"South Africa, like many countries, has a history of intellectual property misappropriation by both individuals and organisations," science and technology minister Derek Hanekom said in Pretoria at the signing of a consortium agreement between the department and a number of research institutions and community organisations.
"With a few notable exceptions, it is unfortunate that many big corporations continue to ignore their moral and legal obligations to seek prior informed consent and to share benefits that result from their use of the knowledge and genetic resources of indigenous communities."
However, indigenous products must be subjected to credible research and people must not make false claims about their efficacy or safety, otherwise they lose their credibility, he said.
Indigenous knowledge systems are a focus of the department, as it is seen as a way to create jobs in rural areas and boost industry – through pharmaceutical, nutrition products and food, and cosmetics derived from local plant and animal knowledge.
The most recent example of property misappropriation is hoodia, a succulent plant used by the Khoikhoi to suppress hunger and thirst.
Several years ago, the Khoikhoi found out that the Council for Scientific and Industrial Research (CSIR) which had been researching the plant since 1963 – had isolated the active ingredient in it, and licensed its use to Phytopharm, a UK-based pharmaceutical company.
The rights were given back to the Khoikhoi people in 2010.
Yonah Seleti, chief director of the national indigenous knowledge systems office, said that there were three flagship projects; African Traditional Medicine, cosmeceuticals and nutraceuticals, but that there were plans to add technology transfer and commercialisation.
Medical Research Council's (MRC's) Charles Perry said: "South Africa has rich knowledge systems and biodiversity that has not been explored. Medicines derived from natural products treat 90% of human diseases."
However, he cautioned that traditional medicines, which are used by millions of South Africans, "should be tested for safety and efficacy and consumers should be given guidelines for use".
The MRC was one of the signatories, along with numerous other research institutions, and is currently the chair of the African Traditional Medicine Platform.
There is a strong push to develop pharmaceuticals locally, with the government looking for a partner to manufacture anti-retroviral drugs in the country.
According to the department of trade and industry, the medical goods sector – which includes pharmaceuticals, medical devices and medical diagnostics – is the fifth largest contributor to South Africa's trade deficit, with pharmaceuticals responsible for a trade gap of R20-billion in 2011.
Hanekom said that indigenous products and traditional medicines were not "sufficiently appreciated in this country".
Millions of people were consuming these products, with a total market value of about R3-billion, he said, noting that other countries such as China were "extracting value from their indigenous knowledge".
However, Hanekom continued to caution the audience to "be excited, not not too excited" about products derived from indigenous knowledge: "Claims that products cure baldness are not dangerous, but saying that [a product] can cure HIV are."