Concepción, Chile, November 30 December 2, 2009

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

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Report of UNIDO’s Expert Group Meeting on Knowledge Based Bio Economy as Basis for Economic Development and Industrial Sustainability Concepción, Chile, November 30 – December 2, 2009

The views expressed in this document are those of the author(s) and do not necessarily reflect the views of UNIDO. This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of UNIDO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialised” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not constitute an endorsement by UNIDO.

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Table of Contents 1. Introduction ................................................................................................................................4
 2. Biodiversity in the context of the knowledge based bioeconomy – KBBE...............................4
 3. Some on-going activities and limitations to be confronted........................................................9
 3.1. Bioprospecting microorganisms .........................................................................................9
 3.1.1 Bioprospecting as a tool for conservation, human and economic development ..........9
 3.1.2 Diversity and biotechnological applications of soil microbiota from Bahia’s semiarid region trough metagenonomic methods .......................................................................11
 3.1.3. The microbes from the sulfuretum of the Humboldt Current Marine Ecosystem: a potential source of biotechnological applications ...............................................................13
 3.2.Transgenic Plants for Industrial Applications ..................................................................14
 3.2.1. Biodiversity, Bioproducts and Biomass for a sustainable regional agro industrial development. .......................................................................................................................15
 3.3 New technologies to prospect biodiversity........................................................................16
 3.3.1 Bioprospecting for novel industrial products: is there a role for bioinformatics?......17
 3.3.2 Novel tools for target and lead identification in drug discovery................................18
 3.3.3 New technologies to ensure seed quality of biodiverse oilseeds................................19
 3.4 Business development (opportunities and constraints)......................................................20
 3.4.1.Biodiversity utilisation agreements: lessons learned and future perspectives in LAC .............................................................................................................................................20
 3.4.2. Integrating science, technology and innovation into social development processes in the region.............................................................................................................................22
 3.4.3. Building a World Class Technology Transfer Programme – The case of the “Consorcio de Tecnología e Investigación para la Salud (CTI-Salud)” .............................25
 3.4.4. A strategy for developing biobusiness in the Amazonian Rain Forest of Peru.........28
 4. Conclusions from the Expert Group Meeting ..........................................................................30
 5. Evolving into the future: A matchmaking collaborative platform for promoting KBBE applications on agriculture, bioenergy and health. ......................................................................32
 Bibliography.................................................................................................................................33
 Annex 1: Programme of the Meeting...........................................................................................34
 Annex 2: List of Participants .......................................................................................................36
 Annex 3: Wild and cultivated plant biodiversity from Latin America with potential industrial applications ..................................................................................................................................37


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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Executive Summary The Expert Group Meeting on the Knowledge Based Bioeconomy – KBBE – as basis for Economic Development and Industrial Sustainability, held in Concepción, Chile, November 30 to December 2, 2009, had as its main objectives (i) to set in motion a consultative process to identify bottlenecks for transfer of new technologies in bioprospecting to meet major developmental and biodiversity conservation targets in the Latin America and the Caribbean region, and (ii) to establish a work plan leading to the creation of a facilitating mechanism aimed at providing support to all relevant KBBE stakeholders as well as specific implementation initiatives. This report summarises the results of the meeting, starting with an introduction to the KBBE concept and the role that biodiversity valorisation can play in its development. Then, it presents a number of on-going experiences – either already underway or at the advanced project level – discussed during the meeting, with a focus on identifying the opportunities, as well as the constrains that would need to be confronted for their development. The final two section presents the conclusions arrived regarding the state of the arts in the field and the necessary actions for further development and a specific proposal for the implementation of a cooperation mechanism focused on promoting the implementation of KBBE related initiatives in the countries of the Latin American region. From the cases analysed and the discussion held there is a clear conclusion that the problem for the development of KBBE related initiatives in the region is not the lack of innovative ideas and visions but rather external and internal factors limiting further action to go from resource provision to value-addition and commercialisation of genetic resources. Lack of awareness, inadequate public policies and R&D funding, weak scientific capacities - human resources, access to relevant data bases, infrastructure - IPR management and business development support, among other aspects were identified as the key limiting factors in all cases reported. These aspects need to be addressed if progress is to be made in better exploiting the potential of biotechnology applications for biodiversity valorisation. The EGM also concluded that the development of an explicit institutional mechanism to assist the countries or regions in these areas could be an initiative with a very high impact and rate of return to investment. Based on the above, it was recommended to establish a support mechanism with the goal to a) facilitate a better understanding of the opportunities, resources and processes involved in the development and application of biotechnology to biodiversity valorisation, and b) provide a permanent source of information and advise concerning policy and business development options and existing instruments to deal with the many limitations hindering such applications. To achieve these objectives, it was also recommended that specific activities be considered in three broad areas: (i) policy design and decision making, (ii) capacity building, and (iii) facilitating business development, with cross cutting activities focused at raising public awareness and marketing of the KBBE, identification of bottlenecks and mapping the available knowledge and capacities – public and private – in the different areas and products, providing an appraisal of policy frameworks for private investment, among others.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Report of UNIDO’s Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability Concepción, Chile, November 30 – December 2, 2009 1. Introduction The Expert Group Meeting on the Knowledge Based Bio Economy –KBBE– as basis for Economic Development and Industrial Sustainability, held in Concepción, Chile, November 30 to December 2, 2009, had as its main objectives (i) to set in motion a consultative process to identify bottlenecks for transfer of new technologies in bioprospecting to meet major developmental and biodiversity conservation targets in the Latin America and the Caribbean region, and (ii) establish a work plan leading to the creation of a facilitating mechanism aimed at providing support to relevant policy making processes as well as specific implementation initiatives. To this purpose, the United Nations Industrial Development Organization, UNIDO, together with the Universidad de Concepción in Chile brought together a group of experts from ten different countries of Latin America and Europe to discuss the existing opportunities, ongoing specific experiences of biodiversity valorisation through the application of biotechnological approaches and identify constrains for further development and identify the actions that could be undertaken to help create the appropriate conditions to solve them. The programme and the list of participants of the meeting are included as annexes 1 and 2. This report is organised in five sections including this introduction. Section 2, is an introduction to the KBBE concept and the role that biodiversity valorisation can play in its development. Section 3, summarises the presentation of the on-going experiences – either already underway or at the advanced project level – discussed during the meeting, with a focus on identifying the opportunities, as well as the constrains that would need to be confronted for their development. Finally, sections 4 and 5, present the conclusionsand recommendations of the experts, including the mechanisms and actions that should be set in place. 2. Biodiversity in the context of the knowledge based bioeconomy – KBBE The new bioeconomy, a concept synthesised by the OECD as “the aggregate set of economic operations in a society that uses the latent value incumbent in biological products and processes to capture new growth and welfare benefits for citizens and nations” (OECD, 2006), is increasingly seen as a workable alternative to move today’s economies in the direction of more sustainable natural resource use and economic growth. In its essence it’s the coming together of biology, chemistry, materials sciences, genomics and information technology to better exploit natural resources both in agriculture and industry. As such, it implies to capture solar energy and transform it in energy and products, and eventually whole new value chains, with a reduced environmental impact, without sacrificing job creation, helping reduce poverty and continuing to improve the quality of life for a growing world population. In this context the Knowledge Based Bioeconomy - KBBE is about new ways of linking natural resources and processes to goods and services through increased knowledge intensity as a common denominator of the new value chains. The transition to economies and societies based on this concept is already underway and there is clear evidence of its potential and impacts in a wide arch of application in different sectors, going from food and health to transportation, construction and, even, the recreational industry. Besides plant biotechnology – which is rapidly becoming the standard rather than the exception in the international agricultural commodities markets – some of the most prominent applications until now have been in the health and pharmaceutical industry and in bioenergy production, where modern biotechnology is already widely used both in diagnostics as well as therapeutically applications. Current biotechnological applications generate a market that ranges in the tens of billions of US dollars a year as the basis of both the production of the new energy feedstocks, as well as in the design of new, more efficient, biofuel production processes. The

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

production of biomaterials including biopolymers and bioplastics for the construction and engineering sectors is also rapidly developing, although it still represents a very small fraction of the market, but the combination of what has become to be known as “green” (plant) and “white” (industrial) biotechnology is bound to change that, in the not so distant future, as the combination of conventional plant breeding with genomics and genetic engineering tools allows the production of “high tech” plants designed to better perform under stress conditions, or with properties well suited for industrial processing and the biosynthetic production of specialty chemicals and more complex molecules. This together with emerging bio-energy alternatives aimed at the engineering of enzymes and micro-organisms to convert cellulose crops and waste into more advanced biofuels such as isobutanol and butanol – among other initiatives – are already clear examples of how KBBE processes work at integrating green and white biotechnology, agricultural production, conversion technologies, materials sciences and other areas, to create new and more sustainable value chains.1 Even though these developments are, in most cases, still at an early stage, and market wise they represent only small fractions of the different sectors, their feasibility is proven in most cases. The issues to be confronted are not whether the new concepts are feasible or not, but whether they represent a workable instrument to advance the situation in the developing world and can help improve poverty conditions and their insertion in the world economy. Most of existing experiences, both from science as well as from implementation of the KBBE concepts, refer to a relatively strong science basis and relatively complex applications (both in terms of process and scale). The questions and challenge is whether the new concepts are of relevance for the simpler and small-scale situations and what are the needed policies to promote and guide capacity development and investments, as well as ensure the safety of the new technologies and the equitable distribution of the benefits of the ensuing economic growth. Food insecurity and hunger in most developing countries are concentrated in rural areas, and are a consequence of poverty and lack of opportunities, making any sustained progress in food security more related to new income generation than to food production itself (IICA (a), 2007). The bioeconomy approach may offer significant new opportunities to start addressing these limitations. KBBE opportunities can be linked to nearly any kind of biological resources and as such bio-based industries are well suited for local production, and as engines for rural development and income generation. In developed countries, most of the available land is already used, but in many of the poorer regions of the world, the proportion of unused land is still significant, and that could potentially be used for the cultivation of energy crops, as well as other crops generating higher value, which might be even more sustainable economically (IICA (b), 2007). Bioeconomy alternatives may bring to many rural areas a way out of the vicious circle of poverty in which many rural communities find themselves when their land base is not fit for high productivity food crop production or even improve value production through cascade utilisation of biomass in areas that have been used for food production only. The issue is probably to look beyond the present generation of biotechnology based alternatives – GMOs, biofuels, etc. – into strategies aiming more aggressively at local biodiversity resources, and not evaluating KBBE contributions in terms of energy productions, but rather in terms of its effects on the overall productivity of the systems, through the creation of new products, the improvement of production and processing alternatives, market access, etc. In this context biodiversity resources – understood as “the variety of life on Earth at all its levels, from genes to ecosystems, and the ecological and evolutionary processes that sustain it”2 –are called to play a key strategic role as the basis for new economic opportunities, and Latin America is particularly well endowed in this sense. The region concentrates a number of major 1 2

See: www.checkbiotech.org/green_ News_Biofuels.aspx?infold=17894 http://cnx.org/content/m12151/latest/ 5

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

biodiversity hotspots (table 1) and seven of the nineteen countries considered to be “mega diverse” in terms of the extent of the biodiversity resources within their political-administrative frontiers - no other region of the world includes as many countries within this category. Table 1: Biodiversity richness in Latin American countries.3 Country NBI Country NBI México* 0,928 Bolivia* 0,724 Colombia* 0,877 Guyana 0,685 Brazil* 0,877 Dominican Rep. 0,661 Ecuador* 0,873 Honduras 0,653 Venezuela* 0,850 Nicaragua 0,643 Peru* 0,843 El Salvador 0,616 Costa Rica 0,820 Argentina 0,615 Panama 0,793 Paraguay 0,613 Guatemala 0,744 Chile 0,570 * Belonging to the « Mega diverse » group Source: The authors on the basis of http://www.cbd.int/gbo1/annex.shtml

The countries of the region in the mega diverse group are Brazil, Colombia, México, Peru, Ecuador, Venezuela and Bolivia, but other three – Costa Rica, Panama, and Guatemala – have National Biodiversity Indexes (NBI) equal or higher to some of the countries in that grouping, and even Uruguay, which has the lowest NBI in the region – 0,487 – ranks over most of the European countries. 4 The region is also a centre of origin and diversity of a number of species that sustain current world food supply (e.g., potato, sweet potato, maize, tomato, beans, cassava, peanuts, pineapple, cacao, chili pepper, and papaya). Furthermore, the greatest number of flowering plants with unusual sources of compounds for food and agriculture, as well as for the biopharmaceutical, nutraceutical, cosmetic, and environmental industries, exists in this region (see Annex3). All these resources represent a substantial source of comparative advantage in terms of the opportunities for valorisation and sustainable exploitation using new biotechnological tools. However, there are increasing concerns about this wealth been threatened by diverse social and economical processes, including changes in land use, primarily for increased agricultural production, the excessive use of biomass for the production of energy, low-value construction material etc., and the situation is further compounded by climate change. At the very root of the problem is the fact that in very few cases biodiversity resources are clearly linked to economic wellbeing, that is ‘win-win’ scenarios which enhance both people’s livelihoods and biodiversity. Rather the opposite, conservation is often seen as a barrier to the creation of value adding opportunities, as biodiversity is a public good with no immediate economic value. As long as its

3

NBI = National Biodiversity Index. This index is based on estimates of country richness and endemism in four terrestrial vertebrate classes and vascular plants; vertebrates and plants are ranked equally; index values range between (maximum: Indonesia) and 0.000 (minimum: Greenland). The NBI includes some adjustment allowing for country size. 4 Seventeen countries rich in biological diversity and associated traditional knowledge have formed a group known as the Like Minded Megadiverse Countries (LMMC). These countries are Bolivia, Brazil, China, Colombia, Costa Rica, Democratic Republic of Congo, Ecuador, India, Indonesia, Kenya, Madagascar, Malaysia, Mexico, Peru, Philippines, South Africa and Venezuela. The LMMC Group has been created to Act as a mechanism of cooperation to promote their interests regarding biological diversity and in particular the protection of traditional knowledge, access to genetic resources and the fair and equitable sharing of benefits derived from their use. The LMMC Group holds more than 70% of all biodiversity, and 45% of the world’s population and is now well recognized as an important negotiating block in the UN and other international fora. (http://lmmc.nic.in) 6

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

full economic potential is not explored and captured by means of suitable economic and technological instruments, the erosion of biodiversity will continue.5 The recent phenomenal scientific and technological advancements embedded in biotechnology, are making possible the construction of new ‘win-win’ scenarios as there are a wide range of technologies to choose from that allow us to tap into the economic value of hitherto underutilised or unexplored biological resources. The joint US-EC Task Force on Biotechnology Research published a report on “Biotechnology and Genetic Resources” which examined the links between biodiversity valuation & biotechnology and recognised unprecedented opportunities for the sustainable exploration and utilisation of biodiversity offered by technology6. Since the publication of this report, the role of technology has not been adequately considered despite the fact that the technologies mentioned have reached a state of maturity and newer, more efficient and cost-effective technologies have emerged such as high-throughput screening and genetic improvement technologies. Although the focus until now has been on biomass conversion technologies, there are numerous other technology applications amenable to the screening of biological resources, the identification of novel compounds of industrial interest (e.g. specialty chemicals, industrial enzymes, biopesticides, essential oils, etc.) and the incorporation of components of biological material into high-value commercial products in food and food-supplements. Unlike biomass conversion, which usually requires considerable capital inputs and poses significant logistical challenges, these applications are particularly suitable for the involvement of local communities, small and medium-size enterprises (SMEs) and technology groups. Bioprospecting involves several distinct phases each of which results in the addition of extra value and requires different technologies at different degrees of sophistication: Explore the genetic and biochemical diversity captured in natural resources; • Discover bio-active compounds of potential industrial interest; • Utilise these resources to produce sustainable high added value ecofriendly bioproducts and to generate employment and Biotechnology offers a set of tools for biodiversity value income for rural addition. communities. The utilisation of novel technologies to develop high-added value products offers unprecedented opportunities not only for advanced technology countries which could benefit from an additional push towards a •

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Pavan Sukhdev (2008): The Economics of Ecosystems and Biodiversity (TEEB). An interim report. ISBN-13 978-92-79-08960-2. http://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm 6 US-EC Task Force on Biotechnology Research (1992): Biotechnology and Genetic Resources. Report on a workshop convened on 21 and 22 October 1992 in Airlie, Virginia, USA. The report recommends, inter alia, • “A joint study/evaluation of the economic and scientific contributions of genetic resources to existing and prospective biotechnology development; [..] • Cooperation in the further development and application of molecular tools for assessing and characterising genetic diversity”. 7

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

knowledge-based bio-economy, but also for developing countries which could leverage their genetic resource endowment for sustainable economic development, technology transfer and for catalysing additional research and investment. Bioprospecting through partnerships with the owners of technological know-how can generate new sources of income which would reduce the pressure to use land for conventional agricultural production and which could be invested in conservation programmes.

Creating a virtuous cycle: Contribution of Different phases of biodiversity value addition biotechnology to sustainable bioprospecting and through biotechnology. conservation.

However, the application of new technology for value-addition of biodiversity depends on capacities to: • Evaluate current and pipeline technologies with a potential to add economic value to genetic resources; • Optimise human, industrial and financial resources to meet specific developmental needs and increase competitiveness through technology alliances and knowledge networks; • Overcome institutional and market constraints that hinder the adoption of biotransformation technologies by industry; • Institute effective regulation that is consistent with international agreements (e.g. WTOTBT, Cartagena Protocol of the Convention on Biological Diversity (CBD); • Put in place instruments allowing access to intellectual property assets and institute equitable access and benefit sharing arrangements between the owners of the genetic resources and the owners of the technology in compliance with CBD; • Link public research with private sector industry. Although these capacities are in short supply in most developing countries, it is realistic to expect that major gains can be achieved through facilitator mechanisms creating awareness for opportunities offered by technology, identifying best suitable technology options and fostering access to technological know-how through partnerships, the engagement of SMEs in such partnerships and, whenever necessary, strengthening institutional capacities in research and technology management. So far public policy has been a major driver in the development of the KBBE – for instance the case of the biofuel industry – and in most cases scale efficiency considerations have prevailed over community and/or rural development objectives. In order to move forward, smarter policy formulation – R&D, infrastructure, investments, trade – is crucial if the potential benefits of the KBBE are to be captured and transformed in sustainable development. Knowledge should be 8

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

build on which crops will contribute best to the biobased economy, which crops could best yield new materials and chemicals (bioprospecting), where they best can be grown, what kind of (pre) processing will be required, and what (logistical) conditions should be fulfilled in order to get the trade between South America, Europe and in a global market, on stream. 3. Some on-going activities and limitations to be confronted The specific cases that constituted the basis for the EGM deliberations were presented according to their contributions to four main areas: the bioprospection of microorganisms, transgenic plants for industrial uses, new technologies to prospect biodiversity, and the opportunities and constraints to business development. Prior to the presentation of the specific cases, and with the objective of framing their discussion in terms of the emerging policy and institutional issues there were two presentations aimed at the discussion of the overall opportunities and limitations confronting the development of the KBBE in the LAC region, and looking into the issue of the role of the public – private partnerships in creating the conditions for fully exploiting the synergies between biodiversity and biotechnology. Eduardo J. Trigo and Carlos Pomareda presented these topics. 3.1. Bioprospecting microorganisms Microbes are the most abundant and diverse form of life. Recent estimates indicate that microorganisms and invertebrates may represent almost 90% of the total number of species of the Earth. The microbial communities support all other kind of life, as they are engine behind the operation of the Earth ecosystems. Microbes are well known for synthesising products or carrying out reactions that are useful to mankind, yet the specific species remain largely unknown. Less than 1% of bacteria and viruses and less than 5% of fungi are known, in contrast with more than 80% and 90% of known extant plants and vertebrates respectively. A better understanding of microbial diversity will improve our knowledge on the processes and interactions of microbial communities among themselves and with other components of the terrestrial ecosystems. Unravelling the collective properties of microbe communities can lead to important advances to the benefit of humankind and the planet. New antibiotics and therapeutic agents, probiotics, chemicals, enzymes and polymers for industry, bioremediation of pollutants, and biomining are just a few examples of biotechnology applications. Other benefits include the prognostic and prevention of emergent diseases in human beings, other animals and plants, and the optimisation of the microbial capacity for soil fertilisation and clean up of ground water. There are several on-going activities in Latin America that explore the biotechnological applications of the microbiota. The cases discussed during the workshop are summarised bellow. 3.1.1 Bioprospecting as a tool for conservation, human and economic development Luis Cubilla Ríos, Panamá, presented this case Background information and project summary The bioprospecting programme in Panama was launched in 1998 within the framework of The International Cooperative Biodiversity Groups (ICBG). The ICBG is an initiative from the United States government, specifically from the National Institutes of Health (NHI), The National Science Foundation (NSF), The US Department of Agriculture (USDA), the Department of Energy (DOE), and National Oceanographic and Atmospheric Administration (NOAA). The programme acknowledges the urgency of the discovery research to understand the potential applications of earth's plants, animals and microorganisms. Advances in areas such as modern medicine, crop protection, and bioenergy continue to look to biodiversity for solutions and the enduring habitat destruction and the resulting diminishment of biodiversity is

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

jeopardising its exploitation. The programme’s goal is to use biological exploration and discovery to create incentives for conservation of biodiversity and to promote scientific research and sustainable economic growth. The on-going project “Training, Conservation and Drug Discovery Using Panamanian Microorganisms” started in 2008 and was build on two previous five-year ICBG awards, to continue the bioprospecting programme in Panama for discovery of both pharmaceutical and agricultural products from endophytic fungi, cyanobacteria and heterotrophic bacteria from both terrestrial and marine sources. Partners include the University of Panama, Panama's National Secretariat for Science, Technology, and Innovation (INDICASAT), Smithsonian Tropical Research Institute, University of California San Diego, University of Utah, University of California Santa Cruz, Oregon State University, Scripps Institution of Oceanography, University of Arizona, Eisai Pharmaceuticals and Dow Agrosciences. Through this programme, it 3,540 species of plants, 5,950 isolates of endophytic fungi, 70 species of algae and cyanobacteria (from 369 collections), 31 specimens of corals to provide bacteria (686 pure strains of bacteria have already been isolated) have been collected. The extracts have been tested against tropical diseases (malaria, chagas and leishmaniasis). From active extracts, 160 compounds have already been isolated. So far four pre-patents have been obtained one of which is still active, as it protects a promissory compound. The results of this research have generated 46 publications in scientific journals. Feasibility assessment The ICGB supported a bioprospecting programme in Panama because, in addition to being a hotspot for biodiversity, Panama had in 1998 a number of competitive advantages: (i) the project leaders had more than twenty years of basic research in ecology to guide collections, specifically on plant – herbivore interactions; (ii) the occurrence in Panama of researchers in the different fields of the project: biologists, botanists, natural products chemists, specialists in tropical diseases and pharmacologists; (iii) two national institutions working in areas related to the project (the University of Panama and the Gorgas Memorial Institute); (iv) the presence in Panama of the Smithsonian Tropical Research Institute, with more than seventy years of experience in ecological research. Additionally, the Panamanian National Authority of the Environment (ANAM) had the disposition to negotiate agreements to facilitate access to the biological resources. In the past two years advances have been achieved that will facilitate the accomplishment of the project aims and to strengthen the development of ICBG bioprospecting program, among them: 1. The establishment of new regulations for access to biological resources; a document simple and easy to handle that addresses the distribution of economic benefits. This was a result of many hours of collaborative work between the scientific community and the responsible authorities. 2. The signing of a new agreement for access to biological resources for the ICBG group. This contemplates among other things the topic of the right of the Panamanian State to receive economic benefits and establishes its distribution. 3. The same agreement allows signing secondary agreements with academic and industrial collaborators. Recently agreements have been signed with US Universities and Industries. These will facilitate the access to new technologies and to collaborators with expertise in some key areas. Likewise it will allow the testing of extracts and compounds in new biological assays. 4. The project has recently recruited new national scientific personnel, which have finished their postgraduate studies (Master, doctorates and postdoctorates) in related areas to the ICBG goals.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Infrastructure and training After eleven years of the presence of the ICBG in Panama, more than one million US Dollar have been invested in high technology equipment, such as a nuclear magnetic resonance (NMR) instrument (Bruker Avance 300 MHz) and High-Performance Liquid Chromatography (HPLC) systems. Over 100 undergraduate students received training and several of them have produced scientific publications. Both elements facilitate them to apply for fellowships for postgraduate studies. For example 15 students got fellowships to follow studies in the field of Chemistry. The incorporation of postdoc students from the USA to the ICBG in Panama has facilitated US under-graduated students to improve their skills in natural product chemistry or microbiology in Panama. The programme facilitates the creation of jobs and in the last ten years the projects have employed 159 technicians, 7 postdoc researchers and 32 under-graduated students. Conservation as an issue One of the issues that the ICBG groups contemplate is the conservation of biological resources. To understand the value of biodiversity, it is necessary to inventorise and assign uses to it. Most members of the ICBG give talks to different auditoriums to illustrate the value of biodiversity and the meaning of its conservation. One of the ICBG commitments is to carry out biological inventories. The inventory of plants in the Coiba National Park has contributed to its recognition as a UNESCO World Heritage Site. Limitations to be confronted Different challenges limit bioprospecting projects in developing countries: (i) the absence of a greater number of competitive local specialists in the required fields; for example the lack of taxonomists to identify samples, mainly microorganisms; (ii) the absence of biotechnologists to improve the quality of microorganism cultures; (iii) animal models to test the safety and efficiency of the compounds tested in our in vitro assays; (iv) the absence of high technology equipments like high-field RMN and mass spectroscopy linked to HPLC systems; and (v) difficult access to databases to improve the process of dereplication, that avoids the isolation of already well-studied compounds and unsuitable molecules. It is also necessary to mention two misconceptions related to bioprospecting: (1) the false expectative that every project will produce monetary benefits and (2) the myth that the perfect medicament will be obtained directly from nature. This is also the reason why the study of active compounds in vitro, though not of a highest level of activity, is abandoned and not taken any further, e.g. to in vivo assays. Unclear policies for the access to biological resources and incomprehension about the research process by the authorities are two main limitations at the institutional level. Among other things they hinder the development of agreements with academic and industrials collaborators and the expedition of collection and export permits. Finally, not everyone is ready to follow the rules; this attitude in some researchers results in the establishment of stricter controls for the use of biological resources. 3.1.2 Diversity and biotechnological applications of soil microbiota from Bahia’s semi-arid region trough metagenonomic methods Aristóteles Góes-Neto, Brazil, presented this case Background information and problem identification The Brazilian Semi-arid covers a total area of 974,752 Km2, from which 86.48% is at the Northeast region. About half of this area is within the State of Bahia comprising 70% of the State territory. The semi-arid ecosystem is characterised by a great diversity of environments, with “caatinga” vegetation at the interplanaltic depressions and “cerrado”, humid forest and “campos rupestres”

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

at higher altitude. The average temperature is high (27º), the rainfall is irregular and does not exceed 1000 mm/year, and the soils are a mosaic of shallow, stony and sandy soils. Sandy soil and large areas without vegetation characterize the degraded “caatinga”. The semi-arid region endures environmental and social problems as well as scientific and technological challenges for its development. Two major problems are the high degree of environmental degradation and the low quantitative and qualitative knowledge of its biodiversity. According to the World Wide Fund for Nature, the Brazilian “caatinga” is biologically the richest savanna in the world. It is also acknowledged to have the most peculiar biota worldwide in terms of species composition and adaptation to environmental conditions. Notwithstanding, it remains one of the less known biomes in Brazil and suffers continuing and constant degradation due to 400 years of disordered and predatory use of the land. Proposed solution Any programme for the development of the Brazilian semi-arid should prioritise a better knowledge of its natural resources and its sustainable use by the local population. This projectis focused on the industrial and pharmacological potential of semi-arid soil microbial communities. The soil will be screened for genes encoding enzymes of industrial interest using the metagenomics approach. In this approach, the power of genomic analysis is applied to entire communities of microbes, bypassing the need to isolate and culture individual microbial species. The establishment of a research network consortium in the new field of metagenomics can open new opportunities of cooperation and financing for the research groups with focus in the semi-arid. The project proposes the creation of a database of genes with potential industrial and energetic application. The access to the database would be licensed to clients and the use of any sequence conditioned to the payment of royalties. The project also envisages the development of new biotechnological products at bench level in partnership with industry, to demonstrate the database relevance. It is expected that the project would incite strategic alliances with small to medium biotech enterprises at national and international level, opening opportunities to development of new business plans and spin-offs. Feasibility assessment The project is a consortium of three Brazilian institutions that are complementary in expertise and infrastructure: • Universidade Estadual de Feira de Santana (UEFS) - BA, Research Laboratory in Microbiology (LAPEM). Expertise in Microbiology, Molecular Biology, Biochemistry. • FIOCRUZ Centro de Pesquisa Renée Rachou (CPqRR) - MG. Expertise in Bioinformatics • Universidade Estadual de Santa Cruz (UESC) – BA, Centro de Biotecnologia e Genética. Expertise in Genomics, Proteomics. It is expect that the consortium will overcome most of the technical hurdles of a metagenomic project, namely: • Getting a representative sample from an environment. The number of sampling and the best way to sample one environment has to be accessed • DNA extraction techniques must be improved to ensure that a metagenomic library represents the entire community’s genome and has no contamination. The detection of rare members of a microbial community is a challenge, but it can be very important if a small number of microbes play a critical role in the community. • Metagenomics projects generate enormous amounts of data, and effective data management systems will be essential. Given the scope of the project, more groups should be involved with expertise on semi-arid ecosystems, evolution, soil sciences, and statistics, mathematics and database development.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Financial resources The State of Bahia has expressed interest in co-financing international activities intended to capture the full potential of metagenomics for the semi-arid. More funding agencies should be approached. Because of the broad scope of applications, a metagenomics project has the potential in fulfilling the missions of agencies acting in different fields, such as medicine, energy, industry, and fundamental science. 3.1.3. The microbes from the sulfuretum of the Humboldt Current Marine Ecosystem: a potential source of biotechnological applications Victor Ariel Gallardo, Chile, presented this case. Background information and problem identification The marine subsurface represents a unique, widespread, and largely understudied microbial ecosystem that influences large-scale geochemical cycles biosphere. It has been estimated that subsea floor sediments contain between 10-30% of the Earth’s total biomass and a major proportion of the global prokaryotic biomass (~65%). However, this environment is still one of the least explored and understood microbial habitats on Earth. Open ocean oxygen deficient/anoxic benthic zones are minimal in terms of world bottom ocean coverage, but may be most significant in conveying the high productivity characterising the coastal seas where they mostly occur. The target of the proposal is one of these major ecosystems occurring under the oxygen minimum zone (OMZ) of the eastern South Pacific. The bottoms associated with it, between ca. 20-300m depth, due to the highly productive surface waters, maintain a special kind of highly toxic sedimentary environment known as a “sulfuretum” which is formed wherever accumulation of organic matter exceeds the water capability of oxidation. This environment contains an extremely massive and diverse community of micro-aerophilic and/or anaerobic microbes surpassing biomasses of 1000 g m-2. Recent results from preliminary research applying the 454 Roche massive parallel sequencing of the V6 region of the 16S rRNA gene to DNA extracted from 8 g of sulfuretum sediment has yielded close to 300.000 useful sequences within which around 625 genera of Bacteria were discriminated of which, in turn, around 113 could not even be assigned a known name. Also a preliminary analysis of the data suggests that about 80% of the known genera are chemo-organotrophs and about 20% chemo-lithotrophs. Their relevance to the high productivity of these oceans is still under study but what emphasises their potential for biotechnological and industrial applications is the fact that this system is a perfect analogue of ancient ones. The oxygen-deficient areas of the world’s modern oceans are thought to provide analogs for the open-ocean benthic conditions that probably contained similar assemblages in the sulfidic ocean of Archean and Proterozoic eons (around 2 billion years ago). This system is rare in the present day Earth covering only around one million km2 or approx. 0.27% of today’s total ocean surface area. Both these observations: their putative ancient descent and their presence in this modern ocean, in particular just off Chilean/Peruvian coast, suggest that it might be very rewarding, both scientifically and biotechnologically, to look closely into the genomes of the multifarious forms. Proposed solution The project proposes the creation of a modern facility for genomic research at the University of Concepcion charged with the task of studying not only this novel community of microbes, a resource base that could in the near future equate or surpass the importance of mining and fisheries, but also the genomes of organisms living in the very varied extreme and old ecosystems existing within Chilean boundaries. In exploring organisms that live in such extreme conditions, there is a high probability of finding interesting metabolisms, genes, proteins/enzymes, etc., of commercial/ technological/industrial value. Indeed, the different mechanisms that extremophiles use for intake nutrients is explored industrially is such diverse areas as wastewater treatment, bioremediation, or mining.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

The in-depth research on this novel genetic resource is urgent because, for one, many of natural resources are being illegally taken from national biodiversity resource base, and secondly, and more significant, there is urgent need to find innovative solutions to national energy, health, industrial and environmental problems. Feasibility assessment The project is multidisciplinary and is a consortium of several units at the University of Conception with complementary expertise: Department of Oceanography, Center for Biotechnology, Department of Microbiology, and Department of Information Engineering. The project requires a substantial government and institutional support to create the capabilities in the University of Concepción. The involvement of regional and international cooperation is also foreseen. The isolation and identification of the species involved, and the setting up of a strain bank, and/or gene bank would be required also to establish intellectual property rights that will protect future businesses and biotechnological applications. 3.2.Transgenic Plants for Industrial Applications The remarkable innovative breakthroughs in fundamental plant sciences are fuelling new opportunities to an agriculture-based bio-industry. Green biotechnology is opening new promises for the sustainable use of plants as feedstock for industry and energy. For instance, the use of jatropha and algae as biofuel feedstocks, as well as techniques to produce cellulosic ethanol and liquid fuel directly from biomass. Faced with a global energy crisis and concerns over climate change, the genetic improvement of plants is an area that will grow in importance through renewed interest in plants as a source of biofuels as much of the demand will be met through the exploitation of plant-based resources. Plants are also being more and more used as a source of raw materials for a non-polluting industry that is not dependent upon the refining of petroleum, such as biodegradable plastic or intermediates for the chemical industries.7 There is significant scope for growth of this sector since large segments of the chemical industry is essentially carbon-based.8It is highly likely that a large number of presently underutilised plant commodities will emerge in the coming years as sources of raw material for the carbonbased chemical industry. Plants also are being manipulated to be used as vehicles for development and manufacture of high value pharmaceuticals. Research and development in the

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For instance, Cargill started the production of poly-lactic acid (PLA) under the Natureworks™ name, by fermentation of cornstarch. Although having properties comparable to conventional polymers, which make it suitable for use in the packaging and textile industries, PLA is completely biodegradable. After use, cups and other articles can simply be composted with organic waste. Annual production has now reached 140,000 tonnes. DuPont manufactures a copolymer of 1,3-propanediol (PDO) and terephthalic acid under the Sorona® name. Sorona® has been produced using propanediol synthesized from petrochemical feedstock. Recently, DuPont and Tate & Lyle formed a joint venture to commercialise the production of PDO from glucose using a modified bacterium. A large-scale fermentation facility will be completed in 2006, and it will have a capacity of 90,000 tonnes of PDO annually. Bio-PDO is produced more economically than petrochemical PDO, it can be produced at higher purity - and in turn yields a superior polymer, and it reduces dependence on non-renewable resources 8 Sustainability in the Chemical Industry: Grand Challenges and Research Needs - A Workshop Report (Free Executive Summary) http://www.nap.edu/catalog/11437.html 14

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

area of plant-made pharmaceuticals include a number of vaccines already progressing to clinical trials, antibodies and nutraceuticals.9 Significant sums have already been invested in green biotechnology in the technologically proficient countries, but much needs to be done to promote an enabling environment for the development of a plant-based industry in the developing countries. 3.2.1. Biodiversity, Bioproducts and Biomass for a sustainable regional agro industrial development. Gabriel Ricardo Vellicce, Josefina Racedo, Karina Inés Dantur, Eduardo Blumwald and Atilio Pedro Castagnaro, Argentina, presented this case. Background information and problem formulation Sugarcane is one of the most important crops for the production of the first-generation bioethanol as it has been acknowledged as the crop with best net energy rate. The agricultural production of sugarcane is fully integrated to the industrial production of ethanol and sugar and is extremely efficient in energy and residues use. The vinasse and other by-products complement the chemicals that are used for soil fertilisation and part of the bagasse is used for energy production. In spite of this, the use of sugarcane to produce sugar, ethanol, and electricity is not accomplishing the full potential of this crop and, moreover, there is a growing concern that the competition for existing arable and pastureland will constrain the potential for biofuels production using current technology. Such a constraint causes feedstock price increase for both food and fuel. So the challenge is to be able to produce transportation fuels from nonfood sources at an economically competitive price. In this scenario, there is great potential for further gain with the use of sugarcane bagasse as cellulosic feedstock for the second-generation ethanol. The full development of the process for the commercial production of the cellulosic ethanol in the years to come can be a transformational change in the sugarcane industry. Sugarcane is an important crop in Tucumán, Argentina, where the cultivated area reaches 200.000 ha. Improvements of varieties that can grow in marginal land will double the cultivated area. This would allow a sustainable regional development at social, economic and environmental level as the sugar industry involves small, medium and large companies. The major obstacle for ethanol production from cellulosic feedstocks is the high cost of obtaining sugars from cell walls. Because of the presence of lignin and the complex structure of cell walls, cellulosic biomass is more difficult than starch to break down into sugars. Should this problem be solved, bagasse and the crop waste will be used to enhance the energetic balance. The waste represents 30% of the biomass produced by the crop and entails a major pollution problem in Tucumán as it is burned in the field illegally. However, nowadays it is being used partially in the process of cogeneration of electricity. Proposed solution The project proposes solutions to maximise the production of ligno-cellulosic ethanol from the bagasse by searching for new genes that encode cellulolytic enzymes as well as by the development of new varieties adapted to poor soils, less water requirements, and resistant to attacks by pests, fungi, and bacterial diseases. For this purpose, sugarcane breeding that efficiently incorporates new technologies such as molecular markers and genetic engineering will be essential. Both approaches are being carried out in cooperation with private companies under confidentiality conditions. At least one strategy is being exploited to confer resistance to water stress. It involves the introduction of the IPT gene (A. tumefaciens isopentenil transferase gene) under the control of an inducible promoter to retard the senescence induced by stress. During water stress, plants show lower levels of cytokinins while the levels of abscisic acid 9

http://pharmalicensing.com/public/articles/view/1086100502_40bc9416bc4ca/technology-update-plantbase 15

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

increase. This triggers senescence events that lead to leaf drop and low stomata conductance. The IPT is the bottleneck enzyme at the cytokinin biosynthesis pathway and its expression under water stress would allow a more prompt plant recovery when the stress condition disappears. Feasibility assessment Concerning the production of second-generation alcohol, the main issue at stake is the lack of efficient ligno-cellulollitic enzymes. The breakdown of biomass involves the release of longchain polysaccharides, specifically cellulose and hemicellulose, and the subsequent hydrolysis of these polysaccharides into their component 5- and 6-carbon chain sugars. Currently, the mainstream process of bioethanol production makes use of the yeast S. cerevisiae. Although this organism can provide the higher conversion yields of ethanol from glucose, during their evolution, they have not been exposed to the aromatic compounds and the adverse conditions of the industrial conversion of lignocellulose to ethanol. Hopefully, a variety of other organisms have evolved to take advantage of this nutrient source, including the free-living organisms and symbiotic animal–microbe consortia present in biomass-rich environments, many of which are difficult-to-culture microbes. Therefore, the metagenomic to assess the information encoded in their genomes has an important role in developing biofuel production systems. The proven track record of both the institution (Estación Experimental Agroindustrial Obispo Colombres de Tucumán) and the research team leave no doubt on the availability of technical and human resources for the development of the project on sugarcane improvements. Moreover, the project is being developed in cooperation with private companies, a fact that offers good prospects for the adoption of the proposed solution by the private sector. However, it must be taken into account that, due to its economic importance, the project is highly competitive and novel genomic approaches are accelerating feedstock domestication. Through the use of highthroughput transgenesis, genes affecting features of importance for biofuel production such as plant height, stem elongation and trunk radial growth, drought tolerance and cell wall stability, are likely to be identified in a fraction of the time required to carry out similar studies using single gene identification approaches. 3.3 New technologies to prospect biodiversity Humanity receives countless benefits from natural environment in the form of goods and services. The rich plant biodiversity not only provides valuable sources for nutrition, commodities and energy as well as a multitude of raw materials, such as fats, oils and natural polymers like cellulose or starch, but is also a source of many life-saving drugs, helps to protect from floods and soil erosion, functions as a sink for wastes, and is able to buffer climate change through carbon capture and sequestration. More recently plants have become a cornerstone of sustainable industry. The wealth of plant biosynthetic pathways makes them an attractive source of fascinating new enzymes for new biotechnological applications. Doubtlessly, the use of plant enzymes and compounds in industrial biotechnology offers new means to address energy savings and increases in efficiency and sustainability. The continuous degradation of our natural capital is thus jeopardising mankind’s prospects for global sustainable development. One way to combat this loss is to demonstrate their value as potential sources of new pharmaceutical or agrochemical products. New integrated strategies involving high throughput screening and breakthroughs in -omics and systems biology open up an exciting new range of possibilities that will enable further deployment of our rich natural endowment.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

3.3.1 Bioprospecting for novel industrial products: is there a role for bioinformatics? Fabian M. Capdevielle, Uruguay, presented this case. Background information and problem identification Exploration of biological resources has long been characterized by a two-fold approach with (a) field observation, specimen collection and classification and (b) laboratory experimentation, often based on hypotheses formed by careful examination of specimen collections. This paradigm in biological research is currently shifting. The new paradigm is based on the availability of large volumes of DNA and protein sequences in the databases, allowing individual researchers to focus biodiversity exploration on specific genes of interest, helping to develop hypotheses for new experiments by mining the databases. In the new paradigm, there are increasing chances of discoveries made by experiments conducted in silico, rather than in vivo or in vitro. Consequently, biology could be considered now as part of information-intensive sciences, with bioinformatics currently evolving towards integration of information technologies (IT) into system biology, driving forward the knowledge discovery process. Understanding the basic network of metabolic intermediates and enzymes is a first step in unravelling the specific determinants of metabolites at the base of novel industrial products. Subsequent steps should aim at dissecting the regulatory mechanisms that control the enzymeencoding genes, the mechanisms that control the activities of transcriptional regulators, and the mechanisms of intra- and inter-cellular transport of metabolites and enzymes. This requires databases of samples to reflect the most recent evolutionary classifications so we can statistically identify the taxonomic groups that give the highest yield of positive screening results. As the cost of next-generation sequencing continues to decline, genome surveys are likely to become a key component of bioprospecting screenings from our plant diversity, providing information for data mining applications and bioinformatics support to genotypedriven characterisation of non-model (but otherwise very promising) species within the KBBE framework. Proposed solution This case study is based on theories, opportunities and issues defining an information-biology approach towards knowledge discovery in the context of bioprospecting for novel industrial products. Indeed “Knowledge Discovery in Databases” (KDD) procedures are proposed as a foundation for bioinformatics applications supporting prospective approaches focusing on novel sources of bio-products. This approach represents the integration and consolidation of many diverse data sources, from national and international data repositories (structural and functional genomics, proteomics, metabolomics and other -omics technologies, bioactive compounds, agronomic traits, etc.) into refined - and hopefully relevant to support business and political decisions - information. This information could then be condensed through application of innovative Information Technology (IT) systems for diverse bioprospecting activities, including bioinformatics network building, data warehousing and web hosted applications for collaborative - between local and distant applications over the web - data mining applied towards bioproducts foresight, design and development. Choosing a proper feedback loop between in silico and in vivo / in vitro experiments could indeed accelerate the knowledge discovery process over the biological data. Within KDD, an exploratory form of data mining applies a search process to a data set, often a very large data set, and looks for interesting associations. While the data may initially have been collected to answer some primary question or questions, the expectation is that there will be other interesting and potentially useful information in the data. KDD also refers to the overall process of discovering useful knowledge from data, while data mining refers to the initial step of extracting patterns, without the additional steps designed to check whether these patterns are meaningful.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Feasibility assessment In order to serve as a foundation for collaborative research consortia integrating technological platforms (genomics, proteomics, metabolomics, bioinformatics, cheminformatics, etc.) and diverse public and private organizations (from agriculture, industry, health care, etc.), information should be made available to scientists and industrial partners together with effective data mining procedures. The chief concern here is developing cost-effective measures that will make research financially viable, while providing reliable, scalable, intensive computing capabilities to gather, mine, analyse, and use data collected from a variety of international sources. Human experts are unable to cope with this fast growing trend, and require some automatic yet intelligent approaches to assist them to extract the useful biological information underlying these databases. Machine learning is one such approach, which has been widely applied to bioinformatics and has gained a lot of success in this research area. Machine learning methods are suitable for molecular biology data due to the learning algorithm’s ability to construct classifiers/hypotheses that can explain complex relationships in the data. The classifiers or hypotheses can then be interpreted by a domain expert who suggests some wet-lab experiments to validate or refute the hypotheses. Features of the rapidly changing research scene are the demand to gather better data, to gather more comprehensive data, to organise data better, and to make better use of the generated data. Overall, this emphasises the importance of properly selecting data mining methodologies, which in terms require pooling skills of computer scientists, statisticians, biotechnology experts and subject area (industry in this case) specialists. As in many other cases within the KBBE framework, perhaps the most important product from this bioinformatics-assisted bioprospecting endeavour will be the consolidation of a network of highly trained human resources in statistical and computational genomics, with access to stateof-the-art infrastructure for handling large scale genotyping of germplasm, and the ability to further develop the expertise available in various institutions and persons for breaking the knowledge barriers of the biological species that they deal with. 3.3.2 Novel tools for target and lead identification in drug discovery Lars Bohlin, Sweden, presented this case. Background information and problem identification With a realistic threat against biodiversity in rain forests and in the sea, a sustainable use of natural products is becoming more and more important. Basic research directed against different organisms in Nature could reveal unexpected insights into fundamental biological mechanisms but also new pharmaceutical or biotechnological possibilities of more immediate use. Many different strategies have been used prospecting the biodiversity of Earth in the search for novel structure-activity relationships, which has resulted in important discoveries in drug development. Numerous publications describing novel natural products and biologically active principles from assay results have for many years formed a basis for pharmacognostic research. During the recent years pharmaceutical industries have switched emphasis from natural products to combinatorial chemistry though it did not result in the expected generation of new lead molecules. The unrealised expectations from current R&D strategies together with the appraisal of modern technologies are prompting a renewed interest in natural products as a source of chemical diversity and lead generation. However, the development of multidisciplinary incentives will be necessary for a future successful exploration of nature. A multidisciplinary subject like pharmacognosy, bridging biology and chemistry with medicine, has a strategic position for studies of complex scientific questions based on observations in nature. New tools are now available for the modernisation and renewal of this venerable proven interdisciplinary science. Through the application of emerging techniques and integration of informatics, entirely novel possibilities for rational selection, prediction, and interpretation, are within grasp.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Proposed solution Connecting biological activity to data by systems biology implicates the immense possibilities of implementing wide approaches such as metabolomics and genomics in the field of pharmacognosy. This has been demonstrated by several ongoing researches: (i) anti-inflammatory natural products have been discovered based on ethnopharmacological observations – (for example, Saururus chinensis extract, Vitex negundo, Desmodium gangeticum, etc) add a few examples. (ii) combinatory strategy of ecology and chemistry has revealed new insights into the biodiversity of fungi; (iii) in depth studies of a cyclic peptides (cyclotides) has created new possibilities for engineering of bioactive peptides, development of new strategies using phylogeny; (iv) chemography has resulted in new possibilities for navigating in chemical and biological space; and (v) the use of bioinformatic tools for understanding of lateral gene transfer could provide potential drug targets. Limitations to be confronted An important challenge is to conceive ways to standardise and utilise bioinformatic data. All informatics approaches, as with other scientific-based research, should rely heavily upon robust data. There is also a need for active design of experiments to optimise the information flow and utilisation of resources. It is fundamental to keep on isolating known and novel compounds and deduce their biological effects. In doing so vast amounts of information are produced that can be used for forming hypotheses and re-evaluating results. Other limitations related to bioprospecting of plants for drug discovery include IPR and bioconventions as well as regulatory issues. 3.3.3 New technologies to ensure seed quality of biodiverse oilseeds Hugh Pritchard, England, presented this case. Background information and problem identification Plant oils are major agricultural commodities with an annual production of 129 million metric tonnes. As much as 90% of the plant oil used annually in the world is produced by only six oil crops, which are oil palm, soybean, rapeseed, sunflower, peanut and cotton. They all produce multi-purpose oils and 15% of this production is used as industrial feedstocks for a range of product applications such as surfactants, soap, detergents, lubricants, solvents, paints, chemical feedstocks, cosmetics, and, more recently, for the production of biodiesel. The fatty acid composition of our cultivated crops is mainly mono- and di-unsaturated oleic and linoleic acids and saturated palmitic acid. The development of oil crops with high-oleic acid is highly desirable because it raises their usability as industrial feedstock. Also a great number of unusual fatty acids are produced by wild plant species that can lead to the development of new marked applications due to their unique characteristics. In this context the bioprospecting of wild plant species for high quality fatty acid represents a major opportunity to the preservation of biodiversity and to the sustainable development of semi-tropical and tropical agriculture. The diversity of fatty acids can also be used to develop new technical oil qualities in domesticated oil crops taking advantage of the new tools in genomics and genetic engineering. Proposed solution The project proposes the bioprospecting of local biodiversity aiming at the development of new oilseed crops. The screening would take advantage of a new first-step technology that can easily determine the thermal properties of the oilseeds. The thermal fingerprint is indicative of the fatty acid composition of the sample.

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Feasibility assessment The Royal Botanical Gardens, Kew, have access to collections globally, with network collaborations with major centres of biodiversity in Latin America such as Bolivia, Brazil, Chile, Costa Rica, Cuba, Colombia, Ecuador, Guatemala and Mexico. The institution has technical capacities for chemical characterisation and the new first-step technology proposed will allow the screening of 36 species per week. 3.4 Business development (opportunities and constraints) 3.4.1.Biodiversity utilisation agreements: lessons learned and future perspectives in LAC Nicolás Mateo, FONTAGRO, presented this case The use and application of new biotechnologies to wild and cultivated biodiversity in order to generate knowledge, develop new products and promote economic development is generally viewed as a desirable and lofty goal, particularly by countries in tropical regions of the world that house the greatest species diversity. However, the aspirations and opportunities, shared by these countries - including several Latin American and Caribbean (LAC) nations- to advance in this path are often hampered by an important question: how to move forward? The purpose of this section is to highlight experiences and best practices derived from the initial bioprospecting agreements developed in the LAC countries. It considers access, benefits, lessons learned and their implications for future agreements. Access Access to biodiversity for research and development purposes is guided by the Convention on Biological Diversity, crafted at the 1992 United Nations Conference on Environmental and Development (UNCED), also known as the Rio Summit, and by national pertinent legislation. However, access is not always clear-cut and may be affected by the rights of local communities – associated with traditional knowledge – and by national property rights legislation. Access will require, in any case, prior consent agreements by means of contractual instruments as well as considerable social sensitivity and benefit sharing clarity, particularly if local knowledge is involved. Access, in the framework of bioprospecting agreements, needs to be limited in three different dimensions: previously agreed purposes, quantity and time. Benefits Access is also dependant on the fulfilment of compensation criteria and agreed benefits. The benefits related to access are negotiable and will likely include -when indigenous or local communities are not involved-10 at least five categories, as it has been the case with the original agreements reached in the LAC region:11 • Research costs • Transfer of technology • Capacity building • Royalties • Sustainable use

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Because, when indigenous or rural communities are involved, the complexity of benefit sharing increases significantly. There is no clear-cut agreement on how to deal with this issue on an equitable manner; however ten Kate and Laird (1999) provide several benefit sharing examples, where useful approaches and lessons learned can be extracted. 11 Mateo, N., W. Nader and G. Tamayo. 2001. INBio. Bioprospecting. In: Encyclopedia of Biodiversity, Vol 1. Academic Press, p. 471-488. 20

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

The initial agreements: Lessons learned There are at least three key lessons derived from the initial agreements, which warrant careful consideration:12 • The agreements do not operate in a vacuum. Bioprospecting, in order to be useful and sustainable, must be based on a knowledge system that often takes the form of a regional or national inventory that provides not only passport data, but also relevant natural history information. • Bioprospecting did not become the anticipated gold mine. The expectation of millions of dollars in royalties, generated by pharmaceutical or biotechnology products reaching the markets has not materialised. This is understandable since the low probabilities, the long time required and the high development costs of producing and commercialising a mayor novel product, all conspire against quick and significant gains. In essence, the better prepared a country is –in terms of solid knowledge systems, legal framework, adequate human resources and social sensitivity – the more it stands to profit from true and sustainable benefits. • The development of marketable pharmaceutical and biotechnology productsfrom natural compounds has been slowed down by the possibilities offered by combinatorial chemistry, which allows the combination of various sets of chemical building blocks -in a short time period- to generate huge molecular diversity. There are other lessons learned that warrant attention,13 for instance: business development, contract negotiation, milestone payments, monitoring, intellectual property rights and information sharing, etc. Future agreements: A perspective As the prevalence of combinatorial chemistry puts a partial halt to the use of natural products from well known taxonomic groups, countries wishing to expand their options must consider investing resources and generating knowledge in lesser known groups such as fungi, bacteria and extremophilic organisms, which may have potential and significant industrial applications. In the same line of thought, countries should consider not only the high-end opportunities in chemical prospecting – normally in partnership with transnational companies– but also the development, with local industries, of products such as nutraceuticals, cosmetics, enzymes, essential oils, all of which may have a relevant place in national or regional markets. Gene prospecting both from cultivated and wild species presents significant opportunities (genes from wild plants, vertebrates, insects and soil bacteria are used as well to create transgenic crops that enhance productivity and carry resistance to pests and herbicides). This is still a new science frontier, particularly for the smaller and resource-constrained countries of LAC. Therefore, creative partnerships and collaboration will be a key factor in order to achieve desired results and impact. Development and management of competitive bioprospecting grants: FONTAGRO as a pilot case Considering that the Knowledge Based Bioeconomy (KBBE) initiative, led by European and Latin American partners to add value and to strengthen biodiversity utilisation, may wish to put in operation future competitive bioprospecting grants in LAC, it seems appropriate to provide – as an example- the practices and protocols used by the Regional Fund for Agricultural Technology (FONTAGRO). The Fund is an alliance of countries set up to support regional agricultural research and innovation on a competitive basis. Member countries have contributed 12

Mateo, N., et al; op cit. Some of them described in the seminal Merck/INBio agreement (Reid, W. V. et al. 1993. Biodiversity Prospecting : Using Genetic Resources for Sustainable Development. World Resources Institute, Washington, DC. 341 p.), as well as in Mateo et al. (2001) 13

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

resources to the Fund, have requested the Inter-American Development Bank (IBD) to invest them and have used capital gains and cofinancing mechanisms to support further research. The Fund has leveraged five times its contributions by means of counterpart funding and grant resources from other agencies, and has provided support to sixty five regional initiatives. The implementation elements of interest are briefly described below and can be further examined in www.fontagro.org. 3.4.2. Integrating science, technology and innovation into social development processes in the region Myriam Sánchez Mejía, Colombia, presented this case The Cauca Valley Region, in Colombia, has been a pioneer in identifying development opportunities based on life sciences and innovation, taking advantage of their mega diversity and an institutional network of enterprises, academic and research institutions. The productive developments account for 40% of the GDP of the region and comprise ten bio industry chains at different developmental stages: • Industrialised short cycles agriculture • Food and feed agriculture and agro-industry • Microorganisms (yeasts) and derived products • Sugarcane cluster • Fruits • Coffee • Forest and paper industry and derived products • Fishing production and marine industry • Oil, soaps and cosmetic industry • Natural products derived of the sustainable use of the biodiversity In this context, Corporation Biotec (CB)14 was established in 1995, in Cali, Cauca Valley, as an answer to the opportunity the Colombian western region identified for improving the bioindustry and the use of life sciences. CB has been a dynamic actor in the promotion of the regional knowledge based development, taking advantage in some cases and anticipating in other, of policies and strategies for technological innovation and public-private and academic relationships. CB has also promoted the development of life sciences to the benefit of the agricultural and agroindustrial production. From its conception, CB integrated knowledge and innovation management in not only academic processes, but also in social processes. In this sense and to this purpose it created a school of thought and it generated mechanisms and tools that facilitate the “research value chain”, as a fundamental concept and practice and has developed an associative work in “innovation systems”15 that facilitate the social and productive appropriation of the generated knowledge. In this process of social construction, the Western Colombian Bioindustrial Cluster (CBOC) was established in 2004 with the mission of integrating science, technology and innovation into 14

Corporación BIOTEC (CB) is a CDT (Centre for technology development and innovation) organised as a private, not for profit Corporation, in the framework of the science and technology Colombian Law. In 1995, with the leadership of Universidad del Valle, CB was created with the participation of 39 entities from the private, academic and governmental sectors. Its mission is to develop and apply microbial and plant biotechnologies to contribute to the optimisation of bioindustrial production chains, based on knowledge and sustainable use of the biodiversity in western Colombia. CB and CIAT have a special agreement whereby the Corporation has its headquarters at CIAT since 1999, as part of the AGRONATURA Science Park. 15 Innovation systems understood as the group of agents and processes that allow the competitiveness and welfare of communities, empowered by the mobilisation of capitals, especially (the capital) knowledge. (Bennet A and D., MQI Press, USA 2007) 22

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

social development processes in the region. Corporation Biotec, Sucromiles, Smurfit Cartón Colombia, Cenicaña and Asocaña, Universidad del Valle, Universidad Javeriana–Cali, Recamier, CIAT, Universidad Nacional–Palmira, to mention some, participated actively on these processes. Priorities for bioindustrial development opportunities were identified such high added value new natural products from the fruit sector and biopolymers from the sugar cane and forest sectors. In 2007 these actions acquired a broader scope with the creation of a Bioregión supported by Colciencias and the Government of the Cauca Valley. A Strategy Council for Bioregión (CoBI) was created to formulate a strategic plan to 2019. Recently, the Regional Council of Competitiveness appointed the bioindustrial sector as a world-class sector key to the competitiveness of the region. There has been in the region a disperse but meaningful institutional tradition in developments on life sciences. These are the cases of Universidad del Valle, Cenicaña, CIDEIM, CIPAV, CorpoICA, Corporacion Biotec, Universidad Nacional-Palmira and the CIAT. Important initiatives sprout in the recent years such as the schools of Natural Sciences and of Medicine at ICESI University, the Biology and Medicine Programs at the Universidad Javeriana–Cali, the Center of Vaccines and Research Caucaseco, the graduate degree in agroindustrial biotechnology of the University San Buenaventura, the programmes in environmental sciences of the UAO. At the political side, the new science, technology and innovation law, Law 1286/2009 and the CONPES 3582, April 2009, on “the state policy to increase the Colombian capacity of the country to generate and use scientific and technological knowledge in order to foster social and economic knowledge-based growth”, represent to the Cauca Valley, the western Colombian region, and Corporation Biotec, an important opportunity mark to take advantage of the emphasis on innovation, the identification of biotechnology as one of the prioritized strategic sectors, and the recognition of the importance of regional development as base of the national knowledge based development strategy. At the same time as an answer to fundamental global challenges, also valid for Colombia and the Cauca Valley region, agriculture has been expanded into health, energy, chemicals and materials. More and more food security, energy supply, environmental sustainability, technological change, rural development, and poverty alleviation depend upon the use of biobased resources. This brings a new opportunity for the economy and the regional development of the Cauca Valley region. Processes, tools and procedures to innovation management: the Corporation Biotec experience Corporation Biotec has focused its work in five topics of research: • Biotechnology in productive chains of promising tropical fruits • Evaluation of biodiversity and genetic improvement of the tropical trees • Management and use of residues (biomass) in productive chains • Identification and use of plant and microbial metabolites with potential industrial application • Specialised innovation management. Some Results Four category of results are highlighted: 1) Institutional: CB has developed a “school of thought” and has trained a large number of researchers and actors in the sector. A model of knowledge management has been developed and is in operation with at least four documented new practices and mechanisms. 2) Social recognition: CB has two groups of research and development, recognised by Colciencias, laboratory infrastructure – BIOLAB, a Unit of Information Services for the bioindustry (USI) – and a portfolio of technological services to sector

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3) Technological products in the production system: As examples: (i) a joint Patent CBCIAT for the cyclic micrografting of guanábana (annona muricata L.) to produce elite planting material; (ii) a model of Specific Site Agriculture (SEA) applied to fruits based in the experience of the farmers and developed with international and inter-institutional cooperation as part of a Swiss-Colombian agreement; (iii) development of the programme and the trade mark “Healthy agriculture” including identification and research advances on bioactive products for nutrition and for industry, amongst them the cosmetic industry. 4) National and international networks of cooperation, starting with CIAT, the headquarters of CB since 1999. Some Impacts 1) The “innovation systems“ methodology of CB with the different actors of research, technological development and innovation has an impact on accelerating the appropriation of the generated knowledge and its use. Technological gaps reduction as the case of the planting material of guanábana (Annona muricata L.) is an example of impact generation. 2) With the model of SEA for tropical fruits CB, in partnership with Cenicaña, CIAT, HEI-VD and others, facilitates the use of technological tools to small producers, organised to participate and share knowledge and considering themselves as coresearchers. 3) The Healthy Agriculture concept created a culture of respect to quality standards that is key for competitiveness in a biobased economy. 4) The inclusion of agriculture in a biobased economy requires new skills and new ways of organizing research and production. The creation of interdisciplinary and interinstitutional environments such as Agropolis del Norte enables long-term biobased research and developments. Learned lessons Throughout its fifteen years of existence, the Corporción Biotec have been able to develop approaches to link research to added value production to the benefit of regional development using public-private partnerships as well as multi institutional and interdisciplinary cooperations in the fields of agriculture, agro-industry and bioindustry. Four practices of knowledge management, developed in CB, are highlighted: • Technological innovation in processes of social construction in the region. • Analysis of the return of investments in science and technology cooperation. • Systems of knowledge valuation and property protection in the organisation. • Benefits distribution in the participative production of elite planting material Documents and field experiences related to these institutional practices can be consulted at CB. Three broad issues summarise some important learned lessons: 1) A new focus and new skills are required to integrate science, technology and innovation into social development in the way society is asking as return of research investments. Novel organisations are needed. 2) Recognition that not only the financial capital but also and more importantly the natural, environmental, cultural, scientific and technological, institutional, economic and financial and social capitals are key to sustainable development especially in a biobased economy. The knowledge capital mobilisation is critical to the challenges ahead. 3) Partnerships, in all its dimensions, are critical to the competitiveness and prosperity of the diverse communities and resources involved in biobased economies. It requires rethinking on the way research and production are done and a new knowledge an innovation management system that takes into account intellectual property agreements, funding systems, roles of the actors, new skills and new rules.

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3.4.3. Building a World Class Technology Transfer Programme – The case of the “Consorcio de Tecnología e Investigación para la Salud (CTI-Salud)” Ivan Mimica, Chile, presented this case This case study described the setting up and running a technology transfer office in Chile. The Chilean government encourages the development of an entrepreneurial culture that can drive the development of new innovative technology companies, build international linkages, and enhance the global competitiveness of Chile’s economy. Technology transfer is a talented-based business in that it converts scientific findings into useful products or services. A technology transfer programme facilitates the interaction between public institutions and private sector enterprises and its output, the creation of new enterprises and industries, is one of the most powerful impacts that public sector research can have on an economy. Setting up and running a technology transfer office is a complex undertaking that draws on a diverse set of technical, managerial, and business skills, that are all not commonly found within research institutions. University and industry encompass fundamentally contrasting cultures. Organisational and cultural changes require clear leadership and a commitment of resources from senior administrators and policymakers. The aim of the University is to create knowledge and it is fundamentally driven by social responsibility and public service. The research in universities is motivated by curiosity and knowledge generation. It has the tradition of establishing collaborations and sharing material. The number and quality of scientific publications measure the output of the fundamental research in universities. Industry on the other hand develops applied research focused on specific objectives and intend at developing new products. Industry value ownership and secrecy, and researches are driven by responsibility to shareholders. A technology transfer programme aims at fostering the interchange between these two contrasting cultures through: (i) enhancing access to university research and ensuring that society reaps the benefits of new inventions; (ii) capturing fair value for the university; and (iii) providing service to the faculty to ensure technology transfer. The technology transfer commercialisation process involves: (i) research innovation and discovery, (ii) access to technology and commercial potential, (iii) development of patent, (iv) marketing and business development, (iv) licensing and start-up, and (v) contract management and enforcement. A programme aiming at tech transfer should be able to act proactively in the opportunity recognition of a laboratory research prompt to innovation. It has also to take proactive measures in the technology development as well as in integrate business developments, IP protection, contract negotiation and market targeting. Several factors contribute to a successful tech transfer event. The history and culture of the organisations counts in that it is relevant to have a history of academic entrepreneurship and incentives, supported by policy and strong institutional commitment and investment in technology transfer. The public research institution should also have a positive perception of technology transfer and industry collaboration and value technology development as reinforcing the academic mission. It is also important to have well-funded research base comprising public and private sources (including industry sponsored research funding). The tech transfer programme should focus on areas of research excellence within the university, leveraging existing resources and research infrastructures. The limiting factor in technology transfer is the development gap that exists between the typical early stage academic discovery and the “proof of concept” required by industry for commercialisation. The main causes of bottlenecks are the facts that often the technology is too early and investment entry points have moved further downstream, and university technologies suffer from inadequate resources and expertise to advance sufficiently. As a consequence the

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promising new technologies lie fallow, and are never developed, or are transferred to industry prematurely. Summarising, the success in university technology transfer requires: (i) a clear institutional mission and strategy; (ii) a seasoned, entrepreneurial team; (iii) proactive engagement of internal and external stakeholders; (iv) building a reputation as a partner of choice; (v) an integrated intellectual property and business development approach; (vi) infrastructure and policies to support the tech transfer mission; (vii) strategies for bridging the “development gap”. The “Consorcio de Tecnología e Investigación para la Salud” (CTI-Salud Ltd.) is a private company created by an interdisciplinary group of Chilean researchers and entrepreneurs from universities, national research institutions, enterprises and prestigious international institutions. Its mission is to conduct scientific research and technological innovation in the area of human health, to develop novel therapeutics to combat diseases of high impact. The goals of CTI-Salud are: (i) to set up a pole of scientific and technologic developments in the field of health to generate therapeutic products to combat relevant diseases, allowing the development of local industry; (ii) to set up new start-ups based in the development of new products, services and intellectual property able to compete within a global market; and (iii) to create capacity building and innovations in biomedical issues of national and international relevance. The current members of the Consortium are: • Chilean Universities: La Frontera, Concepcion, • Chilean companies: Farmindustria SA and VitroGen STG Group SA • International Institution: Fundación Instituto Leloir (Argentina) CTI-Salud have generated several spin-offs: 1. Biotherapeutic is a company focused on colorectal cancer, pancreas and melanoma treatment products. The present R&D activities are on the identification of new therapeutic target genes for gastrointestinal cancers based on the human promoters A33 (A33 antigen), SPARC (Secreted Protein Acidic and Rich in Cysteine) and REG-1A (Regenerating gene I alpha), as well as on the development of new oncolytic vectors. Patents are pending (PCT USA) for A33 and SPARC and the patent for REG-1A is presently in preparation. The business opportunities for the products of Biotherapeutic are in that there is little competition in the treatment of colorectal cancer (CCR) based on gene therapy, while it remains one of the most common cancers. Only 10% of patients are diagnosed in early stages and CCR survival rate remains very low (10%). The world market for CCR is of $ 4.1 billion for 465,711 patients, where most commercial products are cytotoxic or the co-called "white" therapies. Shareholding: • CTI Salud, Chile (51.7%) • INIS Biotech, Argentina (46%) • Uxmal S.A., Chile (2.3%) Strategic partners: • University of Navarra, Spain • Digna Biotech SL, Spain • Dr David Curiel, USA • Alabama University, USA 2. Biodiagnosis is a company for development of diagnostic kits for colorectal cancer, pancreatic and melanoma based on the identification of new target genes for gastrointestinal cancers.

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Shareholding: • CTI-Salud, Chile (45%) • INIS Biotech Argentina (35%) • Uxmal SA Chile (20%) 3. Biocertifica is a company for certification of biopharmaceuticals. It was created based on the following facts: (i) in Chile there is legislation to the certification of biopharmaceuticals but no physical and human capacity to make such certification; (ii) biological drugs are accepted to be imported for sale in Chile only with certification of origin; (iii) in Chile it is already being marketed biosimilars, i.e. biopharmaceuticals whose patents already expired and which are produced by biotechnology companies in India, China and other countries. Shareholding: • Farmindustria SA, Chile • CTI-Salud, Chile. Strategic partners: • Institut Pasteur Montevideo Uruguay • Universidad de Los Andes (laboratories and animal facilities) 4. Maqui is a spin-off to explore the nutraceutical potential of a berry (Maqui) that grows only in southern Chile and has been historically used by the Mapuches for various ailments. The berry is intensely purple and has the highest level of antioxidants ORAC (Oxigen Radical Absorbance Capacity) units of all known fruits as measured by the Brunswick Laboratories of America. The following properties have been identified: (i) powerful antioxidant; (ii) antiaging; (iii) anti-inflammatory properties; (iv) strong activator of the human immunologic blood system and; (v) properties to combat metabolic syndrome. A patent is pending (PCT USA) to the use of Maqui extract to combat inflammatory diseases, metabolic syndrome and for strengthening the immune system. Business opportunity: The market for functional nutraceuticals is a major market in the world. In the U.S. it amounted to U.S. $ 123,870 million in 2008 and is expected to grow to U.S. $ 176,740 by 2013 (BCC Research). This market is led by products called "Blockbuster", which have potent medicinal qualities. The so-called "superfruits" are especially attractive because they are strongly associated with anti-aging products. The Chilean Maqui berry fulfils the conditions of product "blockbuster" because of its potent properties as anti-inflammatory, immuno-stimulants and anti-metabolic syndrome. The use of high quality standardised extract for the treatment of diseases of high incidence is protected by international patents and reached rates of more than U.S. $ 2,000 per kilo. Shareholding: • CTI Salud SA, Chile (57.5%) • Extremo Sur SA, Chile (37.5%) • Indena Spa, Italy, (5%, under negotiation) Strategic partners: • CTI Salud SA contributes in research, patents, technology transfer and entrepreneurship • Far South HS contributes in collecting, culture (strategic sourcing) and cold storage of raw material (fruit of Maqui) • Indena Spa standardised extract production • Medwell Inc deals with finished product distribution in the U.S., Europe and Japan. 5. Biocash is a company to commercialise the software developed for the management control system of the Consortium CTI-Salut SA. The new software is a global management system for research projects. It allows the managing of budget, activities, monitoring milestones, managing

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suppliers, procurement and other actions that occur in R & D. Shareholding: • Southern Technology Group SA (40%) • Health-CTI SA (40%) • Uxmal SA (20%) 6. BioAntart-K is set up to identify in Deschampsia antarctica (DA) components of high-level photoprotection as well as components that may have therapeutic effects and nutraceuticals. DA is one of two flowering plants native to Antarctica. In recent years, DA has been exposed to high levels of UV radiation and high stress conditions. Extracts of DA shows promising activity as protector of UV radiation and potential anti-cancer agent. It has been identified in it new flavonoid molecules. The synthesis of these compounds can be reproduced in vitro under specific conditions of stress. The global market for flavonoids as a nutritional supplement was at least US $ 862 million in 2007, with an annual growth of 12% (Business Insight, 2007). Shareholding: • Uxmal SA (60%) • CTI Salut SA, Chile (20%) • INIS Biotech Argentina (20%) 3.4.4. A strategy for developing biobusiness in the Amazonian Rain Forest of Peru Javier García Saavedra, Perú, presented this case. Background information and problem formulation This project deals with the sustainable exploitation of Camu Camu to help avoid environmental and economic ups and downs that typically occur when products from indigenous trees are harvested from the wild. Camu Camu (Myrciaria dubia (HBK) Mc Vaugh) is a native tree that grows in flooded areas in the Amazon region. The tree is an important component of riparian vegetation in Peru and Brazil, and is especially abundant in Peruvian black water river systems. It produces a fruit with the same name extremely rich in ascorbic acid (an average of 2.7–2.8g of AA and up to 4000mg AA per 100g of pulp). The tree is also highly productive, with some studies of wild populations estimating fruit production at 9000 to 12,000kg per hectare, with the potential to generate exceptional economic returns. Besides ascorbic acid, the Camu Camu fruits contain small quantities of calcium, iron, niacin, tiamin, riboflavin and other phytochemicals that gives to the fruit powerful oxidative, anti-inflammatory and anti-depressive properties. This, combined to the agreeable flavour, makes Camu Camu a good alternative to the nutraceuticals industry. Proposed solution Camu Camu planting in Peru started in earnest in 1996 when Government-funded “reforestation” projects were implemented by state and private institutions under the Programa Nacional de Camu Camu (PNCC) to attend the increasing demand of Camu Camu both for internal consumption as well as for export, Japan being the major importer. The PNCC initially aimed to plant Camu Camu with rural smallholders living along the floodplains to supplement wild harvesting and raise household incomes. This programme was followed by the “Programa integral para el aprovechamiento sostenible del camu camu en cuencas seleccionadas del departamento de Loreto, Perú”. The aim is to convert Camu Camu into a highly productive tree crop for agroforestry as a sustainable development pathway by which farmers, buyers, and processors in the Amazon region enhance their livelihoods and alleviate poverty.

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The project proposes participative planning including all relevant stakeholder aiming at achieving the sustainable use of Camu Camu, taking into consideration the economic, social and ecological issues. The main proposed actions are: • The creation of a Sustainability Fund to guarantee the costs and management of the whole value chain • Develop cooperation networks for the value chain to achieve synergies • Generate value added with the participation of native population • Training farmers in management • Strengthen local organisations in the field and create enterprises with the participation of natives • Actions to maintain the competitive positioning of the product • Systematise and replicate experiences Feasibility assessment The strategy has proven its feasibility in the first phase of Camu Camu project. For scaling-up, it is necessary to integrate the smallholder farmers in the Peruvian Amazon with the private sector in a win-win scenario for the creation of success bioindustries based on sustainability and competitiveness. The expected outcome is a biobusiness that integrates the native farmers in the transformation and commercialisation process. This requires training of Amazon natives in management, marketing as all well as in application of practical methodologies in production and transformation. Limitations to be confronted To achieve its objective, the project has to overcome several bottlenecks in the productive chain, from the farming phase to the industrial transformation and commercialisation. The main problems that the rural smallholders face with the cultivation of Camu Camu are: • Presence of pests and diseases in plantations causing serious economic damages to farmers, in some cases those damages surpass 50% of the production. • Lack of good genetic material for the expansion of cultivation. Certified seeds that guarantee the highest content of vitamin C, yield and resistance to plagues and sickness are not available. • Uncontrolled collection of fruits by natives, motivated by companies involved in the downstream value chain (storage or industrial processing). • Lack of storage facilities for fruits in the storage centres at strategic locations alongside the basins with important production volumes. • Limited cooperation between the actors of the production chain in order to coordinate logistics, storage and transport of fruits to the industrial processing centres. At the industrial phase, the project faces the following constrains: • Lack of technology at or near the production area for lyophilisation or freeze drying of the product to reach desired concentration levels • Limited participation of farmers in the industrial transformation processes of Camu Camu • Economic loss due to waste of shell and Camu Camu seed caused by limited knowledge of their uses and low research activities in this area • Fluctuating product quality due to the lack of systematic quality control along the production chain • Lack of government support to provide required infrastructure to improve logistics At the commercialisation phase the main problems are: • Lack of air transport capacity and high transportation costs for transporting the pulp to Lima • Exports are concentrated in Japan; it is recommendable to diversify the export markets • Restrictions raised by “Novel Food Regulations” hamper the possibility to penetrate the European market

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•

Lack of a strategy to competitively market the Camu Camu at national and international level with the participation of farmers to achieve equitable benefits

4. Conclusions from the Expert Group Meeting
 The scope of topics touched varied ecosystems from semiarid northeastern Brazil to the rain forest of Panama and Peru to temperate and marine ecosystems, as well as a number of innovative institutional models, such as the case of Corporation Biotec in Colombia and the “Consorcio de Tecnologia e Investigacion para la Salud” (CTI-Salud)” in Chile. In every case, local natural resources were scrutinised in terms of the needs and benefits that could be derived from their more intensive exploitation, the technologies required for valorisation and the bottlenecks that have to be confronted, both at policy, project and market level. The ensuing exchange of ideas and knowledge led to a better understanding of the current situation and a number of conclusions: • There was consensus that the prospects of adoption of the new bioeconomy in Latin America are considerable, and if the proper policy and institutional conditions are assured bio-businesses can be developed and sustainably established. • Existing science and technology capacities are varied amongst countries and even within. Where capacities are deemed to be insufficient, they can be augmented and/or complemented by expertise and knowledge centers of excellence in Latin America and elsewhere through appropriate collaboration. • Opportunities cover a wide diversity of resources and application from almost “traditional” situations such as the case of Camu Camu based bio-business development in the Amazonian Rain Forest of Peru, to state-of-the-art genomics and metagenomics projects such as those described in the cases of the Humboldt Current Marine Ecosystems and Bahia’s semi-arid region (Brasil). Table 2 summarises the consolidated findings touched upon by this meeting. Currently there seems to be no lack of innovative ideas and visions. However, external and internal factors are limiting further action to go from resource provision to value-addition and commercialisation of genetic resources. This is due to the lack of awareness, inadequate public policies and lack of R&D funding, IPR management and business development support. Further were market, social and economic capacity building - human resources, access to relevant databases, infrastructure - in scientific disciplines identified as a key requirement in all cases reported. This needs to be addressed if progress is to be made in better exploiting the potential of biotechnology applications for biodiversity valorisation.

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Table 2: Main limitations and actions needed for biodiversity valorisation in major resource/product categories Resource/produc Needs/ benefits Technologies Bottle neck Implications t category Medicinal & fine chemicals

- Identification of new valuable chemicals & lead generation - Conservation & sustainable use. - Trade potential high

Whole indigenous plants for food, feed and industry (preference to small farmers)

- Nutritional alternatives - Conservation & sustainable use - Income generation - Diversification of use of potential multipurpose plants - Meeting the energyneed to local people - Income generation - Industrial feedstock - Food/feed - Conservation & sustainable use

Oil seeds -

Microbial screening

a

- Identification of new valuable products (antibiotics, enzymes, etc) - Trade potential high

Wide approachesa and bioinformatics for rational selection, prediction and interpretation (including identification of organisms, extraction, screening, isolation and structure/function establishment) - Micro-propagation - Domesticationd - Use of biofertilisers and biopesticides

-Strong research capacity needed -IP& access to biodiversity resources - Financial resourcesb - Establishment of optimal scale-up strategyc

- Benefits sharing mechanisms - Technology transfer opportunities

- Long term projecte - Lack of seed industry -Food regulations can restrict the international market

- Poverty reduction - Benefit sharing mechanisms -South-south technology transfer opportunities

- Genomics - Thermal fingerprinting as fist step technology

- IP & access to biodiversity resources

-Genomics -Metagenomics, -Biological testing Database development

- Technical hurdlesf - Strong research capacity needed - Financial resources

- Poverty reduction - Benefit sharing mechanisms -Network collaborations to access global collections and biodiversity resources - South-south technology transfer opportunities -Benefit sharing mechanisms - Technology transfer opportunities

e.g.: genomics, metabolomics and high throughput screening. In many cases, the private sector is not interested in bioprospection because it is relatively risk and long term. c Breeding, molecular tools, GM technology. d e.g. :biomass production in bioreactors, clonal farming, etc. e Depend on the crop length breeding period. f Representative samples of an environment, DNA extraction techniques, effective data management systems. b

The EGM also concluded that the development of an explicit institutional mechanism to assist the countries or regions in these areas could be an initiative with a very high impact and rate of return to investment. In the next section the board outlines for such a mechanism are put forward for further consideration.

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5. Evolving into the future: A matchmaking collaborative platform for promoting KBBE applications on agriculture, bioenergy and health.
 Based on the above conclusions it was recommended to establish a support mechanism with the goal to: 1) Facilitate a better understanding of the opportunities, resources and processes involved in the development and application of biotechnology to biodiversity valorisation, and 2) Provide a permanent source of information and advise concerning policy and business development options and existing instruments to deal with the many limitations hindering such applications. To achieve these objectives, specific activities should be considered in three broad areas: (i) policy design and decision making, (ii) capacity building, and (iii) facilitating business development, with cross cutting activities focused at raising public awareness and marketing of the KBBE, identification of bottlenecks and mapping the available knowledge and capacities – public and private – in the different areas and products, providing an appraisal of policy frameworks for private investment, among others. From the organisational point of view the EGM recommended that such a scheme should be set up as a semi-permanent open-access network of interdisciplinary and experts representing different disciplines and having no conflict of interests. The work approach must be inherently flexible, combining advisory services, information gathering and analysis with periodic meetings and online communication for the development of specific activities. This can happen under the management-coordination of a consortium of regional and international organisations. Specific activities should evolve both from specific requests as well as be of an anticipatory nature, promoting a prospective analysis of the potential impacts of the new technologies on specific biodiversity resources and existing production processes. Within this context, the platform should serve as an informed and pluralistic environment for the analysis and discussion of the different ways in which biotechnology and biodiversity exploitation can contribute to socioeconomic development and poverty alleviation. In developing its activities, the platform should offer direct support and information to policy makers as well as the scientific community and private investors to strengthen their decisionmaking processes at the macro and micro level. Specific products from this effort will include: 1) Conclusions and recommendations emerging from region-wide consultations aimed at facilitating dialogue among the different actors (scientist, policy makers, industry representatives, etc.) involved in the biodiversity and biotechnology sectors, 2) Direct support to specific projects evolving from the platforms activities, 3) Formal in-depth reports on specific issues and policy areas (e.g. public perception, investment requirements, biosafety, IPR, etc.), and 4) Capacity development through seminars and other training activities organised directly, or in cooperation with other organisations. Table 3 summarises a structure of activities for the platform on the basis of the above stated orientations. In terms of implementation the EGM recommended that experts participating in the meeting constitute the initial members of the platform and that UNIDO undertakes the responsibility of developing the platform statues and operational rules and initial budget. It was also recommended that the implementation mechanism should include regional organisations, such as the Interamerican Institute for Cooperation on Agriculture, IICA, as well as other institutions working in the field, such as the International Industrial Biotechnology Network (IIBN) and the Royal Botanical Gardens, Kew, among others, and that UNIDO should as soon as possible initiate contacts with this organisations to start exploring their potential interest and the possible institutional and financial arrangements for the platform.

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Table 3: Summary of potential platform areas for action and main activities* AREAS OF ACTIVITY TASKS Raising public awareness, marketing of KBBE Identification of bottlenecks

Mapping available knowledge

Providing advisory support for specific issues

Policy design & decision making support Benchmarking and dissemination of information related to key areas of the KBBE Analysis of the institutional and policy environments (regulations, incentives) and existing capacities (human and infrastructure) in relation to different KBBE situations. Develop alternative policy instruments and investment pathways for research and define R&D investments priority setting Development of white papers and inventorising best practice in key issues as input to policy makers and other relevant stakeholders.

Capacity building Introducing the KBBE and related issues and policies in public at different levels – national and international Human resource development in biological and social sciences (PhD, Master, etc.). Improvement of entrepreneurial capacities and institutional innovations to reflect opportunities and challenges of transition to KBBE. Highlighting areas were training of human resources in biological sciences and other KBBE related areas is needed.

Facilitating biobusiness development Match-making, dissemination of material in scientific and popular media Improved data bases of existing capacities, development of competitive intelligence, promotion of risk capital mechanisms. Alternatives to facilitate accessibility to existing capacities and scaling up options

Facilitating priority setting and help guiding investments to areas in need

Assist in interpreting market data and regulatory information, project profiling, identification of alternative funding opportunities Impact assessment Evaluation of policy Promotion of research and Wide dissemination of (economic-socialalternatives validation of methodologies existing methodologies environmentfor impact assessment and impact assessment cultural) information Web based Facilitate E-consultations Offer E and distance Promote business communication and E-conferencing on learning facilities to lower oriented E-based instrument relevant KBBE issues capacity development costs discussion groups (information and policies in areas where these Offer an affordable portal) methodologies can be match-making applied enhancement facility * Cells in the table offer a summary description of orientation and expected contribution of the platform to each of the main areas where interventions are needed.

Bibliography OECD (2006) The Bioeconomy to 2030: Designing a Policy Agenda. Informal Experts Meeting IICA (2007) (a) Preguntas y respuestas más frecuentes sobre biocombustibles. San José, Costa Rica. IICA (2007) (b)Atlas de la agroenergía y los biocombustibles en las Américas: I Etanol.San José: 2007. 181 p.

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Annex 1: Programme of the Meeting Day 1: Monday, 30 November 2009: Session 1 1. OPENING Welcome UNIDO / Local Organisers The EGM and its objectives & outcomes George T. Tzotzos 1. INTRODUCTION OF PARTICIPANTS: Participants will have 5 minutes to introduce themselves and raise potential issues for discussions. Chair: Martin Zilic Session 2 2. BIOPROSPECTING INITIATIVES IN LATIN AMERICA: Opportunities and Challenges The new economic model of a Knowledge-based Bioeconomy (KBBE) offers a wide range of potentials & opportunities, but entails also specific challenges encompassing the fields of science, technology, regulation, policy and socio-economy. This session will address overarching issues. Conditions and requirements for bioprospecting to be a viable economic activity. Policy and economic issues (such as regulation, standardisation, IP management, competing products, partnerships). Chair: Martin Zilic The new Knowledge-based Bio-Economy (KBBE): Eduardo Trigo, Argentina Opportunities and Limitations in the LAC region Public-Private Partnerships for Agricultural Carlos Pomareda, Costa Rica Innovation through synergies between Biodiversity and Biotechnology Integrating science, technology and innovation into Myriam Sánchez Mejía, Colombia social development processes in the region Bioprospecting Agreements: Lessons learned and Nicolás Mateo Valverde, Costa Rica Future Perspectives • Moving Innovations from the Lab to the Market: Ivan Mimica, Chile Best Practices in Technology Transfer • Building World Class Technology Bioprospecting as a Tool for Conservation; Human Luis Cubilla Ríos, Panamá and Economic Development General Discussion Session Moderator: Eduardo Trigo

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Day 2: Tuesday, 1 December 2009: Session 3 3. BIOPROSPECTING OF PLANTS This session will discuss how new technologies for the identification and functional analysis, the isolation and preparation of active fractions from plants, their further purification, modification and formulation as chemically defined entity(ies) under quality-controlled and standardised processes could play a role in improving the competitive position of plant-derived high-added-value botanical drugs, phytochemicals, etc. Speakers are required to make a critical evaluation of the advantages and disadvantages of novel technologies vis-à-vis technologies currently in use. Chair: Elizabeth Hodson Natural products in modern life science Lars Bohlin, Sweden A strategy for developing biobusinesses in the Javier García Saavedra, Perú Amazon Rain Forst of Peru New technologies to ensure seed quality of biodiverse Hugh Pritchard, England oilseeds Bioprospecting for novel industrial products: is there Fabian Capdevielle, Uruguay a role for bioinformatics? General Discussion Session Moderator: Dulce de Oliveira Session 4 4. BIOPROSPECTING OF MICROORGANISMS Biotechnology can contribute significantly to the development of novel production systems for the processing of biomass and production of chemicals, as well as, the rapid screening, improvement and cost-effective production of biocatalysts with desired functional properties. Evaluation of genomic and post-genomic technologies in tapping the potential of microbial diversity and the development of new products and services. Speakers are required to critically evaluate the level of technology maturation and well as of the factors that impact on the adoption of these technologies. Chair: Elizabeth Hodson Metagenomics as a powerful tool for bioprospecting Aristóteles Góes-Neto, Brazil Bioprocess Plants: A transition necessity from Alberto Díaz, Argentina biotechnology to bioindustry The White Genome Project: Analysis of low Andrés Bercovich, Argentina temperature extremophiles isolated from Antartica The microbes from the sulfuretum of the Humboldt Victor Ariel Gallardo Gallardo, Chile Current Marine Ecosystem: A potential source of biotechnological applications General Discussion Session Moderator: George Tzotzos Day 3: Wednesday, 2 December 2009: Session 5 5. CONCLUSIONS: WRAP UP AND FOLLOW UP ACTIONS Identified follow-up projects will be analysed conceptually in terms of filling specific needs (national and regional); technical feasibility; economic benefits; and funding potential. Preparation of report and project concepts Session 6 6. CLOSING SESSION Presentation of report and follow-up project concepts (15 minutes each, followed by 15 minutes discussion) Closing remarks

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Annex 2: List of Participants Lars Bohlin, Uppsala University, Sweden Hugh Pritchard, Royal Kew Gardens, UK Eduardo Trigo, Grupo CEO, Argentina Alberto Díaz, INTI, Argentina Andrés Bercovich, BioSidus, Argentina Gabriel Vellicce, EEAOC, Argentina Aristóteles Góes-Neto, UEFS, Brazil Dulce de Oliveira, IPBO, Belgium/Brazil Bruno Andrade, Universidad Estadual de Feira de Santana, Brazil Elizabeth Hodson de Jaramillo, Pontificia Universidad Javeriana, Bogotá, Colombia Myriam Sánchez Mejía, Biotec, Colombia Nicolás Mateo Valverde, Banco Interamericano de Desarrollo (Washington), Costa Rica Luis Cubilla Ríos, Smithsonian Tropical ResearchInstitute, Panamá Carlos Pomareda, Servicios Internacionales para el Desarrollo Empresarial S.A., Perú Javier García Saavedra, Presidente Ejecutivo, Centro de Desarrollo para la Competitividad de la Amazonía, Perú Fabián Capdevielle, INIA, Plataforma Biotecsur, Uruguay Victor Ariel Gallardo Gallardo, Universidad de Concepción, Chile Iván Mimica, Consorcio de Innovación y Tecnología para la Salud, Chile Andrés Viveros Cifuentes, Director, ARIDP BioBio, Chile Juan Izquierdo, FAO Regional Office for Latin America and the Caribbean, Chile Martín Zilic, Universidad de Concepción, Chile

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Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Annex 3: Wild and cultivated plant biodiversity from Latin America with potential industrial applications16
 Biological resource Maca (Lepidium meyenii)

Ecosystemª Key ingredients H Alkaloids, esteroids

Some reported properties Fertility, sexual disfunction, vigor enhancer Antibacteria (E. pilori),antioxidants, insecticide Low-calorie sweetener

Mashua (Tropaeolum tuberosum)

H

Isothiocyanates, pigments

Yacon (Smallanthus sonchifolia)

H

Oligofructans

Native potatoes (Solanum andigena, Strenotomum, S. Gonicalix, S. Curtilobum, S. Juzepsuki, S. Chaucha, S. Ajanhuiri) Oca (Oxalis tuberosa)

H

Pigments (anthocianins, xanthophylls, carotenoids)

Antioxidants, nutraceutic

H

Pigments, alkaloids

Antioxidants, nutraceutic, insect repelent Nutritive food for babies

Arracacha (Arracacia xanthorriza)

H/L

Starch

Achira (Canna edulis) Mauka (Mirabilis expansa) Sangre de grado (Croton lechleri, perspiciosus, C. palanostigma, C. gossypifolium, C. draconoides) Matico (Piper angustifolium, P. Aduncum)

H/L H L

Starch (large size grain)

Manayupa (Desmodium molliculum)

H

Monoterpenes (camphor, camphenol, borneol, boneoliso), sesquiterpenes (bisabololbeta), phenil propanoid Steroids and organic acids

Sand flower (Tiquilia paranychoides)

H

-

Coco mbokajà (Acronomia totai mart) Agracejo (Berberi vulgaris)

L

High oleic and linoleic acids.

H

-

White flower (Buddleja incana)

H

-

Canchalagua (Schkuria pinnata)

H

-

Andean grains (Chenopodium quinoa, C. pallidicaule, Amaranthus cadatus) Tarwi (Lupinus mutabilis)

H

High protein content, saponins

Hepatovesicle antiinflammatory Genitourinary antiinflammatory Anti-inflammatory, blood detoxicating Nutritive food

H

High protein content

Nutritive food

High cellulose and lignin content High protein content

Fibre insdustry

Ricinoleato de metilo Pigments

Biofuel, chemicals and plastics Natural Colorant

H

Tannins

Achiote (Bixa orellana)

L

Pigments

Alrampo (Opuntia spp.)

H

Pigments

Anti-inflammatory, antiseptic, leather Natural colorant for food industry Natural colorant

Boliche (Sapindus saponaria)

H

Saponins

Personal care, detergent

Jatropha curcas

L

High oleic and linoleic acids

Biodiesel

Tuna (Opuntia ficus-indica)

L

Hydrocarbons

Biofuel

Atajo (Amaranthus spp.; wild kiwicha) Molle (Echinus molle)

H

Lodine, proteins

Nutraceutical food

H

-

Insect repellent

Sisal (Agave sisala Perr) Nuna (Phasseolus vulgaris) Casto bean (Ricinus communis) Sangre de drago do Socotra (Dracaena cinnaban) Tara (Caesalpinea tintorea)

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H

Pro-anthcianidins (catequine, epicatequine, galocatequine)

Starch industry Antiviral, antifungal Antiviral, cicatrizing

H/L H L H/L

Nutraceutic, antiinflammatory, antitussive, anti-diarrheic, antitrichomona vaginale, antiseptic Mucous membrane antiinflammatory Neuroglandular system antiinflammatory Biofuels

Nutritive food

Applications in agriculture, food, energy, health, industry and environmental sectors 37

Expert Group Meeting on the KBBE as basis for Economic Development and Industrial Sustainability

Biological resource Wild papaya (carica peruviana) Tomate de árbol (Cyphomandra betacea) Uchuva (Physalis peruviana) Camu Camu (Myrciaria spp.) Pasifloras (Passiflora spp.) Lúcuma (Pouteria caimita)

Ecosystemª Key ingredients H Papaine H Micronutrients

Some reported properties Food industry Nutritive food

H

Vitamins A $ C

Nutraceutic, micronutrients

L

Ascorbic acid

Food industry, pharmacological Nutraceutic, micronutrients Nutraceutic, cosmetics

H/L L

Vitamins A & C Flavors, pigments, vitamins, fats Vitamins A & C, calcium, phosphorous Micronutrients

Chirimoyas (Annona cherimolla)

L

Guanábana ( Annona muricata)

L

Sauco (Sambucus peruviana) Mora (Rubus spp.) Chiles and rocoto (Capsicum spp.)

H H H

Sweetpotato (Ipomea batatas) Muña (Minthostachs mollis) Algarrobo (Prosopis peruviana) Cotton (Gosyppium spp.) Wild anise (Tagetes filifolia) Coca (Erytroxylum cocae)

L H L L H H

Flavors, pigments, vitamin C Flavors, pigments Capsisicum acid (alkaloid) ascorbic Carotenoids, provitamin A Essential oils Vitamins Pigments Essential oils Alkaloids, vitamins, minerals

Pihuayo (Bactris gasipaes)

L

Carotenoids, pigments, fats

Micronutrients, nutraceutic Food Antioxidant Antioxidant Flavors, antiseptic Micreonutrients Spicy, insecticide, bactericle Flavors, nutraceutic, syrup Textile industry Aromatic, duretic Stimulative drug, vasodilator, food industry Micronutrients, food industry

ª H-highland ecosystems; L-lowland ecosystems; H/L –highland and lowland ecosystems. Source: Agricultural Applications of Biotechnology and the Potential for Biodiversity Valorization in Latin American and Caribbean. Roca and all. AgBioForum, 7(1%2), 2004, page 19, modified by the authors.

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