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WIPOGEOBEI07WWW[81759] Geographical Indications a Variety of

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WIPOGEOBEI07WWW[81759] Geographical Indications a Variety of

    E

    WIPO/GEO/BEI/07/1

    ORIGINAL: English

    DATE: June 6, 2007

    STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE WORLD INTELLECTUAL PROPERTY ORGANIZATION

    INTERNATIONAL SYMPOSIUM ON GEOGRAPHICAL INDICATIONS

    jointly organized by

    the World Intellectual Property Organization (WIPO)

    and

    the State Administration for Industry and Commerce (SAIC)

    of the People’s Republic of China

    Beijing, June 26 to 28, 2007

    GEOGRAPHICAL INDICATIONS AT THE NATIONAL LEVEL

    A VARIETY OF APPROACHES AND INSTITUTIONAL ASPECTS

    Presentation by Dr. Dirk Troskie

    Agricultural Economist and Deputy Director, Department of Agriculture,

    Western Cape, Elsenburg, South Africa

    c:\convert\temp\54411376.doc

    WIPO/GEO/BEI/07/1

    page 2

INTRODUCTION

     What is the role of Agriculture in a modern economy? Does Agriculture remain

    relevant when its share of the total economy is continuously decreasing? How can we

    successfully assimilate in an increasingly integrated international society? How does

    Agriculture react to social pressures such as the need for the more equal distribution of

    ownership of productive resources and employment creation? What about Agriculture’s role

    as custodian of the natural resources? How do we prevent losing our collective heritage to

    unscrupulous individuals?

     These are some of the questions that we, in South Africa, grapple with on a daily basis.

    Various remedies exist in order to address these issues, but a developing country must always

    be observant of the pressures on its scarce and limited public resources. In this paper the

    Geographic Indication (GI) approach in South Africa and its value in addressing some of

    these issues will be analysed. As South Africa is a country faced by duality (rich and poor,

    urban and rural, developed and marginalised), it is not strange that the systems used for wines

    and the one used for non-alcoholic products differs considerably. For this reason these two

    systems will be addressed separately. The final part of this paper will focus on Rooibos; one

    specific potential GI in South Africa with a very special place in society.

THE INSTITUTIONAL SYSTEM IN THE WINES AND SPIRITS INDUSTRY

     The history of wines in South Africa dates back to 1659 when the then Governor of the

    Cape, Jan van Riebeeck, made an inscription in his diary. From 1726 wines the Constantia-

    wines were very prominent and the wine culture became a very special element in the cultural

    and social life of the population, but especially the rural people, of the South-Western Part of

    South Africa (Brink 1974). At a very early stage South Africa acknowledged the linkage

    between the product of the vine and its origin by entering into the Crayfish Agreement with

    France in the 1930’s. At the basis of this Agreement is the fact that South Africa relinquished

    the use of the term “Champaign” on the condition that France would open up its market for South African crayfish. A more formal indigenous system for managing and certifying the

    link between the product and its specific environment was created with the establishment of

    the Wine and Spirits Control Act in 1970 (Act 47 of 1970).

     This system was refined with the establishment of the Liquor Products Act of 1989

    (Act 60 of 1989). In this Act a number of elements are relevant for the purpose of this

    International Symposium:

    (a) In Section 2 of the Act it establishes a Board that will be responsible for the

    development of policy and the appropriate systems.

    (b) However, in Section 3 it allows for the delegation of the Administration of the

    System to another party that may be better suited for the administration of this

    system. At this stage the Administration of the Wine and Spirits Scheme is

    delegated to South African Wine Information and Systems (SAWIS).

    (c) It makes provision for the establishment of the Wine and Spirits Scheme in

    Sections 14 and 15.

    WIPO/GEO/BEI/07/1

    page 3

    (d) As it is acknowledged that we are living in a fast changing environment, the Act

    provide in Section 27 for the majority of the details of the scheme to be

    proclaimed by Regulation.

As part of this System 22 Regulations have been published to date. The most important one

    that provided the foundation for the Wine and Spirits System was Regulation 1434 of 1990.

    This Regulation provided inter alia for:

    (a) The details of the Scheme.

    (b) Delimitation of the Geographic Areas.

    (c) Prescripts for cultivar wines.

    (d) Vintage wines.

    (e) Prescribe the conditions for the use of certain terms and prohibits the use of some

    other terms.

    (f) Prescribe bottling, sampling, certification and the requirements for seals and

    labels.

    (g) Payment of fees.

     It is clear that this scheme is an absolute success. From 1985 to 2006 the volume of

    wine certified under this scheme has increased from 22,3 million litre to 330,2 million litre

    (SAWIS, 2007). This represents and increase of 1 382 percent over this period. At the same

    time it must be mentioned that the system receives no subsidies from government, but that the

    producers carries the cost of this system. The current cost of the System amounts to R0,04

    (about $0,005) per bottle.

     Within the context of this Symposium and as this System allows for the formalisation of

    the linkage between the geographical area and the wine, it is appropriate focusing on nature of

    the geographical descriptions. The System makes provision, in an overlaying order and in

    declining order of size, for:

    (a) 3 Geographical units

    (b) 5 Production areas

    (c) 21 Districts

    (d) 56 Wards

    (e) 129 Estates

    (f) Single vineyards

     This means that a producer may, according to individual needs, decide where to source

    the grapes for the wines. In practice it means that certain entrepreneurs would decide to

    produce Estate Wine of Origin, of course sourcing all grapes from the specific estate. In other

    instances an entrepreneur may decide it is more appropriate to have Wine of Origin from a

    bigger delimitation, allowing him to source grapes from a number of farms. In this case it

    allows the co-existence of trademarks and GI.

    WIPO/GEO/BEI/07/1

    page 4

     Finally, the System is very rigorous in terms of the Certification procedures and the latest technologies are being used. On the neck of each bottle a certification seal is attached. As each bottle has a unique number and the consumer can in real time query the number on the website, this allows for consumer participation and confidence.

     This System has been long established, globally recognised and is flexible in allowing the entrepreneur to decide what is appropriate for the specific circumstances. At the same time it ensures that the correct information is conveyed to the consumer.

THE INSTITUTIONAL SYSTEM FOR NON-ALCHOLIC PRODUCTS

     It is now appropriate to move the attention from the Wines and Spirits System to the System for non-alcoholic products. During this movement the real meaning of South Africa’s

    duality is being experienced. Whereas the Wine System has been long established, the System for other products is being driven by fear. Fear for other countries claiming their right to their products. It is not strange to hear people referring to the claims that may be made on generic products such as pizza and salami. The result of this fear is that the System has been designed to be just compliant with South Africa’s international commitments and, more specifically, the Trips Agreement. The result is that the system is not cohesive, but uses a combination of the Trade Marks Act, Unfair Competition Regulations and Consumer Protection Laws (Bramley, 2007). The result is that, in effect, the South African System provides better protection for foreign GI than for domestic GI.

However, around the turn of the Century the so-called “Rooibos case” captured the headlines

    in South Africa. The essence of the case is that Forever Young, a South African Company specialising in pharmaceutical and skin care products, registered the “Rooibos” trademark on 12 August 1992 in the United States (USPTO, 2004). When the owner of the Forever Young neared retirement age, she sold the Rooibos trademark in 2001 for $10 to her long standing US business partner, a company with the name of Burke International (Cape Argus, 2005). Although cancellation procedures was started by Rooibos Ltd (the major Rooibos processor in South Africa) soon after the registration by Forever Young (USPTO, 2004), the whole problem only reached the front pages of the popular press in South Africa when the Wupperthal cooperative (representing the resource poor farmers in Wupperthal) ran into legal problems while exporting their product to the US. During the process Burke International claim to have spent quite a considerable amount ($250 000) on policing and protecting its trademark (Tralac, 2007). However, probably one of the most insulting incidents was when Burke International demanded royalties from South African companies for using the term Rooibos in the US (Sunday Times, 2004). Further, it must be remembered that Burke International use Rooibos as an ingredient in their skin care products with the result that their imports of Rooibos amounts to less than 1 ton per year. Fortunately (from a South African perspective) a number of the coffee houses in the US wanted to sell Rooibos and thus joined the litigation process (Cape Argus, 2004). The case has since been settled out of court following a ruling in February 2005 by a district court in Missouri in favour of a US company (Republic of Tea) (Tralac, 2007). Nevertheless, this was done at the cost of about $1 million for the Industry.

    WIPO/GEO/BEI/07/1

    page 5

     Partly as a result of this specific case some realisations took place in South Africa.

    These include:

    (a) We should not only be afraid of other countries trying to protect their own, but we

    also have a heritage that is at risk.

    (b) The cost of the case represented quite a substantial amount for a small industry.

    (c) Who should protect our heritage? Is that the function of government or of the

    (private) role-players in the industries? This is especially a problem for the

    smaller industries without a substantial economic base, multiplied by the number

    of countries where protection is sought.

    (d) It is necessary to embark on a serious quest in search of solutions.

    (e) Even South Africans cannot be trusted, but may for financial or other personal

    reasons exploit the collective heritage if it is not protected adequately.

One of the results that came out of this whole case is the establishment of the South African

    Rooibos Council (SARC). Although it is still in its infancy, it represents the whole industry

    (small and commercial producers, labour, processors, etc.) and is an ideal vehicle for

    collective action. Another result is that, since this case reached the headlines, various

    government institutions (Department of Trade and Industry, National Agricultural Marketing

    Council) started showing interest in the problematique surrounding this case. At the same

    time, and providing a link between policy development and research, a number of research

    projects surrounding Geographical Indicators were launched. These included a collaborative

    project between four of the nine Provinces, the multi-stakeholder (Universities, Research

    Institutions, Government Departments) and multi-country (South Africa, Namibia, France)

    Duras Project as well as the Biodivalloc project. Finally, an Amendment Bill on Intellectual

    Property is in the process of being finalised by the Department of Trade and Industry. It is

    clear that this Bill will address some of the Intellectual Property concerns that are currently on

    the table.

CASE STUDY: ROOIBOS AS A POTENTIAL GEOGRAPHIC INDICATOR

     In the previous Section the importance of Rooibos in the collective consciousness of

    South Africa’s people was discussed. It follows that it was appropriate to include Rooibos as

    one of the Southern African case studies in the Duras Project. The other case studies include

    Honeybush Tea, Cambeboo Mohair, Karoo Lamb, Kalahari Melon Seed (Namibia) and

    Swakara (Namibia). In the rest of the Section Rooibos as a potential Geographical Indicator

    will be explained in more detail. To this end information will be drawn from the ongoing

    work of Bienabe and Troskie (2007).

     Rooibos is a fairly small industry localised in the arid parts of Western South Africa.

    About 350 farmers are involved in the production of Rooibos and the majority of these

    farmers are commercial farmers. However, there are specific communities of resource poor

    farmers such as Wupperthal and Heiveld where the production of Rooibos is indelibly linked

    to the culture as well as the economic and social life of the individuals. It is significant to

    note that there is a significant price difference between ordinary Rooibos and Rooibos with

    WIPO/GEO/BEI/07/1

    page 6

attributes such as originating in the mountain, wild harvested and organically or fair trade

    certified.

     On the processing side there are 8 processors, of which one dominates the market with

    approximately 75% of the market share. Close to two thirds of the Rooibos is exported and in

    the export market Rooibos is distinctly recognised as a uniquely South African product. The

    current boom in the export demand for Rooibos is closely related to its health attributes. A

    major problem is that the majority of the product is currently exported in bulk and it follows

    that a significant opportunity for down-stream value adding exists. Another opportunity or

    problem, depending on your specific point of view, is that Rooibos is not only used as a tea,

    but also forms a significant ingredient in certain pharmaceutical and skin-care products. This

    property was exactly at the basis of the trade mark dispute with Forever Young.

It is important that the SARC has fully accepted ownership of Rooibos as a potential GI, and

    the whole case study with its potential future registration as a GI is being driven by this body.

    At the centre of the Rooibos as a GI is the product specification and the Industry is in the

    process of finalising this specification. It is important to note that this specification is based

    on consensus on the one hand, but also on the need for good scientific evidence for each of

    the elements. The first part of the specification is the delimitation of the areas and the

    industry has identified five conditions that need to exist for the successful production of

    Rooibos. These are:

    (a) It must in the winter rainfall area.

    (b) The substrate must be a derivative of Table Mountain Sandstone.

    (c) It must be deep, well drained sandy soils.

    (d) The ph of the soil must be below 7.

    (e) It must be in the Fynbos biome.

By using these criteria the delineation as indicated in FIGURE 1 is being identified.

     The second leg of the product specification is production practices. The main elements

    of the agreed upon production practices include:

    (a) Production must take place in the delimitated area.

    (b) Biodiversity standards are being developed. The reason for this is that due to wild

    harvesting, production expansion and changes in the crop patterns, biodiversity

    and the well being of natural resources are under threat.

    (c) It must be produced under dryland conditions.

    (d) However, irrigation is allowed on the condition that no irrigation takes place

    within the two months prior or during harvesting.

     The third leg of the product specification is the harvesting standards. Only two

    important elements were identified, namely:

    (a) It must be annually harvested.

    (b) At leas 20% of the leaves must be retained.

    WIPO/GEO/BEI/07/1

    page 7

     Probably the most important part of the product specification, and also the part

    containing the most sensitive elements, is the processing part of Rooibos. The main elements

    include:

    (a) It must be delivered to the tea court within a specified time.

    (b) The green material must be cut to a specified length.

    (c) It must be placed in a specified manner in the sun and wetted to aid fermentation.

    (d) The leaves must be bruised for fermentation.

    (e) No catalysts may be added to the product in order to facilitate fermentation.

    (f) Odour and colour codes have been agreed upon for the fermented product.

    (g) Following the fermentation the product must be spread in the sun for drying. Due

    to the specific harsh conditions in this area, the exposure to the sun provides a

    further link to the specific delimitated area.

    (h) It must be dried in the sun to a moisture content of less than 10%.

    (i) It must be stored in a cool, dry place.

    (j) All health regulations must be adhered to.

    (k) The tea court itself must be in the delimitated area.

FIGURE 1: THE CURRENT AND POTENTIAL CULTIVATION AREA OF

    ROOIBOS TEA

    Source: Elsenburg GIS (2007)

     With the exception of the delimitated are, a separate and distinct product specification

    has been developed for Rooibos as a green tea. Certain key elements of the product

    specification have not been completed yet. These include the social elements of the

    specification as well as how inspection and certification will take place. As soon as these

    have been agreed upon, a more detailed cost/benefit analysis can be completed.

     Although certain questions and challenges still remain in the Industry, it is clear that

    there is a momentum in the Industry for the valorisation and protection of Rooibos. This

    momentum is not only at producer level, but also on an institutional and consumer level. It

    follows that it can be expected that, once the product specification is completed, domestic and

    international registration as a GI will be sought by the Industry.

CONCLUSION

     The purpose of this paper was to describe the institutional environment for

    Geographical Indicators in South Africa. It became clear that the institutional environment

    for wines and spirits is significantly different form that of non-alcoholic products. However,

    WIPO/GEO/BEI/07/1

    page 8

it also became clear that there are forces working towards an institutional change for non-

    alcoholic products. As Rooibos played an important role in this process, it was appropriate to

    consider it as a potential case study for one of the non-alcoholic products.

REFERENCES

Bienabe, E & Troskie, DP (2007) A Product Specification of the Rooibos Industry. Work in

    Progress, Western Cape Department of Agriculture,

    Elsenburg. Bramley, C (2007) A legal synopsis of the protection of geographical

    indications in Southern Countries. Paper presented at the

    International Symposium: Promoting Local Specialities

    from Southern Countries, 23 26 April 2007, Addis

    Abeba, Ethiopia. Brink, AP (1974) Dessertwyn in Suid-Afrika. Buren, Kaapstad.

    Cape Argus (2004) Business Report in Cape Argus, 28 April 2004).

    Cape Argus (2005) Business Report in Cape Argus, 10 February 2005).

    Elsenburg GIS (2007) Geographic Information System, Division of Natural

    Resources, Western Cape Department of Agriculture. SAWIS (2007) South African Wine Information System.

    http://www.sawis.co.za

    Sunday Times (2004) Sunday Times, 3 May 2004.

    Tralac (2007) Trade Law Centre for Southern Africa.

    http://www.tralac.org. USPTO (2004) United States Patent and Trademark Office.

    http://www.uspto.gov.

    [End of document]

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