In 1999 the NBI entered into an agreement with the Ball Horticultural Company of Chicago, USA. In April 2001 this agreement received attention in the SA press and the following document seeks to explain the Agreement and address concerns raised.

What is the NBI-Ball Agreement?

The agreement between NBI and Ball facilitates access to South Africa's plants, in a manner that ensures fair and equitable sharing of benefits and transfer of technology. Ball are provided access to selected plants in the NBI's collections on condition that they pay a royalty on products that they develop from them, and that they only use the plants for ornamental purposes. The NBI-Ball Agreement is the first of its kind, setting a new precedent for ethical bioprospecting in the field of ornamental horticulture. Profits generated by the Agreement will be placed in an ear-marked account administered by the NBI Board, to be used for capacity building in botany and horticulture, and as a source of funding for plant conservation and community-based environmental upliftment projects.

Who is Ball Horticultural Company?

Ball Horticultural is a nearly century old family-owned company with headquarters outside of Chicago, USA. Ball specialises in bedding plants.

What is bioprospecting?

Bioprospecting can be defined as the search for economically valuable genetic and biochemical resources from living organisms. Although the term is most commonly associated with the hunt for novel molecules with medical and industrial potential, it can also be extended to the search for plants with ornamental horticulture / floriculture potential. The bioprospecting issue is often surrounded by controversy. On the one hand bioprospecting is often seen as 'biopiracy', the plundering of other countries' genetic resources, without fair and equitable compensation. On the other hand, Bioprospecting is a potential source of income for developing countries, who are not in a position to competitively develop the commercial potential of their own genetic resources.

Will this agreement impact the use of South African material for pharmaceutical uses?

The agreement specifically prohibits Ball Horticultural from developing South African products for any use other than ornamental horticulture. It also prohibits Ball from allowing any other company to use the plants for any purpose at all.

What is the Convention on Biological Diversity?

The United Nations Convention on Biological Diversity (CBD) is the first multilateral agreement to address the issue of Bioprospecting directly. It recognizes a country's sovereignty over its genetic resources, the right to restrict access to these resources, and determine mutually acceptable terms under which access is granted. It places the responsibility for taking 'appropriate measures' aimed at securing fair and equitable bioprospecting activities on governments (particularly those supplying genetic resources) and the parties involved in negotiating the agreements. It also recognizes the role of 'stakeholders' - NGOs, academic and research institutes, indigenous peoples, local communities, business and donors - and encourages their participation.

Is a company based in the United States bound to adhere to the Convention on Biological Diversity?

The agreement between Ball Horticultural and South Africa is a legally binding contract. This agreement is subject to South African and U.S. laws, regardless of the status of the Convention on Biological Diversity. Payments to South Africa are required based on the contract, not by the Convention.

What legislation is there in South Africa with regard access to genetic resources?

Although South Africa ratified the CBD in 1995, it still lacks legislation on bioprospecting, and access to South Africa's genetic resources is virtually uncontrolled. Seed of indigenous plants is freely available via mail-order catalogues, and plants and vegetative propagules can be exported with relative ease. Appropriate legislation is being drafted, but indications are that it will only come into force late in 2002. Until then, South Africa will continue to be a victim of biopiracy, with limited benefits continuing to accrue to just a few individuals. Considering South Africa's bountiful genetic diversity, it is surprising that so little has been done to take advantage of the situation. Even more surprising though, is that the National Botanical Institute's (NBI's) efforts to address the situation as an institution have been met with vehement opposition and harsh criticism.

What right does NBI have to enter into such agreements, and what is the NBI doing?

The NBI has a parliamentary mandate to "investigate and utilize, and promote the utilization of, the economic potential of indigenous plants". When South Africa ratified the CBD, the NBI had already begun revising its policy regarding access to plants housed in its living collections. Access to these plants by foreign individuals was restricted, but still made possible via various legal agreements and for bona fide research. At the same time the NBI investigated local opportunities to cooperatively develop and exploit the ornamental potential of these plants. After several years it became clear that local capacity to competitively develop products for commercial exploitation in international markets is limited. Problems associated with the production and marketing of products in the international ornamental horticulture industry also present a major challenge. To address these problems and challenges, the NBI developed the NBI-Ball Agreement.

NBI Board Statement on Ball Agreement

How does this agreement impact South African floriculture and other industries?

This agreement will be positive for all of South Africa. Ball is one of the premier horticultural companies in the world and has done what few other companies have been willing to do; invest capital as well as time and effort, to continue to develop the South African marketplace. Ball Horticulture is the first and only ornamental horticulture company to invest in South Africa, by partnering in Ball Straathof. This is concrete evidence of the long-term investment Ball is making in South Africa.


Has the NBI "sold the rights to South Africa's floral heritage?"

No. No-one can sell the (exclusive) commercial rights to a species or group of plants, or plants that are in their wild form. As such, the NBI-Ball Agreement will not alter any rights that people have to the plants in question. The NBI has not sold Ball any of the plants that it has supplied in terms of the Agreement, it has granted Ball the right to market and distribute these plants and commercial varieties that Ball develop from them. The NBI will restrict access to some of the plants in its collections, but this does not mean that others are prevented from obtaining access to these plants from other sources, or from marketing these plants or products that they develop from them.

Has the NBI "sold off the patent rights to huge sections of South Africa's floral kingdom"

No. Intellectual Property Rights like Patents and Plant Breeders Rights are only applicable to plants that are distinctly different from those found in nature, or those already in the public domain. For the most part, the plants that make up the NBI's living collections are representative samples of what is to be found in nature, or 'wild' plants. Intellectual Property Rights do not apply to such plants, and only apply to a few plants in the NBI's collections, which have been developed to be distinctly different from the original plants collected in nature. Ball will not sell "huge sections of South Africa's flora kingdom" either, Ball will concentrate on a relatively small number of plants that are suitable for commercial introduction and the development of commercial cultivars.

Was the Agreement "signed behind closed doors"?

No. Prior to the signing of the Agreement, the NBI consulted with a wide range of stakeholders, both directly, and via stakeholder meetings in Cape Town and Pretoria. These stakeholders included NGO's, academics, institutions, government departments, individuals and provincial conservation bodies. The NBI also released a press release to South African newspapers several months prior to the signing of the Agreement, thereby informing the public of its intention to enter into the Agreement with Ball. Articles like "Reclaiming the green gold", which appeared in the Sunday Times Lifestyle July 4 1999, are testimony to the NBI's transparency with regard the Agreement. See also the detailed review of the Ball Agreement published by Henne and Fakir in: "NBI-Ball Agreement: A new phase in bioprospecting?" Biotechnology and Development Monitor, No. 39, p. 18-21. (1999).

Can the NBI-Ball be compared to the "Dolphin deal"?

No. The Dolphin deal in Mpumalanga involved the selling off of public game reserves to private foreign investors. This was done in secret, and involved the sale of property that was not in the public interest. As previously explained, the NBI-Ball Agreement was not done in secret and nothing was sold to Ball. The aim of the NBI-Ball Agreement is to ensure benefit sharing and transfer of technology to South Africa, which is clearly in the public interest. If comparisons are to be drawn with the Dolphin deal, it should be noted that South African seed companies continue to be permitted to collect and sell wild plants for personal gain.

Will Ball get "90% of the royalty profits"?

No. The royalty profits will almost entirely come back to South Africa, if the plants supplied by NBI to Ball are suitable for commercialisation. If Ball develop the product to be more suitable, then depending on the methods used, NBI and Ball share the royalty in a way that provides increasing returns to Ball. This is only fair, since product research and development can be very expensive, and Ball will be carrying this risk and providing their expertise.

Will Ball be given "ownership" of the plants?

No. Ball will not own the plants supplied to them from the NBI's collections. Ball will have shared ownership on plants collected using the funds provided by them in terms of the agreement, and will own the new plants that they develop. Other than the plants developed by Ball, this ownership will not prevent others from accessing the same or similar plants. Some of the plants that Ball develop and market may be protected with intellectual property rights, but these will not prevent people from accessing them, just from propagating and selling them.

Is it true that the "NBI-Ball Agreement "effectively kills off the potential of local companies to develop the floriculture export industry"?

No, far from it. The deal does not prevent local companies from developing the local floriculture export industry. The NBI-Ball Agreement is a minor threat when compared to the ongoing loss of South Africa's resources, due to the fact that there are almost no restrictions on access to them by foreigners. Ball will host five interns over the course of the agreement, and will present seminars to the local industry on topics to do with international horticulture. If anything, the Agreement will provide an incentive for access control and a mechanism to boost local capacity and develop the local floriculture export industry.

7 May 2001


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