700098,

033 – 23352731 (Board’s Office) / 23352702 9433046567 (mobile) 033-24546565(resi)

Ms.wbbb@nic.in raydebal@gmail.com

29 Smt. Pratibha Singh IFS., 1/193, vikramkhand, Gomti Nagar, Lucknow 226010

9415921847 poly.singh@gmail.com

30 Dr. T. Ramakrishna, Former Director, Zoological Survey of India, University of Agricultural Sciences, Botanical Garden Bengaluru – 560065

07760669210 ramakrishna_zsi@yahoo.com

31 Shri. K.S. Sugara IFS., Member Secretary, Karnataka Biodiversity Board, Ground floor, “Vanavikas”, 18th Cross, Malleshwaram, Bangalore-560003

080-23448783/23440535 09448189516

sugaraks@gmail.com; kbb.kar@gmail.com

33

32 Dr.S. Subramaniyan, 54, VGP, Golden Sea View, Part-II, 2nd Main Road, 5th Cross Street, Palavakkam, Chennai- 600 041

044 24510858 9444410858

ssub0123@gmail.com

33 ShriSriram, IRS Director , National Academy of Customs Excise and Narcotics, Bangalor

080-28388824, 9900353152

Sriram.iimb@gmail.com

34 Dr. James Jacob Director, Rubber Research Institute, Rubber Board PO Kottayam– 686 009 Kerala, India

Phone: 91-481-2353323 Fax: 0481-2353327 Mob: 9447719323

james@rubberboard.org.in

35 Dr.Krishnamoorthy Scientist Indian Institute of Spices Research, Marikunnu P.O., Kozhikode (Calicut), Kerala, India – 673012

Ph: 0091- 0495-2730294, 9447132294 09846729165

director@spices.res.in bkmoorthy@spices.res.in

36 Shri. ArunGoyal, Director, Academy of Business Studies, 24/4866, Sheeltara House, Ansari Road, New Delhi-110002

Mob.: 98210079983 Tel: 011-30183435

arungoyal.delhi@gmail.com arung@ica-ind.org

37 Dr.Rengaswamy, Asst. Controller of Patents, Chennai

9444324466 044-22502080

veeaar4@sify.com

38 Shri.RajendraDobriyal, ADMA representative

9654682277 rajendra.dobriyal@unilever.com

39 Smt. S. Padmavathi, Adminstrative Officer, NBA

admin@nbaindia.in

40 Shri. Chitrarasu, Advisor Law, NBA

law@nbaindia.in

41 Dr. K.P. Raghuram Technical Officer(BS) NBA

9884164904 tech@nbaindia.in

34

42 Dr.RavishankarThupalli, Project Manager (UNDP), NBA

91 9445394057 91 9441143019

rthupalli@hotmail.com

43 Dr. Thompson Jacob, Expert Consultant, NBA

044 2254 2777 ecbd@nbaindia,in

44 Dr.Thamizholi, Expert consulatant, NBA

044 2254 2777