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Big tobacco bullies the global south. Trade deals are their biggest weapon

The industry has a long history of using trade to force their products into new markets. This has led to at least a 5% increase in cigarette deaths

https://www.theguardian.com/commentisfree/2017/jul/17/big-tobacco-trade-deals-new-markets-bat

Cigarette packets often carry the warning to “protect children: don’t make them breathe your smoke”. In 2014, the Kenyan government attempted to do just that – banning the sale of single cigarettes, banning smoking in vehicles with a child and keeping the tobacco industry out of initiatives aimed at children and young people.

But as the Guardian reported last week, British American Tobacco, in an effort to keep Kenyans breathing their smoke, fought the regulations on the grounds that they “constitute an unjustifiable barrier to international trade”.

In fact, big tobacco has a long history of using trade and investment rules to force their products on markets in the global south and attack laws and threaten lawmakers that attempt to control tobacco use.

Back in the 1980s, as cigarette consumption fell off in North America and western Europe, US trade officials worked aggressively to grant American companies access to markets in Asia, demanding not only the right to sell their products, but also the right to advertise, sponsor sports events and run free promotions. Smoking rates surged.

In the 1990s, World Trade Organisation agreements led to a liberalisation of the international tobacco trade, with countries reducing import tariffs on tobacco products. The impact, according to a joint study of the World Health Organisation and the World Bank, was a 5% increase in global cigarette consumption and accompanying mortality rates.

Big tobacco’s lawyers were quick to discover the value of “next generation” trade agreements. In the 1990s, Canada dropped a plain packaging initiative after US manufacturers threatened a suit using the first next-gen trade deal, the North American Free Trade Agreement (Nafta). A few years later, Philip Morris threatened Canada again after it prohibited terms such as “light” and “mild” cigarettes. Philip Morris argued it would be owed millions in compensation for damage to its brand identity.

Philip Morris was able to credibly wield this threat because of the extraordinary powers that Nafta grants international corporations: the right to sue governments in private tribunals over regulations that affect their profits.

A toxic combination of far-reaching and poorly defined “rights” for investors, eye-watering legal costs, and tribunals composed of corporate lawyers with the power to set limitless awards against governments makes investment arbitration and the modern “trade” agreement a formidable weapon to intimidate regulators.

And what big tobacco learned in the global north it has been replicating in the global south, where threats carry greater force against poorer countries that may lack the resources to see down a legal challenge.

In 2010, Philip Morris launched a $25m claim against Uruguay after it introduced graphic warnings on cigarette packs. Though Uruguay successfully defended the measure, it still faced millions in legal costs. And Philip Morris effectively won, as Costa Rica and Paraguay held off introducing similar measures.

Such are the fears around big tobacco’s aggressive use of trade and investment rules that the US-negotiated Trans-Pacific Partnership trade deal featured a carve-out excluding big tobacco from investment protections – an explicit admission of the problem.

But this does not go far enough. The important thing to realise is that the problem goes beyond big tobacco. Big oil, big pharma and big mining follow the same playbook, launching investment arbitration cases to defend their business models from governments that would regulate to protect public health, the local environment or the climate.

Rather than target individual companies or sectors, we must push our governments to reform trade and investment rules that grant such extraordinary powers to corporations. That means removing special investor rights and investment courts from trade agreements. It means removing limits on the freedom of governments to protect public health, labour and human rights and the environment.

Of course, this is easier said than done. Robert Lighthizer, US trade representative, served as deputy in a Reagan administration that pressured countries to open their tobacco markets to US exporters in the 1980s.

Vice-President Mike Pence’s record includes opposing smoking regulation, taking huge campaign donations from big tobacco, and denying the causal link between smoking and lung cancer. The EU commission, meanwhile, has been criticized for its meetings with big tobacco while it was negotiating EU-US trade talks.

The good news is that from Brazil to India to Ecuador, countries are stepping away from outdated trade and investment rules. In the UK, the Labour party manifesto opposes parallel courts for multinationals and proposes to review the UK’s investment treaties.

But until we scrap the powers that we grant big tobacco and others to frustrate and bypass our laws, efforts around the world to protect public health will continue to go up in smoke.

Inside the murky world of Nairobi’s smoking zones

The Kenyan government has cracked down on cigarettes with a ban on advertising and smoking in public, driving the habit into the shadows

https://www.theguardian.com/world/2017/jul/12/nairobi-kenya-smoking-zones-cigarette-crackdown

There is a wooden shed in the middle of Nairobi city centre, dark, full of fumes, crowded and deliberately built beside the public toilets. It feels like a place of shame.

Jairus Masumba, Nairobi County’s deputy director of public health, calls it in jest the gazebo. It’s the public smoking place, created by his department. It is claustrophobic and filled with smoke, some of which drifts out through slats, but most of which hangs heavily in the fugged air inside.

Those who enter have to be desperate – and they’re usually men. A 27-year-old woman, who comes from the south of Kenya, is a rarity. She is heavily made-up and stands in the doorway. She smokes seven to 10 cigarettes a day. “It’s bad for you, no?” she says several times, though she knows the answer.

The men inside, barely visible as you enter because of the darkness and the fug, are smoking hard, standing up like a football crowd, all facing the same way though there is nothing to look at except the wooden slats of the far side of the shed. Music blares but nobody is dancing. They are grim faced, doing what they have to do. A young man, high probably on khat and cigarette in hand, chases some of the butts and the ash out with a broom, seeking money from the other smokers for cleaning up. He says he has a diploma in business marketing and another diploma in substance abuse counselling.

At the door are two cigarette sellers, doing a busy trade. It’s rare for anyone to buy whole packets. Packs of cigarettes in Kenya are broken up and sold by vendors as single sticks. That makes them cheap for women, children and the poor, despite manufacturers being banned from producing packets of less than 10. One of the two sellers sitting passively inhaling smoke is a woman who taps a packet of 20 and shakes them deftly out, one at a time, exchanging them for small coins. Men buy one, sometimes a couple, sometimes three. They will not all be smoked here. The sellers sit at the large red wooden boxes, with open lids that become the display cabinet. Most popular and cheapest is Sportsman at 100 shillings a pack (75p, 97 cents) or 5 shillings (less than 4p, 5 cents) for a single. Smokers buy sweets too, to take away the smell of tobacco when the worker goes back to the office.

The shed is vile, but few dare smoke even on the pavement outside in the cleaner air in the knowledge that the plain clothed official public health enforcers will be circling, ready to impose fines on anyone they catch. Nairobi city has got tough on smoking. The Kenyan government has banned advertising and marketing and smoking in public places, but it is up to the individual counties to interpret and enforce that and they all do it differently. Nairobi County has cracked down hard. Lighting up on the open street in the city centre can result in a stiff fine of 50,000 shillings (£374, $485) or even arrest. But it’s not so everywhere, or even outside of the city centre.

WHO-africa-deaths

Yusef, 58 and from Kenya’s second city, Mombasa, on the Indian Ocean coast, says people smoke openly in Mombasa. He has been smoking since the 1970s. His 28-year-old daughter died recently from colon cancer. That gives him a different perspective. “I’m more worried about GM foods,” he says.

Nairobi’s Uhuru Park is just under the nose of the ministry of health and has two small designated open-air smoking areas. On a Saturday, young women who are not smoking are there laughing and chatting with the young men who are. It’s somewhere to hang out. Elsewhere in the park, the same snack stalls proliferate. After 5pm, when the official public health enforcement officers go home, vendors and smokers relax. Cigarettes are sold and smoked openly.

Outside of the city centre, the restrictions do not appear to be enforced at all. In the High Ridge residential area, a predominantly Indian community, stall holders are grilling corn and frying cassava crisps on the street. Others run the small stalls selling sweets, biscuits, fizzy drinks and cigarettes, openly smoking themselves. People wander along the road with a cigarette between their fingers. A large lorry stops and a man jumps down to buy two sticks, lighting both and passing one to his fellow labourer before they unload.

These stalls are common near schools. A recent report compiled by the Consumer Information Network, a campaigning Kenyan anti-tobacco organisation, with Johns Hopkins University in the US, found such stalls selling sweets and single cigarettes within yards of primary schools across the country.

You won’t see an advert for Dunhill or Rothmans in Kenya. At least, nothing that looks like an advert. Advertising and promoting cigarettes has been banned. But everybody knows what the large red wooden boxes and red wooden display trays at stalls at the side of roads contain. Red is the colour of British American Tobacco (BAT). The words have been stripped off the red umbrellas that protect street vendors from the sun or patched over, but the colour is a tacit reminder of what they used to say and what is still sold there.

BAT said its products were for adult smokers only and that it would much prefer that stalls sold whole packets rather than single sticks, “given our investment in the brands and the fact there are clear health warnings on the packs.

“Across the world, we have very strict rules regarding not selling our products to retailers located near schools. BAT Kenya provides support to many of these independent vendors, including providing stalls painted in non-corporate colours, and providing youth smoking prevention and health warnings messages. We also educate vendors to ensure they do not sell tobacco products near schools.

“We are a company that takes its responsibilities very seriously, and we are naturally keen to look further into any instances that are brought to our attention, so we can take action if necessary.”

Pictures and video by David Levene. Multimedia editing by Ekaterina Ochagavia.

Threats, bullying, lawsuits: tobacco industry’s dirty war for the African market

Revealed: In pursuit of growth in Africa, British American Tobacco and others use intimidatory tactics to attempt to suppress health warnings and regulation

https://www.theguardian.com/world/2017/jul/12/big-tobacco-dirty-war-africa-market

British American Tobacco (BAT) and other multinational tobacco firms have threatened governments in at least eight countries in Africa demanding they axe or dilute the kind of protections that have saved millions of lives in the west, a Guardian investigation has found.

BAT, one of the world’s leading cigarette manufacturers, is fighting through the courts to try to block the Kenyan and Ugandan governments’ attempts to bring in regulations to limit the harm caused by smoking. The giant tobacco firms hope to boost their markets in Africa, which has a fast-growing young and increasingly prosperous population.

In one undisclosed court document in Kenya, seen by the Guardian, BAT’s lawyers demand the country’s high court “quash in its entirety” a package of anti-smoking regulations and rails against what it calls a “capricious” tax plan. The case is now before the supreme court after BAT Kenya lost in the high court and the appeal court. A ruling is expected as early as next month.

BAT in Uganda asserts in another document that the government’s Tobacco Control Act is “inconsistent with and in contravention of the constitution”.

The Guardian has also seen letters, including three by BAT, sent to the governments of Uganda, Namibia, Togo, Gabon, Democratic Republic of Congo, Ethiopia and Burkina Faso revealing the intimidatory tactics that tobacco companies are using, accusing governments of breaching their own laws and international trade agreements and warning of damage to the economy.

Extract – court document

“The Regulations are unlawful in their entirety as a result of procedural impropriety … The warning requirements [on cigarette packets] constitute an unjustifiable barrier to international trade.”

A petition by British American Tobacco Kenya to the country’s high court against aspects of the Kenyan government’s proposed tobacco regulations, 16 April 2015

BAT denies it is opposed to all tobacco regulation, but says it reserves the right to ask the courts to intervene where it believes regulations may not comply with the law.

Later this month, BAT is expected to become the world’s biggest listed tobacco firm as it completes its acquisition of the large US tobacco company Reynolds in a $49bn deal, and there are fears over the extent to which big tobacco can financially outmuscle health ministries in poorer nations. A vote on the deal by shareholders of both firms is due to take place next Wednesday, simultaneously in London at BAT and North Carolina at Reynolds.

Professor Peter Odhiambo, a former heart surgeon who is head of the government’s Tobacco Control Board in Kenya, told the Guardian: “BAT has done as much as they can to block us.”

Experts say Africa and southern Asia are urgent new battlegrounds in the global fight against smoking because of demographics and rising prosperity. Despite declining smoking and more controls in some richer countries, it still kills more than seven million people globally every year, according to the WHO, and there are fears the tactics of big tobacco will effectively succeed in “exporting the death and harm” to poorer nations.

There are an estimated 77 million smokers in Africa and those numbers are predicted to rise by nearly 40% from 2010 levels by 2030, which is the largest projected such increase in the world.

In Kenya, BAT has succeeded in delaying regulations to restrict the promotion and sale of cigarettes for 15 years, fighting through every level of the legal system. In February it launched a case in the supreme court that has already halted the imposition of tobacco controls until probably after the country’s general election in August, which are being contested by parliamentarians who have been linked to payments by the multinational company.

Extract – court document

“[A proposal for a new 2% tax on the industry in Kenya] … is arbitrary, capricious and inaccessible … it will have a significant effect on cigarette manufacturers and importers putting at risk further investment and direct and indirect employment opportunities in Kenya.”

A petition by British American Tobacco Kenya to the country’s high court against aspects of the Kenyan government’s proposed tobacco regulations, April 16th 2015

In Uganda, BAT launched legal action against the government in November, arguing that the Tobacco Control Act, which became law in 2015, contravenes the constitution. It is fighting restrictions that are now commonplace in richer countries, including the expansion of health warnings on packets and point-of-sale displays, arguing that they unfairly restrict its trade.

The court actions are brought by BAT’s local affiliates, BAT Kenya and BAT Uganda, but approved at Globe House, the London headquarters of the multinational, which receives most of the profits from the African trade. In its 2016 annual report, BAT outlined the “risk” that “unreasonable litigation” would be brought in to control tobacco around the world. Its response was an “engagement and litigation strategy coordinated and aligned across the Group”.

‘Focus on emerging markets’

At its annual meeting in March, chairman Richard Burrows toasted a “vintage year” for BAT, as profits rose 4% to £5.2bn after investors took their cut – their dividend had increased by 10%. When asked about the legal actions in Africa, he said tobacco was an industry that “should be regulated … but we want to see that regulation is serving the correct interests of the health mission and human mission which should lie behind it”.

Extract – court document

“Your Petitioner alleges and shall demonstrate that the Tobacco Control Act, read as a whole, has the effect of unjustifiably singling out the tobacco industry for discriminative treatment.”

A petition of British American Tobacco Uganda in the constitutional court against the Ugandan government’s Tobacco Control Act

So, “from time to time it’s necessary for us to take legal action to challenge new regulation” which he said was led by “the local board”.

BAT says it is “simply not true that we oppose all tobacco regulation, particularly in developing countries”. Tobacco should be appropriately regulated as a product that has risks to health, it said, but “where there are different interpretations of whether regulations comply with the law, we think it is entirely reasonable to ask the courts to assist in resolving it”. It was opposed to only a handful of the issues in Kenya’s regulations, not the entirety, it said in a statement.

Although most countries in Africa have signed the World Health Organisation (WHO) treaty on tobacco control, none has yet fully implemented the smoking restrictions it endorses.

The WHO predicts that by 2025, smoking rates will go up in 17 of the 30 Africa-region countries from their 2010 level. In some countries a massive hike is expected – in Congo-Brazzaville, from 13.9% to nearly half the population (47.1%) and in Cameroon from 13.7% to 42.7%. In Sierra Leone it will be 41.2% (74% among men) and in Lesotho 36.9%.

In contrast, research showed last year that just 16.9% of adults smoke in the UK; and last month new figures showed UK heart disease deaths had fallen 20% since that country’s indoor smoking ban.

“The tobacco industry is now turning its focus toward emerging markets in sub-Saharan Africa, seeking to exploit the continent’s patchwork tobacco control regulations and limited resources to combat industry marketing advances,” said Dr Emmanuela Gakidou and colleagues at the Institute for Health Metrics and Evaluation at the University of Washington in Seattle, publishing an analysis of smoking prevalence around the world in the Lancet in April.

Extract – letter

Uganda’s economy has “benefitted… significantly” from BAT’s tobacco business, employing 200 Ugandans and 1500 extra in the tobacco buying season. “This has helped to alleviate poverty and improve welfare in urban and rural areas …”

Extracts of a letter from Jonathan D’Souza, managing director of BAT Uganda to the chairperson of the Uganda Parliamentary committee on health, 14 April 2014

Africa’s growing numbers of children and young people, and its increasing wealth, represent a huge future market for the tobacco industry. The companies deny targeting children and cannot sell packs smaller than 10, but a new study carried out in Nairobi by the Johns Hopkins school of public health in the US and the Kenya-based Consumer Information Network found vendors selling cigarettes along the routes children take to walk to primary schools.

WHO-congo-smoke

Stalls sell single Dunhill, Embassy, Safari and other BAT cigarette sticks, costing around 4p (5 cents) each, alongside sweets, biscuits and fizzy drinks. The vendors split the packets of 20 manufactured by BAT. “They are targeting children,” said Samuel Ochieng, chief executive of the Consumer Information Network. “They mix cigarettes with candies and sell along the school paths.”

BAT said that its products were for adult smokers only and that it would much prefer that stalls sold whole packets rather than single sticks, “given our investment in the brands and the fact there are clear health warnings on the packs.

“Across the world, we have very strict rules regarding not selling our products to retailers located near schools. BAT Kenya provides support to many of these independent vendors, including providing stalls painted in non-corporate colours, and providing youth smoking prevention and health warnings messages. We also educate vendors to ensure they do not sell tobacco products near schools.”

Links with politicians

The Kenya case, expected to be heard after the elections on 8 August, is seen as critical for the continent. If the government loses, other countries will have less appetite for the long and expensive fight against the wealthy tobacco industry.

BAT has around 70% of the Kenyan market; its Kenyan competitor, Mastermind, has joined in the legal action against the government.

Extract – letter

“If these measures are brought into effect, the economic and social impact will be extremely negative. They could even threaten the continuation of our factory which has operated in Bobo Dioulasso for more than fifty years with more than 210 salaried employees.”

Excerpt from letter from Imperial Tobacco to the prime minister of Burkina Faso, 25 January 2016, concerning new regulations on plain cigarette packaging and large graphic health warnings.

Concerns have been raised about links between politicians and the tobacco companies. “There are allegations of some of them having been bribed in the past,” said Joel Gitali, chief executive of the Kenya Tobacco Control Alliance.

BAT whistleblower Paul Hopkins, who worked in Africa for BAT for 13 years, told a British newspaper he paid bribes on the company’s behalf to the Kenya Revenue Authority for access to information BAT could use against its Kenyan competitor, Mastermind. Hopkins has also alleged links between certain prominent opposition Kenyan politicians and two tobacco companies, BAT Kenya and Mastermind. Hopkins, who says he alerted BAT to the documents before the company made him redundant, claimed BAT Kenya paid bribes to government officials in Burundi, Rwanda and the Comoros Islands to undermine tobacco control regulations. Gitali is concerned about the outcome of the election: “If the opposition takes over government we shall be deeply in the hands of the tobacco companies.”

BAT denies any wrongdoing. A spokesperson said: “We will not tolerate improper conduct in our business anywhere in the world and take any allegations of misconduct extremely seriously. We are investigating, through external legal advisors, allegations of misconduct and are liaising with the Serious Fraud Office and other relevant authorities.”

Extract – letter

“Once the decision to smoke is taken by an adult smoker, the pack provides adult consumers with pertinent information”

British American Tobacco letter to the prime minister of Gabon, 1 January 2012

‘We grow up dreaming we can be one of them’

Tih Ntiabang, regional coordinator for Africa of the Framework Convention Alliance – NGOs that support the WHO treaty – said the tobacco companies had become bolder. “In the past it used to be invisible interference, but today it is so shameful that it is so visible and they are openly opposing public health treaties like the case in Kenya at the moment … Today they boldly go to court to oppose public health policy. Every single government is highly interested in economic growth. They [the tobacco companies] know they have this economic power. The budget of tobacco companies like BAT could be as much as the whole budget of the Africa region.

“Our health systems are not really well organised. Our policy makers can’t see clearly what are the health costs of inaction on tobacco control because our health system is not very good. It puts the tobacco industry at an advantage on public health.”

The sale across the whole of Africa of single cigarette sticks was a serious problem because it enabled children to buy them. “They are extremely affordable. Young teenagers are able to purchase a cigarette. You don’t need £1 for a pack of 20,” he said.

WHO-africa-deaths

BAT has a reputation in Africa as an employer offering steady and well-paid jobs, said Ntiabang, based in Cameroon. “When I was about 10, I was always dreaming I could work for BAT. They have always painted themselves as a responsible company – a dream company to work for. All the staff are well-off. The young people think ‘I want to work for BAT’. They promote a lot of events and make their name appear to young people. We grow up dreaming we can be one of them.”

In Uganda in 2014, BAT managing director, Jonathan D’Souza, sent a 13-page detailed attack on the tobacco control bill, then going through parliament, to the chair of the government’s health committee.

BAT was contracting with 18,000 farmers and paid them 61bn Ugandan shillings for 16.8m kg of tobacco in 2013, said the letter. The economy has “benefited significantly” from BAT Uganda’s investments, it said. “This has helped to alleviate poverty and improve welfare in urban and rural areas,” it says.

Extract – letter

“The draft regulations which you have published deal with a wide range of issues which will have a massive impact not only on the tobacco industry but also on a wider scale on the Namibian economy at large.”

Excerpt from a letter from the general manager of BAT in Namibia to the minister of health and social services, 17 November 2011

BAT Uganda (BATU) agreed tobacco should be regulated while “respecting the informed choices and rights of adults who choose to smoke and the legal rights of a legal industry”. But it cited 11 “areas of concern”, claiming there is no evidence to support a ban on tobacco displays in shops, that large graphic health warnings on packs are ineffective, that proposals on bans on smoking in public places were too broad and that prohibiting smoking under the age of 21 was unreasonable, since at 18 young people are adults and can make up their own mind.

Documents made public by the University of Bath show that BATU had another concern: the ban on the sale of cheap single cigarettes. Adults should be “free to purchase what they can afford”, says an internal leaked paper. BATU also took action against the MP who sponsored the bill. A letter informed him that the company would no longer be contracting with the 709 tobacco farmers in his region. There is evidence that the company also lobbied other MPs with tobacco farmers in their constituencies.

The Tobacco Control Act became law in 2015, and in November last year, BAT sued. Many people choose to smoke, said an affidavit to the court from managing director Dadson Mwaura and it was important to ensure regulation did not lead to “unintended consequences that risk an untaxed and unrestrained illegitimate trade in tobacco products”. BATU’s legal product contributed to the Ugandan economy “in many dimensions”.

The Guardian has seen letters showing that at least six other African governments have faced challenges from the multinational tobacco companies over their attempts to control smoking.

Democratic Republic of Congo: Letter to the president sent in April 2017 by the Fédération des Entreprises du Congo (chamber of commerce) on behalf of the tobacco industry, listing 29 concerns with the proposed tobacco control regulations, which they claim violate the constitution, international agreements and domestic law.

Burkina Faso: Letter sent in January 2016 to the minister of health from Imperial Tobacco, warning that restrictions on labeling and packaging cigarettes risks economic and social damage to the country. Previous letter sent to the prime minister from the US Chambers of Commerce in December 2013 warning that large health warnings and plain packaging could put Burkina Faso in breach of its obligations to the World Trade Organisation.

Ethiopia: Letter sent in February 2015 to the ministers of health and science and technology by Philip Morris International, claiming that the government’s tobacco directive banning trademarks, brands and added ingredients to tobacco breached existing laws and would penalise all consumer retailers.

Togo: Letter to the minister of commerce in June 2012 from Philip Morris International opposing plain packaging, which “risks having damaging consequences on Togo’s economy and business environment”.

Gabon: Letter from BAT arguing that there is no evidence that plain packaging reduces smoking, citing the Deloitte report of 2011, alleging its introduction would put Gabon in breach of trade agreements and promote smuggling.

Namibia: Letter to the minister of health from BAT, warning that planned tobacco controls will have “a massive impact … on the Namibian economy at large”.

Extract – memo

“As a country whose economy heavily relies on exports, Togo can ill afford to anger its international partners by introducing plain packaging.”

Excerpt from memo on plain packaging from chief executive of Philip Morris West Africa to the minister of commerce of Togo, to reiterate its concerns following a meeting, 21 June 2013

Bintou Camara, director of Africa programs at Campaign for Tobacco-Free Kids, said: “British American Tobacco, Philip Morris International and other multinational tobacco companies have set their sights on Africa as a ‘growth market’ for their deadly products”. Throughout Africa, tobacco companies have tried to intimidate countries from taking effective action to reduce tobacco use, the world’s leading cause of preventable death, he added.

“Governments in Africa should know that they can and should move forward with measures aimed at preventing and reducing tobacco use – and that they do so with the support of the many governments and leaders around the world that have taken strong action to protect public health.”

Cloe Franko, senior international organizer at Corporate Accountability International, said: “In Kenya, as in other parts of the world, the industry has resorted to frivolous litigation, aggressive interference … to thwart, block, and delay lifesaving policies. BAT’s actions are emblematic of a desperate industry grasping to maintain its hold over countries and continue to peddle its deadly product.”

Philip Morris said it is regularly engaged in discussions with governments. “We are approached by or approach public authorities to discuss a range of issues that are important for them and for us, such as taxation, international trade, and tobacco control policies. Participating in discussions and sharing points of view is a basic principle of public policy making and does not stop governments from taking decisions and enacting the laws they deem best.” It said that it supports effective regulation, “including laws banning sales to minors, mandatory health warnings, and advertising restrictions”.

Imperial Tobacco said it sold its brands “where there’s a legitimate and existing demand for tobacco and take the same responsible approach in Africa as we do in any Western territory”. A spokesman said it supported “reasonable, proportionate and evidence-based regulation of tobacco”, including “health warnings that are consistent with global public health messages”. But, it said, Imperial would “continue to make our views known on excessive, unnecessary and often counter-productive regulatory proposals”.

Court upholds stringent anti-tobacco laws

https://citizentv.co.ke/news/court-upholds-stringent-anti-tobacco-laws-158336/

The High Court has delivered a landmark ruling allowing the Tobacco Amendment Act (2014) to take effect after a protracted legal battle with cigarette manufacturing companies.

The stringent anti-tobacco laws were published on December 5, 2014 and expected to take effect six months later but this did not happen owing to court cases lodged by tobacco companies led by British American Tobacco Limited opposing the laws.

On March 24, 2016, Lady Justice Mumbi Ngugi upheld the laws and ordered them to be deployed six months after the date of the ruling.

A High Court panel comprising of Judges Festus Azangalala, Hannah Okwengu and Fatuma Sichale have upheld Justice Mumbi Ngugi’s ruling, thereby giving the Tobacco Amendments Act (2014) life.

Delighted by the ruling, Kenya Tobacco Control Alliance (KETCA) coordinator Thomas Lindi, urged the government to implement the laws comprehensively, arguing that there are currently 6,000 tobacco-related deaths annually and more than 220,000 children exposed to tobacco smoke.

Tobacco firm ‘paid bribes’ to wreck health treaty

http://www.thesundaytimes.co.uk/sto/news/uk_news/Health/article1682252.ece

THE Serious Fraud Office is investigating British American Tobacco (BAT) over alleged corruption after documents and secret tape recordings were passed to its staff in Kenya and South Africa.

The company, whose brands include Benson & Hedges, Dunhill and Lucky Strike, was allegedly involved in bribing politicians and government officials from at least five African nations in a covert campaign to undermine a United Nations public health treaty.

Kenya’s anti-corruption commission said last week it was working with the Serious Fraud Office (SFO) and Britain’s National Crime Agency to investigate alleged “bribery and tax evasion”.

It is understood that officials are also examining claims that payments were made by a BAT intelligence unit in London to a network of people in Africa, including police officers, to disrupt the activities of commercial rivals

Kenya: Lighting Up

http://www.westfieldtimes.com/world/kenya-lighting-up/16702/

Last year, the British parliament, despite fierce lobbying from tobacco companies, decided that from May 2016 cigarettes would be sold only in plain packaging in the UK.

Anti-smoking campaigners in that country were quick to declare it as the latest nail in the coffin of an industry that has seen consumption of its products shrink inexorably in the West over the past three decades.

But while it is true that health concerns, public education, and increasingly stringent controls on the advertising, sale and use of tobacco have brought about that decline in North America and Europe, anyone thinking to write the obituary of Big Tobacco had better think again, because elsewhere in the world, especially in the developing world, smoking is increasing dramatically.

Nearly 80 percent of the world’s one billion smokers now live in low- and middle-income countries, a figure that continues to rise year on year. In China, for example, an estimated 350 million adults are hooked on tobacco; smoking in Indonesia has more than quadrupled in the past four decades; and in Russia around a third of all teenagers will have tried their first cigarette by age 12.

But it is Africa that is probably most critical to the long-term future of the multinational tobacco firms, because it is relatively unexploited. For all the continent’s other woes, Africa has traditionally had some of the lowest smoking rates in the world, largely because most people can’t afford it. That, though, is now changing as parts of the continent become more prosperous, disposable incomes increase and populations mushroom.

It has become an enticing target for a profit-hungry industry as other routes to growth have been closed off by rules, directives and worries about life-threatening diseases.

With the most smokers in sub-Saharan Africa, Kenya is one of the biggest prizes on offer.

The problem for the industry is that Kenyan health officials are as aware as anyone else about the dreadful menace smoking poses to their nation’s health. Kenya was the first African nation to ratify the World Health Organization’s Convention on Tobacco Control. One of its key sections, Article 5.3, says that countries must “protect their tobacco control and public health policies from commercial and other vested interests of the tobacco industry”.

It gave officials the impetus to work with legislators on drafting strict regulations. These include putting graphic images on cigarette packets, banning advertising, promotion and sponsorship of tobacco and the imposition of a 2 percent health tax on every packet.

Professor Peter Odhiambo, chairman of the Tobacco Control Board, said: “We are already sitting on an epidemic of the cancers from tobacco. The tobacco problem is the most silent undeclared disaster in Kenya and therefore the more we delay the more we will see Kenyans dying.”

But as investigative journalist Purity Mwambia and filmmaker Giovanni Ulleri have been finding out, the industry hasn’t been slow to fight back, going to court in Kenya to argue about the legality of the rules and the proposed timetable for their introduction.

And now, most recently, disturbing allegations about the bribery of government figures have begun to emerge.

FILMMAKER’S VIEW

By Giovanni Ulleri

Around the town of Migori, beside the dusty country roads, you’ll find them: groups of farmers sharing a social moment away from their football pitch-sized plots of tobacco. Here, in one of the most important agricultural regions in Kenya, tobacco is king but, as I discovered in making Lighting Up, this is a crop that demands a high price from those who grow it and those who smoke it.

When I got a phone call from my former boss over the summer about me directing a film on tobacco in Kenya, I hesitated before saying yes. Not because I didn’t want to do it, but because of a potential conflict of interest; I was a former smoker – and in my eyes, once a smoker, always a smoker.

I was fully aware of all the known cancer risks of smoking and I had tried to quit many times over the years, but like most addicts I kept falling off the wagon and stealing a cigarette from friends. I had starting smoking as a stupid act of rebellion as a teenager behind the bike sheds at school and here I was heading off to Kenya to see how they have been trying to prevent other youngsters from doing what I did – lighting their first cigarette and starting down a path that could eventually lead to an untimely death.

On arriving in Nairobi and meeting up with my colleague Purity Mwambia, the first thing I noticed walking around the streets was how few people smoked in public.

Unlike any high street in the UK, where you see smokers huddled up in doorways of offices and in the cold and rain trying to light up, here in Kenya you are allowed to smoke only in designated smoking zones which, I imagine, makes the city centre of Nairobi one of the largest no-smoking zones in the world.

There’s even a 50,000 Kenyan shilling ($490) fine if you are caught smoking outside these zones. But despite this, eight billion cigarettes are smoked in Kenya every year and the government is trying to introduce new regulations to try to prevent what it fears is just around the corner: a veritable host of tobacco-related diseases.

However tobacco companies view Africa as one of their largest growing markets.

They are eager to keep their market share and to persuade policymakers, not to penalise them. We spoke to a young MP, Stephen Mule, who sits on the Kenyan parliamentary health committee. He told us that he was offered an expenses-paid fact-finding trip to the UK from Kenya’s largest tobacco manufacturer, British American Tobacco. What BAT didn’t know was that Mule’s father had died of a tobacco-related disease and nothing would ever weaken his resolve to introduce strict tobacco control regulations back home.

I also met his mother, who told me how she looked after her dying husband and how she tried to get him to stop smoking. She is rightly proud of her son, whose aim is to stop other Kenyan families from suffering the way his family did caring for a smoker.

But everyone involved in tobacco regulation in Kenya knows they have a fight on their hands. They are up against a rich and powerful industry, battle-scarred from years of similar confrontations in Europe and the US and determined to protect its burgeoning African businesses from government interference.

The more we began to look into this story, the more we began to realise exactly what that determination meant in practice.

BAT scandal: We received letter from Raila office, no action was taken, says KRA

http://www.the-star.co.ke/news/2015/12/24/bat-scandal-we-received-letter-from-raila-office-no-action-was-taken_c1265650

No action was taken to suspend freezing Mastermind Tobacco Kenya’s accounts as asked by the Office of the Prime Minister, KRA has said.

CEO John Njiraini said tax demands against MTK were legitimate and “are not influenced by any party and will be defended at the right forum in the Tax Tribunal courts”.

“Tax matters are handled strictly in accordance with the legal provisions of which taxpayers or their appointed tax consultants are well appraised,” Njiraini said in a statement on Thursday.

In a letter dated May 4, 2010, former PM Raila Odinga “intervened” to stop Kenya Revenue Authority from freezing Mastermind’s accounts over non payment of taxes amounting to billions.

Njiraini urged all parties who feel aggrieved by the commission’s demands to avoid advancing partisan positions and “to await the rulings of the property mandated organs”.

“We consider ongoing public commentary on MTK tax issues to border on contempt of the property constituted judicial processes.”

This comes after the office of the Prime Minister wrote to then KRA boss Michael Waweru to “immediately suspend notices issued to Mastermind Kenya asking for payment within 50 days”.

Raila was Prime Minister at the time.

“You are requested to put on hold the enforcement action you have instituted against Mastermind Tobacco Kenya Limited in order to facilitate further review of the matter,” read the letter signed by acting PS Andrew Mondoh.

On December 23, the EACC said it will investigate the scandal surrounding British American Tobacco and MTK after they were invited by KRA.

Njiraini said the Authority held discussions with EACC after media reports highlighted “alleged unethical relations between staff of BAT and unspecified staff at KRA.

Raila entangled in BAT’s grand bribery of senior KRA officials

http://www.businessdailyafrica.com/Raila-entangled-in-BAT-s-grand-bribery-of-senior-KRA-officials/-/539546/3005584/-/1154ooqz/-/index.html

From left, former Prime Minister Raila Odinga and former acting PS Andrew Mondoh. Whistleblower Paul Hopkins says senior officials in Mr Odinga’s office ordered the KRA to freeze multi-million shilling tax demands issued to Mastermind Tobacco. PHOTO | FILE

From left, former Prime Minister Raila Odinga and former acting PS Andrew Mondoh. Whistleblower Paul Hopkins says senior officials in Mr Odinga’s office ordered the KRA to freeze multi-million shilling tax demands issued to Mastermind Tobacco. PHOTO | FILE

IN SUMMARY

According to Mr Hopkins, Mr Odinga’s office ordered the KRA to freeze multi-million shilling tax demands issued to Mastermind Tobacco – the maker of the Supermatch brand of cigarettes.
Mr Odinga’s office wrote to the then KRA boss Michael Waweru asking him to immediately suspend agency notices issued to Mastermind Tobacco’s bankers, according to a letter seen by the Business Daily.

Former Prime Minister Raila Odinga has become the latest high-ranking politician to be entangled in the ongoing revelations of bribery involving British American Tobacco (BAT), Kenya Revenue Authority (KRA) officials and Mastermind Tobacco.

Whistleblower Paul Hopkins says in his latest revelations to a British newspaper the Independent that high-ranking officials in Mr Odinga’s office intervened to stop the KRA from freezing Mastermind’s accounts over non-payment taxes worth billions of shillings.

Mr Hopkins told the UK newspaper that the senior officials in Mr Odinga’s office ordered the KRA to freeze multi-million shilling tax demands issued to Mastermind Tobacco – the maker of the Supermatch brand of cigarettes.

“When KRA wrote to Mastermind’s bankers threatening to freeze accounts until the outstanding amounts were paid, officials in the office of former Kenyan Prime Minister Raila Odinga stepped in and ordered them to suspend the demands,” the report says.

Mr Hopkins, who worked for BAT in Africa for 13 years, has admitted to offering KRA officials hefty bribes for access to rival Mastermind Tobacco’s tax files and directing the taxman to demand the amounts due.

Mr Odinga’s office wrote to the then KRA boss Michael Waweru asking him to immediately suspend agency notices issued to Mastermind’s bankers, according to a letter seen by the Business Daily.

“You are requested to put on hold the enforcement action you have instituted against Mastermind Tobacco Kenya Limited in order to facilitate further review of the matter,” says the letter dated May 4, 2010 and signed by Andrew Mondoh, who was the acting permanent secretary in Mr Odinga’s office.

Mr Odinga in October appointed Mr Mondoh to lead a team of administrative advisers working in his private office as he prepares for the 2017 presidential poll.

The involvement of Mr Odinga’s office in the BAT bribery scam are contained in a dossier Mr Hopkins forwarded to the UK’s Serious Fraud Office (SFO), according to the Independent.

Mr Odinga was yet to respond to our queries by the time of going to press.

Meddling

Mr Odinga is no stranger to allegations of his meddling in tax matters having faced a similar storm in April 2012 when an MP accused him of meddling in the KRA’s affairs in order to shield Mastermind from paying its rightful share of taxes.

The then Mutito MP Kiema Kilonzo filed a question in the House seeking to know whether Mastermind had been remitting taxes to the KRA since 2007 and accused Mr Odinga, then Prime Minister, of shielding the cigarette firm from paying taxes.

“The court case that exists challenges issues up to April 2010. What about penalties, taxes and interest thereafter? I table a letter from the PM instructing that the company’s taxes should not be collected,” Mr Kilonzo told the House.

But then Finance assistant minister Oburu Oginga, who is Mr Odinga’s elder brother, hit back, saying Mr Kilonzo had on two occasions demanded Sh6.6 million from Mastermind to drop the question — suggesting that Mr Kilonzo had attempted to extort money from the tobacco firm.

Mr Kilonzo was in August last year appointed Kenya’s first ever ambassador to Turkey.

The KRA yesterday confirmed having received the letter from the former PM’s office, saying it did not in any way affect its pursuit of Mastermind for taxes.

“In the particular case of the letter from the former PM, KRA is aware that such a letter was written, but it had no influence whatsoever on the tax demands,” the KRA said in a statement.

The taxman declined to provide details on how many other orders from the PM’s office it received seeking to stop collection of taxes, citing rules of confidentiality.

“The law prohibits KRA from divulging details regarding the affairs of any taxpayer,” said the KRA statement.

The claims that the KRA has been acting on the whims of top bureaucrats and multinationals instructing the agency on tax matters come in the wake of the agency’s failure to meet revenue targets in the first quarter (July- September) of the current fiscal year. The Treasury has partly blamed the revenue shortfall for the recent cash crisis in government.

President Uhuru Kenyatta has responded to the crisis by ordering a lifestyle audit of all KRA employees in an effort to stop rampant corruption in the agency that costs the State billions of shillings in revenue leakages.

The KRA further argued in response to our queries that its acrimonious tax battle with Mastermind was before court, making it difficult for the agency to comment on the matter.

“A significant proportion of tax demands against Mastermind are the subject of court cases, and so any comment on them must take this into account,” the KRA said.

 

Mr Odinga, who served as Prime Minister between 2008 and 2013, now becomes the fifth Kenyan to be named in the mounting allegations that BAT operated an elaborate bribery scheme involving tax officials, legislators, rival company insiders and the United Nations representatives — all aimed at crippling rival Mastermind’s operations.

According to the Independent report, former Justice minister Martha Karua allegedly received £50,000 from BAT in bribes to block a rival firm from winning a multi-million pound contract at the KRA meant to fight smuggling of tobacco products.

Ms Karua has disputed the sum of cash received and its purpose, saying she received a Sh2 million “donation” to her presidential campaign.

“At no time did I ever discuss the award or influence of contracts/tenders whether at KRA or indeed within any other government entity with Paul [Hopkins] or anyone else,” Ms Karua said in response to the allegations.

The BAT bribe was supposedly paid to Ms Karua through her aide Mary M’Mukindia, currently a board member at the KRA.

Ms M’Mukindia, a former chief executive at State-owned oil marketer Nock, served as campaign adviser and fundraiser for Ms Karua’s unsuccessful presidential bid in 2013.

Julie Adell-Owino, a former BAT Kenya lobbyist, also left his job at East African Breweries (EABL) early this month after she was accused of organising payment of bribes to senior government officials, including former Trade minister Moses Wetang’ula, for reasons that were not explained.

Ms Adell-Owino resigned from EABL where she had taken a new job, indicating that the Diageo-owned brewer did not want to be associated with the corporate upheaval at BAT.

Taxman invites EACC to investigate staff over BAT bribery scandal

http://in2eastafrica.net/2015/12/10/taxman-invites-eacc-to-investigate-staff-over-bat-bribery-scandal/

THE TAXMAN HAS INVITED THE ANTI-CORRUPTION WATCHDOG TO INVESTIGATE ALLEGATIONS THAT ITS STAFF RECEIVED BRIBES FROM CIGARETTE MAKER BRITISH AMERICAN TOBACCO (BAT) TO SPY ON ITS KENYAN RIVAL FIRM.

The British Broadcasting Corporation (BBC) in its investigative show Panorama reported that BAT executives paid bribes to Kenya Revenue Authority (KRA) officials to spy on Mastermind Tobacco — the manufacturer of Supermatch cigarettes — and hand over tax files.

The expose shows that the KRA officials were also paid to make numerous tax demands from Mastermind, a strategy whose aim was to intimidate and damage the reputation of the homegrown Kenyan firm.

“We have taken action to seek relevant details in support including the nature of information allegedly divulged, recordings if any of the bribery incidents, individuals involved on both sides (KRA/BAT), amounts paid/received and the evidence to support bribe taking,” KRA Commissioner General John Njiraini said in a statement released yesterday.

BAT is UK’s fifth-biggest company and last year it sold 667 billion cigarettes and made Sh693 billion (£4.5 billion) profit. It has big operations in Kenya.

The expose also accused BAT of bribing senior politicians and top civil servants in East Africa. One of the top politicians named in the scandal is Bungoma Senator Moses Wetang’ula, who has since denied the allegations.

The programme, dubbed ‘The Secret Bribes of Big Tobacc’, also names Julie Adell-Owino, a Kenyan lobbyist who allegedly arranged bribes totalling Sh2.6 million ($26,000) for three public officials in Rwanda, Burundi and the Comoros Islands. She is a former head of corporate and regulatory affairs at BAT.

Mr Njiraini maintained that KRA requires staff to maintain strict confidentiality as provided by law, in the handling of tax matters of any taxpayer as the grounds on which he would not comment on the substance of the allegations.

Njiraini said that he has declined to publicly comment on the agency’s tax enforcement actions against Mastermind Tobacco (MTK), for ‘confidentiality’ reasons.

Instead, the taxman says he has asked investigating agencies to look into the allegations with the view of taking action.

“We have invited other investigative agencies including the EACC to partner with us in unearthing any unethical practices, and wish to encourage those making the allegations to share them with ourselves and with the EACC at the earliest point,” Njiraini said.

The taxman has a long-running battle with Mastermind Tobacco over tax issues and the allegations give a new dimension to what could have motivated some of its staff to pursue the firm so furiously.

“We paid the KRA guy, the right KRA guy a shed load of money. He issued all the tax demands. I mean we have tax demands now,” says Paul Hopkins in a leaked recorded telephone conversation with then BAT Kenya boss Gary Fagan. Mr Hopkins worked for BAT Kenya for 13 years and was the man tasked with arranging and delivering bribes to tax officials. He has now turned into a whistleblower.

By Paul Wafula, The Standard