Innovative approaches to business, investment and trade policies are required to successfully address the challenges associated in fighting poverty, unemployment, and the overexploitation of natural resources leading to biodiversity loss and the rapid deterioration of ecosystem services. Promoting the commercialization of biodiversity-based products, or “Biotrade” is being increasingly recognized as a means of providing incentives for the sustainable management of biodiversity while simultaneously creating employment opportunities and livelihoods.
Moreover, the demand of many biodiversity-based products such as natural cosmetics, medicines, food and food ingredients is ever increasing and shows the potential for further growth.
The Capacity Building for Biotrade (CBBT) Initiative addresses national and international challenges in promoting Biotrade.
Trade in biodiversity-based businesses or Biotrade refers to those activities of collection, production, transformation, and commercialization of goods and services derived from native biodiversity under the criteria of environmental, social and economic sustainability. For this project, this definition will be used with the understanding that it only includes “native” biodiversity resources, which means only those species which develop, occur naturally, or have existed in a country for many years. The meaning of “native” species thus differs from the meaning of “endemic” species, which are unique to one area/ country.
The demand for many biodiversity-based products such as natural cosmetics, medicines, food and food ingredients has grown significantly and shows considerable potential for further growth. However, in many instances, the supply of biodiversity-based products has failed to keep up with the rising demand. At the same time, some developing countries are still unaware of the opportunities offered by Biotrade, and in places where they are aware they face challenges in seizing these opportunities effectively. At national level, further measures are needed to raise awareness of Biotrade opportunities in the private as well as in the public sector.
At the international level, before gaining access to export markets, many biodiversity-based products need to comply with complex technical regulations and standards that address issues such as product safety and consumer-health protection.
Developing countries need support to build institutional and technical capacity for meeting these complex technical requirements and for effectively using voluntary sustainability standards as a marketing tool, including Geographical Indicators (GIs), Intellectual Property Rights (IPRs) and Access and Benefit Sharing (ABS) mechanisms. They also need support for more effective participation in international trade negotiations affecting Biotrade, such as those on Sanitary and Phytosanitary measures (SPS) and Technical Barriers to Trade (TBT).
A Two-pronged Approach:
The CBBT initiative takes a two-pronged approach to addressing national and international challenges in promoting Biotrade:
International Level: The United Nations Environment Programme (UNEP) and the United Nations Conference on Trade and Development (UNEP-UNCTAD) Capacity Building Task Force (CBTF) take the lead in implementing international levelactivities. CBTF provides support to countries on issues related to trade and environment in pursuit of national sustainable development and poverty reduction goals. CBTF has a history of providing capacity building support to a number of countries.
National Level: GIZ (former GTZ) takes the lead in implementing national level activities in three pilot countries. This is done in close cooperation with national multi-stakeholder task teams on environment and trade in the following countries:
- In Nepal, with the “Inclusive Development of the Economy Programme (INCLUDE)”, where the task team works closely with the Ministry of Commerce and Supplies and other relevant government, private sector and NGOs.
- In Namibia, with the “Biodiversity and Sustainable Land Management Project”
- In Peru, with the “Programa Desarrollo Rural Sostenible” / “Sustainable Rural Development Programme”
The Roles of Other International Players:
- International Trade Centre (ITC) : Offers assistance to businesses in developing countries with the aim of helping these countries achieve sustainable development through exports.
- Convention on International Trade in Endangered Species (CITES) : Aims to ensure that international trade in specimens of wild animals and plants is legal, sustainable and traceable.
- Convention on Biological Diversity (CBD) : CBD’s objectives are to conserve biological diversity, to use components of biological diversity in a sustainable manner and to share the benefits arising out of the utilization of genetic resources fairly and equitably.
Principles of Biotrade:
CBTF and GIZ agree to leave it to countries to decide what, under their economic, ecological and socio political conditions should be included in Biotrade; however, UNCTAD has formulated the following seven underlying principles:
- Conservation of biodiversity;
- Sustainable use of biodiversity;
- Fair and equitable sharing of benefits derived from the use of biodiversity;
- Socio-economic sustainability;
- Compliance with national and international regulations;
- Respect for the rights of actors involved in Biotrade activities;
- Clarity about land tenure, use, and access to natural resources and knowledge.
Objectives of the Project:
- To strengthen Biotrade-related capacities in the three pilot countries: A set of national and international, interrelated and mutually supportive activities are carried out, involving national institutions, NGOs, local businesses, the private sector, and governments.
- To promote South-South cooperation between participating countries by providing a hub for effective exchange of experiences and lessons learned. This enables the replication of successful models of seizing opportunities and overcoming barriers in Biotrade.
- A manual on Biotrade which includes a reference guide on regulations and negotiations on selected issues such as SPS, TBT, ABS, IPRs, and GIs;
- Three country studies on “Biotrade: A Catalyst for Transitioning to a Green Economy”;
- Capacity building material that identifies barriers to Biotrade and how to overcome them;
- A study to assess markets for Biotrade products and options for adding value through the use of existing standards and labels, trademarks and GIs.
The Nepal CBBT Project has the following objectives which are to be achieved through a set of interrelated and mutually supportive activities on the national and international levels:
- Operationalize a coordination framework on national Biotrade policy and negotiations;
- Strengthening of the institutional capacity to enhance negotiation and implementation for SPS/TBT, GI and ABS as well as to include biodiversity aspects into national trade related policies and strategies;
- Assessment of market potential and trade barriers for biodiversity-based products;
- Develop and implement marketing strategies for the selected bioproducts (Essential Oils –Wintergreen, Anthopogon and Juniper).
This project is funded by the Federal German Ministry of Economic Cooperation and Development through its Monterrey Fund and implemented by CBTF in partnership with GIZ.
The selected essential oils are wild crafted items and are new in the market. Hence, the producers face difficulty in entering the market. Given the capacity of Nepal’s producers and exporters, weak communication, documentation and finance is a problem. Additionally, environment and labor problems in Nepal are a challenge.
Further, the certification requirements for these products are a significant challenge for the producers. Nepal does not yet have a proper infrastructure that suffices these requirements, so producers have to go through complicated certification processes in India or other countries and have to bear significant cost in the procedure.
Working Modality - Project Organization Chart Nepal:
Process and Project Activities:
In Nepal, where Biotrade is still a relatively new topic, the project is implemented with close guidance from the Project Steering Committee and technical advice from the Project Advisory Group.
In the initial phase, the Project Advisory Group (PAG) was set up as the central forum which accompanies the project and meets regularly to review the project status and activities and to decide on next steps. Following the definition of the guiding principles for CBBT Nepal, the PAG short listed potential Biotrade products. Studies on the market potential and trade barriers for biodiversity-based products were then conducted. Based on these studies and recommendations from the PAG, Juniper, Anthopogen and Wintergreen essential oils were prioritized and taken to the next step of the project.
In cooperation with the Trade and Export Promotion Centre of Nepal (TEPC), four interested exporters of the above mentioned essential oils – accompanied by TEPC personnel and GIZ Nepal - participated in BioFach 2011, the world organic trade fair in Nurnberg, Germany.
Before attending BioFach 2011, four modules of training on quality and trade fair participation were conducted. Further, to facilitate effective participation in Biofach, a joint marketing strategy (DOWNLOAD), a group label (“Essential oils of Nepal”), a joint brochure (DOWNLOAD) and a video documentary reflecting these three prioritized essential oils and the efforts of the four companies were developed.
A detailed results chain can be DOWNLOADED here.
Milestones Achieved (until March 2011):
- Milestone: Support to national bio trade policy established - This process is embedded in the implementation the "Enhanced Integrated Framework (EIF)" in Nepal
- Milestone: Negotiations framework operational
- Milestone: Market potential for biodiversity-based products assessed
DOWNLOAD: MAPs Market Survey of Nepal, ECCOS 2010
DOWNLOAD: Sector Study of Essential Oils in Nepal
- Milestone: Trade barriers for biodiversity-based products assessed
DOWNLOAD: Sector Study of Essential Oils in Nepal
- Milestone: Marketing strategy for selected biodiversity-based product (Essential oils - Juniper, Anthopogon, Wintergreen) developed. The selection of these biodiversity products for this project was based on the market side research and supply side research made by international and national consultants respectively and also from the recommendation from the PAG
DOWNLOAD: Group Marketing Strategy for Essential Oils
- Milestone: Execution of group marketing strategy for the selected products
DOWNLOAD: Group Brochure of Essential Oils, Joint Label, Video Documentary, Participation at BioFach 2011 in Nurnberg, Germany
- Milestone: Support to international level CBTF activities
- The Swiss government agency for import promotion (SIPPO) has shown interest in supporting Nepal’s continued participation in Biofach
- Nepal’s Trade and Export Promotion Center (TEPC) has agreed to take the lead regarding future activities in this area
- GIZ INCLUDE Nepal is bidding for the biodiversity component to give continuity to this effort towards Biotrade
- Other synergies with GIZ Nepal activities include:
“GIZ INCLUDE” is working on Medicinal and Aromatic Plants (MAPs) value chain
“GIZ WTO/EIF – Support Programme” is working to develop a sector strategy for Medicinal and Aromatic Plants (MAPs) and essential oils