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The Union welcomes new analysis published by the Tax Justice Network highlighting how British American Tobacco (BAT) is taking advantage of accounting loopholes to systematically shift profits out of low- and middle-income countries to avoid paying the full corporate income tax in the countries that most need these revenues.

According to the report, for every dollar British American Tobacco (BAT) paid in tax in the developing countries it operates in, it shifted more than half a dollar that would have been taxed locally to a subsidiary located in the UK where BAT paid almost no tax.

Tax Justice Network estimates Bangladesh, Indonesia, Kenya, Guyana, Brazil and Trinidad and Tobago together stand to lose a total of nearly $700 million in tax revenue by 2030 from the financial manoeuvring of just one tobacco company if business continues as usual.

Tobacco use imposes massive social and economic costs, especially in low- and middle- income countries where 80 percent of the world’s smokers live, yet British American Tobacco is exploiting the rules to pay far less than countries’ tax codes call for.

Ashes to Ashes: How British American Tobacco avoids taxes in low and middle income countries was published on the heels of BAT’s annual shareholder meeting in London. It reveals a range of mechanisms used by the tobacco company in 2016 to shift income equivalent to over 12 per cent ($941 million) of its pre-tax profits to BAT Holdings Ltd, a UK-based subsidiary where BAT paid almost no corporate income tax.

Dr Gan Quan, Director of Tobacco Control, says: “The Union welcomes this evidence reinforcing that BAT cannot be trusted, particularly by low- and middle-income countries and investigations should be launched immediately in these countries into the company’s corporate tax payments. These countries are being left with a huge burden of death and disease caused by tobacco products.”

Dr Gan Quan, Director of Tobacco Control, says: “The Union welcomes this evidence reinforcing that BAT cannot be trusted, particularly by low- and middle-income countries and investigations should be launched immediately in these countries into the company’s corporate tax payments. These countries are being left with a huge burden of death and disease caused by tobacco products.”

 

Deal puts youth at risk and undermines Disney’s commitment to reducing youth tobacco use and exposure to smoking imagery

WASHINGTON, D.C. (April 25, 2019) – A coalition of eight national and international health organisations today urged The Walt Disney Company (Disney) to require its partner network, Vice, to terminate its relationship with Philip Morris International, the world’s largest manufacturer and seller of cigarettes.

Disney, a prominent stakeholder, has invested more than $400 million in Vice and reportedly owns more than 10% of the company. The health organisations are asking Disney to require that Vice adopt a strict policy prohibiting the company and its subsidiaries from working with tobacco companies. Second, the groups want Disney to require Vice to make all tobacco-related business relationships public, including a detailed description of all tobacco-related marketing activities.

Vice’s existing partnership with Philip Morris International undermines the strong anti-tobacco stance taken by Disney and its commitment to protecting youth from tobacco and smoke exposure, according to the health organisations.

“We are confident that Disney, which has been a leader in reducing youth exposure to tobacco use in entertainment, would not want to be associated with a company actively supporting the tobacco industry,” the letter from the health organisations states. “We hope you will use your influence as a shareholder and as a respected public company to encourage Vice to cease working for an industry whose major product is projected to kill a billion people worldwide this century.”

The groups that have signed on to the appeal include: Truth Initiative®, American Cancer Society, American Heart Association, American Lung Association, Campaign for Tobacco-Free Kids, The Union (International Union Against Tuberculosis and Lung Disease), the American Academy of Pediatrics and Vital Strategies.

The Financial Times recently reported on a $6.5 million deal between Vice and Phillip Morris International to produce sponsored content endorsing e-cigarettes. Vice and Phillip Morris International have disputed the details of the arrangement and claim it will not promote vaping, but they have acknowledged that Vice is accepting funding from Phillip Morris International to create a media platform.

The prospect of a media platform with the presumed intent to promote e-cigarettes and smoking products is deeply troubling to national health organisations. In 2018, the U.S. surgeon general declared e-cigarette use among youth a public health epidemic. Recent data show that in 2018, 20.8% of U.S. high school students used e-cigarettes in the last 30 days. Further, young people who use e-cigarettes are four times more likely to progress to cigarette smoking compared to their peers who do not use e-cigarettes.

Largely considered a leader in reducing youth exposure to tobacco, Disney has long been committed to addressing tobacco in its youth-rated (i.e., G/PG/PG-13) movies. In 2016, Disney was the only company of the six major movie companies who belong to the Motion Picture Association of America who had zero tobacco incidents per movie. Further, Disney recently banned smoking at its Florida and California theme parks.

“The game plan seems clear: continue the pipeline of nicotine addiction to preserve profits and markets even if the new users are kids,” the organisations write in their letter. “Vice appears to be committed to continuing to be an industry shill.”

 

The Union has joined forces with organisations from across the globe to expose the tobacco industry’s efforts to interfere with tobacco control, as part of STOP.

STOP (Stopping Tobacco Organizations and Products) is a new global tobacco industry watchdog group funded by Bloomberg Philanthropies and collectively directed by The University of Bath, The Global Centre for Good Governance in Tobacco Control, The Union, and Vital Strategies.

Launched in December 2018, STOP is working to expose the tobacco industry’s efforts to hook a new generation of smokers, attempts to undermine tobacco control, work to derail policy and unethical business practices.

The Union is supporting the broad strategy of the project by creating in-country connections and synergizing with those already doing industry interference work on the ground.

The Union’s role in the project is also to facilitate linking to and coordinating with the wider Bloomberg Initiative to Reduce Tobacco Use network.

Overall, STOP aims to expose tobacco industry tactics in all forms and arm stakeholders with evidence and tools to effectively counter the industry and advance policy.

 

In June 2018, The Union launched a new Global Enforcement Programme funded by Bloomberg Philanthropies. This is a pilot programme running for three years in two cities in each of the following countries: China, Indonesia, India and Pakistan.

The focus is on sub-national support, working with city governments to increase compliance with laws on smoke-free and tobacco advertising, promotion and sponsorship (TAPS) ban at points of sale.

The Johns Hopkins University School of Public Health is supporting the programme by conducting pre- and post-compliance surveys in each city. The baseline surveys have already taken place in China and Indonesia; India and Pakistan surveys will be completed this year. In addition to the program activity in each city, a global resource hub is being developed to share learning, tools, resources and case studies with other cities and countries across the globe.

 

Today the Task Force on Fiscal Policy for Health has published “Health Taxes to Save Lives”, calling on countries to significantly raise tobacco, alcohol and sugary beverage taxes to save lives and address the growing burden of noncommunicable diseases (NCDs).

The Task Force, co-chaired by Michael Bloomberg and economist Larry Summers, former Secretary of the U.S. Treasury and former Director of the National Economic Council, examined the use of excise tax policy for health and how countries can best leverage fiscal policies to yield improved health outcomes for their citizens with the added benefit of bringing in additional revenue.

The Union welcomes the Task Force’s recommendation to increase taxes on tobacco, alcohol and sugary beverages to save lives and help economies, particularly in low- and middle-income countries.

The analysis within the report shows we could prevent 50 million premature deaths in the next 50 years if countries implemented taxes to raise prices of tobacco, alcohol and sugary beverages by 50 percent.

NCDs are the leading cause of death in the world, killing 40 million people each year and representing 70 percent of all annual deaths. Eighty percent of NCD deaths occur in low- and middle-income countries, straining health care systems, contributing to poverty and posing a major barrier to development. Tobacco use, obesity and risky alcohol consumption are three leading risk factors for the development of NCDs.

As the report highlights, Ministers of Finance control a powerful tool to reduce the harmful use of these products: tax policy.

The Task Force brought together fiscal policy, development and health leaders from around the globe to address the enormous and growing health and economic burden of NCDs with fiscal policy tools that are currently underutilised by governments and their leaders.

The report can be found on the Task Force website here: https://www.bloomberg.org/program/public-health/task-force-fiscal-policy-health/#overview

 

The following speech was given by José Luis Castro, Executive Director of The Union, at the first Global Forum on Human Rights and a Tobacco-Free World, on 26 March in the Cotroceni Palace, Bucharest, Romania. Global leaders in public health and human rights came together to focus on the ongoing tobacco epidemic and to determine what is needed to create an actionable plan to end it.

“A year ago this month, at the 17th World Conference on Tobacco or Health in South Africa, delegates endorsed the “Cape Town Declaration on Human Rights and a Tobacco-free World.” The declaration includes a phrase I want to highlight. It states:

“We agree that the manufacture, marketing and sale of tobacco are incompatible with the human right to health.”

“In the spirit of the Cape Town Declaration, I want to call on all of us working to fulfil the implementation of the Framework Convention on Tobacco Control (FCTC) to utilise human rights mechanisms to advance the objectives of the FCTC. At the same time, I want to urge all of us to work together to see that the United Nations Human Rights Council includes support for the implementation of the FCTC within its objectives.

Implementing the FCTC is a way for the tobacco control community to advance human rights objectives. And the human rights community must see tobacco control as an important human rights issue. These two goals reinforce each other.

“I’m encouraged that the UN intergovernmental working group on transnational corporations and other business enterprises with respect for human rights is paying close attention to the FCTC. As many of you know, this body is working to advance an internationally binding instrument to regulate the activities of transnational corporations and business enterprises within human rights law. And the FCTC Secretariat is actively participating in those negotiations.

“All of us have the right to achieve the highest attainable standard of physical and mental health. And when it comes to protecting that right, there might be no other area of public policy as important as tobacco control.

“For tens of millions of people around the world, who have become addicted to tobacco products by using those products as intended, the tobacco industry remains one of the main obstacles to improving their standard of health.

“The rhetoric of the tobacco industry has always been intended to confuse and mislead governments and the public. Nothing has changed. Even though the industry has begun to speak the language of public health, we all know their goal is to weaken the adoption and implementation of the Framework Convention.

“Their interference is more than rhetorical, however. The Foundation for a Smoke-Free World, founded with an enormous investment from Philip Morris International (PMI), is working to secure a seat at the table with public health policymakers around the world. They have stated that their company strategy is to phase out the sale of traditional cigarettes. We saw the headlines, saying that PMI was “giving up cigarettes.”

“Yet PMI has not set any kind of timeline for stopping its sale of cigarettes. In fact, the company continues to make new investments in its capacity to produce traditional cigarettes. In January, for example, it was reported that PMI was in negotiations to buy a large stake in Mastermind Tobacco, Kenya’s second-largest cigarette producer. And last year, PMI opened a new cigarette factory in that country, which was inaugurated by Tanzania’s president. While PMI is making new investments in cigarettes, its parent company recently acquired a 35-percent stake in e-cigarette maker Juul.

“It appears that their objective is to maximise the sale and profit from cigarettes, heated tobacco products, and e-cigarettes… all at the expense of people’s right to health.

“The truth still holds: what is good for the tobacco industry is bad for public health.

“If we want to reach SDG 3.4, which is to reduce premature death from non-communicable diseases by one-third by 2030 and to promote mental health and wellbeing. If we want to reach SDG 3.3, which is to end the epidemics of AIDS, tuberculosis and other communicable diseases.

“Then we know that we need countries to fully implement the Framework Convention. And we know that, despite its new rhetoric that uses the language of public health, the tobacco industry would have governments to move in the opposite direction.

“This is why it’s so important that we continue to work together to persuade governments to place our human right to health well above the interests of the tobacco industry. Governments must fulfil their binding obligations and implement all measures of the Framework Convention, and they must do so urgently.

“Implementing the Framework Convention is the minimum of what we should expect governments to do. We know that the treaty actually encourages States Parties to implement measures beyond those required by the Convention and its protocols.

“Jeff Collin, a professor of global health policy at the University of Edinburgh, and others have been making the argument that the Sustainable Development Goals do not do enough to address the commercial determinants of health. And because of that, we need new approaches to governing the commercial determinants of health.

“One important way that we can fight back against the commercial determinants of poor health is to work more within a human rights framework. This includes advocating for human rights bodies to champion the cause of tobacco control as a human rights issue. I would like to see the UN Human Rights Council adopt a resolution on tobacco control. This would provide a valuable tool for advocates to influence public policy at the national level.

“Among other things, it would establish closer working relationships between the Human Rights Council and the Convention Secretariat. It would help us to embed support for the FCTC within national human rights plans. It would help us clarify, for policymakers, exactly where tobacco control and human rights intersect.

“I would also like to see us successfully secure a human rights decision at the upcoming COP9. We were close to securing this at the last COP and fell short. I very much hope we are successful next time.

“And I would like to see the human rights community work with us to hold the tobacco industry accountable for phasing out the commercial sale of traditional cigarettes. PMI has stated that this is its strategy, and we need to do everything we can to hold them accountable for doing so along a clear timeline. If they will not set a timeline, then perhaps it is up to us to set a deadline and campaign around it together.

“There is so much progress to be made by putting human rights at the centre of our work, and by becoming true partners with human rights advocates. I am confident that this forum is the start of something new and important for tobacco control, and for the millions of people whose right to health continues to be attacked by the tobacco industry.”

 

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