TWN Info Service on WTO and Trade Issues (Mar20/14)
27 March 2020
Third World Network

WHO-business joint COVID-19 letter to G-20 raises concerns

New Delhi, 27 March (K M Gopakumar) – A joint letter from the World Health Organization and private business to the G-20 leaders on the response to COVID 19 and its economic fallout raises concerns.

The letter dated 23 March signed by the WHO Director-General, the Secretary-General of the International Chamber of Commerce (ICC) and Saudi Arabia chair of Business 20 (B20), a private sector grouping of G-20 was addressed to the G20 Heads of State and Government prior to their virtual summit on the.

Saudi Arabia, currently holding the G-20 Presidency, facilitated the summit on 26 March.

The letter states that COVID 19 and its economic fallout “have a potentially massive impact on the health sector and especially on the poor and vulnerable, requiring important investments in social protection schemes”. It also states that co-ordinated global action is necessary to support national priorities announced by many G-20 countries.

The letter makes a set of demands in health and economic issues. There were six related to health as follows:

• There should be improved experience sharing and monitoring at the national and subnational levels like between city mayors etc.

• On access to the medical products, the letter notes that export controls imposed by many countries are hindering global efforts. According to the letter, “Given the globally integrated nature of medical supply chains, short-sighted trade restrictions will only exacerbate the potential long-term toll of a virus that crosses borders with ease”.

• On the use of the private sector, the letter states “the private sector should be allowed and encouraged to support government services for both diagnostics and surveillance with mechanisms to assure quality and ensure reporting to national authorities”.

• The letter calls for ramping up of production asking the G-20 governments to take measures so that the “Excess capacities in unrelated manufacturing sectors could be deployed for the urgent ramp-up. Governments must accelerate ail regulatory approvals, such as licenses and certifications, to urgently meet this need”.

• On access to essential medical supplies G-20 governments are asked to focus on the “major cost drivers as well as, where applicable and where significant to pricing, import taxes, quotas, anti-hoarding mechanisms, and other government-imposed costs as well as ensuring appropriate logistics & supply chains, such as air cargo facilities, remain operational”.

Further, it also refers to the need for “coordinated and streamlined investment in  R&D, large scale manufacturing to enable equitable and affordable access to populations and facilitating regulatory harmonization”.

• On international assistance the letter calls for the significant scale-up of financial assistance to help the world’s poorest countries deal with the likely effects of COVID-19,  both by increasing aid funding for public health programs and broader social and economic interventions.

On economic issues the letter makes the following demands:

• On short and medium-term fiscal measures the letter states that “monetary policy has already been heavily applied, now is the time for all governments to more clearly and directly apply all available fiscal levers to support their economies and ensure a base level of activity within the constraints imposed”.

• The letter called on G-20 governments to resolve “priority pending trade issues and avoid new ones”.

• The letter also highlighted the need to prioritize direct support to small businesses and workers, calling on the G-20 leaders “to commit to urgent stimulus and safeguard measures to support MSMEs (micro, small and medium sized enterprises) and avoid rampant unemployment”. 

• On social protection for displaced & affected workers, the letter stressed that G-20 leaders must urgently scale-up social protection, which should include a daily allowance, deferment of credit repayments and other liabilities, for workers displaced and affected due to shutdowns and lockdowns, and those infected by the COVID-19.

Though the ICC termed the letter as a historical collaboration, for many observers this letter raises concerns of conflict of interest i.e. the risk of secondary interest influencing the primary interest of the WHO.  In this case, the risk is that the WHO’s primary interest in the protection of public health may be overshadowed by the financial and business interest of ICC and B20.

The engagements of WHO with the private sector is regulated through the Framework of Engagement with Non-state Actors (FENSA) which was adopted by the 69^th World Health assembly in 2016.

One of the FENSA principles states: “be effectively managed, including by, where possible avoiding conflict of interest and other forms of risks to WHO”. FENSA also identified a conflict of interest as a risk of engagement with non-State actors.

Paragraph 26 of FENSA states: “For WHO, the potential risk of institutional conflicts of interest could be the highest in situations where the interest of non-State actors, in particular economic, commercial or financial, conflict with WHO’s public health policies, constitutional mandate, and interests, in particular, the Organization’s independence and impartiality in setting policies, norms, and standards”.

A few issues advocated in the joint letter bear the risk of furthering business interest over public health. For instance, the letter advocated for the use of the private sector for testing. The letter states that testing and contact tracing is important to suppress the pandemic and goes on to say: “To meet this need for testing, the private sector should be allowed and encouraged to support government services for both diagnostics and surveillance with mechanisms to assure quality and ensure reporting to national authorities”.

ICC representing the business interest does not offer its services to counter the COVID-19 outbreak by offering the private sector test and treatment infrastructure; rather it asks the governments to involve the private sector and to pay. Countries such as Spain used the private sector hospital to treat COVID-19 patients but it was not through commercial terms, instead it putt the private hospital under government control.

Similarly, another demand in the letter is for regulatory harmonization for expediting the equitable access to the medical products. Regulatory harmonization is a pharmaceutical transnational corporate agenda to control the competition from generic companies. In the name of regulatory harmonization, pharmaceutical TNCs often want to harmonize regulatory standards at a high threshold level and this increases the compliance cost for generic companies.

This in a way to take away the policy space for many developing countries to set appropriate standards based on evidence to facilitate local production. In 2014 developing country governments had opposed the regulatory harmonisation agenda and removed the term from the World Health Assembly WHA resolution on regulatory system strengthening.

In line with FENSA, the WHO has to carry out due diligence before engaging with a non-State actor.  FENSA provides a certain exemption to its application during an emergency.  According to Paragraph 73 “the Director-General may exercise flexibility as might be needed in the application of the procedures of this framework in those responses, when he/she deems necessary, in accordance with WHO’s responsibilities as health cluster lead, and the need to engage quickly and broadly with non-State actors for coordination, scale-up and service delivery”.

Thus the exemption is limited to coordination, scale-up and service delivery and not for such broad advocacy as contained in the joint letter to the G-20 leaders. While doing so “The Director-General will inform the Member States through appropriate means, including in particular written communication, without undue delay when such a response requires exercise of flexibility, and include summary information with justification on the use of such flexibility in the annual report on engagement with non-State actors”.

There is no such justification available in the public domain.

The letter also seeks investments in R&D; however it is conspicuously silent on whether the R&D outcomes would be protected by patent monopolies. The industry’s R&D practices so far have focused on blockbuster drugs and largely ignored investments in medicines or vaccines of infectious diseases.

On the broader scheme of things, according to an observer, it is industry’s profit motive and quests to avoid labor welfare and environmental compliance that have led to the creation of a global supply chain and concentration in a few locations. This has ultimately resulted in the current problem of lack of access to essential medical products due to supply chain constraints.  The industry demand for a liberal labor market also contributed to the poor conditions of labor such as lack of sick leave, social security etc. As a result, the majority of workers cannot withstand the temporary disruption in their jobs due to events like a disease outbreak.

The ICC and B20 joint letter with WHO provides business with an opportunity to whitewash their image to project them as part of the solution by covering up their past deeds.+