H.E. Ambassador Xolelwa Mlumbi-Peter (South Africa)

South Africa

7 ANNUAL REVIEW OF THE SPECIAL COMPULSORY LICENSING SYSTEM (PARAGRAPH 7 OF THE ANNEX TO THE AMENDED TRIPS AGREEMENT AND PARAGRAPH 8 OF THE DECISION ON THE IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH)

226.   The first question I have with respect to the Secretariat presentation refers to the definition of a 'pharmaceutical product' as we find it in the Annex to the TRIPS Agreement. The last sentence of sub-paragraph (a) says "it is understood that active ingredients necessary for its manufacture and diagnostic kits needed for the use would be included". One interesting question that always comes up is that this particular definition does not refer to vaccines. The question I have in context of our discussions around COVID-19 is whether or not we are talking about pharmaceutical products or products of pharmaceutical processes. This essentially would also include vaccines— it would be good if this point could be clarified. 227.   The second question is in relation to Members that have implemented regimes for exportation under this System. And just in terms of the statistics, you indicated that 85% of the worldwide exports comes from Members that have implemented the System into their domestic law. Do we have statistics of who those Members are, i.e. the world exporters, the WTO Members with implementing legislation? 228.   The last question is in respect of the use by LDCs in an RTA. If I go to the text of Article 31bis and I look at paragraph 3, it says and confirms what the slide says. But it goes on to say that where a developing or a LDC Member is party to an RTA within the meaning of Article XXIV of the GATT 1994 and the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries, the requirement then is that at least half of the current Membership is made up of countries presently on the United Nations list of least developing countries. This creates a more cumbersome requirement for Members to benefit from a producer that may be situated within that RTA. To clarify that it is not just any RTA, it is only RTAs where at least 50% of Members are LDCs. According to my calculations, there are only two of these currently existing, and both of them are situated in Africa. 229.   So as indicated I will proceed to read my prepared statement, and noting your introduction, thanking you for the consultations that you have held. We are also appreciative of the Secretariat's interventions including the excellent presentation. 230.   The Doha Declaration on the TRIPS Agreement and Public Health, and the Paragraph 6 System established under the 2003 waiver, and the Protocol Amending the TRIPS Agreement through Article 31, remains a fundamental achievement and a landmark worthy of admiration. Yet, the Paragraph 6 System has stood as a monument to good intentions—pristine and only invoked once during the entire time. There is a recognition that the use of the System is overly cumbersome with too many conditionalities and procedural prescripts to be useful to Members with insufficient or no manufacturing capacity in the pharmaceutical sector. 231.   Having studied the recently updated trilateral study, it points out that concerns have been expressed that the System is overly complex and not practical, and the potential use of the System may be deterred by concerns of political or trade ramifications associated with the use of compulsory licences. We agree that the System cannot be a panacea against all eventualities. However, conditioning the use of the Paragraph 6 System to time-consuming and overly burdensome procedures does not make for quick action irrespective of the level of development of a country. 232.   Looking at the System through the lens of COVID-19 quickly reveals of the cracks in its construction and application. The System is based on developing countries notifying the WTO of the general intention to use the System, yet we see that there are many factors that might prevent a country from doing so and especially given the COVID-19 circumstances. As we indicated, we remain concerned about the apparent procedural and legal difficulties that continue to exist under this System and we stand ready to continue a discussion on many of these concerns that we have. 233.   I just wanted to point out that in the context of HIV/AIDS, South Africa being one of the most affected countries in the world and so too the African continent, it is estimated that between 1997 and 2012, 12 million Africans died waiting for enough life-saving drugs to reach the continent. This is already during the time when the Doha Declaration on the TRIPS Agreement and Public Health had been issued, the 2003 waiver had been adopted and implemented on a provisional basis until it was finally subject to the Amendment of the TRIPS Agreement—yet millions of people still died. What are we to make of a System that allows a humanitarian crisis of this magnitude to continue without abatement? If this many people died in the genocide or an armed war or conflict there would be immediate action. Yet many of these people did not die because they were killed by bullets or artillery shelling, they died because they could not access life-saving medicine in a timely manner. We ask, will we allow this to continue? I hope not. The WTO must be responsive to the needs of its Members, chief amongst them must be counted the poorest and the most vulnerable.

The Council agreed to adopt the draft report and to attach the record of the discussion to it.

30. The Chair recalled that, in the past, the review had been conducted pursuant to Paragraph 6 System of the 2003 Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. Since the entry into force of the Protocol Amending the TRIPS Agreement on 23 January 2017, the review also responded to the requirements that had now been incorporated into the amended TRIPS Agreement.
31. Paragraph 7 of the Annex to the amended TRIPS Agreement and paragraph 8 of the 2003 Waiver Decision required the Council to review the functioning of the System annually, with a view to ensuring its effective operation. They also required the Council to report annually on the System's operation to the General Council. In the case of the Waiver Decision, this review was also deemed to fulfil the requirements of Article IX:4 of the WTO Agreement.
32. During the Chair's consultations in September concerning Members' preferences for approaching the annual review, a number of Members had suggested that the discussion focus on concrete problems with the application of the System, rather than an abstract consideration of issues. Some had referred to procedural complexities of the System that needed to be discussed so that the System could ensure access to medicines as intended. Others had cautioned that this agenda item should not be "another COVID-19 item". One concrete proposal that had gathered broad support was the suggestion that the Secretariat give a presentation on how to use the Special Compulsory Licensing System (as opposed to how to accept the Amendment), so as to refresh delegations' memory and provide background to the discussion.
33. The Chair suggested that she would proceed by first informing Members about the status of acceptances of the Protocol Amending the TRIPS Agreement, and then give the floor to the Secretariat to provide a presentation on how to use the Special Compulsory Licensing System to remind everyone about the detail. The floor would then be open to delegations for an exchange of views about the functioning of the System, and finally, the Council would consider its Report to the General Council.
34. The Chair updated Members on the status of acceptances of the TRIPS Protocol. The current period for accepting it ran until 31 December 2021. The amended TRIPS Agreement was thus binding for 131 WTO Members. In other words, 33 Members were yet to accept the Protocol Amending the TRIPS Agreement. She encouraged those Members to complete their domestic procedures as soon as possible.
35. When the TRIPS Amendment had entered into force in January 2017, Members had noted that it would be useful to consider how to make this new procurement tool work effectively in practice. The Chair therefore encouraged Members to engage in a constructive discussion which could also build on earlier reviews. As previous Chairs and she herself had indicated on past occasions, Members might find two documents particularly helpful to facilitate their considerations. The first document was the Council's Annual Review of 2016 (circulated in document IP/C/76); and the second document was the Secretariat's 2016 Report on Technical Cooperation Activities (circulated in document IP/C/W/618). Annex II of that report summarized key issues that delegations might wish to consider to support the practical use of the System.
36. The representatives of the WTO Secretariat, Chad (on behalf of the LDC Group), Ukraine, South Africa, India, China, Tanzania (on behalf of the African Group), Japan, Australia, the United States of America, Canada, Chile, Switzerland and the European Union took the floor.
37. The Council took note of the statements made.
38. The Chair turned to the Council's report to the General Council. A draft report had been prepared by the Secretariat (circulated in document JOB/IP/38). It was modelled on previous years' reports and contained factual information on the implementation and use of the System. Under the section on the Amendment to the TRIPS Agreement, it also included a list of Members who were yet to accept the Protocol Amending the TRIPS Agreement. As with past reports, an extract from the Council's minutes on this agenda item would be attached to the report in Annex 1 and Appendix 1.
39. The Council agreed to adopt the draft report and to attach the record of the discussion to it.

IP/C/M/96, IP/C/M/96/Add.1