Digital Sequence Information (DSI) and the Cali Fund

Every living thing carries a genetic code, written in DNA or RNA. Scientists can read this code and store it as digital data, a long string of letters, in online databases. This data is called Digital Sequence Information (DSI). The Cali Fund is a global fund, set up under the Convention on Biological Diversity, which asks companies that make money using DSI to share part of their profits for protecting nature and supporting the communities that look after it.

Why does this matter?

Many new medicines, crop varieties, cosmetics and enzymes are made using genetic information from plants, animals and microbes. Most of this biodiversity is found in developing countries, often on land looked after by indigenous peoples and local communities. Earlier rules made a company that took a physical sample (a leaf or a soil microbe) seek permission and share benefits.

But today a company can simply download the genetic sequence from a free database and never touch the sample. Many developing countries call this a "digital loophole" or digital biopiracy: profits are made, but nothing is shared with the country of origin.

Where did it come from?

The idea of benefit-sharing is old, but the DSI problem grew with cheap gene sequencing.

• 1992: The CBD made fair and equitable benefit-sharing one of its three objectives.
• 2010: The Nagoya Protocol set rules for Access and Benefit-Sharing (ABS): a user needs the prior informed consent of the source country and mutually agreed terms for sharing benefits. It entered into force on 12 October 2014. But it was built around physical samples, and whether it covers DSI was never settled.
• 2016: The CBD COP first took up DSI as an issue (COP13, Cancun, Mexico).
• 2022 (COP15, Montreal): Countries agreed to create a multilateral mechanism (one common global system) for DSI benefit-sharing, including a global fund, and put DSI into Target 13 of the Global Biodiversity Framework.
• 2024 (COP16, Cali, Colombia): Decision 16/2 set out how the mechanism works and created the global fund, named the Cali Fund for the Fair and Equitable Sharing of Benefits from the Use of Digital Sequence Information on Genetic Resources.
• 25 February 2025: The Cali Fund was formally launched in Rome, at the resumed session of COP16.

How does the multilateral mechanism work?

Instead of a separate deal for each sample, there is one common pot.

1. Researchers and companies continue to use DSI from open databases freely; data stays open.
2. Large companies in sectors that profit from DSI are expected to pay into the Cali Fund.
3. The fund sends money to developing countries and directly to indigenous peoples and local communities, for conservation and capacity building.

A simple comparison: think of a public library of songs. Anyone can listen for free, but a company that uses the songs to make a commercial hit is asked to pay a small share into a common fund that supports the original musicians.

Who should pay, and how much?

Decision 16/2 gives an indicative (suggested, not fixed) rate:

• Entities that exceed at least two of three thresholds, averaged over the past three years: total assets of US$ 20 million, sales of US$ 50 million, profit of US$ 5 million.
• Such entities should contribute 1% of their profits or 0.1% of their revenue.
• Contributions are voluntary; there is no legal penalty for not paying.
• Users who do not use DSI in their business are not covered. Academic and public research users are not expected to pay.

Which sectors are listed?

The decision gives an indicative list of sectors that may benefit from DSI:

• Pharmaceuticals
• Nutraceuticals (food and health supplements)
• Cosmetics
• Animal and plant breeding
• Biotechnology
• Laboratory equipment linked to sequencing (including reagents and supplies)
• Information, scientific and technical services linked to DSI, including artificial intelligence

Who gets the money?

• At least half of the fund should support the self-identified needs of indigenous peoples and local communities (including women and youth), subject to national circumstances, either through governments or directly through institutions they choose.
• The rest goes to developing countries, especially least developed countries and small island developing states, for conservation, research and capacity to generate and use DSI.
• The fund is administered through the UN Multi-Partner Trust Fund Office, working with UNDP and UNEP.

What has happened since?

The results have been very weak. The first contribution came only in November 2025: US$ 1,000 from a small UK start-up, TierraViva AI. By October 2026, the fund had received about US$ 7,085 from three small companies, against hopes of around US$ 1 billion a year. No large pharmaceutical or agri-biotech company had paid. Decision 16/2 had asked COP17 to fix thresholds, rates and an allocation formula, and asked COP18 to review the fund's effectiveness.

India's position and examples

India is one of the world's 17 megadiverse countries, so it is a natural "provider" of genetic resources. Along with other developing countries, it has supported benefit-sharing on DSI. At home, the Biological Diversity Act, 2002 (amended in 2023) regulates access to Indian biological resources and traditional knowledge through the National Biodiversity Authority (Chennai), State Biodiversity Boards and local Biodiversity Management Committees.

Whether this law fully covers DSI is still debated by legal experts. A classic Indian example of why benefit-sharing matters is the Kani tribe of Kerala, who shared knowledge of the arogyapacha plant used to make the health tonic Jeevani, and received a share of the licence fee.

Commonly confused concepts

• DSI vs genetic resources: Genetic resources are the physical material (a seed, a leaf, a microbe sample). DSI is the digital data (the sequence) read from that material.
• Nagoya Protocol vs Cali Fund: Nagoya works bilaterally: each user deals with the provider country, with consent and a contract. The Cali Fund is multilateral: one global pot, no contract per sample.
• Cali Fund vs Global Environment Facility (GEF): The GEF is funded mainly by governments and is the CBD's main financial mechanism. The Cali Fund is meant to be funded by companies that use DSI.
• Cali Fund vs BBNJ Agreement: The High Seas Treaty (BBNJ Agreement), adopted in June 2023, has its own benefit-sharing system for marine genetic resources (including DSI) from areas beyond national jurisdiction. The Cali Fund covers DSI under the CBD.
• Benefit-sharing vs biopiracy: Benefit-sharing is giving a fair share back to the source. Biopiracy is using biological resources or traditional knowledge for profit without consent or sharing.

Issues, criticism and the way forward

• Voluntary payments: Because paying is voluntary, almost no big company has contributed. Many developing countries want contributions made mandatory through national laws.
• Unclear rules: Companies say the definitions of "use of DSI" and the contribution rates are vague, which makes them hesitant.
• Open science concerns: Scientists worry that heavy rules could limit free access to genetic databases, which are vital for research, including on pandemics.
• Reaching communities: It is unclear how money will actually reach indigenous peoples and local communities, especially where national laws do not recognise them well.
• Fragmentation: Separate benefit-sharing systems under the CBD, the BBNJ Agreement and the WHO pandemic talks could overlap and confuse users.
• Way forward: Fix clear thresholds and rates, encourage countries to make payments mandatory at home, build transparent allocation rules, and link the fund with other benefit-sharing systems.

Concepts to Know

• Genetic sequence: The order of the chemical "letters" (A, T, G, C in DNA) in a gene. It works like a recipe that tells a living thing how to make a protein.
• Access and Benefit-Sharing (ABS): The rule that anyone who uses a country's genetic resources must get permission and share the gains fairly with that country and its communities.
• Prior Informed Consent (PIC): Permission given in advance, after the provider fully understands how its resources will be used.
• Indigenous peoples and local communities (IPLCs): Communities, often tribal, who have lived in and looked after an area for generations and hold traditional knowledge about its plants and animals.
• Megadiverse country: One of 17 countries that together hold most of the world's species, including India, Brazil and Indonesia.
• Multilateral vs bilateral: Bilateral means a deal between two parties; multilateral means one common system for many parties.