Digital Sequence Information
& the Cali Fund

What is Digital Sequence Information?

The term Digital Sequence Information does not yet have a single internationally agreed legal definition - a deliberate ambiguity that reflects the political sensitivity of the subject. In practice, it refers to digital representations of genetic material: the sequences of nucleotide bases (A, T, C, G) that encode the genetic instructions of living organisms, held and transmitted as computer files rather than physical biological samples.

DSI encompasses genome sequences (the complete DNA blueprint of an organism), transcriptomic data (which genes are active in which tissues), and - by extension in current policy discussions - the broader categories of metabolomic and proteomic data derived from digital analysis of biological material. It is the raw material from which pharmaceutical companies identify drug targets, agritech firms develop crop traits, and AI platforms train biology foundation models.

Public databases such as NCBI GenBank, the European Nucleotide Archive (ENA), and the DNA Data Bank of Japan (DDBJ) contain petabytes of DSI - including sequences from organisms collected in Madagascar and other biodiversity-rich developing countries. These databases are open-access by design, which has accelerated scientific progress enormously. But the open-access model was built before the commercial value of genomic data was fully understood, and it creates a systematic transfer of value from countries with biological wealth to entities - largely in the Global North - with the computing power and capital to exploit that wealth digitally.

The scale of this value transfer is significant. Estimates of the annual commercial value derived from DSI accessed in public databases run into the tens of billions of dollars globally, once pharmaceutical, agricultural, industrial biotech, and AI applications are included.

How the Cali Fund Works

The Cali Fund - formally the Global Benefit-Sharing Fund established under the Kunming-Montreal Global Biodiversity Framework - is a multilateral mechanism, meaning it pools contributions from many users and distributes them to many provider countries through a managed process, rather than requiring a direct bilateral agreement between every company using DSI and every country from which that DSI originates.

This multilateral structure is deliberate. A bilateral system - where every pharmaceutical company must negotiate separately with every country whose sequences it uses - would be administratively unworkable given that a single drug discovery programme might draw on sequences from dozens of countries across thousands of database records. The multilateral approach accepts a degree of averaging in exchange for practicality.

Who contributes?

The Cali Fund is designed to collect contributions from commercial entities that derive revenue from products developed using DSI. The indicative contribution parameters under active discussion at COP16 were 0.1% of annual revenues or 1% of profits from DSI-derived products - with companies choosing whichever calculation produces the larger figure. These are indicative starting points; the final rates will be confirmed through subsequent CBD negotiations.

Key sectors subject to contribution requirements include:

• Pharmaceutical companies - drugs developed using genomic or metabolomic data from biological sources
• Agritech and seed companies - crop varieties developed using genomic trait data from wild or cultivated plant relatives
• Industrial biotechnology - fermentation-based production processes developed using enzyme or pathway sequences from biological sources
• AI and data platform companies - where AI models are trained on DSI and commercially licensed
• Cosmetics and personal care - products developed using botanical bioactives characterised via DSI

Who receives?

Fund disbursements are directed primarily to biodiversity-rich developing countries - those whose biological resources are most extensively represented in public DSI databases. Disbursement allocations are expected to be weighted by estimated contribution of each country's biological resources to the global DSI pool, though the precise methodology is still being developed by the CBD Secretariat and the designated Fund administrator (expected to be the Global Environment Facility, GEF).

A minimum of 50% of Fund disbursements is mandated to flow through or directly to indigenous peoples and local communities - an explicit recognition that traditional knowledge often sits at the origin of the discoveries that DSI makes commercially valuable. The remainder supports national government conservation and capacity-building priorities.

Why This Matters Specifically for Madagascar

Madagascar's case for substantial Cali Fund allocations is among the strongest of any country on Earth, for reasons rooted in its extraordinary biological distinctiveness.

Madagascar separated from Africa approximately 88 million years ago and from India around 80 million years ago. In that vast span of evolutionary isolation, its flora and fauna evolved along entirely independent trajectories. The result is a level of endemism - species found nowhere else - that is globally exceptional. Of Madagascar's approximately 12,000 vascular plant species, more than 83% are endemic. Its plant families include entire lineages with no close relatives anywhere else on Earth.

This matters for DSI because endemism translates directly into uniqueness of sequence. A genome sequence from a Malagasy endemic cannot be sourced from anywhere else. When a pharmaceutical AI platform mines public genomic databases for novel biosynthetic gene clusters, or an agritech firm searches for drought-tolerance alleles absent from temperate crop wild relatives, they are disproportionately drawing on the genetic legacy of countries like Madagascar - countries that are currently receiving nothing for that contribution.

The Rose Periwinkle (*Catharanthus roseus*) is the canonical illustration. This endemic Malagasy plant produced vincristine and vinblastine, two of the most important cancer drugs in clinical history, which have generated revenues estimated in the tens of billions of dollars globally across six decades of use. Madagascar received no share of those revenues - because the periwinkle was collected before Nagoya, before any benefit-sharing framework existed, and before anyone understood that a roadside weed could be worth more than the country's entire annual GDP. Under the Cali Fund framework, the genomic sequences of Madagascar's remaining 11,999+ endemic species carry potential commercial value that - for the first time - has a legal pathway back to the country that protected them.

How Other Countries Are Using Benefit-Sharing Funds

The Cali Fund is new, but the principle of multilateral and bilateral biodiversity benefit-sharing has precedents. Several countries have developed funds or mechanisms that offer useful models for how Madagascar might structure and deploy its receipts.

Brazil - The National Benefit-Sharing Fund (FNRB)

Brazil's Lei da Biodiversidade (Law 13,123/2015) created the National Benefit-Sharing Fund (Fundo Nacional para a Reparti--o de Benef-cios, FNRB), financed by a mandatory monetary benefit-sharing rate of 1% of net revenues from products commercialised using Brazilian genetic resources. Companies can reduce this to 0.1% if they invest instead in conservation or research activities within Brazil. As of 2024, the FNRB had received contributions from cosmetics, pharmaceutical, and food companies, with disbursements directed to conservation activities and indigenous communities. Brazil's model demonstrates that contribution obligations can be met with relatively low administrative friction once reporting systems are established.

India - The National Biodiversity Authority and Kani Tribe Royalties

India's Biological Diversity Act (2002) established the National Biodiversity Authority (NBA) and mandatory benefit-sharing for commercial use of biological resources. The most cited case involves the Kani tribe of Kerala, whose traditional knowledge of the plant *Trichopus zeylanicus* ('arogyappacha') led to the development of Jeevani, a sports supplement commercialised by the Arya Vaidya Pharmacy. A benefit-sharing agreement directed 50% of licence fees and 2% of product royalties to a Kani tribal welfare fund - a small revenue stream that nonetheless funded healthcare and education infrastructure in communities that had no other comparable income source. India's experience shows that even modest monetary flows from DSI can produce lasting change at community scale when governance is sound.

Costa Rica - INBio and the Merck Agreement

In 1991, Costa Rica's National Institute of Biodiversity (INBio) signed a landmark agreement with Merck & Co. under which Merck paid $1.135 million upfront for the right to screen Costa Rican biological extracts for pharmaceutical leads, with a further royalty obligation on any product reaching commercialisation. A portion of the upfront payment was directed to Costa Rica's national parks system. While no commercial drug resulted, the Merck-INBio agreement became the model for bioprospecting contracts globally and demonstrated that formal, contractual benefit-sharing from biodiversity access was commercially feasible for major pharmaceutical companies.

The African Union - Protocol on the Rights of Older Persons and ABS

The Nagoya Protocol's African implementation has been uneven, but several African Union member states have used ABS revenues specifically to fund in-country sequencing capacity and taxonomy programmes - recognising that the ability to generate DSI is itself a form of sovereignty. South Africa's Bioprospecting Trust Fund, established under NEMBA (National Environmental Management: Biodiversity Act, 2004), collects permit fees and royalty shares and channels them to conservation, research, and community benefit. The fund has supported restoration projects and scientific training programmes across South African biomes.

How IsoGentiX Is Designed to Support Madagascar's Cali Fund Participation

IsoGentiX's commercial model is a native DSI business. We do not export physical plants. We collect specimens, extract and sequence their genetic material in our laboratory in Antananarivo, and license the resulting digital datasets to pharmaceutical, agritech, and AI companies globally. Every commercial transaction we make involves DSI - which means we are directly within the scope of the emerging Cali Fund obligations.

Rather than viewing this as a compliance burden, we designed our platform to treat it as a structural advantage. Here is how each layer of our architecture supports Madagascar's participation in the Cali Fund framework.

Specimen-Level GUID Linkage

Every specimen we collect is assigned a Globally Unique Identifier (GUID) at the moment of collection - before any extraction, sequencing, or analysis occurs. This identifier links every subsequent data layer produced from that specimen: genome assembly, transcriptomes, metabolite profiles, phenotypic records, soil chemistry, and cryopreserved germplasm. The GUID is the thread that connects physical plant to digital data.

For the Cali Fund, this matters enormously. One of the central implementation challenges for the Fund is attribution - determining which country's biological resources contributed to which commercial product. If sequence data is anonymised or poorly documented, that attribution becomes impossible and the country of origin receives nothing. IsoGentiX's GUID architecture ensures that the origin of every data record is unambiguous, traceable, and auditable - creating a direct line from commercial DSI use back to Madagascar.

Digital Provenance Layer

All IsoGentiX data records are cryptographically hashed and registered on an immutable digital audit trail at the point of generation. Each dataset carries a SHA-256 fingerprint embedded at record creation, enabling any downstream user - or any auditor - to verify the integrity and origin of the data. Steganographic watermarks are embedded in FASTA sequence files at nucleotide level, invisible to standard tools but recoverable under forensic examination.

This architecture directly addresses one of the Cali Fund's core enforcement challenges. Under the Fund's proposed framework, companies that use DSI from public databases are expected to self-declare and contribute accordingly. Verification of those declarations requires the ability to trace commercial products back to specific DSI sources. For IsoGentiX-licensed data, that traceability is built in - our clients' use of the data is documented, hash-verified, and contractually restricted to permitted domains.

Nagoya-Compliant PIC/MAT Framework

Every IsoGentiX collection operates under Prior Informed Consent (PIC) and Mutually Agreed Terms (MAT) issued by Madagascar's competent national authority, the Direction G-n-rale de l'Environnement et des For-ts (DGEF) under MEDD. Each agreement includes explicit benefit-sharing obligations - both monetary (licence revenue sharing) and non-monetary (technology transfer, training, infrastructure, co-authorship).

Our Framework MoU with MEDD will explicitly address the Cali Fund interface, defining the scope of DSI coverage, identifying Madagascar's share of Cali Fund disbursements attributable to IsoGentiX-derived sequences, and establishing the institutional channel through which those disbursements flow. This is not standard practice in the sector - most DSI providers do not have this level of contractual integration with provider country governments. For IsoGentiX, it is fundamental.

Benefit-Sharing by Design

IsoGentiX's benefit-sharing commitments extend beyond legal minimum compliance. Our model includes:

• Direct revenue sharing - a defined percentage of commercial licence revenues returned to MEDD's national ABS fund under MAT terms
• Community benefit funds - direct payments to local communities in collection zones, linked to Free, Prior and Informed Consent (FPIC) agreements
• In-country infrastructure - the IsoGentiX Institute (IGI) laboratory in Antananarivo is permanently Malagasy. Equipment, training, and bioinformatics capacity remain in Madagascar regardless of our commercial outcomes
• Co-authorship and publication rights - Malagasy scientists are named authors on publications arising from the dataset
• Priority access licences - Madagascar-based research institutions receive preferential access terms to datasets generated from national biological resources

Data Traceability: The Missing Infrastructure

The Cali Fund's success depends entirely on one capability that currently does not exist at scale: the ability to trace commercial products back to their DSI sources. Without traceability, self-declaration becomes unverifiable, enforcement becomes impossible, and the Fund becomes a voluntary gesture rather than a structural mechanism.

Consider the challenge in practical terms. A large pharmaceutical company's AI drug discovery platform might train on millions of sequences downloaded from GenBank over several years. Those sequences include material from hundreds of countries, collected under varying permit conditions, by dozens of different research institutions, over decades. Asking that company to produce a precise attribution of which country contributed which proportion of the training data that led to a specific drug candidate is, under current database architectures, essentially impossible.

This is not a hypothetical problem. It is the central implementation challenge identified by the CBD Secretariat, by the IUCN, and by legal scholars who have analysed the Cali Fund's design. The Fund's architects are aware of it; the solution, broadly, is to build provenance into DSI at the point of generation rather than attempting to reconstruct it after the fact.

IsoGentiX is building that solution for Madagascar's biological resources. Our data architecture treats provenance not as an annotation that might be added later, but as a structural property of every record from the moment of collection. By the time an IsoGentiX sequence enters a pharmaceutical AI platform's training dataset, its Malagasy origin, its collection permit identifiers, its GUID, and its cryptographic integrity proof are all part of the record - indelibly. When that platform's product reaches commercialisation and triggers a Cali Fund contribution, the attribution back to Madagascar is automatic, auditable, and legally defensible.

What the Cali Fund Means for Madagascar's Government

For the Government of Madagascar - through MEDD and DGEF - the Cali Fund represents a genuinely new revenue stream that does not require additional extraction of physical resources, does not generate environmental pressure, and scales with global commercial activity rather than with Madagascar's own budget capacity.

Madagascar's endemic species are represented in global genomic databases already - sequences deposited before any systematic benefit-sharing framework existed. As the Cali Fund begins collecting contributions and developing its attribution methodology, Madagascar's case for significant allocations rests on the breadth and uniqueness of its biological contribution to global DSI pools. That case is strong on the raw data: no other island of comparable size has Madagascar's combination of endemism, species richness, and phylogenetic distinctiveness.

But the strength of that case will depend on Madagascar's ability to document and quantify its contribution - and that, in turn, depends on having the systematic genomic data that IsoGentiX aims to generate. A country with 12,000 endemic species and fewer than 10 chromosome-level genome assemblies in public databases is making a weak evidentiary case regardless of its biological wealth. A country with 10,000 well-documented, GUID-linked, provenance-verified genomes in a recognised data platform is making a very strong one.

IsoGentiX's role, in this context, is not merely to collect and commercialise data. It is to build the evidential infrastructure - the documented, traceable, internationally verifiable record of Madagascar's biological resources - on which Madagascar's Cali Fund claims will be assessed and adjudicated. Every genome we sequence and every IRCC we register adds to that evidentiary base.

What Happens Next

The Cali Fund is operational in principle but continues to be developed in practice. The CBD Secretariat is working with the GEF and member states to finalise contribution reporting mechanisms, attribution methodologies, disbursement governance, and monitoring frameworks. This process will continue through CBD COP17 (expected 2026) and beyond.

For DSI-generating companies like IsoGentiX, the practical implication is clear: the transparency and traceability standards embedded in our platform are not currently legally mandated - they represent a forward commitment to the direction of regulatory travel. Companies that invest in provenance infrastructure now will be better positioned when Cali Fund reporting requirements are formally codified; those that do not will face costly retrofitting and potential liability gaps.

For Madagascar, the immediate priority is ensuring that the Framework MoU with MEDD explicitly addresses DSI scope, Cali Fund participation rights, and the institutional channel for receiving disbursements. IsoGentiX intends to be a technical partner to MEDD in that process - providing the documented methodology, GUID architecture documentation, and provenance data structures that Madagascar will need to present to the CBD Secretariat and GEF in asserting its share of Fund allocations.

The Cali Fund is, ultimately, a recognition that biological wealth - like mineral wealth - belongs to the countries and communities that steward it. Madagascar has stewarded 88 million years of evolutionary history. The Cali Fund is the first mechanism through which the world acknowledges that stewardship has a price, and that the price should be paid.