The Thinker: Battle Big Tobacco in Indonesia
According to the World Health Organization, nearly 6 million people, including 600,000 non-smokers who are exposed to tobacco smoke, die from smoking-related diseases annually. While cigarette consumption is declining in developed countries, the trend is the opposite in developing countries. According to the Campaign for Tobacco-Free Kids, tobacco kills 225,000 smokers in Indonesia every year.
Indonesia is known to be the world's main producer of clove cigarettes, as well as one of the biggest tobacco consumers in the world. A lack of control and enforcement of laws related to tobacco by the government has made Indonesia a favorable market and home for major tobacco companies. Even worse, Indonesia seems to position itself as a champion of big tobacco companies' interests.
At the international level, Indonesia, supported by the tobacco industry, initiated a claim against Australia's laws on tobacco plain-packaging through the World Trade Organization's dispute settlement process. Indonesia is the fifth country to do so. Other complainants that have brought the claim are Ukraine, Honduras, the Dominican Republic and Cuba. Under Australia's plain-packaging laws, all tobacco products have to be sold in drab olive-green boxes, use a brand name displayed in a standard size and font but without brand imagery or logos, and contain graphic images of the health effects of smoking.
The Australian market is not profitable for Indonesia's cigarette exports. The smoking rate in Australia has declined steadily in the past few years and Indonesia's exports of cigarettes to Australia are minuscule. The involvement of Indonesia in this case is mainly to help big tobacco companies to prevent further losses. The action is expected to deter other countries that are considering similar schemes to reduce the appeal of smoking. Should Australia's measures be found to be contrary to WTO law, tobacco companies will also benefit from Indonesia's participation if Australia does not comply with adverse rulings.
Compared to other developing-country complainants, Indonesia has more power and capability in imposing retaliatory threats against Australia. However, imposing retaliation can economically harm both targeted and retaliating states. WTO retaliation is normally in the form of increasing tariff against the products of violator states. The imposition of retaliation may result in market distortion and welfare loss for consumers and local industries relying on the imported products in the retaliating state and exporters in the violator state.
Indonesia is the only country in Southeast Asia that has not ratified the WHO Framework Convention on Tobacco Control (FCTC). The FCTC is often praised as the world's first modern public health treaty. The convention provides a set of rules that govern the production, sale, distribution, advertisement and promotion and taxation of tobacco. Today, there are more than 170 WHO member states that have become parties to this convention.
There have been debates over whether or not Indonesia should accede, but it was reported recently that there is no plan under President Susilo Bambang Yudhoyono's administration to ratify.
The tobacco industry has claimed that ratifying the FCTC will have a negative effect on tobacco and clove farmers, factory workers and vendors. This claim is fatuous. Farmers generally do not rely only on one crop, and there are various alternatives. Additionally, the low price of cigarettes in Indonesia means that taxes are low and labor and materials are cheap. Farmers and factory workers remain vulnerable to economic fluctuations.
It is time for Indonesia to prioritize the well-being and health of its people. Weak enforcement and legislative control will only benefit large tobacco companies. Meanwhile, the costs of smoking to society are immeasurable. The fact that cigarettes often are the second-largest item of household expenditure after food for the poorest families in Indonesia is upsetting. Ratifying the FCTC should be a priority for the next government.
source: www.thejakartaglobe.com