Bioprospecting involves searching for, collecting, and deriving genetic material from samples of biodiversity that can be used in commercialized pharmaceutical, agricultural, industrial, or chemical processing end products. By the early 1990s, objections to uncompensated bioprospecting that does not share benefits with the source country became contentious. Since 1991, the Convention on Biological Diversity (CBD) has embodied the principles of compensated bioprospecting globally.

Compensated bioprospecting involves obtaining prior informed consent from the source country, sharing benefits, and promoting sustainable use of biodiversity. Where indigenous knowledge holders are involved, efforts are made to recognize and protect their rights. Benefits can take various forms, from royalties to negotiated advance and milestone payments, capacity building, facilities and equipment transfer, personnel training, sharing of research, and other forms.

The United States (and six other nations) are not parties to the CBD, which is an international protocol meant to apply to sovereign nations, not to individual cities, provinces, or states. The CBD encourages parties to enact national bioprospecting legislation. The United States has not done so. Neither has any individual state. Without participation in the CBD and in the absence of national and state laws, bioprospecting is not regulated in Hawaii. The CBD is difficult to enforce and relies on voluntary compliance. However, it provides guidelines for implementing the principles of prior informed consent, benefit sharing, and promotion of sustainable use of biodiversity.

The Legislature is faced with the decision whether to regulate bioprospecting in Hawaii and who, including native Hawaiians, should share in the benefits. At present, it is the opinion of the Attorney General that the State does not automatically hold title to the genetic material derived from biodiversity taken from public lands. The Attorney General further opines that, at present, revenues from the sale of that genetic material do not qualify for transfer into the Ceded Lands Trust Account to be distributed by the Office of Hawaiian Affairs for the benefit of native Hawaiians. Thus, if the Legislature desires to regulate bioprospecting, it needs to ensure that the State retains title to share in benefits. It must also decide whether native Hawaiians should share in benefits, how, and how much.

It does not make sense to implement actual bioprospecting regulation without first setting policy guidelines. It is important that all stakeholders have the opportunity to be heard and help shape policy through the political process. After the Legislature determines overall policy, the actual implementation of a regulatory framework may fall to a bioprospecting working group composed of representatives of stakeholder groups, including state agencies, to work out the details, guided by legislative policy.