Unnecessary interaction with tobacco industry

Unnecessary interaction with tobacco industry

According to the WHO FCTC Article 5.3 guideline, “Parties should interact with the tobacco industry only when and to the extent strictly necessary to enable them to effectively regulate the tobacco industry and tobacco products” [Recommendation 2.1][1] and “Parties should not award contracts for carrying out any work related to setting and implementing public health policies with respect to tobacco control to candidates or tenderers who have conflicts of interest with established tobacco control policies” [Recommendation 4.3].[2]

Unnecessary interactions occur when, for example, top level government officials attend social functions hosted by tobacco companies or when the government accepts offers of assistance or enters into partnership with the tobacco industry. Some examples of these interactions can be found in the 2020 ASEAN Tobacco Industry Interference Index[3] with summary provided below:

Cambodia:

H.E Khiev Khanharith, Minister of Ministry of Information, allowed courtesy visit of Mr. Jianqiang Wu, Chairman of China Huaxin Group Limited of the Republic of China on 6 December 2019 on tobacco farming project with 2 billion USD investment.[4]

Indonesia:[5]

The unnecessary interactions between top level government officials with the tobacco industry were substantial in 2019. Not less than 7 evidence were reported in the media, among which the MOU between Minister of Research, Technology and Higher Education got the most coverage, while the controversial case of child exploitation related to audition of Djarum Badminton gained mix reactions from the public mostly in social media.

  • Wearing Djarum Badminton t-shirt, Moeldoko, the Head of the Executive Office of the President (KSP) paid investigative visit to Djarum’s office in Central Java in response to a report filed by Djarum Foundation’s Program Director for Sports against alleged exploitation of children in the Djarum badminton audition for new recruits and showed his support. He asserted that children were not being exploited in the program and insisted that Djarum’s audition be continued to maintain Indonesia’s badminton achievement.
  • The Minister of Finance granted “the most tax friendly corporate” in 2019 Country Contributor Award as an appreciation for being the most contributor in taxation sector.
  • The Minister of Industry extended appreciation to SRC at the 11th SRC Anniversary for their concern on Small and Medium-Scale Enterprise to improve inclusive economic ecosystem towards self-reliance and said that tobacco industry was part in the country’s national and cultural history, especially concerning the kretek cigarette industry.
  • The DG of Ministry of Industry accepted assistance from Sampoerna to enforce PP 109/2012 by campaigning of “Preventing Children’s Access to Purchase Cigarettes” (PAPRA) implemented in partnership with SCR outlets.
  • The Ministry of Research, Technology and Higher Education signed a Memo of Understanding with Sampoema on research and development of value-added tobacco products. The Director General of Innovation Strengthening of the Ministry, referring to the government’s provision on incentives given to industries that play a role in R & D explained that Sampoerna would receive incentives in the form of tax deductions. He stated that aside from enhancing industry and innovation-based national education, the Ministry would benefit from Sampoerna’s big factory facilities in Malang City for training and internship. The President Director of Sampoerna said that the industry would follow through Philip Morris’s heading towards the development of hi-tech tobacco alternative, IQOS, to reduce the dangers of burnt tobacco. He confirmed that beside helping smokers of legal age to obtain Modified Risk Tobacco Products (MRTPs) at the local markets, the MOU would serve a scientific-based IQOS Regulation.
  • Following the MOU with Sampoerna, the Ministry of Research, Technology and Higher Education held a joint workshop with the United States-ASEAN Business Council (USABC) on the “1st US-ABC Indonesia Innovation Series SME Workshop” in Bali sponsored by Sampoerna dan Juul. Another collaborative work between Sampoerna and the Center for Science and Technology of the Ministry of Research and Technology on “Indonesia Innovation for SME Workshop and Innovation Talks” was conducted two months later.

Lao PDR:

Following the collapse of the power dam in South of Lao PDR, many companies including the tobacco industry. The government endorsed assistance from TI; for example, Lao-China Hongta Good Luck Tobacco Company provided a truck of instant noodles and other materials to the people affected in the disaster.[6]

No change, the government receives assistance for TI for anti-smuggling enforcement. The MOIC signed a MOU with the tobacco industry to enforce smuggling control and receive incentives for the enforcement. According to the Convention Secretariat’s report on the ‘Needs Assessment for Implementation of the WHO FCTC in Lao PDR’, “The Customs Department collects data on cross-border trade in tobacco products including illicit trade. MOIC collects information on illicit tobacco products in the domestic market. However, information is collected cooperatively with the tobacco industry and is not shared routinely with other authorities such as the MOH.”[7]

In September 2019, Deputy Minister of Industry and Commerce, Mr. Somchit Inthamith, and Vice President of the Lao National Chamber of Commerce and Industry (LNCCI), co-chaired a meeting with companies and entrepreneurs in Vientiane. At this meeting issues of tobacco smuggling was raised by the business requesting the government to address them in the context of providing a business-friendly climate. The businesses highlighted the distribution and sale of smuggled tobacco products without payment of duties and taxes.[8] The 25-year ILA which began 2001 is still valid and being implemented.

Malaysia:

On 25 November 2019, the Deputy Minister of International Trade and Industry, Dr. Ong Kian Ming, attended the AMCHAM year-end signature event, the Thanksgiving and MY AMCHAM CARES celebrations.[9] Philip Morris Malaysia was among the main sponsors of the event.

Border security Agency, AKSEM – the Coordinating Committee has Kenaf Board as a member. JTI sits on the Kenaf Board. No other publicly available information.

Myanmar:

The government does not accept, support, endorse, or enter into partnerships or agreements with the tobacco industry. In September 2018, EuroCham Myanmar announced it has established an Anti-Illicit Trade Advisory Group to fight illicit trade and intensify partnership with the Government of Myanmar. “We’re trying to solve illicit trade in all possible ways,” says U Ko Lay, Director of the Ministry of Commerce. “But we need law and order first, and that will pave the way for legal trade.”[10]

BAT is included as a member of the Anti-illicit trade group, which has the mandate to: “Raise awareness of the volume of illicit trade across industries to both the government and the general public, whilst advocating solutions and best practices that can be implemented to improve enforcement. The key activities will include advocacy, research, engagement and capacity building to support further understanding and enforcement of illicit trade.” Established in 2018, this initiative has continued into 2019. EuroCham Myanmar organized the second edition of the Anti-Illicit Trade Forum in 2019 and established itself as a major stakeholder and partner to the Government to fight against illicit trade in Myanmar.[11] EuroCham teamed up with TRACIT to conduct its activity in Myanmar. In March 2019, TRACIT received a fund of US$21million from PMI-IMPACT to conduct anti-smuggling projects.[12] 

Philippines:

All the incidents included here are based on publications and postings and would require extensive investigation to ascertain whether or not these constitute direct violation of existing laws and policies in the Philippines. However, for purposes of rating only, these incidents may fall under unnecessary interactions.

Unnecessary interactions between the tobacco industry and top-level officials of the government were monitored. In October 2019, a group of legislators, including the chairperson of the Committee on Health in the House of Representatives, went on a study 14 tour in London to meet with Member of Parliament (MP) David Amess. The tour was organized by the Office of Senator Vicente Sotto.[13] Sir David Amess has been shown to support PMI’s UNSMOKE campaign and was quoted saying “Smoking is a health risk. It is damaging for the smoker and for the people around them. I was delighted to attend today’s event to discuss how we can unsmoke the UK.”[14]

There were several instances where government agencies, such as the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR), accepted assistance from the tobacco industry on the enforcement of tobacco control laws. The BOC conducted an anti-smuggling operation with representatives of tobacco companies present and tasked them to help inspect the labels and packaging of tobacco products.[15]

BIR Commissioner Caesar Dulay stated in an interview that he would be meeting with representatives from Philip Morris, Japan Tobacco, and other cigarette companies, as well as those handling the Internal Revenue Stamps Integrated System. The purpose would be to find out how to address the illicit trade activity they discovered, which is the recycling of tax stamps to put on fake cigarette packs.[16]

An event which sought to destroy several machines used in the manufacture of illicitly traded cigarettes was organized and attended by government agencies and tobacco companies. Those in attendance included the PMFTC President Lawrence Chew, JTI Philippines General Manager Manos Koukourakis, DOF Secretary, and officials of the BIR, BOC, and NBI.

During the event, the DOF Secretary thanked the private sector for joining forces with the government in helping fight smuggling and tax evasion.[17]

The Department of Science and Technology (DOST) signed a Memorandum of Understanding with the US-ASEAN Business Council (US-ABC) that purportedly seeks to promote the development and implementation of science, technology, and innovation initiatives of the government in the private sector.[18] HealthJustice Philippines called the attention of DOST about the matter and reminded them of the CSC-DOH JMC No. 2010- 01 and its own memorandum circular against tobacco industry interference. PMI and JUUL Labs are members of the US-ABC.[19]

At the local government level, Manila Mayor Francisco Domagoso signed a Memorandum of Agreement at his office with JVOFI. Officials of PMFTC were also present at the event.[20]

Thailand:

Since the government owns the TTM, there were regular meetings (each trimester or four times a year) between TTM and MOF high level officers. TTM involved government officials in their smuggling control program.[21]

Vietnam:

On 9 January 2019, VINATABA Training Center held a conference on summarizing 10 years of training tasks. Attending the conference were the Director of the Graduate Institute of National Economics University; Vice Chairman of the Faculty of Management and Business, Hanoi National University; Deputy Director, Hanoi Technical Safety Inspection Center.[22]

On 19 June 2019, Vietnam Tobacco Association celebrated its 30th anniversary. Deputy Minister of Industry and Trade- Do Thang Hai attended.[23]

On 19 August 2019, the Saigon Tobacco Company celebrated its 90th founding anniversary and received First-class Labor Medal. Attending the Ceremony, there were Mr. Nguyen Hoang Anh – Member of Central Communist Party – Chairman of State Capital Management Committee at the enterprise; Mr. Cao Quoc Hung – Deputy Minister of Industry and Trade; Mr. Pham Tan Cong – Permanent Deputy Secretary of the Central Business Party Committee; Mr. Nguyen Hoang Nang – Head of Management Board of Industrial Zones and manufacturing zones of Ho Chi Minh City; Mr. Ho Le Nghia – Chairman of Vietnam Tobacco Corporation and representatives of ministries, departments, local authorities.[24]

On 19 June 2019, in Hanoi, the Vietnam Tobacco Association held its Seventh Term Congress and celebrated the 30th anniversary of its founding (1989 – 2019). Deputy Minister of Industry and Trade Do Thang Hai attended and congratulated the Executive Committee for their Seventh Term. The Deputy Minister recognized and praised the efforts of Vietnam Tobacco Association period 2013 – 2018 in advising policy for state management agencies; contribute positively to the state budget as well as participate in social activities, create jobs for workers.[25]

On 24 September 2019, VINATABA held a ceremony to launch a new product: No.1 Vinataba Tobacco at Melia Hotel, Hanoi. The event was attended by representatives of the Commission for the Management of State Capital at Enterprises, the Ministry of Industry and Trade, Leaders and representatives of VINATABA and subsidiaries together with more than 80 distributors.[26]

On 4 October 2019, The CEO of JT (Japan) (Mr. Masamichi) had a meeting with Mr. Nguyen Hoang Anh, Chairman of Commission for the Management of State Capital at Enterprises. At the meeting, Mr. Masamichi wanted to share information about equalization process in VINATABA, as well as follow VINATABA’s development. Chairman of Commission for the Management of State Capital at Enterprises- Nguyen Hoang Anh said that the Government of Vietnam consistent with the policy of equitizing of state-owned enterprises because it is suitable with the development of the market economy.[27]

The government required tobacco manufactures to provide fund for smuggling control following the Circular 306/2016/TT-BTC of Ministry of Finance and Directive 04/CT-BCT on 24/03/2015 of Ministry of Industry and Trade. It is compulsory contribution under the request of government so that it could not consider as Government receive funding from TI. However, beside using money from TI for smuggling control, the Government also considered TI as a partner and cooperated with TI in smuggling control as evidences mentioned in Q1 (about the Government collaboration with the tobacco industry in implementing smuggling control) and Q3 (about the Government allowed/invited the TI to sit in government multisectoral committee/ advisory group body for smuggling control).

On 23 September 2019, in Hai Phong, Material Destruction Council – Coast Guard Region Command 1 destroyed 67,500 packs of smuggled cigarettes bearing the trademark “ESSE” manufactured by Korea. Attending the destruction event were representatives of Vietnam Tobacco Association, Department of Finance and 389 Steering Committee of Hai Phong city.[28]

On 9 September 2019, in Ho Chi Minh City, Mr. Nguyen Hoang Anh – Chairman of the State Capital Management Committee at the enterprise (the Committee) worked with Vina-BAT Joint Venture Company Limited. The Chairman expressed his impression at BAT’s general ways of dealing with tobacco issues in the Vietnamese market, in harmony with the general policy and legal framework. In response to the recommendations of the business, Chairman Nguyen Hoang Anh said: The Committee will coordinate with the relevant state management agencies to prevent smuggled cigarettes and ensure healthy competition of the market. However, the joint venture between VINATABA and BAT needs to continue researching and creating new products, in line with modern trends, to meet the needs of the market.[29]

 

[1] Guidelines for implementation of Article 5.3 of the WHO Framework Convention on Tobacco Control on the protection of public health policies with respect to tobacco control from commercial and other vested interests of the tobacco industry, https://www.who.int/fctc/guidelines/article_5_3.pdf, page 4.
[2] Ibid, page 5.
[3] J. L. Reyes. SEATCA Tobacco Industry Interference Index: Implementation of Article 5.3 of the WHO Framework Convention on Tobacco Control in ASEAN Countries, 2020. November 2020. Southeast Asia Tobacco Control Alliance (SEATCA). Bangkok, Thailand. https://globaltobaccoindex.org/
[4] http://www.akp.gov.kh/kh/post/detail/22088
[5] Indonesia Tobacco Industry Interference Index 2020. https://globaltobaccoindex.org/country/ID
[6] Global Times. Chinese companies join rescue work in Laos. 26 July 2018 https://bit.ly/2LSj81o
[7] Convention Secretariat. Needs assessment for implementation of WHO Framework Convention on Tobacco Control in Lao PDR. February 2015. https://bit.ly/3bZdpkZ
[8] Vientiane Times. Lao business sector seeking crackdown illegal operators. September 9. 2019. https://bit.ly/36t2RJD
[9] AMCHAM Thanksgiving and AMCHAM cares celebration 2019. November 25, 2019 https://amcham.com.my/2019/11/26/amcham-thanksgiving-my-amcham-cares-celebration-2019/
[10] https://www.maritime-executive.com/article/call-for-myanmar-to-act-on-illicit-trade
[11] EuroCham Myanmar Partnership with the Transnational Alliance to Combat Illicit Trade (TRACIT) https://bit.ly/2Uy2Bo6
[12] TobaccoTactics. TRACIT https://tobaccotactics.org/wiki/tracit/
[13] Information and photo from the Facebook page of Rep. Helen Tan. Available at https://www.facebook.com/DoktoraHelenTan.
[14] ‘Sir David attends Unsmoke event, Available at https://www.davidamess.co.uk/news/sir-david-attends-unsmoke-event.
[15] Almonte ‘BOC seizes printing machines for fake cigarette labels,’ June 27, 2019, Available at https://www.portcalls.com/boc-seizes-printing-machines-for-fake-cigarette-labels/.
[16] Rivas ‘New scheme: Cigarette tax stamps traded for sardines, noodles,’ April 9, 2019, Available at https://www.rappler.com/business/227761-cigarette-tax-stamps-traded-sardines-noodles.
[17] Department of Finance ‘Dominguez cites heightened vigilance vs illicit tobacco trade,’ Available at https://www.dof.gov.ph/dominguez-cites-heightened-vigilance-vs-illicit-tobacco-trade/.
[18] DOST-ITCU. ‘DOST signs MOU with US-ASEAN Business Council.’ September 29, 2019 Available at https://pia.gov.ph/news/articles/1027813.
[19] US-ASEAN Business Council. Our Members. Available at https://www.usasean.org/about/members.
[20] Information and photo from the Facebook page of Mayor Domagoso, Available at https://bit.ly/39Cpb7m.
[21] Thailand – country summary, Global Tobacco Industry Interference Index 2020. https://globaltobaccoindex.org/country/TH
[22] https://bit.ly/2Um3hfV
[23] https://thanhtra.com.vn/kinh-te/lao-dong-viec-lam/Hiep-hoi-Thuoc-la-Viet-Nam-ky-niem-30-nam-thanh-lap-150240.html
[24] 90 years of Saigon Tobacco: The journey of writing a brand name http://tapchicongthuong.vn/bai-viet/90-namthuoc-la-sai-gon-hanh-trinh-viet-ten-mot-thuong-hieu-64665.htm
[25] http://www.vinatabatrading.com.vn/tin-tuc/hiep-hoi-thuoc-la-viet-nam-to-chuc-dai-hoi-nhiem-ky-vii-va-ky-niem-30-nam-ngay-thanh-lap-hiep-hoi-1989-2019.html
[26] http://www.vinataba.com.vn/default.aspx?page=news&do=detail&category_id=17&menu_id=4&id=5966
[27] https://bizlive.vn/doanh-nghiep/tap-doan-thuoc-la-lon-thu-3-the-gioi-dang-de-y-co-phan-vinataba-3522839.html
[28] http://thuonghieuvaphapluat.vn/hai-phong-tieu-huy-675000-bao-thuoc-la-ngoai-nhap-lau-d25722.html
[29] http://cmsc.gov.vn/xem-chi-tiet/-/asset_publisher/WqvULR6gmpvh/Content/chu-tich-nguyen-hoang-anh-lam-viec-voi-cong-ty-tnhh-lien-doanh-vina-bat?230302