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PPE Piracy – Proactive International Diplomacy is Necessary to Keep PPE Moving Across Borders During COVID-19

April 8, 2020

By Noel Courage

There have been many cooperative international efforts to provide the personal protective equipment (“PPE”) that protect against COVID-19. Personal protective equipment includes items such as medical gowns, masks (respirators etc.), face shields, goggles, gloves and the like. Companies and governments are collaborating and boosting production to provide supplies. Less-stricken governments and others are donating PPE internationally. Many companies are retooling from their usual business to make personal protective equipment, hand sanitizers or ventilators.   

The shortage of PPE in most countries with COVID-19 cases has been in the news for weeks. Demand is still exceeding supply, despite the strong push to get PPE to those who need them, particularly front-line healthcare workers. Although the vast majority of efforts are cooperative, there is a risk of two types of attempted PPE piracy that need to be minimized, i) unduly restricting or prohibiting export, and ii) redirection of exports in transit. Restriction has become common. Prohibition is less common, but significant when it has occurred. Redirection appear to be mostly the subject of allegation at this point. As this article explains, intensive and proactive diplomacy is the best way to ensure that PPE keep moving fairly to where they are needed most.

Export Restrictions

China bought up supply and allegedly withheld exports during its own COVID-19 crisis. Restricting export has been going on in Western countries for over a month, with France, Germany and other countries making laws limiting export of protective equipment. This is apparently permitted under European treaties, but is arguably against the spirit of the EU. According to the New York Times, the French government said it was not protectionism, but enabling itself to have a complete view of the materials that it has. At least 68 countries now have export restrictions on PPE. This is a controversial practice – it is quite risky that when the pressure ratchets up, restrictions may, in practice, be applied as prohibitions. International diplomacy has been needed already to avoid alleged near-misses of countries using the cover of law for piracy of sold goods. This situation allegedly occurred when France seized PPE headed to the UK. A similar situation also almost occurred in Turkey, where Turkish-manufactured ventilators were held by that country on the basis of export controls, before being released to Spain, the country that ordered them. It is difficult to gauge the truth of what is going on, since customs often slow the progress of goods even in normal times, export restrictions provide another layer of complexity, and the impatiently waiting recipient may publicly cry louder every day they wait during the COVID-19 crisis. However, the risks of customs and export controls, who are also under pressure, unduly delaying or appropriating emergency supplies relied on by other countries must be kept to a minimum.       

Export Prohibitions – Direct and Indirect

The legal prohibitions on export can either be direct, by preventing export, or indirect, by requisitioning that all PPE be provided to the government of the manufacturing country. An example of the indirect prohibition is France requisitioning all masks produced on French soil, potentially making nothing available to export. Trucks with masks heading to the UK were held up by French border officials, and international diplomatic negotiation was required to release the mask to the UK.   

The US government directly requested that 3M stop certain PPE exports on April 3, 2020. The US government has a healthcare crisis on its hands and is under significant pressure to resolve PPE shortages. The US may have overreacted by blanket prohibiting the 3M company, a top PPE supplier, from exporting US-made respirators to Canada and Latin America. Apparently as a result of this US position, a shipment of 500,000 masks was held up at the border on its way to Canada. It is not unexpected that a large shipment of anything could be delayed crossing the border. However, according to the Ontario government and media reports, this could have been a potential attempt by US border officials to keep these respirators in the US, for use in the US, since that is what the US request to prohibit export was intended to do. These respirators were ordered long ago by Ontario under a legal contract, and were being relied upon to alleviate Canada’s own PPE shortages. Any attempt to prevent export of these respirators because of the United States’ own need would not have been the right step from a business and a humanitarian point of view. It is understandable that a government may overreact under pressure and time constraints, but Canada and the US are in similar boats on PPE shortages. Cooler heads must prevail. 

As 3M pointed out in its press release in response to White House:

"The Administration also requested that 3M cease exporting respirators that we currently manufacture in the United States to the Canadian and Latin American markets. There are, however, significant humanitarian implications of ceasing respirator supplies to healthcare workers in Canada and Latin America, where we are a critical supplier of respirators.”

As well, 3M pointed out how export prohibitions are short-sighted and counterproductive:

“In addition, ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done. If that were to occur, the net number of respirators being made available to the United States would actually decrease. That is the opposite of what we and the Administration, on behalf of the American people, both seek."

The position taken by 3M makes sense and is practical. Many supply chains are international, and if everyone prohibits export of medical materials and completed product, then the rate of production of PPE will go down, and everyone suffers. For example, the wood fiber used by some medical mask manufacturers in the US is made in Canada and exported to the US. The US and other countries had already felt the sting of export prohibitions in the non-PPE area through India’s ban on export of an experimental drug, hydroxychloroquine touted by the US. The ban has now been lifted, again following international discussions. In a global community fight against a pandemic, export bans are an easy and fast political step to take to lock down and assess supply, but counter-productive.   

The Canadian and Ontario governments did not retaliate against the US for allegedly blocking its masks from export, and resolved the issue by diplomatic negotiations to free the masks to continue their journey to Canada. As part of the process, 3M reached a deal with the White House to allow 3M to continue to send a portion of the US-made respirators (masks) to Canada and Latin America. Countries should not restrict or prohibit exports to the detriment of other countries. Every day’s delay in distribution of PPE matters when healthcare workers and patients are at risk.    

Redirection of PPE

Redirection is a risk when PPE are available on international markets and ready to go in transit. News outlets have alleged that the competition for PPE in the international marketplace could be going beyond bidding wars for PPE to win the sale. In the scramble to scoop up PPE from Asia, there have been allegations that already-sold PPE have been yanked back by a seller, breaching the contracts of sale, to be redirected and resold to a higher bidder. Tensions are running high, and at least a couple of allegations of redirection may have been false or exaggerated. A French government official retracted a dramatic allegation that his country’s masks were bought off the tarmac and diverted.  Also, a local government official in Berlin said that a shipment of 3M masks from China was seized and redirected to another country, but the other country and 3M denied that occurred. The local government official reportedly walked back that allegation and said that masks were missing, but the manufacturer name and where the masks went was to be investigated. The redirection issue may be a combination of officials’ anxiety, miscommunication and suppliers tempted by money. The issue should be investigated, and countries should ensure that their suppliers are acting ethically, not price gouging or breaching agreements if a better offer comes along later.   

The scramble for PPE has produced many spontaneous constructive efforts amongst science and manufacturing. It appears that careful international diplomacy is required in the PPE supply area, to ensure that fair and equitable trade practices are followed. To date, many reported allegations of piracy are near-misses, but now that the risk has been identified, blanked prohibitions and redirections should not be permitted. Export restriction red tape should be minimized, and legitimate, clear criteria to delay or stop shipments should be provided to border officials (eg. healthcare regulatory, quality control).  

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Author(s):

Noel Courage Noel Courage
B.Sc. (Biochem.), LL.B.
Partner
416.957.1655  email Noel Courage