International Policy Digest

Health /28 Feb 2020
02.28.20

Can the FCTC’s New Head Save the Global Tobacco Control Agenda?

Adriana Blanco, the new head of the World Health Organization’s (WHO) Framework Convention on Tobacco Control (FCTC), will take up her position at the beginning of March at a pivotal juncture for the global fight against tobacco. Since 2005, the FCTC has set the global agenda on tobacco control policies, advertising standards, and on developing a coordinated response to the illicit trade of tobacco products.

And yet, Big Tobacco continues to subvert policies which threaten the profitability of an industry in crisis. Their tactics have evolved with the times, including through promoting flavoured tobacco products like e-cigarettes and “heat-not-burn” devices like Philip Morris’ iQos. The rollout of these new strategies does not mean, however, that the industry has abandoned its tried and tested methods of interfering in national legislative processes and facilitating the illicit tobacco trade they rail against.

Taking on tobacco in the trenches

The FCTC represents a response to this incessant industry pressure, matching the “globalization of the tobacco epidemic” with a commitment among signatory governments to reduce demand for, and supply of, tobacco. The FCTC lays out measures its signatories are obliged to adopt, including regulating the sale and contents of tobacco products, restricting the industry’s ability to advertise, and criminalizing the black market in tobacco products through track and trace measures under government control.

The tobacco industry has, unsurprisingly, fought the implementation of these measures in every part of the world and at every step of the way. Funding armies of lobbyists, think tanks, campaign groups, and even secret towns dedicated to tobacco production, the industry has dealt a number of damaging setbacks for the tobacco control movement. Just a few days ago, tobacco industry pressure in Ukraine pushed President Volodymyr Zelensky to veto a cigarette price increase that was in line with the FCTC’s stipulations.

Tobacco control and public health advocates hope Adriana Blanco’s tenure will see the FCTC promote its agenda more robustly. Blanco played an important role in encouraging her own country, Uruguay, to take a firm anti-tobacco stance and become a party to the FCTC protocol on 24 September 2014. In fact, she even wrote the book on it.

Uruguay showed the great courage of smaller countries

Before its reforms, Uruguay’s sky-high smoking and lung cancer rates were infamous, despite half-hearted attempts to ban smoking indoors. After a successful media campaign and the support of Uruguay’s government, the transformation proved to be remarkable. Indoor air contamination and nicotine levels plummeted by 90%, not to mention a 22% drop in hospital admissions for heart attacks.

Sensing danger, the tobacco industry decided to make an example out of Uruguay, lest the small South American country’s efforts inspire others to follow its lead. Uruguay was soon embroiled in an expensive legal battle with tobacco giant Philip Morris International (PMI) over the introduction of new public health measures, including the requirement that cigarette packs carry graphic warnings. Philip Morris filed a $25 million suit for damages at the World Bank arbitration court in 2010, a claim countered by Uruguayan president and professional oncologist Tabaré Vázquez.

Vázquez argued the health measures were a sovereign right of the republic to protect the health of its citizens. Uruguay was aided by the Pan American Health Organization, to which Adriana Blanco served as an advisor, when it affirmed the guidelines were in accordance with the FCTC. The arbitrators ruled against PMI, leaving the manufacturer to foot the $7 million legal bill – but not before other countries got the message that taking on Big Tobacco would be an expensive undertaking.

Criminalizing the illicit tobacco trade

Indeed, despite its “victory,” Uruguay nonetheless had to bear upwards of $2.5 million in financial costs. The case managed to stall the progress of similar tobacco control measures in other Latin American countries, including Costa Rica and Paraguay. Faced with the likelihood of legal action from corporations in search of policy revisions or financial compensation, governments with limited resources thought twice about their commitment to the FCTC.

Warning labels on packages are not the only area where the tobacco industry has fought to preserve its interests. Tobacco companies have been accused of facilitating the illicit trade of tobacco, in addition to pushing policymakers towards a “soft approach” that focuses on counterfeit products – which represent only 3-4% of the total illicit market and ignore the prevalent issue of the smuggling of legitimate products. By overproducing in some markets, the industry itself boosts black market sales of its genuine products, avoiding taxes and protecting market share.

The FCTC accounts for this by calling on signatory countries to implement track and trace (T&T) systems to monitor the tobacco supply chain at every step of the process. Such traceability systems prevent underreporting of production and boost the collection of sales taxes while preventing the illicit trade in “genuine” products. These systems, through the implementation of enhanced tax stamps, also combine physical security features such as those used on banknotes with digital traceability features with unique identity codes, printed on said stamps. Such robust means enable enforcement authorities to identify illegal products and allow judicial authorities to convict those responsible for such wrongdoings.

The FCTC mandates there should be no industry interference in the design or implementation of these systems. Unfortunately, where small countries like Uruguay have demonstrated their willingness to stand up to the tobacco giants, the European Union seems to have effectively thrown in the towel.

Fixing Europe’s track and trace mistakes

To its critics in the tobacco control movement, the system instituted last year by the European Union’s (EU) Tobacco Products Directive (TPD) violates the FCTC’s illicit trade protocol. Whereas the FCTC clearly states traceability systems need to be independent of industry influence, the EU’s system instead delegates key segments of the traceability regime to the industry itself, including by letting companies choose their own data storage providers.

And the industry very much prefers certain providers. In the 2000s, Philip Morris developed its own track and trace system, Codentify, with the help of IT giants Atos and Dentsu (now in charge of data storage in the EU). Codentify was then sold to a company, Inexto, populated by former tobacco industry employees. As a result of those close links between Inexto, Codentify, partners like Atos and Dentsu and the tobacco industry, the FCTC has explicitly singled out Codentify as an unfit traceability solution. However, if the industry is allowed to choose these types of suppliers, Big Tobacco will have a free hand to safeguard its own vested interests.

The failure to prevent this serious breach of the FCTC’s provisions shows the need for the WHO and FCTC leadership to take a more assertive role in overseeing the treaty’s implementation. A new head of the FCTC Secretariat should represent a fresh start for the organization, and Blanco could draw from her experience in Uruguay to help other emerging markets prevail over the challenges the EU failed to overcome.