As multinational food processor Nestlé attempts to patent the well-known benefits of South Africa’s fynbos plants, Khadija Sharife explains the role tax havens play in enabling corporations to protect the value of intellectual property rights.
Here in South Africa, consumption of rooibos tea, rusks and biltong (dried and spiced beef), is a national past-time. Sure, we engage in other activities – work, procreation, exercise, showering. But really, when it comes to chowing on homegrown grub, its safe to say that all other 'musts' take second place to our quest to be good citizens.
Of the three, it is rooibos (or 'red bush') endemic to South Africa – grown only in the Cederburg Mountains of the Western Cape – that is renowned amongst South Africans for its magical properties. The fynbos plants' extraordinary properties range from curing acne to slowing ageing, inflammation and hair loss, thanks to at least one of its known – and most active, antioxidant ingredient: Aspalathin. Most scientists believe the property is available only in the rooibos plant.
Recently, Nestec SA, a subsidiary of Nestlé, based in Switzerland, applied for five patents, using water or alcohol extraction, for conditions much the same i.e.: rooibos being the 'discovered' property, in addition to that of the honeybush, another endemic plant.
Nestlé, which holds 30.5 per cent shares in L'Oréal (the world's largest cosmetic producer), and 50 per cent in Inneov (a joint venture with L’Oréal), claims that it had no intention of making commercial use of the plants in the future – though it hopes for the 20 year patent. The company further claims to have contravened no national laws (despite stipulating the need for prior informed consent) or international frameworks.
Thanks to the effort of Natural Justice in South Africa, a local organisation comprised of attorneys 'for communities and the environment', the issue is now on the table. Thankfully, this is sooner rather than later as in Switzerland, applications are publicly available 18 months after filing. Filing the patent costs CHF200, with another CHF500 for the examination process. The European Patent Convention allows for applicants to file across more than 30 European states, with a single application.
Several obvious questions come to mind, such as whether the well-known benefits of rooibos can be patented and the value of such property rights. According to the Swiss Federal Institute of Intellectual Property, ‘To be patentable, an invention must be novel. This means it must never have been seen in any form by the public before you apply. So don’t tell coworkers about it or show it at an exhibition too early. Owning a patent gives you the exclusive right to prevent others from commercially using your invention for up to 20 years. During this period you can prohibit others from using it – i.e., producing, using, selling or importing – without your permission.’ A company like 'Research Disclosure' is used by 90 per cent of the world's major companies to selectively disclose information about their 'inventions' in a bid to hit the jackpot first.
Yet while the battle against bio-piracy, that invisible theft of the living continues, another more pervasive question arises: Why Switzerland?
As most disreputable African dictators and terribly respectable multinationals will attest in the privacy of their mansions, Switzerland is the world's premier secrecy vault and low tax state, depending on the aggressiveness of the corporation's 'tax planning'. Ceding ownership of intellectual property and other intangible assets to entities in tax havens allows for companies to retain profit from royalties etc, without having to cough up taxes, as well as allowing companies to act as remote 'contracted' parties rather than manufacturers. McDonalds did the same following the UK's new tax rules in 2009, while SABMiller, one of the world's five leading beverage companies, has long since used the Netherlands for the same purpose.
BROUGHT TO YOU BY PAMBAZUKA NEWS
* This article first appeared on the Tax Justice Network.
* Khadija Sharife is a journalist, visiting scholar at the Center for Civil Society (CCS) based in South Africa, and contributor to the Tax Justice Network.
* Please send comments to [email protected] or comment online at Pambazuka News.