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China wants Nepal to buy vaccines with ‘secret’ conditions after Nepal had to look for other sellers as India decided to stop export

The Nepalese authorities are facing numerous challenges to get these Chinese vaccines as Chinese firms have insisted that Nepal sign a non-disclosure agreement for commercial procurement of these vaccines, putting officials in a fix.

On Wednesday, China announced that it would provide 1 million doses of a Covid-19 vaccine under “grant assistance” to Nepal as the Himalayan country scrambles to secure vaccine amidst a recent surge in Covid-19 infections. However, getting access to these vaccines has become a tough task for Nepalese authorities, reports Kathmandu Post.

In a telephonic conversation, Chinese President Xi Jinping had assured his Nepali counterpart Bidya Devi Bhandari of providing Chinese-made Sinopharm vaccines to Nepal, which is struggling to cope up with the Chinese pandemic. The latest vaccine assistance by China comes just months after the Communist nation had provided 800,000 doses of the Sinopharm vaccine to Nepal, which also received 1 million jabs of the AstraZeneca vaccine as a gift from India.

However, the Nepalese authorities are facing numerous challenges to get these Chinese vaccines as Chinese firms have insisted that Nepal sign a non-disclosure agreement for commercial procurement of these vaccines, putting officials in a fix.

A non-disclosure agreement is a legally binding contract establishing a confidential relationship. If Nepal signs a non-disclosure agreement with China, that would mean confidentiality, and either of the two parties cannot disclose details, including the price.

Dipendra Raman Singh, Director-General at the Department of Health Services of Nepal, said the Nepalese government had received a proposal for a non-disclosure agreement from Sinopharm. The proposed non-disclosure deal contains over a dozen issues, including the price and specifications.

The company will notify Nepal about the quantity, price and delivery schedule only after signing a non-disclosure agreement, said an official.

One of the major issues with procuring vaccines under such a secret agreement is that Nepal currently does not have any guidelines to sign such deals for public procurement. The recently introduced Covid-19 Crisis Management Ordinance is also silent on a non-disclosure agreement, however, it allows the government to procure directly from suppliers or manufacturers without competitive bidding under extraordinary situations.

According to experts in Nepal, non-disclosure agreements are signed only when the government decides to procure defence-related materials, which are sensitive from a national security point of view. Details of all other procurement must be disclosed as per the existing law in Nepal, he added.

The objective of the procurement law is to ensure transparency and fairness, said the official, adding, “If any citizen seeks the procurement details by invoking the Right to Information Act, the government has to provide such details.”

Nepal’s decision to look out for other vaccines, including the untested Chinese vaccines, after it failed to procure any vaccines from India. Nepal had signed a commercial deal with India’s Serum Institute of India in February. However, SII could not supply 1 million of the 2 million doses for which Nepal had already paid.

Interestingly, Nepal had agreed to buy the 2 million doses from Serum at $4 per dose and the deal did not involve a non-disclosure agreement.

Signing non-disclosure agreements with China will make worse for Nepal

The experts believe that such non-disclosure agreements with China will worsen the condition for Nepal as it could make the country immensely difficult to procure vaccines from China. As per them, the country’s procurement law is silent on whether such an agreement is permitted, and secondly, Nepal plans to pay for vaccines from donor funds.

“Apart from some defence-related purchases, Nepal does not engage in the practice of non-disclosure agreements,” said Rameshore Khanal, a former finance secretary. If Nepal is taking money from donor agencies, then it has to disclose procurement details such as the rate, cost and logistical and transportation issues, among other things, said Khanal.

According to the Nepal Health Ministry officials, one of the provisions in the proposed non-disclosure agreement is that the information from the agreement cannot be disclosed to any third party, which in general is a key condition.

However, if Nepal intends to procure any goods or services with the money received from the donor agencies like the World Bank and Asian Development Bank, they have to send all the procurement-related documents to them. The Nepal government intends to procure Covid-19 vaccines with money provided by international development partners.

On April 2, the Nepalese government signed an agreement with the World Bank for a loan worth $75 million to support access to safe and effective Covid-19 vaccines in the country. According to officials at the finance and health ministries, the government is also discussing with the Asian Development Bank to secure aid another $150 million to purchase Covid-19 vaccines.

“It is also difficult to use the government’s own resources for making purchases through non-disclosure agreements because transparency questions could arise, as the public could ask how the taxpayer money is being spent,” said another Nepalese official.

Hence, the non-disclosure agreements being pushed by China has put the Nepal governments in a legal bind. Several questions are also being asked regarding the transparency of the deal between Nepal and Chinese firms, as these deals are clouded with secrecy. The critics believe that such a non-disclosure agreement gives the vaccine manufacturers the upper hand, as the government negotiators will not know what other countries are paying, putting them at risk.

In fact, this is not the first time that the Chinese are indulging in such a suspicious vaccine deal with other countries. In January this year, the Bangladesh government had rejected the Chinese vaccine – CoronaVac vaccine over their non-transparent agreements. The Chinese firm had also brazenly asked Dhaka to share costs of clinical trials of Sinovac manufactured drug in the country.

As the Chinese tried to bully and enforce one-sided deals, Bangladesh rejected the Chinese vaccines and obtained India’s Covishield doses under the Modi government’s ‘Vaccine Maitri’ initiative.

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