Assessing the Impact of the Biosafety Protocol Upon American Growers

Thomas P. Redick, Drew L. Kershen, and William K. Crispin

After four years of intense negotiations, the Conference of the Parties ("COP") to the Convention on Biological Diversity ("CBD") at an Extraordinary Session in Montreal approved a Biosafety Protocol ("Protocol") on January 29, 2000. Article 28 of the CBD allows the adoption of protocols to the CBD as separate international agreements. The Protocol provides minimum international regulatory standards for approval of the release of genetically modified organisms ("GMOs") – called living modified organisms ("LMOs") in the Protocol – into the environment. If ratified by the 176 nation-members of the CBD, this Protocol creates a "biotech-specific" set of rules for GMOs. While the Protocol exempts commodities shipments from "advance informed agreement" requirements imposed on seed imports, it leaves nations free to extend their requirement of advance informed agreement to commodities if they see a scientific risk that requires assessment.

This article provides a brief history of the negotiations and assesses the possible impact of the CBD on U.S. agriculture. Given the potential for advance informed agreement to extend to commodities, creating problems with commingling of varieties not approved overseas, the Protocol could have an adverse impact on U.S. agricultural exports.

The United States and the biotech industry believe the World Trade Organization ("WTO") will continue to have the power to invalidate trade restrictions on GMOs that discriminate or lack scientific support. Other nations, however, interpret the Protocol as mandating that the WTO allows nations to use a precautionary approach to GMO imports. This could set up a confrontation at the WTO over standards like Directive 90/220 in the European Union ("EU"), which has held up approval of new GMOs, including those in commodities shipments that are unlikely to be released into the environment. The U.S. has lost corn trade to the EU over the past two years due to commingling of unapproved-in-EU varieties with corn bound for export.

The battle to narrow the Protocol to exclude commodities from pre-market approval regulations began nearly five years ago. In 1995 at a meeting of the Biotechnology Industry Organization ("BIO"), Val Giddings, then with the U.S. Department of Agriculture as an observer for the United States to the negotiations, warned that the Protocol was a "train headed for a Volkswagen filled with $50 billion in U.S. agricultural assets." Mr. Giddings is currently the vice-president of the Food and Agriculture Division of BIO. He concurs with the U.S. delegation in declaring the negotiations a victory and expects the WTO to enforce the scientific evidence requirements of GATT Article XX to require approval of new GMOs when mainstream scientists find them safe. For the next two years, the details of documentation and approvals will be worked out. The devil may be waiting in the details, and continued vigilance will be required if U.S. commodities exports are to proceed without disruption.

The good news for U.S. commercial agriculture is that the Protocol contains the first declaration in a binding international environmental law of the benefits biotechnology has to offer. It also contains language, however, that some nations interpret as allowing the precautionary principle to be applied to environmental assessments that determine biotechnology’s risks and benefits. See, David B. Sandalow, The Biosafey Protocol: What It Does and Does Not Do. If national governments that are hostile to biotechnology or the U.S. adopt the precautionary principle to justify imposing lengthy ecological risk assessments for commodities shipments pursuant to their national approval standards (as the EU is doing), the battle over biotechnology will continue in many national regulatory processes. The beheaded Protocol could return, like the mythological hydra, with many more heads (in the form of national approval standards that pose a threat to U.S. exports of GMOs) – as many heads as there are nations leery of biotechnology. U.S. Department of Agriculture Secretary Dan Glickman frankly stated this assessment of the Protocol’s impact: "Twenty or 30 years from now, biotechnology will have a very significant role in agricultural production. From here to there, this is not going to be the smoothest road in the world." Reuters Newswire, Montreal Pact May Calm Ag Biotech Fears - Glickman (Feb. 2, 2000).

The new world order for agriculture has created some difficulty on the home front in the U.S., where growers are facing complex decisions as the planting season approaches. U.S. farmers have planted GMO varieties of corn, rapeseed (canola), and soybeans in increasing amounts. The number and variety of GMO crops planted in the U.S. is growing dramatically, and will continue to diversify into an array of genetically-enhanced varieties of common crops. Some of the traits that are being engineered into crops include:

• agronomic traits (e.g., tolerance to proprietary herbicides, disease, and pest resistance);
• improvements in qualities (e.g., protein enhancement, vegetable oil possessing a more favorable fatty acid composition, delayed ripening);
• nutriceuticals (i.e., crops engineered to deliver useful drugs or nutrients – e.g., the new soy isoflavones, http://www.nal.usda.gov/fnic/foodcomp/Data/isoflav/isoflav.html; and
• adaptation to adverse environmental conditions (e.g., drought, salty soil, or cold weather).

The leading genetically modified crop in current use is the Roundup Ready Soybean® ("RRS"), an herbicide-resistant soybean produced by Monsanto Company, that conserves soil by facilitating "no till" farming for soil otherwise under plow. These soybeans may also reduce the net usage of herbicide in that field due to formation of an early canopy that blocks the sun young weeds need to compete. RRSs "are compatible with conservation tillage methods that help prevent soil erosion. In fact, 56 percent of U.S. growers used conservation tillage methods with Roundup Ready soybeans in 1997."

Opponents in non-governmental organizations, such as Greenpeace, the Third World Network, and the Natural Law Party (collectively "NGOs"), have identified real and theoretical risks posed by GMOs. These risks include:

• detrimental effects on non-target species from plant pesticides and pollen drift (e.g., monarch butterflies impacted by pollen from B.t. corn);
• exchanges of genetic material that may improve the fitness of pests, weeds, or pathogenic species making superpests, superweeds, etc.;
• genetic dilution of related species through interbreeding or outcrossing (e.g., a wild relative of corn, such as teosinte, would be genetically different as a result of interbreeding with a genetically modified corn);
• risks to human or animal health from allergenicity or toxicity from genetically modified crops;
• increased use of herbicides in plants (reasoning that plants engineered to tolerate pesticides will receive higher doses from farmers); and
• social and economic impacts on the agricultural sector and society as a whole.

On a more ethical and metaphysical level, many opponents of biotechnology object to what they consider to be an act of hubris on the part of bioengineers who "decide what traits will survive," and may in the process "disrupt the biosphere and the process of natural selection." See Jeremy Rifkin, The Biotech Century: Harnessing the Gene and Remaking the World (Tarcher/Putnam1998).

The short-term risks GMOs present are those they pose to neighboring non-GMO crops. With the marketplace increasingly demanding a steady supply of non-GMO crops for the EU and other regions adopting a "go slow" or "no go" approach to GMOs, there will be a continuing need to maintain segregated supplies of corn, soybeans, and other grains potentially containing GMOs. The following scenarios present a risk of commingling that must be avoided if significant economic loss is to be averted.

First, GMOs must be segregated that are not approved in major overseas markets (particularly the EU which has made clear its intent to exclude unapproved imports and use genetic testing for violations). Unapproved varieties currently have no accepted level of commingling – a zero "tolerance" in trade terminology. The chain of commerce has very limited experience with maintaining zero-tolerance levels for segregating crops grown and handled in close proximity to one another.

The stakes are high with the marketing of unapproved varieties. The EU’s trade barrier to unapproved GMOs resulted in the loss of an estimated $200 million worth of purchases of whole corn. Moreover, the EU continues to threaten to exclude soybeans – the largest U.S. commodities export at $2.5 billion to $3.0 billion annually – if the few unapproved varieties nearing commercialization are marketed commercially without proven segregation methodology. Given the magnitude of this potential risk, the marketing of an unapproved GMO may well constitute a public or private nuisance subject to abatement under the common law of various states. Companies considering such a risky strategy in the present fearful climate toward GMOs should look carefully at the potential for nuisance, negligence, or unfair trade practices claims arising from the marketing of unapproved varieties.

Second, and more widespread in its impact, is the threat any GMO poses to certified non-GMO crops. Generally a tolerance above zero exists for these certified non-GMO crops in most jurisdictions – e.g.,1% in the EU by law and 0.1% to 5% or higher by contract for other markets. Consequently, segregation may be feasible for certified non-GMO commodities. Dupont is leading the way for this marketplace through an identity preserved chain of commerce for certain output-trait commodities. See <http://oscar.itsoptimum.com> for "identity preserved" grain contracts with growers for corn, soybeans, and sunflowers. (Guests to the site can enter zip code 50312, soybeans, Crestland STS program and view a sample non-GMO soybean contract requiring segregation of GMOs at 0.1%. Note carefully the waivers of warranty, limitation of liability to the price premium paid, and indemnity running from the grower to the seed company.)

Third, the increasing acreage planted in organic crops (driven in part by anti-GMO sentiment) may result in organic farmers growing crops near a GMO, approved or unapproved. The potential for pollen drift or adventitious transfer (insects, animals, plant volunteers, or Murphy’s law depositing GMOs in the organic field) may result in failure to certify the crop organic, if testing is conducted by the buyers.

With these new risks posed by commingling, farmers will need legal advice to make sound decisions about the advantages and disadvantages of contracting for GMOs, non-GMOs, or organic. Many standard seed industry form contracts require growers to indemnify the seed company for claims arising from the contract, presumably including nuisance claims. Given the uncertainty about preventing unintended commingling of unapproved varieties, farmers should carefully review their planting options. For unapproved varieties with zero tolerance in nations where approval is pending, the risks of liability may outweigh the benefits of price premiums, increased yields, or reduced chemical usage.

In this brave new marketplace, farmers will need to monitor legal issues relating to overseas approvals – an initiative dubbed "Know Before You Grow" by the National Corn Growers. They will also need to carefully review the contracts they sign, and know what their neighbors are growing. Farmers used to keeping their own counsel will find it necessary to improve lines of communication with seed companies (noting all contract terms, including disclosures regarding approval status, so they can recall them as needed) and their neighbors. While local farm organizations, university extensions, and trade associations will have to rise to the occasion to keep farmers informed, the biotechnology industry would be well-served by improving its lines of communications.

The communication challenges posed by the new world of grain marketing will work themselves out over time. While some litigation may be inevitable, there is much that attorneys can do to assist the entire chain of commerce in documenting responsibility for risk and preventing it. Lawyers would do well to advise their grower-clients of the application of site-specific record keeping to assist in the verification of the grain source. Lawyers should clearly identify, characterize, and prevent risks like the nuisance threat of unapproved varieties. These possible risks become crystal clear with communication and analysis. If these risks are placed firmly upon those best suited to prevent them, the entire chain of commerce will be protected from divisive litigation over barred exports.