Biological Diversity Act, 2002: An Overview

The Biological Diversity Act, 2002 is India’s principal legislation for conserving biological diversity, ensuring the sustainable use of biological resources and providing fair and equitable sharing of benefits arising from their use. It regulates access to Indian biological resources and associated traditional knowledge while recognising the interests of local communities, farmers, knowledge holders and conservers. The Act creates regulatory institutions at the national, State and local levels.

Background of the Biological Diversity Act, 2002

India is one of the world’s biologically rich countries. Its forests, mountains, wetlands, coastal areas, agricultural systems and traditional communities contain a wide variety of plants, animals, microorganisms and genetic resources. These resources are important for food, medicine, agriculture, industry, scientific research and ecological stability.

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However, biological resources may be overused, commercially exploited or removed without adequately recognising the contribution of communities that have conserved them. Traditional knowledge relating to medicinal plants, seeds, agricultural practices and natural resources may also be used for research or commercial purposes without proper consent or benefit sharing.

The Biological Diversity Act, 2002 was enacted to address these concerns and to implement India’s international obligations under the Convention on Biological Diversity, 1992. The Convention recognises the sovereign rights of States over their biological resources and establishes three broad goals:

1. Conservation of biological diversity;
2. Sustainable use of the components of biological diversity; and
3. Fair and equitable sharing of benefits arising from the utilisation of genetic resources.

The Act also reflects India’s obligations under the Nagoya Protocol on access to genetic resources and fair and equitable sharing of benefits arising from their utilisation.

Although the law is called the Biological Diversity Act, 2002, it received presidential assent on 5 February 2003 as Act No. 18 of 2003. Different provisions were brought into force on different dates in 2003 and 2004. The legislation was substantially amended by the Biological Diversity (Amendment) Act, 2023, with the amendments taking effect from 1 April 2024.

Objectives of the Biological Diversity Act, 2002

The Act is based on the idea that biological resources should not be treated merely as commercially available raw materials. Their use must be connected with conservation, sustainability and justice for the communities that protect them.

Its principal objectives are:

Conservation of Biological Diversity

The Act seeks to protect ecosystems, species, habitats, genetic resources, agricultural varieties and other forms of biodiversity. Conservation includes both protection within natural habitats and preservation outside those habitats.

Sustainable Use of Biological Resources

Biological resources must be used at a rate and in a manner that does not cause their long-term decline. Sustainable use allows present needs to be met without reducing the ability of future generations to benefit from the same resources.

Fair and Equitable Benefit Sharing

When biological resources or associated traditional knowledge are used for research, commercial purposes or intellectual property, a fair share of the resulting benefits must reach the persons or communities that conserved the resources or held the knowledge.

Regulation of Access

The Act regulates access to biological resources found in or obtained from India. The level of regulation depends upon the identity of the person seeking access, the purpose of access and the proposed use of the resource.

Protection of Traditional Knowledge

The legislation recognises the role of local communities, farmers, traditional practitioners and knowledge holders. It creates mechanisms for documenting traditional knowledge and sharing benefits arising from its use.

Prevention of Biopiracy

Biopiracy refers to the unauthorised use or commercial exploitation of biological resources or traditional knowledge. The Act allows Indian authorities to oppose intellectual property claims made outside India over Indian biological resources or associated knowledge.

Important Definitions Under the Biological Diversity Act, 2002

Section 2 contains several definitions that determine the scope and application of the legislation.

Biological Diversity

Biological diversity, or biodiversity, means variability among living organisms from all sources and the ecological complexes of which they form part. It includes diversity within species, between species and among ecosystems.

This definition covers genetic diversity, species diversity and ecosystem diversity.

Biological Resources

Biological resources include plants, animals, microorganisms, parts of their genetic material and derivatives having actual or potential use or value for humanity. Human genetic material and value-added products are excluded.

The amended definition specifically includes derivatives. A derivative is a naturally occurring biochemical compound or metabolism of biological resources, even where it does not contain functional units of heredity.

Access

Access means collecting, procuring or possessing any biological resource occurring in or obtained from India, or associated traditional knowledge, for research, bio-survey or commercial utilisation.

This definition is important because the regulatory obligations under the Act begin when access takes place for one of the recognised purposes.

Commercial Utilisation

Commercial utilisation includes end uses of biological resources in products such as drugs, industrial enzymes, flavours, fragrances, cosmetics, extracts, colours and genes used for improving crops or livestock through genetic intervention.

It does not ordinarily include conventional breeding or traditional practices used in agriculture, horticulture, poultry, dairy farming, animal husbandry or beekeeping.

Sustainable Use

Sustainable use means using the components of biological diversity in a manner and at a rate that does not result in their long-term decline. The resource must retain its potential to satisfy the needs of present and future generations.

Benefit Claimers

Benefit claimers include conservers of biological resources and their by-products, as well as creators or holders of associated traditional knowledge, information, innovations and practices.

The definition helps identify the persons or communities who may receive monetary or non-monetary benefits from the use of biological resources.

Codified Traditional Knowledge

Codified traditional knowledge means knowledge derived from authoritative books listed in the First Schedule to the Drugs and Cosmetics Act, 1940. The amended Act treats this category differently in certain regulatory provisions, particularly for Indian users.

Regulation of Access to Biological Resources

The Act establishes different access requirements for foreign-linked persons and Indian persons.

Prior Approval of the National Biodiversity Authority

Section 3 requires certain persons to obtain prior approval from the National Biodiversity Authority before accessing biological resources occurring in India or associated knowledge for research, commercial utilisation, bio-survey or bio-utilisation.

The requirement applies to:

• Persons who are not citizens of India;
• Indian citizens who are non-residents under the Income-tax Act, 1961;
• Bodies corporate, associations or organisations not incorporated or registered in India; and
• Bodies incorporated or registered in India that are controlled by a foreigner within the meaning of the Companies Act, 2013.

The prior approval system enables the National Biodiversity Authority to examine the nature of the proposed access, impose conditions, determine benefit sharing and reject activities contrary to conservation or sustainable use.

Transfer of Research Results

Section 4 regulates the transfer or sharing of research results relating to Indian biological resources or associated traditional knowledge with persons covered under Section 3.

Prior written approval of the National Biodiversity Authority is generally required before such research results are transferred, whether for monetary consideration or otherwise.

However, the publication of research papers or dissemination of knowledge at seminars or workshops may be governed by Central Government guidelines. Where research results are used for further research, registration with the National Biodiversity Authority may be required. Prior approval becomes necessary where the results are used for commercial utilisation or obtaining intellectual property rights.

Collaborative Research Projects

Section 5 creates a limited exception for certain collaborative research projects involving Indian institutions and institutions in other countries.

The exception applies only where the project:

• Conforms to policy guidelines issued by the Central Government; and
• Has been approved by the Central Government.

The exemption does not provide unrestricted freedom to exchange biological resources or traditional knowledge. The project must remain within the approved policy and legal framework.

Intellectual Property Rights Based on Biological Resources

Section 6 connects biodiversity regulation with intellectual property law.

A foreign-linked person covered under Section 3 must obtain prior approval from the National Biodiversity Authority before the grant of an intellectual property right based on research or information involving a biological resource accessed from India or associated traditional knowledge.

An Indian person covered under Section 7 is required to register with the National Biodiversity Authority before the grant of such intellectual property right. Prior approval is required at the stage of commercialisation.

The National Biodiversity Authority may impose a benefit-sharing fee, royalty or other conditions while granting approval. The objective is to ensure that private intellectual property rights do not separate commercial gains from obligations owed to resource conservers and traditional knowledge holders.

Applications under laws relating to the protection of plant varieties are treated separately.

Prior Intimation to the State Biodiversity Board

Section 7 applies mainly to Indian persons and entities that are not covered by the foreign-linked categories under Section 3.

Such persons must give prior intimation to the concerned State Biodiversity Board before accessing biological resources and associated knowledge for commercial utilisation. The State Board may regulate, restrict or reject the activity where it is harmful to biodiversity conservation, sustainable use or fair benefit sharing.

The requirement does not apply in the same manner to certain categories, including:

• Local people and communities;
• Growers and cultivators of biodiversity;
• Vaids and hakims;
• Registered AYUSH practitioners practising indigenous medicine for livelihood;
• Codified traditional knowledge; and
• Cultivated medicinal plants and their products, subject to the statutory conditions.

For cultivated medicinal plants, the exemption depends upon obtaining a certificate of origin from the Biodiversity Management Committee. This requirement helps distinguish cultivated resources from resources collected from the wild.

National Biodiversity Authority

The National Biodiversity Authority is established under Section 8. It is a statutory body corporate with its head office in Chennai.

Its composition includes a Chairperson, ex officio representatives from relevant Central Government ministries, representatives of State Biodiversity Boards, non-official experts and a Member-Secretary.

The Authority performs both regulatory and advisory functions.

Its major functions include:

• Regulating activities under Sections 3, 4 and 6;
• Granting or rejecting applications for access and related activities;
• Framing regulations for access and fair benefit sharing with Central Government approval;
• Advising the Central Government on conservation, sustainable use and benefit sharing;
• Advising State Governments on biodiversity heritage sites;
• Advising State Biodiversity Boards on implementation of the Act; and
• Opposing intellectual property rights claimed outside India over Indian biological resources or associated traditional knowledge.

The National Biodiversity Authority may impose royalties, charges and benefit-sharing obligations while granting approvals. It must record reasons when an application is rejected and provide the affected person an opportunity of being heard.

State Biodiversity Boards

Every State Government may establish a State Biodiversity Board under Section 22. In Union Territories, the National Biodiversity Authority generally performs the functions of a State Board unless those powers are delegated.

The State Biodiversity Board advises the State Government on biodiversity conservation, sustainable use and benefit sharing. It also regulates activities requiring prior intimation under Section 7.

Where an activity is considered harmful to conservation, sustainable use or fair benefit sharing, the Board may restrict or reject it after providing an opportunity of hearing. The Board also determines fair and equitable benefit sharing while granting approvals in accordance with the applicable regulations.

Fair and Equitable Benefit Sharing

Benefit sharing is the central justice-based feature of the Act. It recognises that biological resources and traditional knowledge often result from the conservation efforts and practices of communities over generations.

Under Section 21, the National Biodiversity Authority must ensure that approvals secure fair and equitable sharing of benefits arising from accessed biological resources, derivatives, innovations, associated practices and knowledge.

Benefit sharing may take several forms, including:

• Joint ownership of intellectual property rights;
• Transfer of technology;
• Location of production or research units in areas that benefit local communities;
• Association of Indian scientists, local people and benefit claimers with research and development;
• Creation of venture capital funds;
• Monetary compensation;
• Royalties; and
• Other non-monetary benefits.

Where identifiable individuals, groups or organisations supplied the biological resource or associated knowledge, benefit-sharing amounts may be paid directly to them. In other cases, the amount may be deposited in the National Biodiversity Fund.

The benefit-sharing arrangement is expected to be based on mutually agreed terms between the applicant and the Biodiversity Management Committee represented through the National Biodiversity Authority.

Duties of the Central and State Governments

Section 36 requires the Central Government to develop national strategies, plans and programmes for biodiversity conservation, promotion and sustainable use.

These measures may include:

• Identification and monitoring of biodiversity-rich areas;
• Promotion of in situ and ex situ conservation;
• Protection of cultivars, folk varieties and landraces;
• Incentives for research and training;
• Public education and awareness;
• Environmental impact assessment of projects likely to affect biodiversity;
• Regulation of risks from living modified organisms; and
• Protection and registration of traditional knowledge.

The Central Government must also integrate biodiversity concerns into relevant sectoral and cross-sectoral policies.

Section 36B places a corresponding duty on State Governments to develop State-level strategies and integrate conservation and sustainable use into their policies, plans and programmes.

Biodiversity Heritage Sites and Threatened Species

Under Section 37, State Governments may notify areas of biodiversity importance as biodiversity heritage sites on the recommendation of the State Biodiversity Board.

Before making such a recommendation, the State Board must consult the concerned local body and Biodiversity Management Committee. Schemes must also be framed for compensating or rehabilitating persons economically affected by the notification.

Section 38 empowers the Central Government, in consultation with the State Government, to notify threatened species. It may prohibit or regulate their collection and take measures for rehabilitation and preservation.

Biodiversity Management Committees

Section 41 requires local bodies at the Gram Panchayat level in rural areas and appropriate municipal levels in urban areas to constitute Biodiversity Management Committees.

These committees form the local foundation of the Act. Their functions include:

• Promoting conservation and sustainable use;
• Documenting biological diversity;
• Preserving habitats;
• Conserving landraces, folk varieties, cultivars and farmers’ varieties;
• Recording domesticated animal breeds and aquatic life;
• Documenting microorganisms; and
• Chronicling associated traditional knowledge.

The National Biodiversity Authority and State Biodiversity Boards must consult these committees when decisions concern biological resources or traditional knowledge within their territorial jurisdiction.

Biodiversity Management Committees may also levy collection fees from persons accessing biological resources for commercial purposes.

Biodiversity Funds

The Act establishes funds at the national, State and local levels.

National Biodiversity Fund

The National Biodiversity Fund receives grants, loans, charges, benefit-sharing amounts and other sums. It may be used for:

• Channelling benefits to benefit claimers;
• Conservation and sustainable use of biological resources;
• Socio-economic development of areas from which resources or knowledge were accessed; and
• Other purposes of the Act.

State Biodiversity Fund

The State Biodiversity Fund supports the management of biodiversity heritage sites, benefit claimers, conservation activities, rehabilitation, socio-economic development and Biodiversity Management Committees.

Local Biodiversity Fund

The Local Biodiversity Fund may be used for biodiversity conservation, restoration, community development and administrative expenses of Biodiversity Management Committees.

These funds connect access regulation with actual conservation and local development.

Appeals, Adjudication and Penalties

The Act provides mechanisms for dispute settlement, appeals, inspection and enforcement.

Disputes between biodiversity authorities may be resolved through the process prescribed under Section 50. Appeals may be available against determinations, orders or directions of the National Biodiversity Authority and State Biodiversity Boards. The amended framework also provides for appeals to the National Green Tribunal in specified matters.

The 2023 amendment significantly changed the penalty system. Several contraventions that earlier attracted criminal punishment are now dealt with through monetary penalties and administrative adjudication. Adjudicating officers may inquire into violations and impose penalties after following the prescribed procedure.

The Act also authorises entry, inspection and survey for enforcement purposes. Where a company commits a contravention, persons responsible for its business may be proceeded against, subject to the statutory defences.

The amended approach seeks to simplify compliance and reduce unnecessary criminalisation. At the same time, effective enforcement remains necessary because commercial exploitation of biological resources may cause permanent ecological and social harm.

Significance of the 2023 Amendment

The Biological Diversity (Amendment) Act, 2023 attempted to simplify the regulatory system while continuing the main objectives of conservation, sustainable use and benefit sharing.

Important changes include:

• Revised definitions of access, biological resources, derivatives and benefit claimers;
• Recognition of the Nagoya Protocol in the statutory framework;
• Different intellectual property requirements for foreign-linked and Indian persons;
• Exemptions for certain traditional practitioners, cultivated medicinal plants and codified traditional knowledge;
• Greater clarity regarding foreign control of Indian entities;
• Changes in the composition and functions of biodiversity authorities;
• Expanded roles for State Governments and State Biodiversity Boards;
• Stronger recognition of folk varieties, landraces and traditional knowledge;
• Public disclosure of approvals and rejections;
• Administrative monetary penalties in place of several criminal sanctions; and
• Introduction of an adjudication and inspection mechanism.

The amendments aim to encourage research, innovation, traditional medicine and commercial activity while reducing procedural uncertainty. Their success depends upon whether regulatory simplification continues to protect local communities and conserve biodiversity.

Conclusion

The Biological Diversity Act, 2002 provides India with a broad legal framework for protecting biological resources and associated traditional knowledge. It regulates access, links commercial use with benefit sharing and creates institutions from the national to the local level. The 2023 amendment has simplified several procedures and changed the enforcement structure. However, the long-term effectiveness of the Act depends upon strong institutions, informed communities, transparent decision-making and a careful balance between conservation, innovation and equitable development.