“LAW OF BLACK MARKET”

Alie Vashishtha

Abstract

The emergence of the pandemic has revolutionized the world upside down and especially, in a developing country like India. The country is known for its diversity, values, ethics, and most eminently for its democracy and freedom. These have led to citizens who have played with the legal structure and system of the economy just to earn for. The need for living saving drugs was the need for an hour which was viciously used by traders dealing within the field to earn extra profit. This is where the question lies: were there enough laws enacted that could have curbed the black marketing of covid essentials in India? The paper scrutinizes the law presently in the arena of the Black market and the role of the government to implement the system effectively to curb the malpractice at present and laying down guiding principles for the future.

Keywords

Black market, Covid essentials, Government, Illegal, Malpractice

Introduction

Market is an authorized place by the government for the sale of commodities by seller bound by requisite law, policies, and standards to be purchased by satisfied consumers. The infringement of requisite laws by sellers set by the government, with an intention to earn more which ultimately led to illicit acts, and sale at price higher than the fixed price. This leads to Black marketing. This business was and is still prevalent in every sphere of the market, one of these is pharmaceuticals.

Due to the ongoing unprecedented situation, declared by WHO, global pandemic Covid-19, where the essentials such as prescribed life-saving drugs, oxygen cylinders, and reservation of bed are priced extraordinarily high which are the demand for need and bought to fulfill the hunger of saving a life in the unbearable price termed “black”.

The main concern to be evaluated relates to the fact that the laws enacted are sufficient to interpret the term ‘black market’, if yes, were the enacted laws effective to implement and curb this illicit practice. What loopholes gave birth to this practice? If compared with the period of Influenza (H1N1), was the Black market of essentials prevalent? if yes, what were the laws governing it.

Research Methodology

The descriptive and secondary qualitative data-based analysis is conducted to understand the legal provisions within Black market in Covid and implement provisions to counter such practice within India. The data collected is mostly from sources of journals, articles, annual reports, published by websites and governments of different agencies and organizations.

Review of Literature

The black market is worldwide malpractice that is spread across every sphere of market trading in different spheres of goods. The consequences of all are dangerous but categorizing in pharmaceuticals is extremely poisonous, as this illegal act would lead to death.

The swindling ways in which the vials of medicine enter the black market in unidentifiable demand. The deadly virus supplemented with the least income and greed to earn more is toxically infectious.

Lee and McKibbin (2004) investigated the impact of Black market and the effect in other countries via sale of drug in black.

India recorded another 320,000 Covid-19 infections on Tuesday as the country struggles to cope with a deadly surge of the disease. Hospitals in Delhi and many other cities have run out of beds and oxygen and patients are being turned away. Countries have scrambled to assist India with the United States, France, Germany and the United Kingdom among the governments sending aid. The first ventilators and oxygen have touched down in India but more aid is desperately needed.

The situation in Indian hospitals has seen the price of essential medical supplies skyrocket, according to an investigation carried out by the BBC. They found that the $80 price for a standard 50-liter oxygen cylinder has climbed as high as $1,330 on the black market while the cost of an oxygen concentrator has nearly tripled. Likewise, the cost of essential drugs has also risen dramatically. For example, the highest price for 100mg of Remdesivir in India was quoted by the BBC as $53 and this has climbed as high as $1,000 on the black market.

According to the general assumption, the possible reason for this illicit operation could be to save a good amount of money by the seller and pay a handful tax to the government. This is where stringent operations of Law are demanded to check into the intricacies within the black market and cure the deficiencies for the betterment of people and the nation. There have been numerous statutes enacted to curb these specific illicit acts within the black market, but no specific statute has mentioned “black market” as a whole.

This is where the administration plays great importance as they are empowered with quasi-legislative and quasi-judicial functions to execute laws depending on the circumstances of the case. But maybe due to the impossible execution and lack of certain specifications of their essential and pure function, illicit practices have still not been eradicated. This declares the public health legislation to be ineffective, ultimately empowering this practice and creating loopholes for one’s own benefit. The practice of black marketing covid essential, which itself reflects an emergency state leads to violation of consumer rights and additionally leads to violation of Article 21 within the Indian Constitution.

Medical Trafficking of Essentials Reported and Active Enacted Laws

India, the country known for “pharmacy in the world”^[1] with the status of producing generic drugs in huge chunks to meet the demand of ailing. But, since the onset of the pandemic within the world affecting millions has failed to satisfy the demand of its own citizens. Due to huge demand and limited supply give the intermediaries a chance to hoard the life-saving essentials and sell at the price asked by the seller, which was exuberantly bought by the consumer to save their life. The popular essentials sold in black are commonly named as drugs (Remdesivir, Favipiravir, and Tocilizumab), medical oxygen cylinders and concentrators, reservation of medical beds in private and government hospitals.

A news excerpt from BBC news reflects “On Monday, India recorded a new global high for daily coronavirus cases for a fifth straight day at 352, 991.

Anshu Priya could not get a hospital bed in Delhi or its suburb of Noida for her father-in-law and as his condition continued to deteriorate. She spent most of Sunday looking for an oxygen cylinder, but her search was futile.

So, she finally turned to the black market. She paid a hefty amount – 50,000 rupees ($670; £480) – to procure a cylinder that normally costs 6,000 rupees. With her mother-in-law also struggling to breathe, Anshu knew she may not be able to find or afford another cylinder on the black market.”^[2]

The statutes in force to prevent the practice of black marketing and hoarding are the Essential Commodities Act, 1955, Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980, Drug and Cosmetic Act of 1940, and National Security Act, 1980 which were active when cases were reported within the jurisdiction. To break the ice, none of the mentioned statutes expressly or specifically define “Black marketing”, which was the need of the hour. These usually focused on powers of the central and state government to punish the offenders violating the provisions stated^[3].

There were special statutes in force to manage the Epidemic and Disaster which Covid has the mixture of hilarious circumstances, in case of an emergency which is Epidemic Diseases Act, 1897 read with the primary legislation the National Disaster Management Act, 2005 which states the power of authorities to take special measure to only control the demand and supply of medical essentials and not “Black marketing”^[4].

“The fast pace of research and development and the urgent demand for a vaccine may create opportunities for corruption that are likely to impede public health efforts. Conflicts of interest related to the funding of the research and development of a COVID-19 vaccine is such a corruption risk. An example of this could be when a high-level officer of a government’s COVID-19 vaccine research and development program who used to work for a private vaccine company that is bidding for a large contract under the government program to manufacture a vaccine candidate, participates in a decision-making process on that contract.”^[5]

Considering this similar situation in the period of Influenza (H1N1), 2009 itself was declared an epidemic by WHO. The effective drug recommended for defense against this disease was Tamiflu or oseltamivir. The limited supply and unlimited demand within the pharmaceutical industry made this drug a precious essential, which was bought at prices higher than MRP termed black. According to the report^[6], the governments banned the retail sale of the drug in general medical stores and were only available at government and private hospitals to the patients free of cost.

The statutes active during this phase were the Epidemic Act 1897, Livestock Importation Act 1898, The Drugs and Cosmetics Act, 1940, Draft National Health Bill (2009) and Draft Gujarat Public Health Bill (2009) (in the state of Gujarat). These depict the drawback of implementing the enactment of Black-marketing laws, curbing these practices. It does not address the concern and intricacies of functioning within the Black market^[7].

In comparison with other Countries, a surprising fact, by research through various authorized sources; it is evident that there are statutes within various countries recognizing the black market but specifically does not define it. One of the Australian legislations specifically defined Black marketing named Black Marketing Act 1942^[8] but was later repealed. This brings attention to specifying the definition of black marketing which would enhance the execution of laws not only in the pharmaceutical industry but also in other spheres relating to black marketing.

“Under normal circumstances, the public procurement process poses one of the greatest risks for corruption among all government functions. The large volumes that are involved in public procurement make it highly vulnerable to corruption risks. In many countries, public procurement is estimated to comprise as much as 15 – 30 per cent of the gross domestic product.13 Corruption scandals in procurement are widespread, but in the health-care sector, the procurement of pharmaceuticals and medical devices are particularly prone to corruption”.^[9]

Corrupt vaccine policy decisions

“The private sector, and other relevant stakeholders, may seek to influence government decision-making concerning vaccine policy and deployment. Government officials may be vulnerable to payoffs and bribes from a company with a stake in which vaccine is purchased, for how much, from whom, and where it is distributed. Individuals with close ties to the corruption risks that may compromise the access to safe and effective COVID-19 vaccines by the population. The United Nations Convention against Corruption is the only legally binding, universal anti-corruption instrument. It provides a global framework and key tools to foster accountability, integrity and transparency in times of crisis, during and beyond the COVID-19 pandemic.”^[10]

These grilling circumstances made an aggrieved approach to the judiciary to gain justice which recorded numerous petitions highlighting the situation in and around.

CASE LAWS-

In Re: Distribution of Essential Supplies and Services During Pandemic^{^[11]}

This case was a Suo motu writ petition which catered the issue of supply of essential drug and oxygen and the Government actions to curb malpractices one such is black marketing. To clamp down this practice the Supreme Court ordered to constitute a special team, identifying and prosecuting offenders and charge them under the Indian Penal Code to those who exorbitantly extracted money from the consumers. It also suggested the administration create a platform in case of any grievance related to essentials.

K.S. Puttaswamy v. Union of India (2017) 10 SCC 1

The court in the case also took the precedent and stated by taking into consideration the circumstances of drought in Maharashtra 1973 and the policies which prevented the situation. It also took into the situation of Bengal Feminine in 1943 where during pre-independence British denied this crisis. It concluded that government policies and subject to criticism where civil and political rights flourish which results in socio-economic benefits but primate the for the underprivileged. The existence of freedom is found within the scrutiny of public affairs. Hence the rights are complementary and not mutually exclusive.

Public Interest Litigation v. Union of India

The Court said that the fresh National Plan will again not be framed as it already exists under Section 11 of the Disaster Management Act of 2005 which was also supplemented by various reports and orders.

The Production of Substandard and Falsified Vaccines

With the urgent global demand for vaccines, there is a risk of substandard and falsified vaccines entering a market. Corruption may facilitate the involvement of organized criminal groups in the manufacturing of and trafficking in falsified vaccines, and the production of substandard vaccines by others, particularly when supplies will be limited in the early stages of vaccine production and deployment. This risk is further compounded if quality assurance measures are absent or bypassed during the emergency response, resulting in adverse health outcomes for the population and an erosion of public trust in the safety and efficacy of a vaccine. Organized criminal groups take advantage of the COVID-19 pandemic by attacking vulnerabilities and gaps in health and criminal systems. This includes the manufacturing of and trafficking in falsified medical products, driven by the huge global demand and competition in products for COVID-19 prevention, diagnosis, treatment and risk protection.”^[12]

The year 2020 has been remarked as a thriving industry of black market highlighting major drawbacks within the machinery of the government. Administrative authorities are the machinery that supplements the enacted statutes to be put in action. Reviewing the pre-covid circumstances in the case of Black marketing, there were still manufacturing and trafficking of “substandard and falsified products and cyber security shortcomings^[13]” which reflects a weak legal and regulatory framework for implementation. Post-covid these circumstances have become vulnerable and exacerbated making it difficult to propose significant alteration these days. These illegal operations can be prevented by stringent checks and punishment to the offenders playing with the lives of citizens, to earn more.

Infodemic- pandemic profiteering

The term evolution by WHO named infodemic parallel to the pandemic which states the universe of the internet i.e., online marketing and sale of unapproved, illegal, and counterfeit COVID-19 health products including testing kits, treatments, and other questionable “cures^[14]” In this era, of WWW where whatever is imaginable or unimaginable is available in many of the different spheres. The most popular are social networking sites i.e., Facebook, Instagram, WhatsApp, and not excluding the most searched e-commerce sites which are Amazon, Flipkart, 1mg, Pharm Easy, Apollo Pharmacy, and many more.

These are indeed the greatest development if used for Pro Bono Public but were used to trap the consumer in the vicious circle of profiteering. This has brought serious challenges to cybercrime with an overabundance of information in which more than half of the proportion is misleading, leading to an increase in the complication within public health and management which are ultimately unrecorded reports termed cyber syndemic^[15].

Conclusion And Suggestion

To suggest some for this cure of the Black market, there must be a lucid and detailed interpretation and definition of the term Black market. To control special task machinery created for identifying the loopholes within the organized system and reported to the concerned authority for faster and effective redressal. The Central system of monitoring and recording software with great vigilance creates, authorizing the registered dealers for the sale of essentials including monitoring the process of delivery and consumption.

The circumstances depicted above hint to implement and specify laws to build an effective system of execution of the law for every malpractice benefiting essential and non-essential. These would also establish efficient punishment for violations adapting immoral practices. The intricacies identified could be checked by the administrative authorities, delegated with the power to supervise and assist regions on law and order. The diagnosed drawbacks may lead to eradicating this practice of black market, relieving the needy in the current scenario and preventing the chances of this possibility in future situations. Thus, the nation requires an interpretation, amendment, or enacted within existing laws to curb the practice of the black market for the benefit of today and tomorrow.

Editor’s comments-

Good for publication.
Footnotes corrected. Give more emphasis on proper footnoting.

[1] Murali Krishnan, India’s COVID crisis spawns black market for oxygen, drugs, DEUTSCHE WELLE, (Sept 12,2021), https://www.dw.com/en/india-covid-black-market/a-57496221.html.

[2] Vikas Pandey, Covid-19 in India: Patients struggle at home as hospitals choke, BBC NEWS, (April 26, 2021), https://www.bbc.com/news/world-asia-india-56882167

[3] Ayush Verma, Regulation of black markets for medical supplies in the wake of COVID-19, iPLEADERS, (June 13, 2021), https://blog.ipleaders.in/regulation-black-markets-medical-supplies-wake-covid-19/.

[4] ibid.

[5] ibid

[6] Aarti Dhar,Centre asks States to take “stringent action” on illegal Tamiflu sale, THE HINDU, Aug. 12, 2009.

[7] Manish Kakkar & Sukanya Hazarika & Sanjay Zodpey & K Srinath Reddy, Influenza pandemic preparedness and response: A review of legal frameworks in India, 54(1)IJPH 54, 11-17 (2010).

[8] Black Marketing Act 1942, 49 AustLII. §§ 3 (1942).

[9]United Nations Office On Drugs And Crime (UNODC): https://www.unodc.org/documents/data-and-analysis/covid/COVID-19_research_brief_trafficking_medical_products.pdf.

[10] ibid

[11] In Re: Distribution of Essential Supplies and Services During Pandemic 0366 MANU. 2021 (India).

[12] ibid

[13] United Nations Office On Drugs And Crime (UNODC): https://www.unodc.org/documents/data-and-analysis/covid/COVID-19_research_brief_trafficking_medical_products.pdf.

[14] Tim Ken Mackey & Jiawei Li & Vidya Purushothaman & Matthew Nali & Neal Shah & Cortni Bardier & Mingxiang Cai & Bryan Liang, Big Data, Natural Language Processing, and Deep Learning to Detect and Characterize Illicit COVID-19 Product Sales: Infoveillance Study on Twitter and Instagram, 6(3)JMIR Public Health Surveill 1, 12-13 (2020).

[15] ibid

“LAW OF BLACK MARKET”