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[1]

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.

TI-CSR and the Sustainable Development Goals (SDGs)[2]

With governments having committed to achieving the UN Sustainable Development Goals (SDGs) and establishing long-term implementation plans and partnerships, the TI has re-aligned its CSR programmes along the lines of the SDGs. The term “sustainability” is appearing more frequently in the TI’s programmes and documents. Over the past few years, the TI has referred to “sustainable agriculture”, “sustainable communities” and “sustainable environment”. British American Tobacco (BAT) refers to its CSR programme as Corporate Social Investment (CSI) and talks about how the activities are about “investing in local communities”. BAT claims its activities are aligned directly to SDG 8: Decent Work and Economic Growth, SDG 15: Life on the Land, and SDG 11: Sustainable Cities and Communities.[3] In reality tobacco use undermines public health and sustainable development. The manufacture and consumption of tobacco products as well the industry’s business practices conflict with almost all of the SDGs. The World Health Organization’s (WHO) World No Tobacco Day theme for 2017 was “Tobacco – a threat to development,” which is a reflection of the broad, negative impact tobacco has on society. SDG 3 aims to implement the WHO Framework Convention on Tobacco Control (FCTC) and reduce tobacco use.

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. 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, the industry remains active in collaborating with both local government and socio-political organizations in conducting such activities.[4]

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

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. Figure 2 shows PMI’s contributions to CSR activities are the most in Indonesia and the Philippines where it is growing its market.

Figure 1: Trend of PMI’s CSR activities in the ASEAN region, 2012 – 2018[5]

In 2019, PMI increased its CSR contribution in the ASEAN region to more than $9.5million (Table 2).

Table 2: PMI contribution to CSR activities in the ASEAN region (in USD)[6]

Country201720182019
Indonesia6,224,2316,037,0005,972,145
Malaysia303,718248,98783,870
Philippines1,870,3732,320,2982,927,906
Thailand275,000250,000582,794
Vietnam80,06977,906
Total8,753,3918,934,1919,566,715

According to Table 2, PMI doubled its contribution to Thailand from $250,000 in 2018 to $582,000 the following year, while it increased its portion to the Philippines to almost $2.3 million to almost $3 million in the same timeframe. Indonesia, PMI’s largest cigarette market in ASEAN, continues to receive around $6 million every year. In Vietnam, PMI was providing the Can Tho Red Cross society around $80,000 annually for several years before ceasing contributions in 2019. In Malaysia, only one organization has been a grantee of PMI, and last year it received significantly less than in previous years. Of PMI’s 30 projects in the ASEAN region, 24 of them were in Indonesia and the Philippines, indicating the importance of these two countries to PMI’s business. The majority of contributions were to 10 educational projects, totaling $5,996,241 in Indonesia. In 2019, PMI started contributing towards a category called ‘social welfare’, reflecting government-led activities, such as disaster relief, community development, and donations to low-income households.

TI steps-up CSR activities during the COVID-19 pandemic [7]

Under the best of circumstances, doctors would not be thanking the tobacco industry, nor would health departments be endorsing charity from tobacco companies. But citizens and governments across the world are vulnerable and facing unprecedented challenges due to the COVID-19 pandemic. The tobacco industry is actively exploiting these vulnerable times and has stepped up its CSR activities across the ASEAN region.

TI activities in Indonesia, Malaysia, Myanmar, Philippines and Vietnam between March and April 2020 include the following:

  • Handing out monetary donations to health departments and medical professionals;
  • Donating an ambulance to the Indonesian Red Cross despite the International Red Cross Federation’s clear policy of non-engagement with the tobacco industry (Indonesia);
  • Donating equipment, such as scanners, to the police department;
  • Coursing donations through prominent NGOs to assist the poor (Malaysia);
  • Donating masks, water, and alcohol-based sanitizers to city officials.

In Indonesia, where about 240,000 people die from tobacco related diseases every year, PT Gudang Garam, donated an ambulance to the Indonesian Red Cross. The Red Cross conducts much needed and valued emergency and disaster relief work. However, the Indonesian chapter acceptance of the donation went against its parent body’s policy of non-engagement with the tobacco industry.

The Philippines is home to about 16 million smokers and the local PMI subsidiary, Philip Morris Fortune Tobacco Corp. (PMFTC), controls over 70 percent of the cigarette market. It appears that the Joint-Memorandum Circular between the Department of Health and the Civil Service Commission, which provides a code regulating public officials to only meet with tobacco industry representatives when strictly necessary, is being undermined under the current circumstances. PMFTC has catapulted itself to the forefront with 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 Vietnam, while CSR activities by tobacco companies are allowed, publicizing these activities is prohibited. However, a charitable donation from the Vietnam Tobacco Control Corporation (VINATABA) to Bach Mai hospital for pandemic response efforts was publicized   in the media with a representative of Bach Mai Hospital publicly thanking the tobacco company.

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.

[1] W. Jirathanapiwat et al. Hijacking ‘Sustainability’ from the SDGs: Review of Tobacco Related CSR activities in the ASEAN Region, August 2017, Southeast Asia Tobacco Control Alliance (SEATCA), Bangkok. Thailand.
[2] Ibid.
[3] Southeast Asia Tobacco Control Alliance. (2019). SEATCA Tobacco Advertising, Promotion and Sponsorship Index: Implementation of Article 13 of the WHO Framework Convention on Tobacco Control in ASEAN Countries, 2019. Bangkok: Southeast Asia Tobacco Control Alliance.
[4] HealthBridge. Tobacco industry surveillance database; Philippines Tobacco Industry Interference Report, 2016
[5] PMI Charitable Contribution 2012 – 2018
[6] PMI Charitable Contribution 2019
[7] ASEAN Tobacco Watch. TI steps-up CSR activities during COVID-19 pandemic, April 2020 [Online] at https://tobaccowatch.seatca.org/index.php/2020/04/14/ti-steps-up-csr-activities-during-covid-19-pandemic/

Country Levels

According to the Global Tobacco Industry Interference Index,[1] the updated information regarding TI-CSR activities in ASEAN countries accumulated as follows;

Cambodia

Tobacco industry sponsored CSR activities are not banned and remain a problem in Cambodia. They are mostly conducted by transnational tobacco companies such as British American Tobacco and Japan Tobacco International.

Indonesia

Government agencies continue to accept or endorse tobacco industry CSR. Two big tobacco companies Sampoerna and Djarum actively continue CSR activities in Indonesia. In 2018, Sampoerna expanded their “Sampoerna Retail Community” (SRC) program to cover more provinces in Indonesia; it is a combined promotion and sponsorship for small- and medium-scale retailers in the form of retail incentive program that could be perceived as in line with the government interest in economic development of micro-, small- and medium-scale enterprises. The launching of SRC was mostly attended by the Governors. Apart from the Governor of South Sumatra, the Governor of West Lombok expressed appreciation for the SRC program in extending support to post-disaster economic reconstructions. Djarum Foundation on the other hand, continued its tree plantation program in East Java.

Lao PDR

There has been no government receipt or endorsement of TIrelated 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.

Myanmar

A local Cigarette Company, called Myanmar Kokang Company Ltd. (MMK Cigarette Factory), at Muse, Northern Shan State, provided sponsorship through its distributor, Hexa Power Company Ltd., for the mini marathon and public walking event in Mandalay which were held in 2018 December and 2019 January, respectively. Although tobacco industry-related CSR and tobacco advertising, promotions and sponsorship are prohibited by the Control of Smoking and Consumption of Tobacco Product Law, BAT was awarded an AMCHAM CSR (ACE) Award. The Department of Rural Development endorsed BAT’s CSR activities in 2016 by cooperating to provide a list of villages for its activities. This project is still ongoing. JTI’s project to provide drinking water to Kayin State for refugees is also still ongoing.

Philippines

The Department of Health – Civil Service Commission Joint Memorandum Circular (DOH-CSC JMC) on the Protection of the Bureaucracy Against Tobacco Industry interference is in effect since 2010 and has banned direct partnerships between the government and the tobacco industry. However, tobacco companies continue to conduct socalled CSR activities by coursing these through foundations and other groups such as Wong Chu King Foundation and the American Chamber of Commerce Foundation. Philip Morris Fortune Tobacco Corporation (PMFTC), through its CSR arm “Embrace”, is a partner of Jaime V. Ongpin Foundation and has conducted at least 26 of these so-called CSR activities in 2018.

Thailand

In July 2017, Tobacco Products Control Act 2017 came into force. This new law bans all tobacco industry-related CSR activities, as required under FCTC Article 13 and Article 5.3 Guidelines (Recommendation 6). Previously, the ban applied only to Thai Tobacco Monopoly (TTM), but the other transnational tobacco companies could conduct CSR activities. Some of the CSR activities captured in 2017 were carried out before May 2017. The TTM is seen as a government agency and conducted some CSR activities attended by several officials.

TTM continued to conduct tobacco related CSR activities targeting youth and local communities although the Cabinet agreed on 17 April 2012, to a resolution[2] to prohibit the government sectors/ office from participating in tobacco related corporate social responsibility (CSR) activities. Cabinet resolutions apply to all government sectors, including the State-owned Thai Tobacco Monopoly.[3] On TTM’s official website, its CSR activities are categorized under its public relation section focusing on TAOT’s staff visiting governmental agencies for celebration and/or handing out donations. Through these CSR activities, TTM engages with policymakers, high-level politicians and government officials at national land provincial level, and government institutions such as public hospitals. Section 35 of Tobacco Product Control Act 2017 prohibits the publicity of tobacco-related CSR activities[4] but still providing TTM the opportunity to either directly or indirectly involve government officials among intra-industry trade groups to participate in its so-called CSR activities.

Vietnam

Although there is a ban on certain types of corporate social responsibility (CSR) activities, this makes no difference to the extent by which the tobacco industry conducts these activities. Vinataba and other tobacco companies 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.

[1] Mary Assunta. Global Tobacco Industry Interference Index 2019. Global Center for Good Governance in Tobacco Control (GGTC). Bangkok, Thailand. Sept 2019. https://globaltobaccoindex.org/
[2] National Health Assembly, National strategic plan for tobacco control B.E. 2555-2557 (A.D. 2012-2014) Retrieved from https:// www.samatcha.org/node/103 (accessed on 14 June 2018).
[3] National Health Assembly, National strategic plan for tobacco control B.E. 2555-2557 (A.D. 2012-2014)
[4] Department of Disease Control Bureau of Tobacco Control. Tobacco Products Control Act B.E. 2560 (2017) https://seatca. org/dmdocuments/Tobacco%20Products%20Control%20 Act%20B.E.%202560%20%282017%29.pdf