Biological Diversity Act, 2002: salient features and regulation of access

1. Background and objectives

India signed the Convention on Biological Diversity at Rio in 1992 and ratified it in 1994. The Convention recognises the sovereign rights of States over their biological resources and requires access to be on prior informed consent and mutually agreed terms, with fair and equitable sharing of benefits. The Act, which received assent on 5 February 2003, gives effect to it. Its Preamble states three objectives:

• conservation of biological diversity;
• sustainable use of its components; and
• fair and equitable sharing of benefits arising from the use of biological resources and associated knowledge.

The Act came into force in stages: the National Biodiversity Authority provisions from 1 October 2003 and the remaining provisions from 1 July 2004.

2. Salient features

• Three-tier structure: the National Biodiversity Authority (NBA) at Chennai, State Biodiversity Boards (SBBs) in each State, and Biodiversity Management Committees (BMCs) at the level of local bodies.
• Regulation of access by foreigners through prior approval of the NBA (section 3), and by Indians through prior intimation to the SBB (section 7).
• Control over transfer of research results to foreigners (sections 4 and 20).
• Control over IP: approval or registration with the NBA before grant of any IP right, anywhere, based on Indian biological resources or associated knowledge (section 6).
• Benefit sharing determined by the NBA (section 21), paid to benefit claimers or into Biodiversity Funds at the national, State and local levels (sections 27, 32 and 43).
• Duties of Governments: national and State strategies and plans (sections 36 and 36B), assessment of environmental impact, regulation of living modified organisms, protection of local knowledge (section 36(5)).
• Biodiversity heritage sites notified by the State (section 37), threatened species notified by the Centre (section 38), and designated repositories (section 39).
• Exemptions for normally traded commodities and cultivated medicinal plants notified under section 40, and for those holding rights under the plant varieties law (sections 6(3) and 59A).
• Penalties and adjudication (sections 55 and 55A) and appeals to the National Green Tribunal (sections 52A and 55A(3)).
• The Act is in addition to, not in derogation of, the laws on forests and wildlife (section 59).

3. Who needs what: sections 3 to 7

Section 3: prior approval of the NBA. The following persons may not obtain any biological resource occurring in India, or knowledge associated with it, for research, commercial utilisation or bio-survey and bio-utilisation without the NBA’s previous approval:

• a person who is not a citizen of India;
• a citizen who is a non-resident within the meaning of the Income-tax law;
• a body corporate, association or organisation not incorporated or registered in India; or one incorporated in India but controlled by a foreigner within the meaning of the Companies Act, 2013 (as substituted in 2023; earlier the test was any non-Indian participation in share capital or management).

Section 4: results of research. No one may share or transfer the results of research on Indian biological resources or associated knowledge to a section 3 person without the NBA’s prior written approval, except codified traditional knowledge, which is only for Indians. Publication of research papers and seminars under Central guidelines are excluded; use of results for further research requires registration; and use for commercial utilisation or IP requires prior approval.

Section 5: collaborative research. Collaborative projects between Indian institutions, including government-sponsored ones, and foreign institutions are outside section 3 if they conform to Central policy guidelines and are approved by the Central Government.

Section 6: intellectual property.

• A section 3 person applying for any IP right, in or outside India, for an invention based on research or information on a biological resource accessed from India (including material in foreign repositories) or associated knowledge must obtain the NBA’s prior approval before grant (before 2024 it was before applying).
• An Indian (a section 7 person) must register with the NBA before grant, and obtain its prior approval at the time of commercialisation.
• The NBA may impose a benefit sharing fee, royalty or conditions.
• Applications under the plant varieties law are excluded, but the authority granting such a right must endorse a copy to the NBA.

Section 7: prior intimation to the SBB. Any other person, that is, an Indian individual or entity, must give prior intimation to the State Biodiversity Board before accessing a biological resource and associated knowledge for commercial utilisation. The SBB can restrict or prohibit the activity under section 24(2). The 2023 amendment exempts codified traditional knowledge, cultivated medicinal plants and their products, local people and communities of the area including growers and cultivators, and vaids, hakims and registered AYUSH practitioners who practise indigenous medicine for their livelihood. For cultivated medicinal plants the exemption depends on a certificate of origin from the BMC.

4. Approval procedure and benefit sharing: sections 19 to 21

• Application (section 19) to the NBA in the prescribed form with fee.
• Decision. After inquiry and, if needed, consulting an expert committee, the NBA may grant approval on terms, including royalty, or reject it for recorded reasons after hearing the applicant. While granting approval it determines benefit sharing (section 19(3A)). It may prohibit or restrict an activity detrimental to conservation or benefit sharing. Every approval or rejection must be placed in the public domain (section 19(4)).
• Benefit sharing (section 21) must be fair and equitable, on mutually agreed terms between the applicant and the BMC (represented by the NBA). Forms: joint ownership of IP with the NBA or with identified benefit claimers; transfer of technology; locating production or research units in the area; associating Indian scientists and local people with research; venture capital funds; and monetary and non-monetary compensation. Money goes to the National Biodiversity Fund, or directly to the benefit claimer where the resource or knowledge came from identified persons.

5. Penalties after 2023

Section 55 now provides that a person who contravenes, attempts to contravene or abets contravention of sections 3, 4, 6 or 7 is liable to a penalty of not less than one lakh rupees, which may extend to fifty lakh rupees, commensurate with the damage where the damage is greater, and an additional penalty of up to one crore rupees for continuing contravention. The penalty is imposed by an adjudicating officer (not below Joint Secretary to the Government of India or Secretary to a State Government) under section 55A after an inquiry and hearing. An appeal lies to the National Green Tribunal within sixty days. Section 58, which made offences cognizable and non-bailable, was omitted. Contravention of directions or orders under section 56 is still punishable with fine.

6. Problem

A company incorporated in India, but controlled by a US corporation, collects the bark of a tree from a forest in Karnataka on the basis of a remedy known to local healers, isolates a compound, and applies for a patent in the United States. Advise.

Issue. Whether the company needed the NBA’s approval, and what follows if it did not.

Law. Sections 3(2)(c)(ii), 6(1), 19, 21, 55 and 55A of the Biological Diversity Act, 2002, as amended in 2023.

Application. The company is controlled by a foreigner, so it is a section 3 person. It needed prior approval of the NBA to obtain the bark and the associated knowledge for research or commercial use. The compound is a derivative and so within “biological resources”. The patent is for an invention based on a biological resource accessed from India and on associated traditional knowledge, so section 6(1) requires NBA approval before grant, even though the patent is sought abroad. On approval the NBA would fix benefit sharing with the local BMC and the healers as benefit claimers. Under section 18(4) the NBA may also oppose the US patent.

Conclusion. The company has contravened sections 3 and 6. It is liable to a penalty of one to fifty lakh rupees, or more if the damage is greater, imposed by the adjudicating officer, with appeal to the NGT. It may regularise by applying to the NBA, which will impose benefit sharing.

How this is examined

June 2025 asked “Explain the salient features of Bio-Diversity Act, 2001” (10 marks): use sections 1 and 2 above, then the access rules in brief. “Regulation of access to biological diversity” is answered from sections 3 and 4. Use the 2023 amendments throughout; noting them in the opening paragraph shows the examiner the answer states the current law.