Tobacco-related CSR activities

Corporate social responsibility (CSR) activities are a loophole the tobacco industry (TI) frequently exploits to raise their profile, particularly when all other forms of tobacco advertising, promotion, and sponsorship are prohibited in a given country. The money tobacco companies spend on CSR activities at regional and country levels are a part of their marketing strategy and should not be considered as charity donations.

Activities in ASEAN Region[i]

As the ASEAN region becomes more aware of the deadly effects of tobacco and governments step up regulation of the industry, tobacco companies are resorting to more below-the-line tactics to promote their corporate name and products in order to reach more consumers. Tobacco industry-led corporate social responsibility (TI-CSR) activities have become one of the key strategies exploited by the industry to enhance its image and maintain legitimacy in both public and corporate spheres.

COVID-19 Pandemic: big opportunity for TI to conduct its CSR activities[ii]

During the COVID-19 outbreak, the TI has stepped up its CSR activities across the ASEAN region. A number of TI-CSR activities have been identified since March 2020, especially in five ASEAN countries: Indonesia, Malaysia, Myanmar, Philippines and Vietnam which are also important tobacco markets of TI.[iii] For example, in Indonesia, top tobacco companies PT Gudang Garam and PT Djarum, donated an ambulance to Red Cross[iv] and funds to the taskforce working on COVID-19 prevention, respectively.[v] In Malaysia, JTI donated funds to an NGO initiative, ‘MyKasih’, to support people affected by the pandemic.[vi] In Myanmar, the cheroot producers association made a donation to government bodies to support their work related to COVID-19.[vii] In Vietnam, Vinataba, a state-owned enterprise, made donations to a hospital to fight COVID-19.[viii]

The Philippines’ Joint Memorandum Circular (JMC) between Department of Health and Civil Service Commission restrict interactions between government officials and TI to only when strictly necessary. In this JMC, government officials are not permitted to endorse CSR activities. However, during the pandemic, TI donations were accepted and endorsed by the health sector and enforcement agencies. For example, in March 2020, the business entity, LT Group, Inc., which is the holding company of Philip Morris Fortune Tobacco Corp. (PMFTC), donated medical supplies and personal prevention equipment (PPE) to government agencies.[ix] In April 2020, Jaime V. Ongpin Foundation Inc. (JVOFI), which is funded by PMFTC, donated PPEs to the City of Baguio, Baguio-PNP (Philippine National Police) and PNP-National Headquarters publicized on Facebook.[x]

TI vaccine development: harming and protecting public health simultaneously?

Although TI continues to sell a product that cause diseases and death during the pandemic, Philip Morris International (PMI) and British American Tobacco (BAT) announced they are developing a vaccine for COVID-19. This announcement received media coverage across the globe contributing towards building the public image of TI.[xi] [xii]

Philip Morris Investments B.V. (PMIBV), a subsidiary of PMI, holds an approximately one-third equity stake of Medicago, a Quebec based biopharmaceutical company, and has supported the company’s innovative plant-derived research and development focused on vaccines. PMIBV and Mitsubishi Tanabe Pharma Corporation (MTPC), a major shareholder of Medicago, provided the financial support to the company to develop COVID-19 vaccine.[xiii] BAT supports Kentucky BioProcessing, Inc, its subsidiary company, to develop the COVID-19 vaccines.[xiv]

In March 2022, the World Health Organization announced that it was formally rejecting the vaccine (Covifenz), which was developed by Medicago, due to the company’s ties with the tobacco industry.

The COVID-19 pandemic has been a phenomenal health disaster globally on many countries, leaving low resourced countries more vulnerable. However, accepting donations or other assistance from the TI makes governments even more susceptible to the bidding of the tobacco industry, as stated by the Tobacco Tactics that, “Such CSR behaviour during the pandemic has been described as a ‘Trojan Horse’, gifted by the tobacco industry with less-than-altruistic intentions.”[xv] Although governments are expected to secure a vaccine the soonest to protect their people, it would be prudent to avoid collaboration with TI as it is not compliant with WHO FCTC Article 5.3. Since there are choices available for COVID-19 vaccines, governments can consider vaccines that are not linked to the TI, a business that is already responsible for the death of more 8 million people a year globally.[xvi]

TI-CSR: TI tactic to whitewash tobacco harms and access high-level officials and policy makers

Industry-related CSR activities are a form of sponsorship and are used by the tobacco industry to minimize tobacco harms and access high-level officials and policy makers. In the ASEAN region, only Brunei, Lao PDR, Myanmar, and Thailand have banned CSR by the tobacco industry.

According to FCTC Article 13 guidelines, Parties should ban contributions from tobacco companies to any other entity for “socially responsible causes”, as this is a form of sponsorship. Publicity given to “socially responsible” business practices of the tobacco industry should be banned, as it constitutes advertising and promotion. Tobacco companies are increasingly resorting to conducting CSR activities to buy goodwill and credibility and to earn political mileage. Tobacco companies are increasingly resorting to conducting CSR activities to buy goodwill and credibility to earn political mileage. The top four transnational tobacco companies, Philip Morris International (PMI), British American Tobacco (BAT), Japan Tobacco International (JTI) and Imperial Brands (Tobacco) Group conduct CSR activities in the ASEAN region. Publicity given to these activities in the media constitutes advertising and promotion.  

Thailand, Lao PDR and Myanmar have totally banned tobacco-related CSR activities. Vietnam limits the type of CSR activities the industry can conduct to poverty eradication and disaster relief. Although industry activities are limited in Vietnam, they are active in collaborating with both local government and socio-political organizations in conducting such activities.[xvii] In Vietnam, the sponsorship by tobacco industry is allowed except the cases mentioned in the Article 16 of Tobacco Control Law stating that “Organizations and individuals that trade tobacco may only provide humanitarian sponsorship for programs on hunger elimination and poverty reduction; prevention of natural disasters, epidemic and calamity; and tobacco smuggling prevention, and must not announce such sponsorship on means of mass media.”[xviii]

Table 1: Status of ban on corporate social responsibility (CSR) activities[xix]

Thailand previously banned the publicity of CSR activities by the tobacco industry but, under its Tobacco Product Control Act 2017, now bans the tobacco industry from conducting CSR activities. In Singapore, tobacco industry contributions of financial support for events and activities are not prohibited but the acknowledgement of such contributions (i.e. logo or acknowledgement in other forms) is banned.

In 2020, PMI increased its CSR ‘contribution’ in the ASEAN region to about USD 22 million (Table 2) which is more than double that spent in 2019.

Table 2: PMI’s CSR Activities in ASEAN Region (USD)[xx]

In 2020, PMI’s CSR activities focused on COVID-19 especially in Indonesia (3 projects) and the Philippines (4 projects). In 2021, the donations were still given for Covid-19 response, as well as aligning itself with the Sustainable Development Goals.

The amount PMI has been investing in the Philippines has been steadily increasing.  In 2021, the Philippines received USD 17.3 million from PMI coursed through one organization – JVOFI. This is bigger than all of the donations in the ASEAN countries combined.

WHO FCTC Articles 5.3 and 13 recommend a ban on tobacco related CSR activities. Such activities are banned in Lao PDR, Myanmar and Thailand, while they are restricted in Vietnam. In addition, since 2018, PMI has been making in-kind contribution to its important markets, such as Indonesia, the Philippines, and Malaysia [Table 3]. However, the recipients remain unknown.

Table 3: In-kind contribution of PMI 2018-2020[xxi]

Recommendations:

Governments should ban all tobacco-related CSR activities. Restricting such activities and banning their publicity are ineffective interim measures. It is important that government officials and departments are not beneficiaries of tobacco industry grants, nor should they endorse these activities.

Country Levels

The updated information regarding TI-CSR activities in ASEAN countries accumulated as follows:

Cambodia

In Cambodia, the tobacco industry, especially JTI, has stepped up its CSR activities during the COVID-19 pandemic.  For example, in March 2021, JTI Cambodia’s Facebook posted the photos of the General Manager of JTI Cambodia meeting with the Governor of Phnom Penh Capital Administration, HE Mr. Khoun Sreng, giving its support to address COVID-19 at a ceremony at the Phnom Penh Capital Hall [photo 1]. In April 2021, Mr. Roy Manalili, General Manager of JTI Cambodia handed over 100 automatic alcohol dispensers with thermometer and 100 printed banners to the Ministry of Justice [photo 2].

Photo 1	Photo 2

Indonesia

In 2020, PMI invested in a number of projects, particularly on disaster relief (11 out of 17 projects), costing USD 2,387,172. The biggest recipient is Stapa Center that received USD 1,054,242 for 4 disaster relief projects.   In 2021, PMI’s total CSR investment in Indonesia is USD 5.6 million, with Yayasan Putera Sampoerna getting the bulk of the donation (USD 3.973 million).

National agencies and local government units continue to support and receive contributions for projects related to the environment and small-and-medium scale enterprises (SMEs) through Sampoerna, Bentoel Group, and Djarum Foundation. At the national level, officials from the Ministry of Industry and Ministry of Youth Affairs and Sports have also publicly supported activities by PMI and Djarum Foundation. During the COVID-19 pandemic, PT Djarum, donated an ambulance to the Indonesia Red Cross. While the Red Cross conducts much needed and valued emergency relief during calamities or pandemic, it appears the Indonesian chapter is unaware of its parent body’s policy of non-engagement with the tobacco industry [Photo 3]. In April 2020, PT Djarum’s Bakti Sosial Djarum Foundation provided assistance in the form of Personal Protection Equipment (PPE) for medical personnel in Kudus Regency, Central Java to handle COVID-19 patients [Photo 4].

Photo 3	Photo 4

Lao PDR

There has been no government receipt or endorsement of TI-related CSR activities. The Prime Minister Decree on Tobacco Product Promotional Consumption Ban 2010 bans all forms contributions from the tobacco industry, including CSR.

Malaysia

PMI continued to sponsor Yayasan Salam Malaysia’s activity on ‘Back-to-School’ programme which was officiated by the political secretary of the Prime Minister and endorsed by the government and the Chief Minister of Kedah [Photo 5]. In April 2020, the MyKasih Foundation, a private charity organization, raised RM 3 million (USD 692,000) to assist the poor with food aid in Pahang, Kelantan, Perak and Selangor. Key donors include individuals, as well as corporations such as Japan Tobacco International (JTI) Malaysia [Photo 6]. For 2021, PMI invested in four organizations – Animal Projects & Environmental Education, Impact Altruism, Malaysian AIDS Foundation, MERCY Malaysia.

Photo 5	Photo 6

Myanmar

During the COVID-19 pandemic, the tobacco industry is actively exploiting these vulnerable times and has stepped up its CSR activities across Southeast Asian countries, including Myanmar. In March 2020, Myanmar traditional cheroot producers association donate cash to the National Central Committee on Prevention, Control and Treatment of Coronavirus Disease 2019 (COVID-19), Ministry of Health and Sports in Nay Pyi Taw received donation of MMK 35million (USD 25,000) from the Myanmar traditional cheroot producers association. The Union Minister for Health and Sports Dr Myint Htwe, received the donation and thanked the donors [Photo 7]. In December 2018, BAT was awarded as ACE recognition award. The U.S. Ambassador to Myanmar presided over this event [Photo 8].

Photo 7	Photo 8

Philippines

In 2020, PMI spent USD 13,405,967 in 12 projects, particularly, disaster relief (8 out of 12 projects), costing USD 5,534,487. However, PMI gave USD 7,527,939, the biggest amount of money to Jaime V. Ongpin Foundation Inc. (JVOFI) to conduct a social welfare project. JVOFI is the biggest recipient of PMI, while PGH Medical Foundation Inc. is a new recipient getting USD 218,252 to do 3 projects focusing on social welfare and disaster relief. The amount PMI invested in 2020 is more than four times its invested amount in 2019 (USD 2,927,960).

In 2021, PMI continued to tap JVOFI, providing the organization with USD 17.3 million for social welfare project. JVOFI has a strong presence in the country. Embrace, the CSR arm of Philip Morris Fortune Tobacco Corporation (PMFTC) partners with JVOFI. There seems to be a shift in strategy as most of the donations of PMFTC are coursed through the holding company (LT Group, Inc.). The CSR activities are conducted through their program “Help Flows” and donations focused on medical materials and equipment to respond to the Covid-19 pandemic.

DOH-CSC JMC is being undermined under COVID-19 pandemic. PMFTC has catapulted itself to the forefront with the donations to city officials and the health department. Even the Philippines National Police, who are enforcement officers who implement smoke-free public places, have become recipients of PMFTC’s charity. In March 2020, JVOFI donated thermal scanners through Philippines National Police personnel at border checkpoints [Photo 9]. In November 2020, Cagayan de Oro City’s official Facebook page shows local officials including city Mayor Oscar Moreno receiving donations of face masks, disposable isolation gowns, washable coveralls, and nitrile gloves from JVOFI, the CSR partner of PMFTC [Photo 10].

Photo 9	Photo 10

Thailand

In 2020, Philip Morris International (PMI) spent USD 478,164 to its solo recipient – Population and Community Development Association (PDA) – for a project giving scholarship to children. Between 2016 to 2019, 93.30% of PMI’s total CSR fund in Thailand goes to PDA (USD 1,367,794). TI-CSR is comprehensively banned according to Thailand’s Tobacco Product Control Act in 2017, however, PDA has received funding from PMI for years. Similarly, PMI also tapped PDA as its sole donee in 2021, providing USD 483,871.

PMI and Philip Morris Thailand Ltd (PMTL) continue to provide regular monetary contributions to the PDA to conduct CSR activities focusing on education for vulnerable children, including children of tobacco farmers. In May 2020, the Governor, executives and employees of the Tobacco Authority of Thailand visited Uthai District, Ayudhaya Province, to donate survival bags consisting of rice, dried food, drinking water to the people affected by COVID-19 pandemic. This activity was under the project “Thai Tobacco’s Kindness Sharing to Fight the COVID-19.”

Vietnam

In 2020, Vietnam National Red Cross Society returned to receive money (USD 96,000) from Philip Morris International (PMI) for a disaster relief project. Vietnam National Red Cross Society did not receive money from PMI in 2018 and 2019. 

Vinataba support a variety of programs for disadvantaged students, educational facilities improvement, social enterprise, and subsidies for war veterans, among others. These CSR activities bring the tobacco industry in contact with high-profile government officials including the Prime Minister. In March 2020, the charitable donation from Vinataba to Bach Mai hospital to fight the Covid-19 pandemic has side-stepped prohibition and received publicity in the media with the representative of Bach Mai Hospital thanking the tobacco company [Photo 11]. PMI, and local companies such as Saigon Tobacco Company and Khanh Viet Corporation (KHATOCO) also conducted many charitable activities such as building houses for the poor, career training programs, handing out scholarships and presenting a children’s playground endorsed by government officials. In March 2021, Khatoco donated VND 1 billion to Khan Hoa Provincial Party to buy Covid-19 vaccine [Photo 12].

Photo 11	Photo 12

[i] Southeast Asia Tobacco Control Alliance (2021). Whitewashing a harmful business: Review of tobacco industry’s CSR activities in ASEAN. Bangkok: Southeast Asia Tobacco Control Alliance
[ii] Ibid.
⁴ SEATCA. (2020). ASEAN Tobacco Industry Watch: TI steps-up CSR activities during COVID-19 pandemic. Available at: https://tobaccowatch.seatca.org/index.php/2020/04/14/ti-steps-up-csr-activities-during-covid-19-pandemic/
[iv] Nugroho, A. Covid-19 in Kediri, Gudang Garam Handed Over Ambulance to PMI: Equipped with Emergency Medical Equipment. Jawa Pos. 7 April 2020. Available at: https://bit.ly/3pX7Smk
[v] Djarum Donates Rp. 1.5 Billion for the Procurement of PPE in Kudus. Kompas. 2 April 2020. Available at: https://bit.ly/3op6isV
[vi] MyKasih raises RM 3mil for food aid during MCO. Malaysiakini. 7 April 2020. Available at: https://bit.ly/3hQT8T4
[vii] The Global New Light of Myanmar. 26 March 2020
[viii] Vinataba supports Bach Mai Hospital in the prevention of the Covid-19 epidemic. Baodansinh. 29 March 2020. Available at: https://bit.ly/38no61X
[ix] LT Group supports fight vs Covid-19. The Manila Times. 26 March 2020. Available at: https://bit.ly/2L4iLUN
[x] JVOFI Facebook. 1 April 2020. Available at https://bit.ly/3opq07T
[xi] Medicago to kick off large study of COVID-19 vaccine with GSK booster. Reuters. 13 November 2020. Available at: https://reut.rs/38spDUH 
[xii] Chaudhuri, S. and Roland, D. Big Tobacco joins race for Coronavirus vaccine. The Wall Street Journal. 4 April 2020 Available at: https://www.wsj.com/articles/big-tobacco-joins-race-for-coronavirus-vaccine-11586012401
[xiii] Medicago to Supply Covid-19 Vaccine. Tobacco Reporter. 24 October 2020. Available at: https://bit.ly/3q0aaRH
[xiv] Chisenhall, J. Kentucky company’s COVID-19 vaccine may have 1 big advantage over other companies. Lexington Herald-Leader. 16 December 2020. Available at: https://www.kentucky.com/news/coronavirus/article247895055.html
[xv] CSR: Health. Tobacco Tactics. 23 December 2020. Available at: https://tobaccotactics.org/wiki/csr-health/
[xvi] Cohen, J. and Chapman, S. Philip Morris and the Government of Canada collaborate on COVID-19 vaccine development. BMJ Blog. 21 November 2020. Available at: https://bit.ly/2L4oc69
[xvii] HealthBridge. Tobacco industry surveillance database; Philippines Tobacco Industry Interference Report, 2016
[xviii] The National Assembly. Socialist Republic of Vietnam. Law on Prevention and Control of Tobacco Harms 2012. https://bit.ly/30jGdEK  
[xix] SEATCA. (2019). SEATCA Tobacco Advertising, Promotion and Sponsorship Index: Implementation of Article 13 of the WHO Framework Convention on Tobacco Control in ASEAN Countries, 2021. Bangkok: Southeast Asia Tobacco Control Alliance.
[xx] PMI’s Charitable Contribution in 2017 – 2020
2017: https://bit.ly/3DefUOL
2018: https://bit.ly/3qAaKZL
2019: https://bit.ly/30pVxzX
2020: https://bit.ly/3wJ79K4
2021: https://bit.ly/3vcAlJL
[xxi] Ibid.