Entering the Nagoya Protocol
The Asia-Pacific (APAC) nation has become an official member of the international agreement to protect biological resources, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation (Nagoya Protocol).
Following its commitment on 17th August 2017, Korean news resource Business Korea reports how the cosmetics industry is likely to experience increased vulnerability.
The Nagoya Protocol was first introduced in Nagoya, Japan, and entered into force in 2014. Its primary aim is to split profits gained from accessing and using biological resources appropriately between countries that supply and use those ingredients.
As South Korea presented its ratification to the U.N. Secretariat in May 2017, it is now the 98th nation to become an official member of the Nagoya Protocol.
Genetic resource approval
Through the Nagoya Protocol, South Korean companies — that are famed for K-beauty phenomenon cosmetics and personal care items — are required to achieve approval to use genetic resources.
At present, cosmetics companies import 70% of raw materials, and so now, will experience the additional costs of royalties relating to the supply and demand of raw materials.
Another leading APAC nation, China, entered into the Nagoya Protocol in September 2016. Upon entering the convention on biological diversity, China has stated that foreign firms must collaborate with Chinese companies when genetic resources are being used.
With this new protocol now in force, many South Korean companies are having to navigate their way around the protocol to ensure they know how to meet requirements while remaining strong within the marketplace.
Conglomerate leaders such as AmorePacific are likely to be prepared for these changes, by anticipating that becoming the 98th nation to sign up to the Nagoya Protocol may be an inevitable eventuality rather than a possibility.
Other countries, however, may hold back to look at how these regulations will realistically impact them. Brands now need to explore the genetic origins of raw materials, the costs resulting from sharing prices and available alternatives in South Korea.