Contract Standardisation as an Instrument for Access and Benefit-Sharing under the Convention on Biological Diversity - A Governance Analysis of Transactions with Genetic Resources

Sabine Täuber

Abstract

 

Access to genetic resources and the fair and equitable sharing of benefits arising of their utilisation (short: ABS) is a central issue in the Convention on Biological Diversity. ABS is intended as mechanism to create economic incentives for biodiversity conservation. However, its implementation is not satisfyingly achieved yet. Transaction costs for creating agreements between users and providers of genetic resources are often referred to as impediment. During the consultations for an international regime for ABS contract standardisation in the form of voluntary “menus of model contract clauses” has been suggested as counter measure. To map the potential and design options of such an instrument research is needed.

Problems occurring in the creation of ABS agreements are identified and analysed with a new institutional economics theory framework. Based thereupon, chances and limitations of the suggested instrument are assessed. Then, a governance-theory concept with transaction cost economics and strategic management is developed and tested. It defines similarity of transactions with genetic resources with regard to the choice of governance forms and creates the ground for design recommendations for a model-clause instrument.

A mix of methods including exploratory and standardised data collection and the corresponding evaluation techniques are applied. Literature review and exploratory interviews and group discussions serve to choose appropriate theories, narrow down the set of variables, and operationalise the theory for quantitative analyses. To verify the developed theories quantitative data is collected and correlations between transaction variables and transaction-cost proxies (problem analysis) respectively governance elements (governance analysis) are tested.

The problem analysis shows that transaction costs can be an impediment for the creation of ABS agreements. Factors inducing transaction costs are distinguished in three categories: (1) the nature of the transaction subject and the utilisation intention, (2) the institutional transaction environment in the provider country, and (3) user characteristics, such as access to legal capacities.

A model-clause instrument can substitute users and providers’ lack of capacities for formulating agreements in contractual form, if complementary guidelines are developed and provided that support users and providers in choosing adequate model-clauses with respect to the individuality of their case. However, several transaction cost factors cannot be tackled by a voluntary model-clause instrument, among others search of market information, and several aspects of the provider countries’ transaction environment. It can therefore be stated that the effects of a voluntary instrument like model clauses are limited. However, particularly for small companies and small-scale research it could make a substantial difference, since lack of legal capacities is most prevalent in these user groups.

In the governance analysis contract elements with relevant governance functions and design options for each element are identified empirically and functional differences are explained theoretically. Variables assumingly determining governance choice are identified and characterised for transactions with genetic resources. The operationalisation of governance forms and explanatory variables for quantitative analyses in this research field is a major contribution to the literature, which previously was limited to qualitative surveys and case studies. The governance analysis indicates that several explanatory variables are relevant as predicted. A triangulation of new institutional economics theories and strategic management is supported. Since several classical transaction-cost hypotheses are not supported, it is suggested that the theory could be further developed and the operationalisation of certain variables refined in future research.

Based on the results an instrument is suggested that provides a menu of model clauses for each functional contract element reflecting the different governance options, e.g. types of monetary compensation varying in attributes of flexibility and opportunism-control. With the help of guidelines, contracting parties would characterise their case according to the transaction variables identified as relevant and therewith receive recommendations for adapted contract clauses for each functional contract element.

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© Universitäts- und Landesbibliothek Bonn | Published: 15.07.2011