[Ip-health] Fwd: TWN Health Info: WHO - Civil society calls for deferment of “official relations” status to Gates Foundation

K.M. Gopakumar kumargopakm at gmail.com
Mon Jan 30 00:53:35 PST 2017


*Title :* TWN Health Info: WHO - Civil society calls for deferment of
“official relations” status to Gates Foundation
*Date :* 2017-01-30

*Contents:*

TWN Info Service on Health Issues (Jan17/03)
30 January 2017
Third World Network
www.twn.my

*WHO: Civil society calls for deferment of “official relations” status to
Gates Foundation*

Geneva, 30 January (TWN) – Thirty civil society organisations (CSOs) from
across the world working on global health issues have made a strong call
for the deferment of a decision on the Bill and Melinda Gates Foundation’s
application for official relations with the World health Organization (WHO).

The CSOs wrote an open letter to the WHO Executive Board members at the 140
th meeting of the Board that is taking place in Geneva from 24 January to 1
February.

[The Executive Board is expected to take decision on the official relations
based on the recommendation of the Program, Budget and Administrative
Committee (PBAC) that had met in Geneva on 18 - 20 January. The PBAC has
recommended five organizations including Gates Foundation for official
relations status. Such a status makes eligible an organisation to attend
and make statements during the governing body meetings such as the
Executive Board and World Health Assembly.  The Assembly in 2016 adopted
the Overarching Framework of Engagement with Non-State Actors (FENSA),
which governs the official relations with WHO.  Under FENSA, NGOs,
international business associations and philanthropic foundations are
eligible for official status.]

The CSO demand for deferment is based on the conflict of interest emerging
from Gates Foundation’s official relations with the WHO. The letter states:
“to defer the decision to accept the Gates Foundation and any other new and
legacy applicants for Official Relations status for which there has been no
conflict of interest safeguard review on the record for consideration by
Member States of the Executive Board”.

According to Paragraph 25 of FENSA, the WHO aims to avoid allowing the
conflicting interests of a non-State actor to exert, or be reasonably
perceived to exert, undue influence over the Organization’s decision-making
process or to prevail over its interests.

According to the CSO letter there is conflict of interest stream of revenue
of the Gates Foundation. The Foundation has revenue from investments made
in the forms of stocks, mutual funds, corporate bonds etc. However,
investments are managed by a different legal entity known as the Bill and
Melinda Gates Foundation Trust (Trust).  The letter states: “According to
the United States Government’s Securities and Exchange Commission, the Bill
and Melinda Gates Foundation Trust endowment– the source of revenue for the
Foundation – is heavily invested in many of the food, alcohol, and physical
inactivity-related consumer products that cause or treat the current crisis
of preventable heart disease, stroke, cancer, and diabetes.”

The letter lists the following important direct investments of theTrust:

·      Coca-Cola regional company that operates in the Americas south of
the United States (US$ 466 million),

·      Walmart (US$ 837 million), the largest food retailer in the US and a
leading retailer of pharmaceutical drugs and alcoholic beverages,

·      Walgreen-Boots Alliance (US$ 280 million), a large multinational
pharmaceutical drug retailer,

·      Two of the world’s largest TV companies (screen-time): Group
Televisa (US$ 433 million) and Liberty Global PLC (US$ 221 million).

According to letter “ approximately one-quarter of the Gates Foundation
Trust assets are invested in Berkshire Hathaway Inc., a holding company
that owns a US$ 17 billion share in the US-based Coca-Cola company and US$
29 billion interest in Kraft Heinz Inc., another of the world’s ten largest
food companies”.

The letter further states: “These investments make the Gates Foundation a
beneficiary of sales of several categories of products that are the subject
of WHO standards and advice to governments related to nutrition and
physical activity”.

Moreover, the 2015 tax returns of the Trust shows it holds shares and
corporate bonds in pharmaceutical companies such as Pfizer (US$ 719,462
base market value), Novartis AG REG (US$ 6,920,761), Gilead Sciences (US$
2,920,011 base market value) , Glaxo Smithkline ( US$ 1,589,576 base market
value), BASF (US$  4,909,767), Abott Laboratories (US$ 507,483) , Roche
(US$ 7,760,738), Novo Norisdick A/S B (US$ 6,208,992) , Merck (US$ 782,994)
. Tax returns also reveal that the Trust has investments in major insurance
companies.  (http://www.gatesfoundation.org/Who-We-Are/General-
Information/Financials).

The Nasdaq website reveals that out of 125 institutional shareholders of
Coca Cola Femsa S.A.B de C.V., which collectively hold 24.19% of shares,
the Trust holds a large number of shares (6,214,719) as the top
institutional investor. As of 30 January the total number of shares held by
institutional investors is 12,029,444 (http://www.nasdaq.com/symbol/
kof/ownership-summary).

The Foundation receives its resources from the investment made by the
Trust. According to disclosures made in the WHO register, “The Bill &
Melinda Gates Foundation (BMGF) has the legal right to demand any amount up
to the full net assets of the Bill & Melinda Gates Foundation Trust (BMGFT)
to achieve its charitable goals.  As a result, the financial statements of
BMGF reflect a beneficial interest in the net assets of BMGFT.” In 2015 out
of US$ 765 million annual income US$ 6.7 million was for BMGF and US$ 758.8
for BMGFT (http://apps.who.int/register-nonstate-actors/nsa.aspx?id=328).

The investment policy of the Foundation endowment states that “(Bill and
Melinda) have defined areas in which the endowment will not invest, such as
companies whose profit model is centrally tied to corporate activity that
they find egregious. This is why the endowment does not invest in tobacco
or Sudan-related stocks” (http://www.gatesfoundation.org/Who-We-Are/General-
Information/Financials/Investment-Policy).

Regarding the relationship between the two entities the website of the
Foundation states: “The Foundation Trust holds the endowment, including the
annual instalments of Warren Buffett’s gift, and funds the Foundation. Bill
and Melinda are the trustees for the Foundation Trust, and the endowment
continues to be managed, as it has been for more than 10 years, by a team
of outside investment managers”.  The Gates are also co-chair and trustee
of the Foundation. Thus there is no arms length relation between the Trust
and the Foundation.  Further, “Bill and Melinda do guide the managers of
the foundation's endowment in voting proxies consistent with the principles
of good governance and good management.”

Paragraph 10 of the WHO FENSA defines private sector entities as commercial
enterprises, that is to say businesses that are intended to make a profit
for their owners. The term also refers to entities that represent, or are
governed or controlled by, private sector entities. This group includes
(but is not limited to) business associations representing commercial
enterprises, entities not “at arm’s length” from their commercial sponsors,
and partially or fully State-owned commercial enterprises acting like
private sector entities.

The Gates Foundation in earning their revenue through share and bond
holdings in various private sector entities thus raises a major concern of
conflict of interest.  Accordingly the official relations and the joint
work plan (with the WHO Secretariat) bear the danger of influencing WHO’s
work in favour of the industries concerned. According to an observer, the
Foundation falls well within the definition of private sector and therefore
is not eligible for official relations.

[Under FENSA only NGOs, International Business Associations and
Philanthropic Foundations are eligible to enter into official relations.
The Gates Foundation, which falls within the definition of private sector,
is therefore not eligible for official relations.]

Further, Paragraph 13 of FENSA states that:  “WHO will determine through
its due diligence if a non-State actor is subject to the influence of
private sector entities to the extent that the non-State actor has to be
considered itself a private sector entity. Such influence can be exerted
through financing, participation in decision-making or otherwise. Provided
that the decision-making processes and bodies of a non-State actor remain
independent of undue influence from the private sector, WHO can decide to
consider the entity as a nongovernmental organization, a philanthropic
foundation or an academic institution, but may apply relevant provisions of
the WHO’s policy and operational procedures on engagement with private
sector entities, such as not accepting financial and in-kind contributions
for use in the normative work”.

The WHO Secretariat has not carried out any such exercise before
recommending the Gates Foundation for official relations. According to
Document EB 140/41 tabled for the Executive Body to consider, this exercise
will be carried out in the coming days.

The Secretariat is to carry out due diligence and risk assessment about the
entity prior to a decision on engagement, including official relations, and
make the summary available to the Member States.

The Secretariat is to publish the full version of the collaborative work
plan agreed between the WHO Secretariat and entity that applies for the
official relations. However, the Secretariat did not publish this work plan
prior to the PBAC meeting and this prevented Member States from informed
decision-making. The Secretariat has apologised for not providing work
plans prior to the meeting when the issue was raised (see: WHO Member
States raise information deficit for decisions on official relations
<http://twn.my/title2/health.info/2017/hi170102.htm>).

The PBAC communication to the Executive Board clearly states: “The
Secretariat apologized for the late submission of the document and recalled
that the Framework on Engagement with Non-State Actors mandated the
Programme, Budget and Administration Committee (PBAC) to make
recommendations to the Executive Board regarding”.  Further it states: “The
complete plans for collaborative activities with WHO for 2017?2019 of the
five applicants for admission into official relations would be uploaded
onto the WHO website before the Seventieth World Health Assembly (22-27 May
2017)”.

The CSOs’ open letter states: “It is, of course, deeply troubling from a
governance standpoint that the Executive Board is being asked to approve
applicants for Official Relations and verify compliance with conflicts of
interest safeguards without being provided with any relevant evidence –
verified or otherwise – on the public record”.

The Foundation does not disclose the full information in the WHO’s register
for non-State actors. The Foundation discloses that it has engagements with
the food and beverages industry, health care industry and pharmaceutical
industry. However, it does not declare the nature of the engagement,
especially the share and bond holding in these industries through the
Trust. The ownership in the private sector raises serious concerns of
conflict of interest. The Foundation’s proposed work plan incudes Malaria,
Tuberculosis, neglected Tropical Diseases, Access to Medicines, Nutrition,
Health System, etc. Tax return of the Trust clearly shows that the revenue
of the Foundation is coming from investments in those industries that have
commercial interests in those areas of the work plan.

Signatories of the letter include: African Centre for Global Health &
Social Transformation (ACHEST), Alcohol Justice, Algerian Network of
Small-Scale Fishing Organisation, Baby Milk Action, BUKO Pharma-Kampagne,
Centre for Health Science and Law, FIAN International, Foundation for
Alcohol Research and Education, Health Innovation in Practice (HIP),
International Assn. for Hospice and Palliative Care, International Baby
Food Action Network, International Code Documentation Centre, International
Community Supported Agriculture Network, International Field Representative
International Indian Treaty Council, INFACT Canada and Infant Baby Food
Action Network IBFAN, Initiative for Health & Equity in Society, IOGT
International, Medico International, Medicus Mundi Int’l Network Health for
All, Nigerian Women Agro Allied Farmers Association, People’s Health
Movement, El Poder del Consumidor, Public Health Resource Network, Third
World Network, Transnational Institute (TNI), University of Liverpool,
Dept. of Public Health & Policy, Inst. of Psychology, Health & Society,
WEMOS and World Public Health Nutrition Association.

(With inputs from Bill Jeffery of the Centre for Health Science and Lawand
Dr. Amit Sengupta of the Peoples’ Health Movement.)


*Author :*

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