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Losing out at home, Big Tobacco heads abroad

In Indonesia, Big Tobacco finds loose regulations are good for business.

Big Tobacco, Indonesia
A man smokes a cigarette next to a government sign that bans smoking in Jakarta, Indonesia. (Bay Ismoyo/AFP/Getty Images)

JAKARTA, Indonesia — Robert sits on his haunches exhaling puffs of thin smoke and clutching a ragged cigarette between tobacco-stained fingers. Lines crowd his dark face and the shadow of a moustache is visible above his crooked, slightly blackened smile.

A cardboard container filled with tissues, mints and cigarettes sits before him — his toolbox. Nuri has one too, but rather than strap it across his chest and carry it from place to place as Robert does, Nuri sells his smokes from the back of a bicycle.

These roving cigarette vendors work around Jakarta's Senayan Stadium, home to expos, concerts and sporting events. On an average day Nuri said he makes about $25, but when events are held, profits triple.

Light poles with advertisements for Sampoerna’s A Mild, one of the most popular brands on the market, flank the stadium. Behind the corner where Robert and Nuri work a sign reads: “Smoke Free Zone.”

Nearly 65 percent of adult men smoke in Indonesia, the world's fifth-largest tobacco market behind the United States, China, Russia and Japan. The tobacco industry employs about 6 million people, and smokers consume roughly 240 brillion sticks annually.

That makes Indonesia a premier battleground between tobacco lobbyists and anti-smoking groups who have been pushing policymakers to regulate cigarette sales and promotions. It’s a battle that is the subject of a conference in Uruguay this week where health officials from 171 countries are meeting to hammer out a new global anti-smoking treaty.

Anti-smoking groups here in Indonesia made some headway last year, when the government drafted a health bill with a section on tobacco control — though the clause calling tobacco an addictive substance mysteriously went missing just days before the bill received the president’s signature.

Creating smoke-free zones and advertising restrictions are a part of the health bill, which should have kicked into effect at the beginning of November. As the deadline approached, however, the government put a hold on regulations, citing the need for “more discussion.”

Industry watchers have called foul, saying the delay is another example of the power of the tobacco lobby and the proclivity of Indonesian lawmakers for taking bribes.

“The government and leading families are very much intertwined with the tobacco industry,” said Judith MacKay, director of the Asian Consultancy on Tobacco Control.

“Foreign tobacco companies also are buying up bits of the [Indonesian] tobacco industry and privatizing it,” she said, explaining how they compound the problem by being more sophisticated at advertising and influencing governments.

U.S. tobacco giant Philip Morris acquired Sampoerna, Indonesia’s No. 1 cigarette manufacturer, in 2005, and British American Tobacco entered the market last year, when it bought up Bentoel, the maker of Lucky Strike.

Both companies reject accusations that they’ve expanded into Indonesia to take advantage of looser regulations than the ones they face in their home countries.

Jane Morrison, a spokeswoman for Philip Morris International, said the acquisition was purely strategic, since it provided entry to the business of clove cigarettes, or kretek, which 80 percent of Indonesians smoke.

Morrison said Philip Morris fully supports stronger tobacco regulation, including restrictions on tobacco advertising and sponsorship. But for anti-tobacco advocates the sentiment rings hollow, since tobacco promotions are almost entirely unregulated.

The Southeast Asia Tobacco Control Alliance lambastes Indonesia for not being a party to the World Health Organization’s Framework Convention on Tobacco Control, which requires countries to restrict tobacco publicity.

But then, the United States has not ratified the framework either.

What worries health advocates here more is the rise in youth smoking. The problem drew public condemnation in August when a toddler appeared in a YouTube video scooting around on a tricycle with an ash-heavy cigarette dangling from his lips.

Still, tobacco lobbyists argue that tobacco control would cost people jobs, and hurt the economy by reducing the revenue the government gets from excise taxes. In 2009, that amounted to nearly $6.2 billion, or about 8.5 percent of government tax earnings, according to the Finance Ministry. Policymakers say that money contributes to government expenditures on health care and education.

Anti-tobacco advocates scoff. The money the tobacco industry brings into the country does not offset the costs of smoking, they say. According to estimates from the Indonesian Consumer Protection Foundation, consumers spend $20.8 billion each year treating smoking-related diseases — more than three times what the cigarette excise tax generates.

Mary Assunta’s job as a policy adviser for the Southeast Asia Tobacco Control Alliance is to talk with policymakers and help them understand the arguments being posed by the tobacco lobby.

“If you regulate smoking today, you’re not going to get 60 million people quitting smoking tomorrow,” she said. “But the tobacco industry uses fear to fan emotions and it’s been a very effective strategy.”

In her purse she carries packs of cigarettes from Thailand and Malaysia to show how they use grizzly images of rotting lungs and decayed teeth to reveal the health effects of smoking. (The United States also just announced it would place images as warnings on cigarette boxes.)

In East Java, home to some of the country’s major tobacco farms, cigarettes are far more welcoming. Malang’s hometown brand, Djarum, sponsors neighborhood improvement efforts, small convenience shops display packs with silver logos amid sparkling backgrounds, and community event boards feature fliers for a brand called Safe.

Mild, low-nicotine cigarettes are the latest trend to sweep the market thanks to increased demand from young, urban smokers. But they pose a challenge to health organizations pushing government’s to prevent companies from misleading marketing.

“No level of smoking is safe, so to call a cigarette Safe is an absolutely travesty of the truth,” MacKay said. “We’re struggling to ban terms like mild and light around the world and to try and make the tobacco industry’s terms less appealing, particularly to women and children. And with brands like Safe, well, it’s really quite reprehensible.”

Flavored cigarette brands such as Djarum Coklat appear aimed at a young audience, as does sponsorship of pop stars like Kelly Clarkson, who faced pressure from anti-tobacco groups in April after discovering her concert billboards were tagged with logos for L.A. Lights.

“It’s very clear they’re targeting youth,” said Mia Hanafiah, the executive director of the National Commission on Tobacco Control. And with minors selling cigarettes, they become even more acceptable, she added.

Twenty-year-old Nuri started smoking when he was 15. He said it’s delicious, and he has no plans to quit. Robert, 27, said he smokes to relieve stress. “When we smoke we don’t worry about other things,” he explained.

Both men say smoking has not affected their health — a fact that irks anti-tobacco groups who say as long as there is little awareness of the health dangers, smoking will remain socially acceptable.

And perhaps even embraced. Sampoerna, for example, said it’s contributing to Indonesia’s development by giving out scholarships to poor children and providing aid to disaster relief victims. Others see philanthropy as just another form of advertising.

“It’s just one way to portray them as an industry that cares for people,” Hanafiah said. “If they cared for people, they would stop producing tobacco.”

http://www.globalpost.com/dispatch/indonesia/101115/philip-morris-big-tobacco-indonesia-tobacco-regulation