On April 29, 2025, China released a landmark draft of its first unified Environmental Code, now open for public consultation until June 13, 2025. The 2025 Draft Environmental Code (“Draft Code”) consolidates and elevates into a single legal instrument many of China’s environmental laws, but it also marks a significant development in the regulation of biological genetic resources (GRs). This post explores the most relevant provisions for life sciences companies, especially in light of access and benefit-sharing (ABS) obligations under the Convention on Biological Diversity (CBD) and the Nagoya Protocol, and highlights the implications for international research, global health, and cross-border R&D.

A Shift to High-Level Codification

When finalized, the Draft Code will become a general framework environmental code for China’s legal system, taking precedence over existing sectoral rules and administrative measures. This gives added significance to its ABS-related provisions: they are no longer guidelines as in the past; but would form binding, overarching legal requirements, including for foreign collaborations.  We briefly review key provisions and terms on ABS in the draft Code.

Key Provisions Affecting Access to Genetic Resources

Article 14 – International Cooperation and Treaty Implementation

This foundational article affirms China’s commitment to its international treaty obligations, including the CBD and Nagoya Protocol. It also emphasizes China’s intent to contribute to global environmental rulemaking. While aspirational in tone, this article sets the stage for a domestic ABS regime that aims to balance sovereign control over genetic resources with international treaty regimes—a tension reflected in later provisions.

Article 678 – Exit Control and Benefit-Sharing Requirements

Perhaps the most impactful provision for companies, Article 678 imposes a requirement that:

  • The export of Chinese genetic resources (or their utilization in cooperation with foreign entities) is subject to government approval according to relevant laws and regulations some of which may be forthcoming.
  • Such collaborations must include a “fair and reasonable national benefit-sharing plan.”

This represents a codification of a prior-approval mechanism, aligning with the Nagoya Protocol’s requirement for Prior Informed Consent (PIC) and Mutually Agreed Terms (MAT), but arguably extending beyond it in formality and scope. In practice, this could:

  • Delay or restrict international R&D involving Chinese GRs.
  • Complicate sample transfers between global research facilities.
  • Require early-stage companies or researchers to navigate bureaucratic hurdles without clear timelines or transparency.

Article 820 – Restrictions on Unique Wildlife Genetic Resources

Article 820 adds further constraints by:

  • Prohibiting the provision of unique Chinese wildlife GRs to foreign individuals or institutions.
  • Mandating that international research projects involving these resources:
    • Receive prior approval;
    • Involve “substantial participation” by Chinese research entities;
    • Submit a benefit-sharing plan as required, and comply with other applicable Chinese laws and regulations.

This language is stricter than the Nagoya Protocol, which treats joint research as a form of benefit-sharing rather than a precondition for access. The requirement for substantial local participation could:

  • Reduce the autonomy of international research consortia;
  • Result in forced joint ventures or data localization;
  • Limit access to high-value biodiversity data, especially for companies in biotechnology, pharmaceuticals, agriculture, and synthetic biology.

Key Terms to Watch

“Genetic Resources”

The Draft Code uses the term “biological genetic resources,” which is not defined in the code itself but would presumably align with the CBD’s broad definition: “genetic material of actual or potential value.” This includes plants, animals, microbes, though the treatment of Digital Sequence Information (DSI) remains unclear and will require further regulatory clarification.

“Foreign Institutions or Individuals”

Article 678 and 820 apply not only to foreign companies, but also to Chinese entities “established or controlled” by foreign actors. This could extend obligations to Sino-foreign joint ventures, R&D entities with foreign shareholders, and China affiliates of foreign companies, increasing compliance complexity.

“Substantial Participation”

This term lacks definition but could imply a required percentage of Chinese personnel or research input.  This may may mean the data and research materials must be accessible to Chinese parties.  The risk is that such conditions evolve into quantitative thresholds, reminiscent of indigenous participation requirements in other jurisdictions, potentially undermining scientific independence.

Implications for Public Health and Global R&D

The Draft Code risks unintended consequences for pathogen-sharing, pandemic preparedness, and health innovation:

  • Public Health Emergency Exception: The Nagoya Protocol (Article 8(b)) allows exceptions for public health emergencies, such as pandemic influenza. The Draft Code contains no such provision, potentially complicating sample sharing through platforms like the WHO’s Global Influenza Surveillance and Response System (GISRS).
  • One-Size-Fits-All System: The proposed structure treats all GR transfers uniformly, regardless of risk profile, urgency, or public benefit.
  • DSI Uncertainty: If future rules interpret “biological genetic resources” or “utilization” to include digital data, companies using sequence data generated from Chinese samples could face new compliance obligations, even when no physical material is exchanged.

Strategic Takeaways for Companies

Companies with operations or partnerships in China should:

  • Map out existing collaborations involving Chinese GRs or data derived therefrom.
  • Review current and future contractual terms to ensure flexibility and compliance in the event of new national ABS requirements.
  • Assess risks of data transfer, IP, and benefit-sharing expectations when planning R&D pipelines or joint ventures.

Call to Action: Stakeholder Consultation Open

China’s Draft Environmental Code signals a strengthening of sovereign control over its biodiversity. While the alignment with global ABS norms is welcome, the current draft risks creating compliance burdens and research bottlenecks that may disincentivize scientific collaboration. Now is the time for industry to speak up to help shape a final law that both protects China’s biodiversity and fosters global innovation.

Companies and industry associations now have a time-limited opportunity to shape the future of ABS regulation in China. Stakeholders can submit feedback until June 13, 2025, using the following methods:

  • Online submission: NPC Public Comment Portal
  • Mail submission:
    Legislative Affairs Commission of the Standing Committee of the National People’s Congress
    No. 1 Qianmen West Street, Xicheng District, Beijing, 100805, China
    Label: “Comments on the Draft Ecological Environment Code (生态环境法典草案征求意见)”
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Photo of Bart Van Vooren Bart Van Vooren

Bart Van Vooren, partner leads a dynamic practice at the intersection of EU regulatory law, global health, and biodiversity law. In these fields, he advises innovative pharmaceutical, food, cosmetic and technology companies on complex EU and global regulatory, compliance and policy assignments.

Bart…

Bart Van Vooren, partner leads a dynamic practice at the intersection of EU regulatory law, global health, and biodiversity law. In these fields, he advises innovative pharmaceutical, food, cosmetic and technology companies on complex EU and global regulatory, compliance and policy assignments.

Bart holds a Ph.D. in EU and International Law and was a professor of EU law until 2013. During that time, he wrote the first-ever handbook with Cambridge University Press on “EU External Relations Law” (2014). He then transitioned to private practice, and frequently acted for the Belgian government before the EU Court of Justice (e.g. C-16/16P Belgium vs Commission). Bart joined Covington in 2016, leading some of our most consequential EU litigation proceedings (e.g. C-311/18 “Schrems II”) over the years.  Having handled nearly 50 cases before the EU Court, he’s uniquely qualified to support our corporate clients in our most high-stakes disputes. Recent examples include T-189/21 Aloe Vera of Europe v Commission (which we won, so the Commission decided to appeal); as well as T-201/21 Covington & Burling and Van Vooren v Commission (which we also won, and hence is also on appeal).

As a pioneer in biodiversity law, over the past 15 years Bart has built a unique, global practice on Access and Benefit-Sharing (ABS) laws under the Convention on Biological Diversity, the Nagoya Protocol, the Plant Treaty, the High Seas Treaty and the WHO Pandemic Agreement. ABS compliance is critical when sourcing biological materials for life sciences R&D and I work with many of the world’s innovative life sciences companies on the whole range of e.g. transactional, contractual, compliance, IP, (EU) regulatory and litigation work relating to ABS. As biodiversity has increasingly become identified as a major commercial and financial risk to companies, so has the practice expanded to e.g. biodiversity credit markets, biodiversity insurance, biodiversity claims and advertising, and so on. Since April 2025, Bart has been appointed as the industry representative to the Steering Committee of the UN Biodiversity Fund that seeks funding from the private sector for biodiversity conservation and restoration.

Bart also pioneered our global health practice. He has advised pharmaceutical clients on seasonal and pandemic influenza since 2016. Since then, this practice area expanded to cover all matters relating to infectious diseases, and as of 2020, emergency preparedness and response (eg. WHO prequalification, International Coordination Group negotiations, Emergency Use Listing, International Health Regulations Rev 2024). He has been the pharmaceutical industry’s lead lawyer advising on the WHO Pandemic Treaty negotiations, adopted on 14 May 2025. Currently, he continues to advise on the work of the Intergovernmental Working Group (“IGWG”) teasing out the technical details of the “Pathogen Access and Benefit-Sharing System” intended to create legally binding obligations on companies to commit vaccines, therapeutics and diagnostics in case of a new global health emergency.

In Chambers rankings, clients have kindly described Bart as “very knowledgeable, action-focused and service-focused lawyer”, adding that he “really tries to find a way of working through challenges”, am “customer-oriented” and provide “sound advice and reasonable options for our business with pros and cons.”

Finally, Bart has an active pro bono practice assisting NGOs defending the human rights of persons with a disability through strategic litigation before the EU Court.

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Photo of John Balzano John Balzano

John has over twenty years of experience with legal and regulatory issues related to China and the Asia Pacific Region (APAC), particularly with regard to products regulated in Mainland China by the State Administration for Market Regulation, the National Medical Products Administration (NMPA)…

John has over twenty years of experience with legal and regulatory issues related to China and the Asia Pacific Region (APAC), particularly with regard to products regulated in Mainland China by the State Administration for Market Regulation, the National Medical Products Administration (NMPA), and other agriculture, animal and healthcare (including digital health) products and services. He assists clients with developing strategies to obtain pre-market approvals for these products in China and APAC, including clinical development, understanding relevant pricing and reimbursement policies, and reviewing distribution and promotional plans.

He also advises on regulatory compliance, due diligence, and enforcement matters for China operations, including drafting and revising and integrating China and global standard operating procedures, assessing the functions of regulatory departments in China, responding to inspection results and enforcement inquiries, implementing product recalls, and supporting virtual and onsite overseas quality inspections. John also has significant experience designing strategies to handle professional consumer litigation for companies operating in China and working with local counsel.

He advises companies and industry associations on their advocacy strategies, including the notice and comment process before NMPA and other regulatory agencies.

He is the author of the book, China Food and Drug Law: Policy, Practice, and Future Directions (Springer 2024).

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Photo of Muyun Hu Muyun Hu

Muyun Hu advises multinational and Chinese companies on a range of regulatory, policy, transactional, and litigation matters. Her work focuses on the life science industry, particularly with regard to food, drug, medical device, cosmetic, and other regulated products.

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