A barrel sea sponge on a reef in Indonesia
On November 2, 2024, at the 16th Conference of the Parties to the Convention on Biological Diversity (COP16) held in Colombia, participants agreed to set up a fund comprising mainly the pharmaceutical and cosmetic industries to distribute the revenues they obtain from the use of plant and animal genetic data. Under the agreement, companies will be required to contribute 1 percent of their profits or 0.1 percent of their revenue to the fund. Half of the fund's resources will be distributed to the countries where the species are found and the other half to the indigenous peoples concerned, under the supervision of the United Nations.
The Fund is called the “Kali Fund”. Given that most of the world's biologically diverse areas are located in developing countries, but many of the companies that profit from biodiversity are located in developed countries, the establishment of the Kali Fund sends an important signal that companies in developed countries should share their benefits from biological resources with indigenous communities, which could help to redress long-standing inequities in the protection of biodiversity. However, representatives of communities in some developing countries say the move will not eradicate biopiracy, and representatives of pharmaceutical manufacturers say the agreement fails to strike a balance between the benefits that could be generated and the potential research and development costs for companies.
Currently, the agreement is non-binding and its implementation depends on domestic legislation. The process may vary in different countries. For pharmaceutical and cosmetic companies with international operations, they should continuously pay attention to the adjustment of laws and regulations in the field of biodiversity protection in the countries where their overseas companies or projects are located, and pay the relevant fees according to the requirements, in order to reduce the compliance risk and build up a good company reputation, so as to better win the trust and support of the local government and people.
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