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May 4th, 2015:

Civil society action in India to prevent tobacco industry interference

The International Tax and Investment Center (ITIC) is organizing the 12th Asia Pacific Regional Forum in New Delhi, India from 5-7 May.

ITIC has a number of tobacco companies as part of its board of directors and has produced many publications on several areas related to taxes and prices, investment and illicit trade in tobacco products.

The event website originally listed the Indian Minister of Finance (State) as the confirmed Chief Guest of its Opening ceremony, along with officials from his ministry, former Indian Minister of Finance and state government officials.

The Institute of Public Health (IPH), a Bengaluru based organization, wrote to the Union Minister of Finance requesting him to withdraw participation of his State Minister and ministry officials from the event and we followed up the issue in the media.

Subsequently, the State Minister’s name was removed from the event website and programme agenda.

Further, IPH wrote to the President of the World Bank requesting the Bank to withdraw its sponsorship of the event. The World Bank has today announced withdrawal of its participation and funding of the event.

The World Bank is an intergovernmental organization that is accredited as observer to the Conference of the Parties (COP) of the WHO FCTC and the FCTC Secretariat has concluded a cooperation framework with the Bank on several areas of work related to implementation of the Convention by the Parties. See para 18 of this document:

The timely action by members of the Framework Convention Alliance in different countries in the Asia-Pacific in response to an alert from HealthBridge Foundation has prompted several speakers and delegates to reportedly pull out of the event.

Still, the website of the ITIC-event says “Government and Parliamentary Delegations from the following countries have confirmed their participation: Australia, Bangladesh, Cambodia, Chinese Taipei, India, Indonesia, Korea, Laos, Malaysia, Myanmar, Pakistan, Philippines, Solomon Islands, Tajikistan, and Thailand.” Most of these countries are Parties to the WHO FCTC and are obligated to protect their tobacco control policies from the influence of tobacco industry.

The civil society will continue to work with Governments to put in place long term deterrent policies to avert such conflict of interests in the future.
Additional information

Earlier, before the sixth session of the Conference of the Parties, it has been brought to the attention of the Convention Secretariat that ITIC, in cooperation with the Eurasian Economic Commission, is organizing a briefing on tobacco excise taxation in Moscow on 12 October 2014, one day before the opening of the COP, and inviting tax officials from Parties and WHO Member States that are observers to the COP to participate. The Convention Secretariat responded rapidly, by bringing to the attention of the Parties that ITIC has a number of tobacco companies as part of its board of directors; the Secretariat also advised Parties and accredited observers to the Convention not to participate at the event in the light of their obligations under Article 5.3 of the WHO FCTC and its guidelines.

CTA Letter – Advisory Committee on Business Appointments – Mr Dave Hartnett

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World Bank pension fund found investing in coal and tobacco firms against bank’s principles

The World Bank is reportedly investing a large amount of money in industries such as coal and tobacco, despite its calls for ethical and low-carbon investing.

Reuters, citing an internal post to staff, reported that the World Bank is investing a part of its $18.8bn (£12.4bn, €16.8bn) staff pension fund in equity index funds that are inclusive of companies with environmental and health problems.

The pension fund has been found investing in, among others, the Russell 3000 index, which includes coal producers Peabody Coal and Arch Coal, and tobacco giant Philip Morris.

The news agency also revealed that World Bank employees have questioned the investment, and asked why the bank does not use socially responsible alternatives.

The investment is in contrast to the bank’s proclaimed stance to be away from investments supporting tobacco and coal-based energy industries. The international lender refuses to invest in tobacco production and has banned financial support for the construction of coal-fired electricity except for the poorest countries.

In a recently-released report by the Asset Owners Disclosure Project, the bank’s pension fund was ranked poorly in transparency and managing climate risks. The fund’s ranking was lower than that of pension funds of companies including British Coal and the state oil fund of Azerbaijan.

The World Bank has a responsibility to manage the money “in the best interest of plan beneficiaries”, the bank said in a statement to Reuters.

The bank, which has about 15,000 current employees and around 10,000 retired beneficiaries, operates its pension fund under a separate governance structure. The pension fund assets are held in a separate legal trust administered by its Pension Finance Committee (PFC), chaired by the chief financial officer.

Black market tobacco now 14.5 per cent of all consumption, Illicit Tobacco in Australia report shows

THE BILLION dollar illicit tobacco black market has hit a record high as Australian smokers baulk at the price of legal cigarettes.

Criminals are exploiting the high price of legal smokes to make massive profits by smuggling in cheap tobacco from overseas.

Last year 14.5 per cent of all tobacco consumed was illegal, according to a new report.

The Illicit Tobacco in Australia 2014 report states nearly 2.6 million kilograms of illegal tobacco was consumed last year alone with the tobacco black market rocketing by 30 per cent since 2013.

The report by KPMG, commissioned by the world’s biggest tobacco companies, concludes the black market costs the Federal Government $1.35 billion in lost taxes.

The black market boomed during a period when the government increased tobacco excise by 25 per cent.

Legal cigarettes in Australia are among the most expensive in the Asia Pacific region, costing about seven times more than in countries such as China or South Korea.

John Gledhill, managing director of tobacco giant Philip Morris Limited, said: “The government’s excessive tobacco regulations are providing incentives for the black market.

“As cigarette smuggling continues to grow in Australia the government must enforce the law and prosecute people caught selling illicit tobacco.”

The Australian Customs and Border Protection Service said tobacco smuggling is one of its “key strategic priorities”.

“The Service uses a combination of well-trained and highly skilled staff, intelligence analysis and state of the art technology to detect the movement of prohibited imports, including undeclared tobacco, into Australia,” spokeswoman Sophia Dickinson said.

Since last July Customs has detected illicit tobacco 61 times in sea cargo, which consisted of 91.5 tonnes of loose tobacco and $21.4 million worth of cigarettes.

“There have been two successful prosecutions for tobacco smuggling related offences (since last July),” Ms Dickinson said.

“These cases resulted in the handing down of three custodial sentences.”

The biggest factor in the growth of the illicit tobacco black market is the increase in the consumption of ‘chop chop’ — unbranded loose leaf tobacco.

‘Chop chop’ is sold as loose leaf tobacco in 250 gram to half kilogram amounts or in boxes of 100 pre-rolled tubes with no labelling or health warning.

A packet of illegal cigarettes is about $10 cheaper than a legal product, according to the KPMG report.

Retailers can be fined up to $340,000 for selling tobacco products that breach plain packaging laws but as yet the Department of Health has not prosecuted anyone.

Government to Set Up Labs to Test Tobacco Contents, Emissions

NEW DELHI: Government will set up an apex tobacco research lab and four other regional labs to test the the contents and emissions of various tobacco products like cigarettes and bidis and set a limit to the toxic chemicals in them.

“The aim is to evaluate both smoking and smokeless tobacco products. These labs would be testing the identified chemicals of priority like nicotine, ammonia and carbon monoxide for which the WHO’s TobLabNet has already established Standard Operating Precedures (SOPs)

“These labs will be the first of its kind in South Asia and initially may be regulatory laboratories to verify the declarations of the tobacco industry about the contents and emissions of their products,” said a senior Union Health Ministry official.

The work will be carried out in two phases. In phase-I, an apex research lab will be set up in Food Research & Standardisation Laboratory (FRSL), Ghaziabad and two regional labs in Regional Drugs Testing Laboratory in Guwahati and Central Drugs Testing Laboratory in Mumbai.

In phase-II, two more regional labs will come up in Central Drug Testing Laboratory, Hyderabad and Regional Drug Testing Laboratory in Chandigarh.

The Ministry is in the process of procuring the equipment like environmental chamber, weight, circumference, pressure drop and ventillation measurement apparatus, fully automatic smoking machine with stand alone carbon monoxide (CO)analyser etc centrally.

Team from The Directorate General of Health Services (DGHS) along with the Central Design Bureau (CDB) architect had visited the identified labs and suggestive lay outs have been prepared.

The tobacco testing laboratories will not be built de-novo but they will be housed in the existing Food and Drug testing laboratories.

At present there is Central Tobacco Research Institute in Andhra Pradesh (under the agriculture ministry), which tests tobacco content for the industry.

The Cigarettes and other Tobacco Products (Packaging and Labelling) Act makes it mandatory for all tobacco manufacturers to mention the amount of nicotine and other chemicals in their products.

Once the testing labs will be step up, we will ask the industry to follow the norm.

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Pangasinan town mayor, vice mayor, 17 others face raps for misuse of excise tax fund

ALCALA, Pangasinan – Nineteen officials of the town of Alcala, Pangasinan were accused of allegedly misusing in 2011 the town’s share from the accumulated excise tax from 1997 to 2007 in a case filed last week before the Ombudsman for Luzon.

The complaint accused the 19 officials, led by then Mayor Manuel Collado and then Vice Mayor Paolo Mencias, now the town mayor, eight councilors, and heads of various departments of the municipal government of alleged technical malversation and violation of the Anti-graft and Corrupt Practices Act.

Save the Pangasinan Movement Inc., represented by its president Manuel Tolentino and its secretary general Fleurdeliz Cabalteja filed the case.

At least P2.7 million from the Tobacco Excise Tax were misused for the six infrastructure projects bid out and built by the municipal government, the complainants said.

In their complaint affidavit, Tolentino and Cabalteja charged the municipal officials for technical malversation under Article 220 of the Revised Penal Code and violation of RA 3019 or the Anti-Graft and Corrupt Practices Act and violation of RA 6713 otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees.

The two said RA 8240 provides among others that 15 percent of the incremental revenue from excise tax on tobacco products shall be allocated and divided among the province’s producing burley and native tobacco in accordance with the volume of tobacco leaf production.

This act specifies that the fund shall be exclusively used for programs like cooperative projects that will enhance better quality of agricultural products, livelihood projects, and agro-industrial projects that will enable the tobacco farmers to be involved in the management and subsequent ownership of projects such as post-harvest and secondary processing like cigarette manufacturing and by-product allocation.

The complaint said that in 2009, then President Gloria Macapagal Arroyo released the 15-percent share of beneficiary local government units consisting of provinces, cities and municipalities producing burley and native tobacco covering the period 1997 to 2007 amounting to P6.3 billion.

Of the amount, P600 million was shared by the Fifth District of Pangasinan with then Rep. Mark Cojuangco as congressman, while Alcala, which was the district’s biggest producer of burley and native tobacco, has a share of P332 million.

Basis of the distribution of the 15-percent LGU share was 80 percent to the municipalities and cities in the congressional district; 10 percent to the provincial government of the beneficiary province; and 10 percent to the municipalities and cities.

The complaint stated that sometime in 2011, six infrastructure projects–all farm to market roads–were bid out by the municipality of Alcala using the share of the town from the excise tax and the winning bidder for all of these was Mecer Construction owned by the family of then Vice Mayor Paolo Mencias, now the town mayor.

“The law on tobacco excise tax, RA 8240 and JMC (Joint Memorial Circular) 2009-1 is very explicit in its mandate that the funds ensuing from the collecfion of the tobacco excise tax shall be applied in the pursuit of projects specified, ” the complaint stated.

The two complainants said the provisions of RA 8240, Section 8 or in JMC 2009 do not allow the use of Tobacco Excise Tax fund for infrastructure projects, unlike in RA 7171 which seeks to promote the development of farmers in the Virginia tobacco-producing provinces where the law expressly states that the fund thereof may be applied for the construction of farm to market roads.

The two told newsmen the municipal government also built palay and corn dryer in Barangay Bersamin, Alcala using another P2 million from the excise tax of the municipality which today remains a virtual white elephant.

They said part of the excise fund of the municipality were used to buy molasses and corn grits for a dairy farm in Laoac, Pangasinan, supposed to be a district project of then Congressman Maek Cojuangco.

The two said that the share of the fifth district in the amount of P600 million was released at one time thorough then Congressman Cojuangco and was supposed to have been distributed to other towns and city with Alcala getting its share of P232 million

Anti-smoking activists fear Philip Morris threat is delaying new law

BANGKOK: Anti-smoking activists today (May 4) questioned whether new legislation aimed at curbing smoking has been held up by fierce lobbying from the tobacco industry.

The new law will see the minimum age for tobacco buyers go from 18 to 20.

The proposed legislation would increase the minimum age at which people can buy tobacco from 18 to 20. The aim is to reduce the number of new smokers.

But the Action on Smoking and Health Foundation Thailand (ASH Thailand) has claimed that American tobacco giant Philip Morris International is trying to stall the new law.

ASH Thailand Secretary General Professor Dr Prakit Watheesathokkij, alleged that Philip Morris had submitted a letter to the Ministry of Public Health discouraging the new legislation.

In the letter, Dr Prakit said, the company argued that Thailand need only educate citizens more about the harmful effects of smoking and use existing laws to deter new smokers.

The ASH complaint follows lobbying by a youth network against smoking, which in April urged the government to speed up its deliberation of the bill and forward it to the National Legislative Assembly.

The group’s leader, Supapan Pho-ong, said the group was concerned the bill would run into obstacles after reports it had met with heavy resistance from the tobacco industry.

“We’ve been following the bill’s progress and are wondering why it is being delayed. People have started asking whether foreign corporations have stepped in to block it,” Ms Supapan said.

She said the new law was urgently needed to prevent new smokers as the existing tobacco control law, which has been in force for over two decades, was being undermined by tobacco companies’ marketing strategies.

Philip Morris has frequently brought suits against governments proposing tighter laws, with warnings that it will go for compensation valued in billions of dollars.

It and other tobacco firms sued the Australian government for bringing in plain packaging, with no company colours or logos, but lost. This has not stopped them threatening to sue the British government if it follows the Australian lead.

Philip Morris also sued Norway after that country introduced a ban on cigarette displays in shops. It lost that case, too.

Philip Morris International earns as much as B3 billion a year from sales of tobacco products in Thailand.

Government officials should not endorse any event funded by tobacco industry

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Elderly man escapes jail for assaulting tobacco control officers

A 61-year-old man was sentenced today to two terms of imprisonments of six weeks suspended for 18 months, to be executed concurrently, at Tuen Mun Magistrates’ Courts for assaulting two tobacco control inspectors.

He was also fined HK$1,500 for the smoking offence.

The incident took place at Po Tin Market in Tuen Mun on November 11, 2014. The man assaulted two officers when a team of inspectors was inspecting the premises. He was arrested and charged by the Police

Cigars as bad as cigarettes study proves

Brandy and a cigar might be considered a luxury but there are significant risks associated with cigars

They used to be the hallmark of a powerful man – and they still tend to be overlooked in smoking risk warnings.

But new studies show cigars are associated with many of the same fatal conditions as cigarette smoking.

Researchers from the US Food and Drug Administration (FDA) analysed studies in the USA, the UK, Canada, Denmark, Sweden and Finland.

The results reinforce the fact that cigar smoking carries many of the same health risks as cigarette smoking.

Cigar smoking is linked to fatal mouth,oesophageal, pancreatic, laryngeal, and lung cancers, as well as heart disease and aortic aneurysm.

The authors also report that those who exclusively smoked cigars and had never smoked other tobacco products also had an increased risk of all-cause mortality.

The risk of death from oral, oesophageal and lung cancers was found to increase with inhalation of cigar smoke. Even in those who reported not inhaling cigar smoke, there was a risk. Those who smoked cigars and had previously smoked cigarettes had a much higher risk of lung cancer and chronic obstructive pulmonary disease compared to cigar smokers who had not previously smoked cigarettes. The researchers believe this could be due in part to the inhalation patterns of these different types of cigar smokers.