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December 20th, 2015:

British American Tobacco paid union to disrupt production at one of its chief rivals, whistleblower claims

Whistleblower says tobacco giant funded union organisers and sought confidential tax details

British American Tobacco (BAT) recruited and paid for a union to disrupt production at one of its chief rivals, according to a whistleblower. The union plan was part of a strategy to drive Mastermind Tobacco, an African rival, out of business.

The clandestine plot is revealed in internal BAT documents disclosed by whistleblower Paul Hopkins, who worked for the tobacco giant in Africa for 13 years. The strategy also involved bribing Kenyan tax officials to disclose its rival’s confidential tax dealings, paying company officials to disclose vital corporate secrets, and offering cash to port officials to “lose” or impound its rival’s export shipments and supplies of raw materials.

The damaging revelations will further embarrass Britain’s fifth biggest company, which generated profits of more than £4bn last year. In Kenya there are growing demands for an official investigation into Mr Hopkins’ revelations.

The union plot, codenamed Operation Snake, was an attempt to disrupt Mastermind’s factory production, the documents state. The confidential BAT report said Mastermind had operated without a registered union and claimed any attempt to register one had been “met with ruthless resistance from senior management”.

The result was “iron-fist management” and employees with “no formal channel of airing their grievances”, the report said. “Victimisation of employees is the order of the day,” it claimed. Previous attempts to unionise “lacked co-ordinated effort”, it stated.

Under the scheme, BAT recruited “vocal employees from various departments such as marketing, leaf [tobacco], transport and factory” to be union reps. They were approached with “a handsome offer”, the report said.

BAT budgeted 4.5 million Kenyan shillings (£30,000) for five union reps, it added. As the union reps might face violent opposition, the money “will be able to cater for risk including terminal benefits just in case”, it said.

The person recruited to organise the union was told the money was coming from an anti-tobacco campaign group. BAT also paid to officially register Mastermind workers with the Kenyan Commercial Food and Allied Workers Union. The company funded the union’s legal fees when it became involved in dispute with the management. After two years, BAT withdrew as the union funded itself from membership fees. Once legally recognised, the union was encouraged to start a series of disputes to disrupt Mastermind’s production.

According to Mr Hopkins, BAT came up with the union scheme after another campaign ran into difficulties. BAT had suspected Mastermind was not paying its taxes. Mr Hopkins, a former Irish special forces soldier, was told by BAT to “facilitate” bribes to Kenyan Revenue Authority (KRA) officials to obtain its rivals’ confidential tax details.

For more than five years, Mr Hopkins accumulated a detailed dossier of KRA tax demands and other legal documents which allegedly revealed that Mastermind regularly failed to pay its tax bill. The KRA documents and correspondence showed the Kenyan tax authority was demanding billions in unpaid taxes from Mastermind but collecting only a fraction of it. Mr Hopkins said senior BAT officials instructed him to leak some of the documents to Kenyan newspapers and parliamentarians to embarrass the company as well as force the KRA to be more aggressive in its tax collecting.

According to documents seen by The Independent on Sunday, the strategy was only partially successful and Mastermind paid millions more in taxes. However, when the 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.

Mr Hopkins also facilitated payments on BAT’s account to officials and politicians to cripple anti-smoking laws in several East African countries as well as making payments to undermine the World Health Organisation’s efforts to reduce deaths from smoking.

He also revealed how BAT made a secret campaign donation to a Presidential candidate, Martha Karua, in a bid to block a rival firm winning a multi-million pound contract to minimise cigarette smuggling.

Ms Karua has said she was unaware BAT had made a donation to her campaign. She believed Mr Hopkins had made a personal donation. She said she would have not accepted the donation if she had known it had come from BAT. “If any person within my campaign team, or beyond, purported to accept the donation in exchange for influence of government procurement was acting beyond the scope of their authority, without my knowledge and in their individual capacity, not for me or my campaign. I believe I lost the Presidential campaign in large part because of my unwavering commitment to rule of law and my position against corruption and impunity,” she said.

A BAT spokesman said: “All BAT companies are required to operate in line with the group’s standards of business conduct and are obliged to ensure that all 57,000 employees understand them and abide by them.”

For more on tobacco industry tactics and its efforts to influence public health policy and stall tobacco control laws read the work of the University of Bath’s Tobacco Research Control Group.

The simple trick Australia is using to reduce smoking rates

Australian cigarette packages have graphic health warnings. Cameron Spencer/Getty Images

Australian cigarette packages have graphic health warnings. Cameron Spencer/Getty Images

Cigarette packs in Australia look different from anywhere else in the world. There are no brand logos, no bright colors. Every pack is the same shade of dull brown, plastered with graphic images showing the health impacts of smoking. There’s the gangrenous foot, mouth cancer, and everyone’s favorite, the creepy sickly eye.

Tobacco companies don’t do this by choice. In 2011, Australia became the first country in the world to pass plain packaging laws that severely restrict what can appear on cigarette packs.

Naturally, Big Tobacco hates these laws and has done everything it can think of to get rid of them. On Friday, Australia defeated a challenge by cigarette giant Philip Morris after a four-year international trade dispute in Singapore.

Big Tobacco is clearly running scared — and it should be. The latest ruling is likely to open the door for plain packaging laws around the world. Already, 11 other countries — including England, New Zealand, France, Brazil, India, and South Africa — have plans to implement their own plain packaging rules.

Other countries, including the United States, should follow Australia’s lead. Plain packaging laws are a simple, cost-effective way to cut smoking rates. That’s why tobacco companies hate them.

Big Tobacco has been fighting plain packaging on many fronts

Philip Morris exploited an obscure clause in Australia’s free trade agreement with Hong Kong known as investor-state dispute settlement. President Obama’s controversial Trans-Pacific Partnership trade agreement includes an ISDS provision, and it has caused a lot of controversy. Critics worried that big companies — like Philip Morris — could use the ISDS process to overturn countries’ democratically enacted laws.

Australia may have won this round, but its government now faces an estimated $50 million legal bill. And Philip Morris is not the only company to push back against plain packaging laws. In 2012, British American Tobacco (BAT) challenged the laws in Australia’s high court, alleging they infringed the company’s intellectual property. The court ruled in favor of the government.

Eyebrows were raised at the World Trade Organization when Ukraine — a country that doesn’t actually export tobacco to Australia — challenged plain packaging as anti-trade. Later, it was discovered BAT had footed the country’s legal bill.

It’s not clear whether similar challenges from Cuba, the Dominican Republic, and Honduras are also funded by Big Tobacco.

While in public the tobacco giants insist plain packaging laws won’t work, behind closed doors they have spent millions of dollars trying to discredit the laws.

In 2010, a newly formed group called the Alliance of Australian Retailers launched a media blitz criticizing plain packaging. It was a case of “astroturfing” — an attempt to give the impression of a widespread grassroots backlash against the laws that just didn’t exist

Australian investigative journalists unearthed that Philip Morris, BAT, and Imperial funneled more than A$5 million into forming the Alliance of Australian Retailers. The group’s argument against plain packaging was distilled into a simple message: “It won’t work, so why do it.”

Of course, the obvious response is: If it won’t work, why are you spending millions of dollars to fight it? The alliance wasn’t effective. In fact, one study found for some people the ads increased their support for plain packaging.

Early evidence suggests plain packaging is working

The goal of the plain packaging laws is to make cigarettes less attractive and reduce the glamour of smoking. In lab studies, researchers have found they achieve this. More than 20 studies, undertaken over two decades in five countries, strongly suggest that plain packaging increases the impact of health warnings and reduces the appeal of cigarettes.

The laws aren’t a silver bullet to make people stop smoking. Instead, they work alongside higher taxes, public health campaigns, and education to reduce smoking rates over time.

As Australia is the only country to have implemented the laws, real-world evidence on plain packaging is limited. However, there is a growing body of research gathered since the laws were enacted three years ago. While we don’t yet have long-term evidence pointing to changes in smoking rates, short-term shifts seem positive.

A large study in the Australian state of Victoria found that in just 12 months plain packaging both reduced the appeal of smoking and increased desire to quit for adult smokers. Another study found calls to Quitline, an Australian government service to help people quit smoking, rose by 78 percent after the plain packaging laws came into effect. Smoking in outdoor areas, where the graphic packaging is visible to more people, also declined.

British American Tobacco hit back with its own study by Deloitte, which argued health warnings haven’t been effective in reducing consumption of cigarettes. But this study wasn’t independent — it was commissioned and funded by BAT. The study itself admits the researchers were highly selective about what brands they included.

Tobacco taxes alone are not enough

If cigarettes were like any other product, high taxes would be enough to make people stop buying them. But cigarettes are highly addictive, so rising prices don’t have too much impact on a smoker’s decision to buy cigarettes.

It’s estimated that in rich countries, a 10 percent increase in the price of cigarettes will only bring about a 4 percent drop in demand. In poor to middle-income countries, the figures vary quite a bit because of a host of cultural and economic factors. For some though this sizable price bump would reduce demand by just 2 percent.

Of course, smokers could just take their cigarettes out of the packs. They could smoke rollies and put their tobacco in a tin. However, the evidence suggests very few people do. So the plain packs are always there, a graphic reminder of the harms of smoking. It’s a behavioral nudge that smokers carry around with them.

Globally, tobacco kills around 6 million people every year. Smoking costs the US more than $300 billion a year through both direct medical bills and lost productivity. Taxes, education, and public health campaigns are all important in reducing harm. However, Australia has shown that plain packaging needs to be in the mix too. It’s a simple and effective tool in the fight against a deadly habit

Boston Raises Minimum Age to Buy Tobacco to 21 Years Old

Starting February 15th next year you must be at least 21 years old to purchase tobacco in Boston.

The new regulations are due to Boston’s Board of Health voting to approve amendments that raise the minimum age for purchasing tobacco, including e-cigarettes, from 18 to 21. You must also be at least 21 to enter adult-only retail tobacco stores and smoking bars.

“I am proud to stand with our Board of Health in support of updating Boston’s tobacco regulations. It is our responsibility to do what we can to guide our young people and create a healthier future for all Bostonians,” said Mayor Marty Walsh, who announced the initiative to raise the age in November. “We know the consequences of tobacco use are real and can be devastating. These changes send a strong message that Boston takes the issue of preventing tobacco addiction seriously, and I hope that message is heard throughout Boston and across the entire country.”

With the changes to the city’s tobacco regulations, Boston joins more than 85 other municipalities in Massachusetts, as well as New York City and Hawaii, in requiring the minimum age to be 21.

Boston has actually done a very good job in stopping high school students from using tobacco, with statistics showing the rate of cigarette use declined from 15.3 percent in 2005 to 7.9 percent in 2013, and is well below the national average of 15.7 percent.

Heavy crackdown needed on smoking in public places

Though Qatar has a law banning smoking in public places, it is unfortunate that the implementation part is lacking, Dr Ahmed Mohamed al-Mulla, director of Anti-Smoking Clinic, Hamad Medical Corporation, had pointed out to Gulf Times earlier this year. We are approaching the end of the year and sadly nothing has changed in this regard.

“The Supreme Council of Health has deputed several officers to check the practice. But at the ground level, not much action is taking place. There must be a greater enforcement of the law,” the senior Qatari official had urged. It seems the powers that be are yet to listen to his fervent plea.

On the contrary, smoking in public places has gone up of late. Smokers are puffing away, as if with a vengeance, polluting the air and endangering the lives of non-smokers, who are helpless victims of a crime against good health and wellness.

It is very difficult for non-smokers to visit many public places in Qatar these days. Even a family-friendly recreation location such as the picturesque Museum of Islamic Art Park in Doha reeks of tobacco smoke. Entrances of all popular malls in the country are clouded with tobacco smoke as smokers crowd around and smoke.

Though the managements of malls generally succeed in enforcing the ban on smoking inside their premises, it is unfortunate that some individuals continue to violate the law with impunity, smoking in some coffee shops, sitting right under the ‘No Smoking’ signs. This is nothing but arrogance coupled with ignorance. The staff members at such outlets plead helplessness as the persons who break the law against smoking in public places happen to be “very influential.”

According to facts from the World Health Organisation, tobacco kills up to half of its users. Around 6mn people die each year because of tobacco use. More than 5mn of those deaths are the result of direct tobacco use while more than 600,000 are the result of non-smokers being exposed to second-hand smoke, which fills restaurants, offices or other enclosed spaces when people burn tobacco products such as cigarettes, bidis and water-pipes. There are more than 4,000 chemicals in tobacco smoke, of which at least 250 are known to be harmful and more than 50 are known to cause cancer.

There is no safe level of exposure to second-hand tobacco smoke. In adults, second-hand smoke causes serious cardiovascular and respiratory diseases, including coronary heart disease and lung cancer. In infants, it causes sudden death. In pregnant women, it causes low birth weight.

Almost half of children regularly breathe air polluted by tobacco smoke in public places. In 2004, children accounted for 28% of the deaths attributable to second-hand smoke.

A decision by Katara, the Cultural Village Foundation, earlier this year banning shisha smoking at restaurants at its premises, ought to be emulated elsewhere in Qatar. In an interview with Gulf Times, Dr al-Mulla had called for shifting shisha outlets out of the Doha city limits.

Also needed is a heavy crackdown on all other forms of smoking in public places. Every person should be able to breathe tobacco-smoke-free air. When will Qatar residents be able to breathe clean air? The ball is in the court of the authorities concerned.