Covid-19 has transformed personal protective equipment (PPE) from a niche sector to one of the most sought-after commodities in the world. For garment, component and chemicals manufacturers hit by slumping demand, a pivot to PPE production seemed like a lifeline. However, recent months have shown that the market presents more challenges than opportunities, writes Eleanor Wragg.


Amid all of the pandemic doom and gloom, stories of struggling manufacturers retooling their production lines to produce the equipment that would keep frontline medical staff safe provided some welcome good news.

As the sheer size of the demand for PPE brought about by Covid-19 outstripped supply many times over, governments around the world began encouraging, incentivising, or even compelling non-healthcare manufacturers to help in ramping up production. The market for their products was all but guaranteed: based on World Health Organization modelling, an estimated 89 million medical masks, 79 million examination gloves, and 1.6 million goggles are required for the global Covid-19 response each month.

However, with large buyers, from government agencies to private enterprises, turning to a long list of untested suppliers to meet the new demand, problems quickly began to emerge.

“It started off really well,” says Collins Rex, director for Asia and Africa at the Global Trade Professionals Alliance, which supports small business in developing economies through capability and capacity building programmes. “But then when it came to delivering and getting paid, the reality didn’t always match the dream.”


In short supply

Switching from, say, making t-shirts to producing coveralls means coming up with new sewing patterns as well as competing with numerous others to source the right material to ensure seams don’t burst. For other products, such as N95 masks – the close-fitting particulate-filtering respirators used by hospital staff – it means tracking down meltblown fabric, which can only be made via a complex industrial process on machines costing millions of dollars.

In short, switching production from apparel to masks and gowns is – as many suppliers found to their chagrin – easier said than done.

“Some companies were seriously disadvantaged,” says Rex. “In some cases, materials they had been promised were not delivered, or the orders weren’t there in the volume that they thought they were going to get, or they couldn’t supply the right product because they didn’t have the ability to get the necessary approvals and certifications. Then it would arrive at the other end and be rejected and returned, leaving the manufacturers in a hole.”

She points to the experience of one garment manufacturer in South Asia, which pivoted to producing PPE to fulfil large government orders. “Initially, they produced samples, which were all accepted, but then when they got the rest of the material in, it didn’t meet the specifications anymore. They had effectively been cheated. What they thought they were getting was not the thing they finally got, and they were left stranded with it,” says Rex.


Fraud and crime

As PPE became a cash cow, criminal groups rapidly took advantage of the situation, as one case, recounted by the United Nations Office on Drugs and Crime (UNDOC) in a July report on Covid-related trafficking of medical products, shows. Earlier this year, German health authorities contracted two sales companies in Switzerland and Germany to procure €15mn-worth of face masks through what turned out to be a cloned website of an apparently legitimate company in Spain. According to Interpol, which has since successfully retrieved the funds, after making a €1.5mn upfront payment, the buyers were told that their payment had not been received, and that an emergency wire transfer of €880,000 was needed to secure the order. The buyers made the wire transfer, but the masks never arrived.

“Those arrested in this case had no connections to the medical equipment industry. They were simply experienced fraudsters who saw an opportunity with the outbreak of Covid-19,” says Jürgen Stock, general secretary of Interpol.

In other cases, GTR has been told of scams involving manufacturers in Malaysia, Thailand and Vietnam re-packaging inferior Chinese gloves and selling them as their own product, and of irresponsible traders even going so far as to re-package used gloves and sell them as new items.

“I would not touch a box of nitrile gloves unless I have physically taken it out of the factory and had an inspection happen in front of my eyes,” one buyer tells GTR.

Outright fraud aside, unreliable or inadequate supplies have become a much-publicised – and embarrassing – headache for several governments. Most recently, in the UK, 50 million masks bought from UK-based Ayanda Capital for the NHS as part of a £252mn contract were deemed unfit for use as they came with ear loop fastenings rather than head straps, which meant that they would not fit tightly enough to create a seal – rendering them useless.

In that supply contract, dated April 29, the products are referred to as being “CE certified to British Standard BS EN 149:2001+A1:2009”. Although Ayanda Capital is yet to comment publicly on whether it was provided with this documentation by its end supplier, this – and many other cases like it – seem to indicate serious issues around the testing and certification of these vital products.


Who certifies the certifiers?

“There has been a complete overwhelming of the testing and certification process globally. In some cases, manufacturers have knowingly and therefore fraudulently mobilised an inappropriate third party to issue them with a certificate. And sometimes, they have been hoodwinked,” says Mark Wakem, project director for global markets at Aburi Composites, a UK-based company which has been working with firms in Asia to enable them to enter the PPE market.

Preliminary searches carried out by GTR into both CE and ISO certification have revealed concerning findings. One CE certificate seen by GTR, which came from a Turkish supplier of three-layer surgical masks, was issued by an Istanbul-based certifying body. This body, although appearing at first glance to be a reputable organisation, is not listed by the EU as a recognised notified body and therefore has no authorisation to issue CE certificates in respect of the European medical device directive.

Another certificate, this time confirming that the medical devices quality management system of a mask supplier was compliant with the stringent ISO 13485:2016 standard, was issued by an India-based organisation which is registered as a UK firm. Its latest corporate filing shows it to be a dormant company, and the standards authority it references is neither recognised nor approved by the UK Accreditation Service (UKAS), which is the UK’s sole accreditation body.

“We have the impression that manufacturers outside the EU, and probably even newcomers and importers in the EU are not entirely familiar with the EU legislation on PPE and thus believe that by paying for a certificate, they are fully in compliance with the EU legislation,” says the European Safety Federation (ESF), a trade association of PPE suppliers, in a statement. “On the side of the customers, including health authorities, the knowledge about the exact requirements of the EU legislation is lacking and thus they judge those documents as accurate.”


Risky business

The implications of this are clearly extremely serious. Misleading certification issued by Western companies to Asian suppliers is highly likely to have led to ineffective or even dangerous products entering hospitals, putting healthcare staff at risk. But beyond that, this issue calls into question the confidence anyone along the value chain, from product importers and distributors to financiers, can have if manufacturers’ processes are being certified and audited by unregulated companies with no affiliation to or oversight by a national standards authority – as well as leaving suppliers at risk of having their goods rejected.

In Bangladesh, garment manufacturer Beximco, which recently shipped 6.5 million gowns to US brand Hanes for ultimate delivery to the US Federal Emergency Management Agency (Fema), has taken matters into its own hands. It recently entered into a partnership with Intertek, a British multinational assurance, inspection, product testing and certification company headquartered in London, to run a PPE quality assurance laboratory in Dhaka that will cater to private manufacturers and government agencies alike, which should go some way towards solving the issue.


Ways forward

Meanwhile, a new mapping tool developed by the Asian Development Bank (ADB) will enable governments, banks, investors, and healthcare professionals to trace the companies that make every component used in PPE production. By creating a comprehensive list of suppliers, the tool makes it easier to address problems that might arise, says Steven Beck, ADB’s head of trade and supply chain finance.

“To fix any supply chain problems, we need an in-depth description of what goes into these products and which companies are involved,” says Beck. “Mapping these supply chains means that if help is needed, banks, investors, and governments can use the data to quickly relieve bottlenecks and ramp up supplies.”

In addition, a mapping tool such as this would ultimately enable buyers to directly source the right inputs from companies that make them, rather than going through a complex process of intermediaries.

“The last thing I would want, as a former banker, is to be on the receiving end if the buyer rejects the products,” says Wakem. Although, technically, a financier could seek protection under an Isabella clause, which would separate the underlying export contract from the financing, preserving the borrower’s obligation to repay the loan in the event of a dispute, this is likely to be a challenge. “It is a financier’s duty to ensure that they are funding compliant products,” adds Wakem. “We need to have a big health check on due diligence.”

As the northern hemisphere faces down a potential resurgence in Covid-19 cases through the winter, demand for PPE looks unlikely to slow anytime soon. While supply is yet to meet demand, what seems clear is that simply retooling production lines and hoping for the best is far from an ideal solution, and serious work needs to be done to ensure that safe, compliant PPE is produced, in order to protect everyone – from suppliers all the way to those fighting to save lives.