Report to: Senator Pia Cayetano

From: Arvin Maceda

Policy Analyst

RE: DENORMALIZING TOBACCO INDUSTRY

The Issue

The Tobacco Industry needs to be de-normalized and regulated. Its interference in the
governments policies, bureaucracies and decision making should be exposed and
subsequently be eradicated in the aim of ensuring better health outcomes for Filipinos.

The Philippines is the third highest country in the region in terms of industry participation
and interference. The industry is highly participative in policy development and it is
reported that there is a relatively high interaction between legislators and the industry
managers. In addition, the industry has been reported to use loopholes to promote and
increase sales.

Background

Smoking is the most common cause of preventable death in the world causing five
million deaths per year and is projected to increase to 8 million per year by 2030; three
quarters of these deaths will be in low- and middle-income countries according to the
World Health Organization. It is estimated in 2013 that 25.4% of adult Filipinos are
current smokers and 6.8% of adolescent Filipinos are current smokers.

Although the most cost-effective ways of reducing tobacco consumption are through
price increase through tobacco taxation and through the creation of smoke-free
environments, other non-price measures, such as comprehensive bans on tobacco
advertising, sponsorship and promotion, strong warning labels and wide dissemination
of information in support of these key policy interventions, are also effective.
The comprehensive bans on tobacco advertising, sponsorship and promotion, and
strong warning labels have been institutionalized in the RA 9211 or the Tobacco
Regulation Act and supported by various policies such as the DOH and CSC Joint
Circular Memo AO 10-01 and the recently passed Graphic Health Warnings Law. Its
implementation however is questionable as it did not safeguard the government from
the tobacco interference but instead it gave the industry representation industry to the
implementing agency which shall have the exclusive power and function to administer
and implement the provisions of RA 9211.

It should be noted that in the country Corporate Social Responsibility (CSRs) is not
prohibited by the law. This is a loophole often exploited by tobacco companies as CSRs
results to promotion. Philipp Morris International increased its spending on CSR in the
Philippines in 2012 which is an obvious tactic to subvert and circumvent the law which
implicitly prohibits and regulates advertising.

Tobacco Regulation in the Philippines

In 2003, the Philippines enacted RA 9211, or the Tobacco Regulation Act. It is the policy
of the State to protect the populace from hazardous products and promote the right to
health and instill health consciousness among them. It is also the policy of the State,
consistent with the Constitutional ideal to promote the general welfare, to safeguard the
Interests of the workers and other stakeholders in the tobacco industry. For these
purposes, the government shall institute a balanced policy whereby the use, sale, and
advertisements of tobacco products shall be regulated in order to promote a healthful
environment and protect the citizens from the hazards of tobacco smoke, and at the
same time ensure that the interest of tobacco farmers, growers, workers and
stakeholders are not adversely compromised.

As a member-state of the WHO and as signatory to the FCTC the question arises if the
current policies enough to protect public health policies with respect to tobacco control
from commercial and other vested interests of the tobacco industry.
As previously discussed, there is a need to denormalize not only the use of tobacco but
the tobacco industry itself to intensify tobacco regulation and to promote health in the
country. The current laws and policies that are in place in the country do not give
government power to denormalize albeit it gives protection to the tobacco industry.

According to SEATCA, the Philippines ranked third among the ASEAN countries in
terms of level of tobacco industry interference, highest in the level of tobacco industry
participation in policy development and has the lowest scores in having preventive
measures to curb tobacco industry interaction.

Under these conditions, if left without intervention the industry will continue in its
practice to increase social acceptability of tobacco, maneuver and subvert laws and
legislation for regulation, and partiallyif not totallydiminish our efforts to protect the
youth, the poor and the general public from the known harms of tobacco.

WAYS OF DENORMALIZING TOBACCO INDUSTRY

The analysis presented in the remainder of this report compares the status quo policy to
the following alternatives.

Full Compliance to the Recommended Actions in Article 5.3

The clear way of denormalizing tobacco industry is the full compliance of the
recommended actions found in Article 5.3 of the FCTC for the protection of public health
policies with respect to tobacco control from commercial and other vested interests of
the tobacco industry. This is an internationally accepted recommendation with expert
review and analysis. As listed previously, this will include comprehensive actions to
deformalize the industry, protect the government and expose the industrys dirty tactics.
However, this will severe the relationship between the industry and the government. But
in the pursuit of health for all this might be the trade-off that the country needs.

Regulation of Corporate Social Responsibility Projects of the Tobacco Industry

This alternative is a compromise alternative. This is a small step into full compliance
and taking into count possible drawbacks and conflicts from the tobacco industry. This
includes enacting into law Recommendations 5 and 6 which states aims to require that
information provided by the tobacco industry be transparent and accurate; and
denormalize and, to the extent possible, regulate activities described as socially
responsible by the tobacco industry, including but not limited to activities described as
corporate social responsibility.

POLICY GOALS

What policies should govern the regulation of tobacco and denormalization of tobacco
industry? An answer to this question requires the specification of policy goals that
provide appropriate basis for comparing current policy with possible alternatives.

First, because tobacco is proven to cause harm to others, tobacco industry should not
enjoy liberty in its distribution and promotion. A primary policy goal, therefore, should be
limited liberty of tobacco industry. The liberty that we are trying to regulate is the
industrys liberty to sell, produce, and promote itself and its product because of the
known harm it causes. We are interested in placing a policy that would yield the best
results in SEATCAs tobacco industry interference index. Specifically, we would want a
policy that would decrease industry interference and participation, increase preventive
action from the government, increase in transparency and a decrease of benefits from
the tobacco industry.

Second, the current policy aims to protect the youth from being initiated to cigarette
smoking and tobacco use by prohibiting the sale of tobacco products to minors.
Efficiency to protect the youth and the public from smoking should be a policy goal. The
policy should be able to curb behaviors and perception of the youth that will discourage
them from trying and encourage smokers to quit. It also involves strengthening the
measures to restrict industries from engaging the youth sector.

Lastly, it is vital that our policy is socially acceptable by different key stakeholders. It is
important that our measures be pleasing to the general publics perception and will gain
the most support from experts, health care sector, education sector, politicians and key
decision makers.

ASSESMENT AND RECOMMENDATION

The analyst weighed between the three policy goals namely, limiting liberty, efficiency
and social acceptability. There were trade-offs such as what is most limiting and most
efficient might not be socially acceptable to the most of the society. The Full
Compliance Policy will indeed be the most effective and the most limiting however we
can foresee a great opposition from legislators and from the industry and in turn it might
not be acceptable and politically feasible. The CSR regulation is a valid compromise
which may be less effective and less limiting but might be the most feasible and socially
acceptable alternative.

Our recommendation is for the Senator to enact as law the regulation of Corporate
Social Responsibility Projects of the Tobacco Industry in the aim of denormalization and
decreasing interference.