RIO DE JANEIRO (Reuters) - Brazil plans to expand a crackdown on companies that patent products made from rare plants and animals without adequately compensating the South American country or its indigenous communities.
The fight against "biopiracy" has won the support of indigenous communities and defenders of the Amazon rain forest who say corporations unfairly benefit from medicine and other products derived from Brazil's exotic plants, poisonous snakes or brightly colored frogs.
But the effort has sparked criticism that it slows crucial scientific research and arbitrarily targets entrepreneurs that could develop environmentally sustainable businesses.
Brazil has levied more than 100 million reais ($59 million) in fines since July on companies charged with not paying fair compensation for the use of genetic material native to Brazil, said Bruno Barbosa, who heads inspection for the environmental oversight agency Ibama.
Next year, officials will begin pursuing companies that did not notify the government of their use of local species to create products such as pharmaceuticals, as required by law, meaning fines will likely go up.
"Given that (fighting biopiracy) is a new process and that Brazil has one of the biggest reserves of biodiversity in the world, I think most of this activity is illegal, and we're going to find those people," he said.
Barbosa says examples of biopiracy abound, such as the development in the 1970s of the hypertension medication captopril from a snake venom that indigenous groups used on arrowhead tips.
Pharmaceuticals companies also used the yellow-and-green Kambo frog, found in Brazil's Amazon state of Acre, to create anti-inflammatory drugs without distributing benefits to local residents, he said. Many of these incidents came before a 2001 decree that created the current rules governing species use.
The government this year stepped up the anti-biopiracy effort with a campaign known as "Operation New Direction" that aims to crack down on what it calls profiteering.
Fines in 2011 may rise to $29 million each and companies face possible cancellation of patents in Brazil if inspectors find they did not register the use of local species.
One of the biggest fines levied so far was on Brazil's largest cosmetics maker Natura, Barbosa said. He declined to give details on the amount or the infraction because the process is ongoing.
Critics say Brazil's often aggressive efforts to prevent biopiracy threaten to slow crucial scientific research that could provide new cancer treatments or remedies for diseases suffered by local populations.
They said it treats anyone interested in commercial use of rare species as possibly criminal, complicating government goals of developing research facilities near where the species are found to create jobs in those communities.
The government should make the rules clearer because the current system ends up penalizing those that make the most effort to be transparent about their use of genetic material, said Raul Telles do Valle who works with ISA, a think tank on social and environmental issues.
"The current law is very vague on a lot of points, it ends up classifying everybody as illegitimate," he said. "Just passing out fines under the existing framework isn't going to solve the problem."
The law should reflect the difficulty of determining how to compensate local populations from collective knowledge passed down over generations, he said.
Barbosa insists the government's legislation is suitable and that expanding the fight against biopiracy could help reduce the destruction of sensitive environments.
"This is going to enable concrete alternatives that substitute destruction of the ecosystem for new economic mechanisms," he said.
Editing by Eric Beech