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August 13th, 2011:

Tobacco industry responses to global tobacco control

Aug 13th, 2011
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A new study published in Tobacco Control examines how Philip Morris (PM) and British American Tobacco (BAT) interpreted the relationship between tobacco control non-governmental organizations (NGOs) and the policymaking process that ultimately resulted in the Framework Convention on Tobacco Control (FCTC).  It also examines how the companies have responded to global tobacco control policymaking.  Findings are based on analyses of 506 internal tobacco industry documents released from U.S. litigation and posted online at the Legacy Tobacco Documents Library.

Findings:

  • ·         A prominent public relations firm advised PM to seek access to treaty negotiations through pro-industry and non-tobacco control NGOs.  The firm also advised PM that influencing the development of FCTC implementation protocols was more important than derailing the treaty.
  • ·         PM and BAT used several strategies, including cultivating relationships with tobacco-friendly governments, to try to weaken the FCTC before its ratification.
  • ·         PM and BAT have used national- and regional-level strategies, including use of free-trade agreements, to undermine the FCTC since its ratification.
  • ·         PM and BAT use corporate social responsibility (CSR) programs to counter their negative image and enhance their credibility as responsible corporate citizens.

Key Messages:

  • ·         There is a fundamental and irreconcilable conflict between the tobacco industry’s interests and public health policy interests.
  • ·         FCTC Article 5.3 requires Parties protect public health policies from commercial and other vested interests of the tobacco industry.

Additional resources:

Full citation: Gonzalez M, Green LW, Glantz SA. Through tobacco industry eyes: civil society and the FCTC process from Philip Morris and British American Tobacco’s perspectives. Tobacco Control. 2011 Jun 8.

A link to the article abstract [English only] can be found at: http://tobaccocontrol.bmj.com/content/early/2011/06/08/tc.2010.041657

Tobacco Control is an internationally peer-reviewed journal covering the nature and consequences of tobacco use worldwide. The journal is for health professionals and others in tobacco control and is a publication of the British Medical Journal.

Clear the Air Says

Aug 13th, 2011
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TIME TO QUIT? ASSESSING INTERNATIONAL INVESTMENT CLAIMS AGAINST PLAIN TOBACCO PACKAGING IN AUSTRALIA*

Aug 13th, 2011
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Download PDF : SSRN-id1906560

Opportunities and risks of the proposed FCTC protocol on illicit trade

Aug 13th, 2011
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ABSTRACT
Illicit trade in tobacco products presents a threat to public
health because it undermines the use of tax and price
policies, which are among the most effective mechanisms
for reducing tobacco consumption. Parties to the WHO
Framework Convention on Tobacco Control (FCTC) are in
the final stages of negotiating a protocol aimed at
strengthening international cooperation in the fight
against illicit tobacco trade. While an effective multilateral
response to illicit tobacco trade would make a significant
contribution to global tobacco control, achieving this
through the FCTC forum is challenging. First, while illicit
tobacco trade is a health problem, the expertise,
experience and capacity needed to combat illicit trade are
not traditionally found in health agencies. The
development of links with other agencies, both domestic
and international, is critical to ensure both an effective
response and an efficient use of limited governmental and
non-governmental resources. Second, in many parts of
the world, the tobacco industry cooperates closely with
governments in the combating of illicit trade. This
cooperation poses risks for tobacco control, particularly if
relationships and norms of cooperation spill over into
other areas of FCTC implementation. An examination of
the industry’s positioning suggests that it sees an
opportunity to portray itself as ‘legitimate’ and
‘responsible’, a friend of governments, and a way to
integrate itself into FCTC processes. This paper makes
suggestions for moving forward in this challenging area
towards ensuring that the approach taken actually
reduces illicit tobacco trade, strengthens tobacco tax
policies and does not operate to undermine the FCTC.

ABSTRACTIllicit trade in tobacco products presents a threat to publichealth because it undermines the use of tax and pricepolicies, which are among the most effective mechanismsfor reducing tobacco consumption. Parties to the WHOFramework Convention on Tobacco Control (FCTC) are inthe final stages of negotiating a protocol aimed atstrengthening international cooperation in the fightagainst illicit tobacco trade. While an effective multilateralresponse to illicit tobacco trade would make a significantcontribution to global tobacco control, achieving thisthrough the FCTC forum is challenging. First, while illicittobacco trade is a health problem, the expertise,experience and capacity needed to combat illicit trade arenot traditionally found in health agencies. Thedevelopment of links with other agencies, both domesticand international, is critical to ensure both an effectiveresponse and an efficient use of limited governmental andnon-governmental resources. Second, in many parts ofthe world, the tobacco industry cooperates closely withgovernments in the combating of illicit trade. Thiscooperation poses risks for tobacco control, particularly ifrelationships and norms of cooperation spill over intoother areas of FCTC implementation. An examination ofthe industry’s positioning suggests that it sees anopportunity to portray itself as ‘legitimate’ and‘responsible’, a friend of governments, and a way tointegrate itself into FCTC processes. This paper makessuggestions for moving forward in this challenging areatowards ensuring that the approach taken actuallyreduces illicit tobacco trade, strengthens tobacco taxpolicies and does not operate to undermine the FCTC.

Download PDF : tobaccocontrol-2011-050122 full

Malawi

Aug 13th, 2011
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http://www.fairtradetobacco.org/

Tobacco boss’s struggle with arithmetic

Aug 13th, 2011
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http://media.crikey.com.au/dm/newsletter/dailymail_709ae35410de72443e4a61ad74c80408.html

Last week, David Crow, the CEO of British American Tobacco Australia, gave evidence to the House of Representatives  Standing Committee on Health and Ageing’s hearings into the Tobacco Plain Packaging Bill 2011.

Crow continued to push the argument that the tobacco industry has ushered into the front line of its opposition to plain packaging legislation: that plain packs will cause a deluge of illicit, black-market tobacco to flood the market.

Crow referred to the tobacco industry-commissioned Deloitte report, at one point saying: “It is robust research. It is based on thousands of interviews of consumers done in a very thorough way by Roy Morgan Research, who work with Deloitte. The aim was to estimate — and you will never get a real answer — the size. That size has been consistent over the past 18 months. The last report found that about 15.6% of the industry is illicit. We say one in five; one in 5½ cigarettes smoked in this country is illicit.”

You do, eh, Dave?

There are a couple of small problems with what Crow told the committee. He presumably has read the Deloitte report, which states on page 20 “This initial sample comprised of 9206 identified people. However after allowing for natural sample attrition, 949 respondents completed the survey.”

So 949 smokers in five capital cities, not “thousands”, answered questions about whether they believed they had used illegal tobacco (loose chop-chop, counterfeit or duty not paid). When it comes to counterfeit or duty not paid packs, how would they actually know?

Then there’s the small matter of Crow’s arithmetical,  or is it his rhetorical ability … 15.6% is not one in five (that’s what 20% is Dave!) or one in 5½ cigarettes.  It is one in 6.41, which is “less than one in 6″. So what’s the difference between one in five and one in six? Not much you ask? But when you’re talking about the number of cigarettes involved, this  means a difference of 741.69 tonnes of tobacco, using the Deloitte data.

Depending on what assumptions are made about the average weight of a cigarette (0.75-1grm) this translates to  between about  a mere 750m and 900m cigarettes and roll-your-own cigarette equivalents.

Crow would have been aware that in the week before he gave evidence, the Australian Institute of Health and Welfarepublished its latest estimate how much illicit tobacco is used by smokers in Australia. Surveying 26,648 people across Australia, of whom 15.1% were daily smokers (and with 17% smoking at all — 4530 smokers — now that’s thousands!), the AIHW found about 1.5% of Australian smokers regularly smoked unbranded tobacco in 2010 — see table 3.11 p39.

Predictably, Crow did not refer to this substantially lower estimate.

Time to Quit? Assessing International Investment Claims Against Plain Tobacco Packaging in Australia

Aug 13th, 2011
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Tania S. Voon

Melbourne Law School

Andrew D. Mitchell

Melbourne Law School; Georgetown University Law Center

August 11, 2011
Abstract:
The Australian federal government recently introduced into Parliament legislation mandating the plain packaging of all tobacco products. Tobacco companies and others have raised various legal concerns with this tobacco control scheme, both at a domestic level in relation to constitutional and intellectual property law, and at an international level in relation to international economic law. Some Members of the World Trade Organization (‘WTO’) have asked questions about the scheme in the WTO Committee on Technical Barriers to Trade and the Council for Trade-Related Intellectual Property Rights. In addition, Philip Morris (Asia) Limited has given notice of an investor-State dispute settlement claim against Australia regarding plain packaging pursuant to the Hong Kong – Australia Bilateral Investment Treaty. This article considers the merits of that claim as well as certain related procedural issues. It also compares Australia’s investment obligations with respect to plain packaging under the Australia – United States Free Trade Agreement, as some allegations have been made that plain packaging is inconsistent with those obligations.

IV CONCLUSION

Several impediments exist to PMA’s claim, including the possibility that it has been brought prematurely, the remaining chance (against that background) for Australia and Hong Kong to modify or re-interpret the terms of the Hong Kong – Australia BIT, and the potential difficulties of enforcing an adverse arbitral award against Australia due to concerns of public policy and sovereign immunity. More importantly, most of PMA’s substantive claims under the Hong Kong – Australia BIT appear weak, in particular as regards fair and equitable treatment, full protection and security, unreasonable impairment, and the umbrella clause. PMA may have stronger arguments in relation to Australia’s obligation not to engage in expropriation, but a number of relevant factors still weigh in favour of Australia’s plain packaging measure as a legitimate noncompensable health regulation rather than a compensable expropriation. The outcome of that claim is likely to depend on the final form of the legislation that is enacted and implemented, as well as the evidence brought to bear by both sides and the arbitrators selected to make the decision. In the meantime, the AUSFTA provides a contrasting case study demonstrating the kind of clarifications that Australia, Hong Kong and other countries may wish to consider adding to their more traditional investment protection agreements if they wish to ensure control over their sovereign regulatory frameworks for purposes such as health and the environment. The AUSFTA also offers an example of excluding ISDS, which Australia is contemplating on a broader scale and which may be desirable for a number of countries.

Number of Pages in PDF File: 35

Keywords: Investment, international law, tobacco, cigarettes, bilateral investment treaty, international dispute settlement

JEL Classifications: K33, F21, L66

Working Paper Series

Date posted: August 11, 2011

Suggested Citation

Voon, Tania S. and Mitchell, Andrew D., Time to Quit? Assessing International Investment Claims Against Plain Tobacco Packaging in Australia (August 11, 2011). Available at SSRN: http://ssrn.com/abstract=1906560
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Contact Information

Tania Voon (Contact Author)

Melbourne Law School ( email )

University of Melbourne
Victoria 3010 Australia
Andrew D. Mitchell

Melbourne Law School ( email )

The University of Melbourne
Victoria 3010
Australia
+61383441098 (Phone)
+61393472392 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au/staff/Andrew%20Mitchell
Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

What’s that going up in smoke?

Aug 13th, 2011
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http://www.chinadaily.com.cn/cndy/2011-08/11/content_13089542.htm

What's that going up in smoke?

Facing greater restrictions in the United States and other industrialized countries, transnational tobacco companies have intensified the marketing of their products in developing countries, particularly among women and adolescents.

For the past several years, multinationals such as Philip Morris, RJ Reynolds and British-American Tobacco have been expanding rapidly in Eastern Europe, Asia, Africa and Latin America.

While the percentage of smokers in some industrialized countries is falling by about 1 percent a year, in developing countries it is increasing by about 3 percent a year. It is estimated that if this trend continues for the next 30 years, smoking-related diseases will kill up to 7 million people a year in developing countries.

Tobacco-related deaths can only add to the inequities in health care of ethnic and poor populations. According to data from the Bureau of Census, US Department of Commerce, the number of Latino smoking youth in the United States will increase three times by 2020.

Since the early 1980s, US trade officials, with the help of the Office of the US Trade Representative, have led a sustained campaign to open markets in Asian countries and regions such as Japan, South Korea and Thailand. Their move has prompted the Asia Pacific Association for the Control of Tobacco to protest strongly against the “invasion of their countries” by US companies, which especially target Asian women and children. The association has complained against the strong-arm tactics used by US government officials, too.

In fact, a US General Accounting Office report has established that “US policy and programs for assisting the export of tobacco and tobacco products work at cross purposes to US health policy initiatives, both domestically and internationally”.

Several studies have shown that in the poorest households in developing countries, 10 percent or more of the total household expenditure is on tobacco. As a result, there is less money to spend on necessities such as food, education and health care. This increases malnutrition, illiteracy and the chances of premature death.

In China, tobacco companies have been moving steadily inland with intense promotional campaigns. It is estimated that more than 350 million of the world’s 1.71 billion smokers are in China, where lung cancer cases have been increasing by 4.75 percent a year.

The Chinese government is facing a dilemma in promoting anti-tobacco policies, because the earnings of State-run monopoly tobacco companies form a good part of its revenue. Research scholars with the School of Public Health at the University of California, however, say that increasing tobacco tax by 15 US cents (about 1 yuan) per cigarette pack could save more than 13 million lives and generate $9.5 billion in revenue for the Chinese government.

Lured by financial gains from growing tobacco, millions of hectares in China are under tobacco cultivation. Gains from the sale of tobacco may be short term, because the costs of treating lung cancer and other tobacco-related diseases far exceed the profits. According to experts, the extra cost worldwide could be up to $200 billion a year, one-third of which is incurred by developing countries.

While anti-smoking efforts gather momentum in the US, they are far less effective in developing countries. Such countries’ policies will not be as effective as they should be unless transnational tobacco companies are made to curtail their aggressive advertisements.

Many countries in Asia and Latin America are conducting health-education campaigns and have passed legislation to control smoking. Up to now, several countries across the world have enacted legislation to curb tobacco consumption. Although generally such legislation has been passed at the national level, in the US, Canada and several countries in Latin America and the Caribbean, provinces or local bodies are enacting these laws.

Despite increasing condemnation by public health officials and the World Health Organization, tobacco companies, especially multinationals, continue their indiscriminate and aggressive promotions in developing countries at the cost of human lives. As things stand now, only a multidisciplinary strategy that includes education, taxation, legislation and regulation of trade practices of transnational corporations can control this pandemic.

The author is an international public health consultant.