Medicosnext
The Ebola outbreak in West Africa in 2014 claimed 4,810 lives in Liberia, 3,956 in Sierra Leone, and 2,544 in Guinea. The COVID-19 pandemic has already claimed 766,080 lives in about 213 countries from December 31, 2019, to August 16, 2020.
Even in a relatively modest outbreak, compared to the present pandemic sweeping the world, the Ebola outbreak made it abundantly clear that one of the major offshoots of an outbreak is corruption. The magnitude of corruption in 2014 forced the International Federation of Red Cross and Red Crescent Societies (IFRC) to undertake an internal investigation, which discovered that millions of Swiss francs did not reach those in need during the Ebola outbreak. Over invoicing, fake billing, and inflated prices of relief items, along with fraud in payroll and payment of volunteer incentives were the main reason for the losses; all this done in collusion between former IFRC staff, customs officials, and bank employees.
However, despite losing around $6 million of its Ebola emergency fund to corruption, the IFRC doesn’t think the COVID-19 fund is at risk, with the secretary-general stating, “We have taken very strong measures since then of a zero-tolerance approach on fraud and corruption.” It’s clearly an overtly optimistic statement, as shown by the many cases of corruption already recorded during the COVID-19 pandemic. The huge magnitude of this current pandemic gives rise to much higher significant risks of corruption, since there arise many opportunities for the corrupt when massive resources are mobilized to respond to the health and economic crises, and when procurement oversight and enforcement efforts are compromised by the exigencies of the crisis and social distancing.
The scourge of corruption is a global issue, because the pandemic is affecting both developed and developing countries simultaneously. Breaches of anti-corruption standards—for example, cutting corners in procurement processes due to the need of speed in response—and those in power taking undue advantage of this for personal benefit, have become common. In its March 2020 report, “Corruption in the time of COVID-19: A double-threat for low income countries”, the U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (CMI) has reported on emerging corruption risks and trends. Even in the early months of the pandemic, there had already been “a wave of corruption-related incidents, decreasing transparency and accountability, as well as manipulative political propaganda from all over the world.” The anti-corruption organization has also listed the health system corruption risks during disease outbreaks as follows, especially in many low- and middle-income countries:
- Emergency procurement that increases corruption risks
- Pilfering available supplies, price gouging, and resale on the grey and black markets
- Increase in substandard and falsified products entering the market
Citing an article titled, “Investigating the coronavirus: Who is cashing in?” (March 24, 2020) by the International Consortium of Investigative Journalism (ICIJ), CMI states that at the time when Europe had become the new epicenter of the crisis, a contract with an agricultural company to supply the Italian government with face masks was blocked, with the public procurement agency having to investigate the case. In Serbia, the president declared that the government was compelled to acquire ventilators on the semi-grey market because of shortage in the continent, which obviously cast doubt on the integrity of the procurement procedure.
He was quoted as saying, “You can prosecute me one day for providing respirators to the people,” which naturally meant that he was aware that normal procedures had been ignored. Hungary’s prime minister declared that he would be directly overseeing the pandemic response, instead of the ministers of the concerned departments, and using the emergency to make critical decisions without involving parliament. In Russia, there were accounts of oligarchs purchasing scarce ventilators, with suppliers reporting that private buyers constituted about 30% of their recent sales.
In the United States, concerns were raised that decisions on bailouts and stimulus packages would be influenced by special interest groups, and there were also reports of senators, representatives, and senior aides indulging in insider trading, off-loading stocks, and investing in biotech companies at a time when they themselves were aware of the pandemic threat, but continued to reassure the public. In Israel, the prime minister, who was facing charges of bribery, fraud, and breach of trust, incapacitated the parliament and shut down the courts of justice, which were meant to begin the trial against him on March 24, 2020. This naturally raised the question of whether he was using the outbreak as an excuse to stay on in power.
In Iran, there were suspicions that distribution and prices of items needed for the pandemic response were being controlled by a network closely connected to those in power. In Cameroon and Uganda, there were accounts of citizens evading quarantine by bribing officials. In Kenya, six million face masks ordered by Germany went missing at one of its airports. Latin America has also been in the limelight during the pandemic for many cases of corruption. The need for speeding up procurement processes has given many opportunists the chance to make big bucks due to governments making bids and rules more flexible.
In Brazil, federal police have launched many investigations into pandemic-related corruption, in which total price of contracts and purchases under investigation amounted to more than R$1bn ($200m) till June end. These cases have ensnared scores of state and city-level officials and at least three state governors. The governor of Rio has been accused of embezzling money through field hospitals, which allegedly overcharged for supplies. A former president of Ecuador was arrested in June for alleged corruption involving the purchase of medical supplies. In Bolivia, the health minister had also been detained in June for grossly inflating prices for ventilators to treat coronavirus patients.
According to a study by Transparency International Bangladesh, the national health agency of Bangladesh was found to be procuring medical equipment like medical gowns and safety goggles, as well as emergency COVID-19 project website development and audiovisual clips, at highly inflated prices, even five to ten times the market rates. Nepal was rocked by a healthcare procurement scandal in early April that shook the government to its foundations. The health minister and several senior advisers close to the prime minister were accused of corruption related to a large purchase of Chinese personal protective equipment and other equipment. Their vested interest were exposed because of their controversial links to a firm called Omni Business Corporate International, which had been granted permission without due process to procure the said supplies.
Fierce outcry from the public forced the government to cancel the deal with Omni (the reason given being breach of contract, in that the company was not able to supply several items within the stipulated date). This scandal led to late deliveries, and in some cases, even of testing machines that didn’t work. So serious was the matter that the army was given the responsibility of procuring future supplies, in the hope that it would save the powers-that-be from public embarrassment. However, in a corruption-ridden country like Nepal, the army, too, isn’t viewed as a totally corruption-free establishment. What’s more, the anti-corruption watchdog agency doesn’t have jurisdiction over it, and the army’s competency was also put into question when 28,000 kits purchased were discovered to be incompatible with most of the country’s available testing machines. On June 20, the government finally had to divest the army of its role as the key federal procurement agency of COVID-19 related healthcare equipment and medical supplies.
Quarantine facilities, housing thousands of infected migrant returnees, have also been criticized roundly by everyone due to their lack of primary care facilities. No wonder the government’s declaration of expenses totaling about Rs.10 billion to fight the crisis was viewed with all-round skepticism. Youth-led protests in Kathmandu called into question the government’s response to Covid-19 and demanded that they make public about how and where the Rs 10 billion had been spent. On June 2, 2020, a meeting of the high-level government committee formed to prevent and contain COVID-19 publicized the amount spent by three tiers of the government for setting up quarantine facilities, importing health equipment, and distributing relief materials: “The central government has spent Rs 6.03 billion, while provincial and local governments have spent Rs 1.08 billion and Rs 2.76 billion, respectively.”
An article by Human Rights Watch, titled, “Don’t Let Nepal’s Covid-19 Relief be Squandered”, begins with: “As the Nepali government and international donors respond to the coronavirus crisis, they should not repeat the failings made after the 2015 earthquake. Five years ago, donors committed over $4 billion to the humanitarian response following the earthquake, but reports have claimed that corruption, inefficiency, and the marginalization of vulnerable communities, including Dalits and indigenous groups, left millions in desperate need and deprived of their basic rights.”
The article goes on to say, “Already there are allegations of corruption in the procurement of medical supplies to combat the pandemic. There are reports that food prices are being manipulated, depriving farmers of their income while consumers struggle to feed themselves. And millions of Nepalis who rely on daily wages from informal work suddenly have no income, and are facing an acute crisis due to the lockdown. Many such workers are stranded hundreds of kilometers from home.”
The International Monetary Fund (IMF), the World Bank, and the Asian Development Bank (ADB), as well as bilateral donors, have announced debt relief and grants to Nepal to cope with the pandemic, but at the same time, the article warns, “…the donors should learn from the past, and ensure their support reaches those who really need it. They should demand that all of Nepal’s aid spending is transparent and goes through a competitive procurement system. The government should also open its accounts to an independent auditor, and ensure that any corruption is properly investigated and prosecuted.”
On April 7, 2020, the World Bank approved a fast-track $29 million COVID-19 Emergency Response and Health Systems Preparedness Project for Nepal, while on May 6, 2020, the IMF approved a Rapid Care Facility of about $214 million to help cover urgent balance of payments and fiscal needs arising from the pandemic, and on May 26, 2020, the ADB approved a $250 million concessional loan to fund the country’s response against the pandemic.
The UN Human Rights Council has warned of the devastating human cost if governments fail to guard against corruption when securing personal-protective equipment and essential medicines in the fight against the COVID-19 pandemic, and it has a stark message for all—“Targeted sanctions, asset freezes, and visa denials can be used against individuals who perpetrate human rights abuses and/or engage in corrupt acts. Public procurement laws must ensure that taxpayer funds are not given to companies that pay bribes and commit fraud, and that government contracts go to those that respect human rights.”
References:
1. “Corruption in the time of COVID-19: A double-threat for low income countries”, Sarah Steingrüber, Monica Kirya, David Jackson and Saul Mullard, March, 2020, U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (https://bit.ly/322nquA)
2. “Investigating the coronavirus: Who is cashing in?” Ben Hallman, March 24, 2020, International Consortium of Investigative Journalism, (https://urlzs.com/Z8Pi3)
3. “Coronavirus corruption cases spread across Latin America”, Bryan Harris and Andres Schipani, July 7, 2020, Financial Times, (https://on.ft.com/2Cyy0AR)
4. “After Ebola funds fiasco, IFRC is ‘confident’ corruption won’t get COVID-19 money”, Rebecca Root, April 6, 2020, Devex, (https://bit.ly/320Z04y)
5. “State plunder during a pandemic”, Achyut Wagle, June 22, 2020, The Kathmandu Post, (https://tkpo.st/2B0ki93)
6. “The Coronavirus or The Virus of Corruption”, Deepak Raj Joshi, April 25, 2020, Spotlight, (https://bit.ly/31ZkgHX)
7. “COVID-19: Nepal in Crisis”, Peter Gill and Janak Raj Sapkota, June 29, 2020, The Diplomat, (https://bit.ly/2DSoZn4)
8. “India’s crossborder crises, COVID-19 corruption, and more”, June 26, 2020, Himal South Asian, (https://bit.ly/3h6nvnp)
9. “Nearly Rs 10 billion spent for COVID-19 response in Nepal”, Republica, June 3, 2020, (https://bit.ly/346Ds9F)
10. “Don’t Let Nepal’s Covid-19 Relief be Squandered”, Meenakshi Ganguli, South Asia Director, Human Rights Watch, April 16,2020, (https://bit.ly/2DPFJvd)
11. UN Human Rights Council, July 9, 2020, (https://bit.ly/3fYNUSF)
12. The World Bank Press Release, April 7, 2020, (https://bit.ly/3iKWRRt)
13. International Monetary Fund Press Release, May 6, 2020, (https://bit.ly/3azGyEm)
14. Asian Development Bank News Release, May 26, 2020, (https://bit.ly/341HfF8)
