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Covid diplomacy 2.0 | UPSC

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UPSC Syllabus: Mains:  GS Paper 2: International Relations

Debate about indemnity clause in the vaccination program

• Vaccine manufacturers like Pfizer are demanding indemnity or liability waiver for the supply of vaccines.
• The issue is who will be held liable in case of complaint of side effects.
• Manufacturers are demanding that they should not be held liable. This is a precondition for the introduction of Vaccines in India.

Present status in India –

• The government has included a liability clause in the contract with the manufacturers. As per the contract, the producers will be liable to compensate the people in all claims that arise due to the vaccine.

• Section 124 of the Indian Contract Act 1872 defines the Contract of Indemnity as a contract by which one party guarantees to save the other person from loss caused to him by the action of the guarantor himself, or by the action of any other person.

What are other countries doing?

• Countries like Canada, Singapore, the United Kingdom, the United States, and the European Union, have assumed a considerable amount of liability as opposed to the manufacturers.
• In February, the USA invoked the Public Readiness and Emergency Preparedness Act. The 2005 law empowers the HHS ( Health and Human Service) secretary to provide legal protection to companies making or distributing critical medical supplies, such as vaccines and treatments. The immunity will last till 2024.

• A Countermeasures Injury Compensation Program has also been created under this act where a dedicated compensation amount is enough to treat and indemnify the loss of the aggrieved. While on the other hand, the South African government has launched its own $250 million compensation fund for its citizens waiving off the liability of the manufacturers.

Legal point of view on the issue –

• Article 294 (4) of the Constitution states that the liability of the Union Government may arise ‘out of any contract or otherwise. This means that by virtue of the contract between the vaccine manufacturers and the government, the latter can be held liable. Moreover, the state can also be made vicariously liable. Since, the manufacturers are working for the government and their production, sale, distribution is majorly governed by the policies of the government, these companies are acting as agents.
In the current context, however, the state has freed itself of all liability and shifted the liability to the vaccine manufacturers

Challenges for India Diplomacy in the near future
• To roll out a mass vaccination program India will need to negotiate with the US about various issues like indemnity, the release of vaccine ingredients, the release of stocks of vaccines lying idle, etc.  India’s external affairs minister recently visited the US for such negotiations.
• India proposed a patent waiver on Vaccine production at the WTO. To make it a reality is the biggest challenge for diplomacy to convince the developed world.
• Managing the promise of Vaccine supply to African nations and the neighboring countries is another challenge that Indian diplomacy faces. India has stopped the exports recently.
• India’s stand on the recent reports of the WHO “pathways of emergence” of SARS-CoV2 and the associated “Lab Leak Theory” will be crucial in its relations with China.
• If the lab leak theory is true India should be at the forefront to revamp the 1972 Biological Weapons Convention (formally known as The Convention on the Prohibition of the Development, Production, and Stockpiling of Bacteriological (Biological) and Toxin Weapons to prevent future leaks.


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