Cali Fund launched, company contributions welcome!

Background

On the 25^th of February, 2025, the Cali Fund was launched for the reception and allocation of contributions from commercial users of Digital Sequence Information (DSI) on genetic resources. The Cali Fund is part of the outcomes of the yearlong negotiations over DSI that, also on insistence of DSI users, have resulted in a multilateral mechanism (MLM) for benefit-sharing from the use of DSI on genetic resources (see also the previous news item ‘Digital Sequence Information (DSI): outcomes of the CBD meeting in October/November 2024’). Because DSI from dozens of countries is used simultaneously in research and development processes, the regulation of DSI under bilateral agreements, like the Nagoya Protocol, would have been very complex. Therefore, the Conference of the Parties to the Convention on Biological Diversity (CBD) decided to choose a multilateral solution. The member states have designed the multilateral system on the basis of shared principles, including the maintenance of open access to DSI, accordance with Open Science and FAIR data standards, efficiency (administrative costs in relation to benefits), and exemptions for public databases, academic users and public research institutions. However, these latter groups are still requested to share non-monetary benefits from DSI, such as sharing research results, providing capacity-building and co-authorship for researchers from the country of origin of the DSI or genetic resource. For now, national regulation on the basis of the Nagoya Protocol will continue to apply for access to genetic resources.

Key role companies

It is now up to the private sector, from Parties and non-Parties to the CBD, to commit to the MLM and to start contributing to the Cali Fund. Of particular relevance are the pharmaceutical, nutraceutical, cosmetic, industrial biotechnology, and plant and animal breeding sectors, and producers of lab equipment and service providers related to the utilization of DSI (see ‘Enclosure A’ of the COP16 decision on DSI). Commercial users of DSI that exceed two out of three thresholds (total assets: 20 million United States dollars; sales: 50 million dollars; and profit: 5 million dollars) should contribute to the Cali Fund 0.1 per cent of their revenue or 1 per cent of their profits, as an indicative rate. Companies that contribute to the Cali Fund receive a certificate that indemnifies the recipient from further payments for DSI that falls under the MLM. The money of the Cali Fund is dedicated to realizing the goals of the CBD in developing countries, especially the conservation and sustainable use of biodiversity. It is agreed that at least half of the resources has to support Indigenous peoples and local communities in all regions, who have an important role in biodiversity conservation. The remaining resources will focus, among other activities, on capacity-building to generate and use DSI on genetic resources, so that countries are better equipped to achieve the goals of the ‘Kunming-Montreal Global Biodiversity Framework’ that was adopted in 2022.

During the launch of the Cali Fund, secretary of the CBD Astrid Schomaker spoke of ‘‘a historic consensus’’ and she called upon companies ‘‘to do the right thing’’. The CBD-Secretariat is already engaging with interested companies. The chair of COP16, former Colombian minister Susana Muhamad, emphasized that the Cali Fund is not a form of philanthropy, but rather a solution to ensure the fair and equitable sharing of benefits from DSI use in order to protect nature as the source of DSI and as public good in a manner that is aligned with the reality of DSI users.

So far, there are no legally binding instruments to obligate financial contributions, although that is not ruled out in the mid-term. An idea explored by some developing countries, for instance, is to exempt contributing companies from payment obligations that follow from national access and benefit-sharing regulation for DSI. By contributing to the Cali Fund, companies can furthermore gain reputational benefits, with Fund contributions possibly becoming sectors’ golden standard.

Follow-up process

To govern the Cali Fund, the CBD-Secretariat has started a collaboration with the Multi-Partner Trust Fund Office, which governs various shared funds of United Nations bodies. Also, a steering committee with various stakeholders has been appointed by Parties to the CBD and the CBD-Secretariat to oversee and further develop the Cali Fund.

The launch of the Cali Fund has been received positively by all involved, although some questions remain about the feasibility of implementing the MLM. Law and advisory firm Covington & Burling, for example, remarks that companies are in need of a legal definition of DSI, certainty over the payment thresholds, clarity over what is understood as ‘‘direct’’ and ‘‘indirect’’ use of DSI, and clarity over the global recognition of the certificate that contributing companies receive.

The details and progress of the Cali Fund will become clearer over the coming months. If you have questions or would like to share your thoughts and opinions, you are welcome to get in contact with Ms Kim van Seeters (ABS National Competent Authority; k.vanseeters@minlnv.nl), and/or Mr Martin Brink and Mr Bob Kreiken (National ABS Focal Point; martin.brink@wur.nl, bob.kreiken@wur.nl).