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The Biodiversity Law in Brazil Holds a Surprising Truth: The Obligation to Pay for the Exploration of a Natural Resource Lies with the Company, Not the Landowner. Discover How to Ensure Your Compensation.
The belief that a farmer must share profits with the government from a medicine sourced from their land is a misconception. The Biodiversity Law is clear: the legal responsibility to share economic benefits lies with the one who develops and sells the final product. The landowner is not a direct beneficiary under the law, but has other means to be compensated.
Who Pays the Bill for the Exploration of Biodiversity in Brazil?
Brazilian legislation makes a crucial distinction: one thing is to own the physical resource (the plant or animal), another is to have sovereignty over its genetic information. Legally, genetic heritage is considered a “common good of the people,” belonging to the nation. Therefore, the obligation to share profits lies with the company that exploits this information, not the landowner.
The Company’s Responsibility in Sharing Benefits
The obligation to share benefits does not arise in the research phase, which only requires an online registration to encourage innovation. The trigger for payment is the “economic exploitation of a finished product,” that is, when an item derived from biodiversity reaches the market and has genetic heritage as its primary element of value.
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This sharing can be monetary, where the company pays 1% of the annual net revenue of the product to the National Benefit Sharing Fund (FNRB), an amount that can be reduced through Sectoral Agreements. Alternatively, it can be non-monetary, through conservation projects or technology transfer.
What is the Role of the Landowner? The Power of the Contract
The Biodiversity Law does not grant the private landowner an automatic right to a share of the profits, as the legal beneficiaries are the State or traditional communities. Compensation comes from private rights: the power of the landowner is to control physical access to their property.
The most effective instrument is the negotiation of a private contract prior to collection. This can define access payments, targets, or royalties on future sales, an obligation entirely separate from the one the company has with the State.
Where Do the Benefits Generated by Biodiversity Go?
The resources have clear destinations. If access was only to genetic heritage, the benefit is allocated to the Union, via the National Benefit Sharing Fund (FNRB), to be used for conservation. However, if it involved “Associated Traditional Knowledge” (CTA), the indigenous or traditional community that holds this knowledge becomes the primary beneficiary, negotiating directly with the company.
Biodiversity as a National Asset
The law reinforces that the genetic information of biodiversity is a national heritage, not private. The logic of the system is, therefore, dual: the company negotiates with the landowner for physical access to the land, and, separately, shares the profits from commercial exploitation with the community. In short, the obligation to pay the State lies with the company, but the power to be compensated for access is in the hands of the landowner, through a good contract.
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