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CASHING IN ON 240 DAILY DEATHS: LAWYERING FOR BIG TOBACCO IN THE PHILIPPINES

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Philippines: Department of Health backs Ecigs restrictions supported by WHO

Philippines are going towards one of the toughest tobacco control on Southeast Asia. The government back e-cigarette restrictions decided at the CoP7 and include vaping in smoking bans.

The presence of Alicia Bala, Civil Service Commission (CSC) Chairperson, rather than Department of Health (DOH) Secretary Paulyn Jean Ubial at the head of the Philippine delegation in New Delhi to lead the negotiations with the Worldwide Health Organization (WHO) has been deemed beyond of their expertise.

The delegation clarified that the CSC lead initiatives on tobacco control within governmental agencies. Indeed, in 2009 and 2010, CSC tobacco control initiatives have been to issue an absolute ban on smoking in all government offices and to impose to all government officials and employees not to interact with the tobacco industry unless to supervise, regulate or control tobacco production.

Department of Health agrees with WHOs position on potential risks to the health

During the last CoP7, the Framework Convention on Tobacco Control (FCTC) encouraged parties to “to prohibit or restrict the manufacture, importation, distribution, presentation, sale and use of ENDS,” in response to what the WHO describes as a “tobacco epidemic.” The global organization discourages the use of ENDS until it is deemed “safe and effective, and of accepted quality by a competent national regulatory body.”

As a signatory of the WHO’s treating since 2005, Philippines, the Southeast Asia’s second-most populous country, has committed to prioritise public health over other interests in relation to the manufacture, sale, and use of tobacco products.

To clarify the position of the Government with respect to the ecigarette, the Department of Health (DOH) declared it agrees with WHOs position on potential risks to the health of users, as these have not yet been clearly determined.

The determination of a president to have Philippines smoke-free

After his election on June 30, 2016, Rodrigo Dutertre’s government proposed increasing taxes on cigarettes and other tobacco products. To confirm president Dutertre’s determination to enforce nationally an anti-smoking law that he experimented as a mayor for 22 years of a 1.5 million citizen city, Davao, the government spokesman Ernesto Abella declared “Certainly in Davao, the sentiment and business establishments support a smoke-free Davao. The president sees it as something that’s not ideal for health… and this is part of the public well-being”. DOH Secretary, Paulyn Jean Ubial, told Reuters she was supportive with the president to curb smoking in public places, including parks, bus stations, and even in public vehicles.

During his term as a mayor in Davao, Reuters reports that he once personally forced a man to stub out his cigarette and eat it after he refused to stop smoking in a restaurant. His nickname, “The Punisher”, was inherited from his governance ruled by harsh laws like a ban on late-night drinking and karaoke, and a 10 p.m. curfew for school children in addition to his smoke-free policy in Davao.

Tobacco industry, a powerful lobby

A Sin Tax Law signed by former president Benigno Aquino III in 2012 strengthened the lobby of cigarette manufacturers and kept the tax structure on alcohol and cigarettes complicated and weak. The system was believed to encourage corruption among state agents and to constitute a loss of earnings for the DOH to manage issues arising from abuse in the use of alcohol and cigarettes.

Tobacco group trashes House sin tax bill

http://www.manilatimes.net/tobacco-group-trashes-house-sin-tax-bill/302238/

The Philippine Tobacco Growers Association (PTGA) reiterated its strong objection to the House-approved bill proposing a huge increase in cigarette excise taxes while keeping the two-tier structure even as its president Saturnino Distor disowned press reports maliciously attributing to him statements supporting the measure.

“We have not changed our position. We strongly oppose House Bill 4144 as this will only bring hardship to the farmers still reeling from the huge tax increase in 2013,” Distor said in a statement.

“I also condemn the unauthorized use of my name and the attribution to me of statements that are contrary to my views. This is the product of malicious minds serving vested interests,” he added.

Distor was quoted in media reports as throwing his support behind HB 4144 in his capacity as the Pangasinan Chapter President of the National Federation of Farmers Association and Cooperatives. (NAFTAC).

He said he has not changed his position, which he publicly stated during the hearing of the House Ways and Means Committee last Dec. 5.

“Our position is stated in Congress and is a matter of public record,” Distor said.

In fact, he said he refused to sign a position paper supporting House Bill 4144 that was offered to him by the National Tobacco Administration (NTA) during the House committee hearing.

“I repeat, the tobacco farmers will bear the brunt of this bill,” Distor said.

Earlier, public health think tank HealthJustice Philippines accused legislators of railroading a bill that would allow cigarettes to remain dirt cheap in the Philippines, contrary to the Philippine health agenda and Duterte’s promise of a Smoke Free Philippines.

May Fernandez-Mendoza, HealthJustice president, said that House Bill 4144 was approved without amendment during second reading on December 5.

It sought a P7 increase in excise taxes to P32 and P36 from the current P25 and P29 with marginal increases of 5 percent per year instead of marginal increases of 4 percent per year based on RA 10351,the current Sin Tax Law which is scheduled to bring taxes to a single rate of P30 in 2017.

Rep. Eugene de Vera of ABS Partylist sponsored the bill which was supported by all those in the super majority.
Another bill filed by Rep. Joey Salceda pushed for P40 with P5 increase per year but this was not passed during the plenary hearing.

“There is an illusion of significant increase in taxes but in reality, this is a ruse to preempt ideal taxes for health that President Duterte, being a strong tobacco control advocate, is capable of calling for,” Mendoza said.

“If this is made in line with the Philippine Health Agenda to reduce harm from tobacco use, taxes on tobacco, should be at least P40, hence significant enough to discourage smoking and bring the Philippines out of the category of those countries having the cheapest cigarettes in the world. It should also call for significant annual increases,” she added.

In 2010, a HealthJustice study projected that, in order to achieve a periodic 10 percent reduction in smoking prevalence or save 200,000 lives annually and reducing 500,000 smokers annually, taxes should have reached a unitary rate of P30 by 2014, to be increased annually based on inflation and income growth.

“However, the deliberation of the Sin Tax bill went through a lot of compromises due to the tobacco industry lobby, and was watered down such that the rate of P30 would take effect only in 2017. To make up for the lost lives, we propose a minimum of P40 excise tax per pack as a starting point in 2017,” Irene Reyes of HealthJustice said.

Mendoza also pointed out that incremental revenues from any tobacco tax increase should go back to the health sector in the form of health promotion, to strengthen communities’ capacity to undertake health initiatives and to have healthy cities.

“Investments must be made to prevent Filipinos from getting sick,” she added.

“The price of cigarettes in Philippines is cheap. If we want to protect the youth, we need to break the P100 per pack price barrier,” said Dexter Galban of One for Nursing Empowerment, a group of nursing students from universities in the Philippines.

Internal tobacco industry documents show that the industry targets the youth as replacement smokers.

According to a survey HealthJustice conducted, the youth will stop smoking if prices of cigarettes are at P5-10 per stick or P100-P200 per pack. Price of a pack of cigarettes averages between P36-65 per pack in the Philippines while it is between P100-450 in countries that are committed to stop smoking, such as Thailand, Singapore, Australia, and USA.

It has also been established that smoking contributes to poverty. A 2008 DOH study shows that the total economic costs for the four smoking-related diseases were estimated at P188 bilion a year. The total collection from tobacco products averages at P120 bilion a year and an average of P 75 billion goes to health.

8 Million Smokers Quit After Tax Hike in Philippines

Tax hikes on cigarettes have forced my Filipinos to quit, but it now seems manufacturers may be trying to flood the market before another round of tax hikes hits.

http://www.taxationinfonews.com/2016/12/8-million-smokers-quit-after-tax-hike-in-philippines/

In a recent interview the president of the Philippine Society of General Internal Medicine Antonio Miguel Dans reportedly claimed that as many as 8 million locals have quit smoking due to the effect of tax hikes on the sale of tobacco.

The latest round of tax hikes on the sale of tobacco occurred in 2012, and were aimed specifically at reducing consumption of tobacco in the country.

In 2012 the estimated smoking rate in the country was approximately 31 percent, while it has now dropped to 23 percent, a drop equivalent to approximately 8 million people.

The supply of cigarettes in the Philippines between 2012 and 2015 fell by an estimated 25.9 percent.

However, over the course of 2015 the supply had risen by 9.1 percent, as manufacturers front-load their supplies now, in order to circumvent the hoked tax rates which will be enacted next year.

The Minister also said that the tax has been supplemented by new regulations requiring packets of cigarettes to be affixed with graphic labels showing the negative effects of smoking, a measure which has also had a positive effect on smoking cessation.

Duterte urged to sign EO vs public smoking

http://interaksyon.com/article/134751/duterte-urged-to-sign-eo-vs-public-smoking

An anti-tobacco group is urging President Rodrigo Duterte to sign an executive order banning smoking in all public places across the country to fulfill a promise he made.

“We appeal to our dear president, who we know is an ardent anti-smoking advocate, to please sign the smoke-free Philippines EO now. Each day of delay would bring your people closer to becoming victims of the ills of smoking like me as well as those who are not even smoking,” New Vois Association of the Philippines president Emer Rojas, a former chain-smoker who lost his vocal cords due to cancer, said in a statement.

Rojas said the EO would, in particular, help protect non-smokers from second-hand smoke.

He also said it would help save Filipinos, especially the youth, from smoking-related illnesses. He cited the Tobacco Atlas of 2016, which shows 14.5% of Filipinos aged 13 to 15 and 23.8% of adults smoke regularly.

Records show an estimated 240 Filipinos die from tobacco-related diseases daily.

Aside from banning smoking in public places, Rojas said the EO would be the perfect complement to already existing tobacco control measures, specifically Republic Act No. 10351 (Sin Tax Law) and Republic Act No. 10643 (Graphic Health Warning Law).

Health Secretary Paulyn Ubial earlier said Duterte, who has buergers disease, is more than willing to sign the EO. Buerger’s disease is an ailment linked to heavy smoking.

The EO closely follows the smoking ban implemented in Davao City where Duterte was a long-time mayor.

Think tank: Big-time increase in cigarette taxes to force smokers to quit

http://business.inquirer.net/220377/think-tank-big-time-increase-cigarette-taxes-force-smokers-quit

Public health policy think-tank HealthJustice Philippines Monday pushed for a single-tier tax system for tobacco products, saying other proposed systems would not make smokers quit.

HealthJustice, which won the Bloomberg Award for Global Tobacco Control in 2012, said the industry-proposed two-tier tobacco tax system, which assigns lower tax rates to cheaper cigarettes or those on the “lower-tier,” would not be effective at curbing smoking.

“The two-tier tobacco tax system that the tobacco industry has been pushing for is ineffective and will not encourage smokers to quit or reduce consumption of tobacco products,” HealthJustice consultant Bianca Bacani said in a statement.

Based on government projections, the current multi-tier tax system would eventually shift to single tier by going through a two-tier stage first.

For example, a two-rate structure of P14 and P30 per pack of cigarettes would be implemented for a period of two years, moving on to a uniform rate of P30 per pack on the third year.

“If we don’t make tobacco products substantially more expensive, smokers will continue to shift to cheaper cigarettes instead of shift to a healthy lifestyle,” Bacani said.

She said smokers would sustain their habit and keep smoking. They would even reduce the number of cigarettes they consume.

“This is called downshifting, and it has taken place in many countries after they imposed the two-tier tax tobacco tax,” Bacani said.

HealthJustice also noticed that, as early as 2012, the Department of Finance reported that downshifting in alcohol and tobacco products caused the government to lose P32 billion in revenues.

DOH wants e-cig, vapes covered by smoking ban

http://www.philstar.com/headlines/2016/11/17/1644636/doh-wants-e-cig-vapes-covered-smoking-ban

To fortify the government’s campaign against smoking, the Department of Health (DOH) has recommended to Malacañang that electronic cigarettes (e-cig) and vapes be included in the public smoking ban.

DOH spokesman Eric Tayag said the agency’s proposed executive order for the smoking ban includes e-cigs and vapes, although Republic Act 9211 or the Tobacco Regulation Act of 2003 did not cover these.

“There is now evidence that they are also threats to our health, so they should be included in the ban,” Tayag said.

The DOH is now waiting for President Duterte to sign its proposed EO that seeks to prohibit smoking in all public places across the country. This restriction is not included in RA 9211.

With the proposed ban complemented by the sin tax law, the DOH is expecting the current smoking prevalence rate of 23 percent to go down by at least 10 percent initially.

Tayag noted that while e-cigs and vapes are being marketed as tools to quit smoking, these actually encourage smoking.

He underscored that just like traditional cigarettes, these two devices also contain nicotine and other harmful substances.

“That’s how the manufacturers are marketing it – that they will help people quit smoking. But in fact, many cigarette manufacturers are now manufacturing e-cigs and vapes,” he said.

Tayag noted that since curbing smoking has been succeeding worldwide, cigarette manufacturers are producing e-cigs and vapes as “other avenue” for their business.

He said the health department worries about the grave impact of e-cigs and vapes on children, who could not differentiate them from traditional cigarettes.

The health official said he also expects tobacco manufacturers to block the inclusion of these devices in the health department’s proposed ban on cigarettes.

Tobacco industry’s CSR activities still an issue in PH despite improvement in interference index

http://news.pia.gov.ph/article/view/1141474976323/tobacco-industry-s-csr-activities-still-an-issue-in-ph-despite-improvement-in-interference-index

While the Philippines has made significant improvement to control tobacco industry interference two years after it had ranked high among Southeast Asian countries that reported industry influence, much is still needed to be done to protect the government from unnecessary interaction with cigarette makers.

Citing results of the third Tobacco Industry Interference Index organized by the Southeast Asia Tobacco Control Alliance (SEATCA), New Vois Association of the Philippines (NVAP) President Emer Rojas said based on the report, the tobacco industry still finds ways to wield influence in government affairs in many countries through corporate social responsibility (CSR) activities.

The report, the world’s first ever assessment of tobacco interference in government, and the third one by SEATCA since 2014, reveals that the industry invests huge money on CSR activities to circumvent laws regulating their business and gain access to public officials in charge of implementing tobacco control policies.

“We have a Civil Service Commission guideline that prohibits unnecessary interaction between government and the tobacco industry. Despite that, the industry is able to continue to exercise some influence in government affairs through fake CSR using legitimate business organizations and foundations that lend support to local government units,” Rojas said.

Rojas was referring to the CSC’s Joint Memorandum Circular 2010-01, a code of conduct banning all government officials from receiving or supporting tobacco industry-related CSR activities.

SEATCA noted that while more than 200 national and local government units, including educational institutions and government controlled corporations, have supported the memorandum and drastically reduced unnecessary interaction with the tobacco industry, it still was able to contribute to LGUs through the American Chamber of Commerce which fronts for Philip Morris Fortune Tobacco Corporation (PMFTC) and Mighty Corporation’s Wong Chu King Foundation (WCKF).

SEATCA revealed that as ASEAN countries implement stricter bans on tobacco advertising and promotion, cigarette giants such as Philip Morris International have recently increased their CSR spending in the region.

“Philip Morris International (PMI), for example, increased its spending in three countries (i.e., Malaysia, Philippines and Thailand) in the ASEAN region from USD 1.5 million in 2009 to USD 2.5 million in 2015,” the report said.

“PMI spends the lion’s share of its CSR handouts in Indonesia and the Philippines, about USD 6 million and USD 1.8 million respectively, which are also its largest cigarette markets among ASEAN countries,” added the report.

Rojas said the tobacco industry should be banned from using their “fake” CSR activities because they run counter against the Framework Convention on Tobacco Control guidelines signed by member countries including the Philippines.

“We should encourage legitimate CSR activities and ban fake CSR of the tobacco companies. They need not give us assistance coming from the profits derived from selling products that kill people,” Rojas said.(NVAP)

Cancer support group supports Ubial as DOH secretary

http://interaksyon.com/article/129245/cancer-support-group-supports-ubial-as-doh-secretary

MANILA – The cancer support group New Vois Association of the Philippines (NVAP) has expressed full support for incoming Health Secretary Paulyn Jean Rosell-Ubial, a career official with a 26-year expertise in public health.

In a news release issued Sunday, NVAP President Emer Rojas said Ubial, who had served a total of 13 DOH secretaries since Alfredo Bengzon, was the perfect person for the position having championed public health even when she was regional health director in Mindanao.

“We are confident that with Secretary Ubial as DOH secretary, public health, especially tobacco control, will take on a new level,” said Rojas, who is also a global cancer ambassador for the American Cancer Society.

“Her job as health secretary is a tall order but with her huge experience in public health and dedication to her job we are confident that she can carry on the mandate as DOH chief,” he said.

Rojas said NVAP and other health advocates are familiar with Ubial’s commitment to public health since they have worked with her in pushing for tobacco control legislations like the sin tax and the graphic health warning despite a very strong tobacco lobby.

“We are very hopeful that with Secretary Ubial as health chief, the fight for stronger tobacco control policy will continue. We are confident than ever that there is hope for us to achieve plain packaging for tobacco products,” Rojas, a former smoker-turned-health advocate, said.

Ubial, who was a DOH assistant secretary prior to her appointment by president-elect Rodrigo Duterte, is known for advocating public health and upholding accountability among health employees.

In a recent television interview, Ubial said Duterte’s marching order for her was to improve public health access to the lowest quintile of the population that involves about 20 million Filipinos.

Ubial said Duterte also wants a nationwide ban on liquor, smoking, and use of firecracker, and sin tax for sugar sweetened beverages and junk food.

She said she supports the incoming president’s three-child policy and will again secure a budget to finance the reproductive health program.

Ubial said the Duterte administration will also refile a bill to increase the salary of nurses that was recently vetoed by outgoing President Benigno Aquino III.

Rojas said NVAP will continue to work and support the DOH’s programs for public health to achieve a tobacco-free Philippines.

Sanctions may squeeze North Korea’s counterfeit cigarette trade

http://asia.nikkei.com/magazine/20160609-TAKE-TWO/Politics-Economy/Sanctions-may-squeeze-North-Korea-s-counterfeit-cigarette-trade?page=2

Stepped-up U.N. sanctions against North Korea could put a crimp on an important source of foreign currency for the secretive communist state: illicit cigarettes.

Port officials in Manila and Malta have at least twice in the past three years seized shipments of North Korean cigarettes that camouflaged millions of high-quality counterfeit Marlboros with packaging and markings like those prepared for legal sale in Iraq.

Under a U.N. resolution adopted on March 2 in response to North Korea’s latest nuclear and rocket tests, member states are required to inspect all cargo headed to and from the country to check for contraband goods. Additionally, the U.S. on June 1 barred third-country banks from using accounts in the U.S. to process transactions for North Korean counterparts.

Sulafar Safir, commercial attache at the Iraqi embassy in Seoul, speculated that the seized shipments may have carried Iraqi markings to facilitate sale in neighboring states, such as Syria and Turkey.

The Malta shipment was addressed to a Libyan business identified as Al Shama Al Modea, whose name also surfaced in a 2014 Malta case involving counterfeit Winston cigarettes. Paperwork for the Manila shipment listed two Philippine addresses, Gervic Trading and Transocean Export Sales.

The Philippines is one of Asia’s top markets for counterfeit cigarettes, accounting for an estimated 709 million of the 1 billion counterfeit cigarettes consumed across 16 regional markets in 2014, according to a study released in January by the International Tax and Investment Center and Oxford Economics. The study was underwritten by Marlboro owner Philip Morris International; Japan Tobacco owns rights to the Winston brand outside the U.S.

A tobacco investigator familiar with both seizures said the Manila shipment was to be sent on to the United Arab Emirates port of Jebel Ali for transshipment by a Syrian businessman to his homeland.

While the political affiliations of the businessman are unclear, insurgent and terrorist groups in Syria, Algeria, Afghanistan and other Middle Eastern countries have turned to cigarette smuggling to generate revenue.

In a report last year, the Center for Analysis of Terrorism in Paris counted 15 terror groups who had turned to counterfeit and smuggled cigarettes for financing, including the Kurdistan Workers’ Party, or PKK, in Turkey. Volumes crossing over the border with Syria have doubled since that country’s civil war began in 2011, the report said.

“Cigarettes smuggled into Turkey have been used to fund terrorism,” said Louise Shelley, who directs the Terrorism, Transnational Crime and Corruption Center at George Mason University.

Khaled Abou al-Abbass, known as Mokhtar Belmokhtar and a leader of al-Qaida’s affiliate in northwest Africa, is also known to have relied on cigarette trafficking for funds. Michael Ellis, assistant director at Interpol’s counterfeiting and illicit goods trafficking unit, said, “The links between al-Qaida and cigarette smuggling led to [Belmokhtar’s] nickname of ‘Mr. Marlboro.'”

GOOD AS CASH North Korea emerged as a major producer of counterfeit cigarettes after China joined the World Trade Organization in late 2001 and began cracking down on such activity within its borders, according to a 2014 report by Sheena Greitens, a political science professor at the University of Missouri. Production simply shifted over the Korean border. Between 2002 and 2005, counterfeit Marlboros from North Korea were identified 1,300 times within the U.S., according to a State Department report issued in December.

Although North Korea last year banned the sale of foreign cigarettes at home, counterfeiting of foreign brands continues, according to interviews Greitens conducted with defectors.

“Cigarettes are an especially lucrative item to counterfeit compared to other consumer goods,” she said. “They are also comparatively less risky from an enforcement standpoint than a product like narcotics.”

“How [does North Korea] get hard currency to pay for necessary imports?” asked Daniel Pinkston, a lecturer on international relations at Troy University in Seoul. “With the sanctions regime and the inefficiencies and structural problems in the economy, those problems are not going away any time soon, so pressures to resort to illicit activities remain.”

Hard data on this is naturally difficult to come by. “We don’t know the volumes,” said the investigator involved in the recent seizures. “I think they go up and down, but we believe [the production] to be ongoing and increasing. We know from primary sources that what restricts their volumes is lack of machinery and lack of spare parts. They have a backlog of counterfeit orders. It is just a matter of getting the machinery to produce them.”

The South’s Korea Trade-Investment Promotion Agency has reported that the North imported $180,000 worth of Swiss tobacco manufacturing machinery in the first half of 2014, though the North also produces its own brands for local consumption. North Korean leader Kim Jong Un is a keen smoker, often photographed with a lit cigarette in hand. Legitimate cigarettes are one of the few manufactured items the country exports, mostly to or via China. Along the border, North Korean cigarettes are sometimes used in lieu of currency in small-scale transactions.

The seizures in Manila and Malta followed tipoffs to port authorities from the U.K. Customs and Excise agency and Interpol. The seized cargoes were inspected by U.S.

Homeland Security agents. In both cases, shipping containers with cartons of legitimate North Korean cigarettes concealed packs of pirated Marlboros. The Manila shipment, seized in October 2013, included 8.79 million counterfeit Marlboros in 439,000 packs; the shipment in Malta in June 2014 held 8.16 million sticks in 413,000 packs. A source put the street value of the two shipments at $4.2 million to $8.4 million. The counterfeits were hidden behind stacks of legitimate North Korean cigarettes.

According to shipping documents, the sender for both shipments was Sun Moon Star Trading, based in Dalian, a port in northeast China close to North Korea. But there is no sign of such a company at the address listed on the forms, and people working in the building said they had never heard of Sun Moon Star. Nor are there any signs of Gervic Trading or Transocean Export at their given Manila addresses.

The tobacco investigator said his informant told him the cigarettes came to Dalian from the North Korean port of Nampo. After leaving Dalian, the Manila shipment passed through Kaohsiung, Taiwan, according to shipping records; the Malta container transited through Busan, South Korea.

Philip Morris International is cagey about how it is handling these cases. “We don’t comment on action taken or intended with respect to specific cases,” a spokesman said.
The question now is whether U.N. member states will rigorously implement the inspections which would root out more shipments of counterfeits.

“I think they will make life more difficult for these kinds of operations, and at the moment it is high-energy and high-implementation, but the places most likely to implement cargo checks consistently, over the long term, are places that are least likely to be buyers,” said Christopher Green, a researcher at Leiden University in the Netherlands. “I can imagine that a majority of places in Africa and the Middle East will lose the institutional will or interest in conducting these checks over the long term.”

Said Troy’s Pinkston: “It is certainly going to influence or affect North Korean smuggling, but it is all about enforcement and compliance. Rigorous inspections are costly and a lot of places do not have these capacities, so who is going to pay for this?”

Nikkei staff writers Daisuke Harashima in Dalian and Cliff Venzon in Manila contributed to this report.