Limits of confidentiality

When the new coronavirus hit the country last year, “COVID-19,” “pandemic” and “lockdown” became buzzwords.

They still are up to now, but this time they are uttered in less distressing tone compared to the months the quarantine measures imposed by the government were at their strictest.

With COVID-19 vaccines already in the market, the new buzzword is “confidentiality,” with particular reference to the vaccine developed by Chinese drug maker Sinovac Biotech.

Carlito Galvez Jr., the government’s point person on the acquisition of COVID-19 vaccines, had cited the confidentiality disclosure agreement (CDA) with that company as justification for his refusal to disclose the true price of the Sinovac vaccine in spite of repeated requests by some senators.

He said CDA is standard practice in negotiations. He promised to disclose that information to the public after the signing of the agreement or when the government feels the disclosure is necessary.

That CDAs are the norm in business negotiations is not in question, especially if sensitive information or intellectual property rights are involved in the proposed contract.

But like all business practi­ces, that prescription on confidentiality is not absolute. It has exceptions depending on, among others, the nature of the business of the parties, the underlying contractual circumstances and the regulatory measures the parties have to comply with.

As a rule, all information given by a party (the disclo­ser) to another (the recipient) during negotiations is considered confidential, i.e., it cannot be disclosed by the latter to third parties without the prior consent of the former.

That information, however, will not enjoy the benefit of confidentiality if it is, for example, (a) publicly available other than through the discloser, (b) was already known to the recipient as shown in written records and without restriction as to its use or disclosure, and (c) was rightfully acquired by the recipient from a third party who has the right to disclose it and who did not give any restriction as to its use or disclosure.

Note that in light of the ease by which information can be gathered through internet-based search engines or social media, the level of confidentiality of private information has been substantially eroded.

In recognition of the authority of the regulators of the place where the recipient conducts its business, it is standard in CDAs that the prohibition on nondisclosure will not apply when the disclosure is required under any applicable law, regulation, or order from a court or regulatory agency having competent jurisdiction.

The rationale behind this exception is simple: The parties’ right to confidentiality of their transactions must yield to the greater interests of the public when demanded by competent government authority.

More importantly, government offices have coercive powers that can make recipients think twice before they attempt to refuse compliance with an order of disclosure.

Under these circumstances, the recipient is obliged to give the discloser reasonable advance notice of the required disclosure to enable it to take the proper action on the matter; or disclose only information that it is legally compelled to disclose.

If the discloser is adamant in maintaining the confidentiality of information demanded by the authorities, it may request the information to be given in an executive or private session, or only to government officials who have a right to know it.

Since Galvez has refused to disclose the contents of the CDA to the senators, its scope is a big question mark and the public, whose money will be used to pay for the vaccine, is left in the dark.

The Constitution recognizes the right of the people to information on matters of public concern. It states “access to official records, and to documents and papers pertaining to official acts, transactions, or decisions … shall be afforded the citizen, subject to such limitations as may be provided by law.”

Unless Congress did it in utmost secrecy, no law seems to have been passed exempting China or its companies from that provision. INQ

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