Biopiracy can be defined as:

The correct answer is Option (2) → Use of bio-resources by multinational companies and other organisations without proper authorisation from the countries

Rich nations are often poor in biodiversity but good in technology. Developing nations are rich in biodiversity and traditional knowledge. So companies take out patents on products, such as those based on turmeric and neem, which come from this knowledge.

(1) Use of bio-resources by multinational companies and other organisations with proper authorisation from the countries — Incorrect. Use with permission and fair payment is a lawful use (bioprospecting). It is not piracy.

(2) Use of bio-resources by multinational companies and other organisations without proper authorisation from the countries — Correct. The lack of authorisation is what makes it piracy.

(3) Damage of bio-resources by multinational companies and other organisations with proper authorisation from the countries — Incorrect. Biopiracy is about taking and using resources, not about damaging them.

(4) Formation of bio-resources by multinational companies and other organisations without proper authorisation from the countries — Incorrect. Companies do not form bio-resources. They only use what already exists.

NCERT Extract:
Biopiracy – “… Biopiracy is the term used to refer to the use of bio-resources by multinational companies and other organisations without proper authorisation from the countries and people concerned without compensatory payment.”