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May 6th, 2010:

Former minister’s ties to tobacco industry hurting Ottawa’s anti-smoking work

42-17177519Last updated: May 6, 2010

Source: The Globe and Mail Canada

Led by Barbara McDougall, until recently a director of Imperial Tobacco, federal agency is increasingly being ostracized by health groups worldwide
A Canadian government development agency is increasingly being ostracized by health and tobacco-control organizations around the world who feel it has been tainted by the tobacco-industry links of its chair, former Conservative cabinet minister Barbara McDougall.

The International Development Research Centre manages international projects to discourage smoking in the developing world, but many of the groups it deals with on those initiatives are cutting ties and refusing IDRC money because Ms. McDougall was until recently a member of Imperial Tobacco’s board of directors.

Ms. McDougall’s term on Imperial Tobacco’s board ended on March 31 – but the movement to cut ties with the IDRC’s tobacco programs goes on.

It started a month ago, when the Bill and Melinda Gates Foundation pulled a $5.2-million grant for the IDRC’s tobacco-control programs in Africa.

Now, an Australian tobacco-control conference to be held in Sydney this fall has turned down the IDRC’s money, announcing it has refused a sponsor with a “tobacco link.” The Lancet, one of the world’s most respected medical journals, has revoked a request for the agency to help fund a special issue on chronic diseases. And the World Health Organization asked two IDRC representatives to withdraw from a tobacco-control conference in Ghana two weeks ago.

The movement threatens the Canadian agency’s ability to continue tobacco-control work in the developing world, not because the agency will pull out but because groups around the world increasingly won’t touch it, or its money.

On Thursday, Open Medicine, a Canadian medical journal, published an editorial calling on Ms. McDougall to resign from the agency’s board.

It’s an unusual position for the IDRC, long a respected arms-length government agency. Tobacco control is a small part, less than 1 per cent, of its research work.

“IDRC fervently hopes that anti-tobacco groups will be able to work together with IDRC on the vital issue of tobacco control in the future, as we have done in the past,” Angela Prokopiak, the agency’s communications director, said in an e-mail.

Ms. McDougall, who served in several cabinet posts under prime minister Brian Mulroney, including foreign affairs minister, was appointed by Stephen Harper’s cabinet to the agency’s board in 2007, and became chair later that year. She left Imperial’s board a month ago, and her colleagues on the IDRC board have rallied around her performance as chair.

Health and anti-tobacco organizations are extremely sensitive to ties with the tobacco industry, fearing efforts to influence research and policy. The World Health Organization has stated “the industry has and will continue to interfere in implementation of effective tobacco control.”

In 2004, Canada ratified the international Framework Convention on Tobacco Control, which requires governments to protect tobacco-control policy from the industry, and in 2008 – after Ms. McDougall’s appointment – Canada agreed to guidelines that state that people with tobacco industry ties won’t be appointed to boards of agencies that deal with tobacco-control policy.

A big part of the problem, according to Cynthia Callard, executive director of Physicians for a Smoke-Free Canada, is that neither the IDRC nor the Canadian  government responded to letters in March by acknowledging there was a conflict. “They didn’t say, ‘Oops. It won’t happen again,'” she said.

In statements over the past two weeks, however, the agency has promised to ask board members about tobacco-related activities and ensure compliance with the international convention.

Ms. Callard said she never saw any sign the IDRC’s tobacco-control work was tainted but in the eyes of organizations abroad, it’s now an agency headed by a tobacco-company insider. She insisted the agency’s tobacco programs are important ones, but argued that to save them, they might have to be transferred to some other agency, at least for a few years.

Journal demands McDougall leave agency over tobacco ties

barbara_mcdougal_585461artwLast updated: May 6, 2010

Source: The Star

Editors of the journal Open Medicine want a former federal cabinet minister removed as chair at the International Development Research Centre.

Open Medicine says Barbara McDougall is the wrong person to chair the board of a federal agency that funds tobacco control programs, given that until recently she was also on the board of Imperial Tobacco Canada.

The Bill and Melinda Gates Foundation seems to agree.

Earlier this year the foundation cancelled a $5.2 million grant to the agency when it learned of McDougall’s ties to the tobacco industry.

The editors of Open Medicine say McDougall’s involvement with the tobacco industry has damaged the reputation of the agency and she should step down.

They say in an editorial that the concurrent appointments were a serious conflict of interest.

Parliament of Australia: Inquiry into Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009

smoking-kangarooView all submissions received by the Committee as at 5 May 2010 here.

Cigarette pack plain packing materials

Last updated: May 6, 2010

Source: Cancer Council Australia

High resolution images of cigarette pack plain packaging as advocated by non-government tobacco control organisations are available for download here.

Tobacco giant in IRD tax probe

imgname-british_american_tobacco_uses_soa_for_supply_chain-50226711-images-cigarette-supply-chainLast updated: May 6, 2010

Source: New Zealand Herald

The Inland Revenue Department is investigating transactions by the New Zealand arm of global tobaco giant British and American Tobacco as it pushes home the advantage created by its win over tax avoidance by foreign-owned New Zealand banks.

BAT (New Zealand), whose brands include Dunhill, Rothmans and Benson & Hedges, has provisioned almost $40 million in back taxes because of the IRD review of “a financing transaction undertaken by the company”, according to its report for the year to December 31, filed with the Companies Office.

“The IRD’s review is not yet complete,” BAT NZ said in notes to the accounts. “It has indicated to the company that is preparing an issues paper with respect to the transaction and will make that paper available to the company shortly for comment.

“In light of this and recent New Zealand court decisions which are widely regarded as indicating a conservative shift in tax jurisprudence in New Zealand, the directors decided to make a provision of the tax which may be imposed by the IRD in respect of the transaction.”

The bank tax avoidance cases saw BNZ, ANZ New Zealand, Westpac and ASB – all owned by Australian banks – pay $2.2 billion to settle with IRD last Christmas Eve over cross-border structured finance transactions undertaken in the late 1990’s and early 2000’s.

The banks had challenged IRD’s view that the transactions constituted avoidance, but settled after two separate High Court actions by BNZ and Westpac failed last year.

The transactions were only available to the local branches of foreign-owned companies because they exploited loopholes in New Zealand’s international tax law.

The hit to BAT NZ’s earnings comes as the government wallops smokers with three 10 per cent increases in tobacco excises over the next three years to discourage smoking.

The accounts show BAT NZ declared post-tax “comprehensive earnings”
of $53.2 million, compared with $106.1 million in the year to Dec. 31, 2008.

That was despite a small lift in total revenue to $293.2 million
($284.2 million the previous year), giving gross profit of $228.0 million ($222.8 million).

Income tax provisioning rose from $37.9 million the previous year to $81.1 million, of which $39.5 million was “under-provision for previous years”.

Meanwhile, the New Zealand arm of Imperial Tobacco – owner of brands including Camel, More and Drum – reported after-tax net profit of $12.5 million for the year to Sept. 30 in its Companies Office annual report filings. That compared with $10.8 million in the year to Sept. 30, 2008.

The huge impact of excise duties on tobacco companies’ operations is more clearly shown in Imperial Tobacco (New Zealand) Ltd’s accounts than BAT (NZ)’s.

Imperial’s total revenue for the last financial year was $266 million, of which $192.3 million was excise duties payable to the government. By comparison, “raw materials and consumables used” amounted to just $17.6 million for the year.

Dear Legco


Subcommittee on Dutiable Commodities
(Exempted Quantities) (Amendment) Notice 2010

6th May 2010

Dear Sir,

We are aware that Legco is receiving submissions at 16.40 hrs this afternoon on the above
subject and we are unable to attend at short notice. However we wish the following relevant
information to be brought to the attention of the Honourable Subcommittee…

Read the full document here.

Please see the WHO stance on Duty Free tobacco here.