Big Tobacco’s Big Influence Keeps Indonesia Lighting Up

By webadmin on 01:51 am Nov 02, 2010
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Dewi Kurniawati & Anita Rachman

Jakarta. When Health Minister Endang Rahayu Sedyaningsih announced on Oct. 22 that the government would restrict tobacco advertising, there was no shortage of public skepticism.

That’s not surprising, given the degree to which cigarettes and smoking are ingrained in both Indonesian society and the economy, making it one of the most “free smoking” places in the world at a time when many other countries have sharply curtailed public use of tobacco.

Skepticism was also reinforced by 2009’s “missing clause” scandal, in which a statement declaring tobacco an addictive substance went missing from the 2009 Health Law.

Missing Signature

“Indonesia is a Disney World for the tobacco industry,” Douglas Bettcher, the director of the World Health Organization’s Tobacco Free Initiative, said last week. He cited low taxes, low prices and the lack of graphic warnings on Indonesian cigarette packaging as contributing to a pro-smoking environment.

While 171 countries have signed on to the landmark WHO Framework Convention on Tobacco Control, Indonesia is not one of them.

The cost of inaction: More than 200,000 Indonesians die each year from tobacco-related illnesses, according to the 2010 Asia Pacific Conference on Tobacco or Health (Apact).

At a conferenc e in Sydney in October, Apact passed a resolution denouncing Indonesia for being the only Asian country not to have signed the tobacco convention. The declaration was backed by 700 delegates from 41 countries who attended the conference.

But tobacco puts the Indonesian government in a quandary: Does it risk the health of the public in order to continue protecting an industry that generates huge tax revenues for the state? Is mounting international criticism worth it?

The Hidden Lobby

Another question is whether the powerful tobacco industry would surrender to regulations it was sure to find stifling. How does the industry protect itself?

It may be common knowledge that the tobacco lobby wields potent influence within the government and the legislature, but uncovering the details of exactly how that pull is exercised can be difficult.

To give an idea of how deep the relationship runs between tobacco and the government, journalist Wisnu Nugroho, in his book “Pak Beye dan Istananya” (“President SBY and His Palace”), included a picture of a Rolls Royce with the license plate number “234” parked inside the palace.

The public immediately associated the car with Sampoerna’s Dji Sam Soe brand, which carries those numbers on packs of its cigarettes.

“That is a strong indication that the president has been swayed by the tobacco industry,” said Kartono Muhammad, a leading antitobacco campaigner and former chairman of the Indonesian Doctors Association (IDI).

The president’s office denied that the Rolls Royce had any connection with the palace.

So does the tobacco lobby really reach into the palace?

“I believe so,” said a source with inside knowledge of the lobbying industry who refused to be identified.

“More than a decade ago, each tobacco company appointed two or three employees to be part of a [secret] joint task force that would study the threats the industry will face in the future,” the source claimed. “Each company also pledged to provide unlimited funds for lobbying.”

The source, who was directly involved in lobbying, said that the industry effort, which began long before the current government took office, goes from local politicians all the way up to key members of the House of Representatives and officials in government ministries.

“This has been going on for decades, and will continue,” the source said. “That is just their way of surviving.”

Kartono said he believed the clause on tobacco that went missing from the health bill — which the House secretary general’s office claimed was due to a technical error — was an example of secret lobbying.

“I know that the tobacco industry was really concerned about the insertion of that clause,” he said.

While the clause declaring tobacco to be an addictive substance was reinserted into the 2009 Health Law after its omission was publicly revealed, the tobacco industry is widely expected to continue lobbying the government about the contents of a new draft regulation that would implement the law’s tobacco provisions.

Making It Hurt

The current draft regulation includes a total ban on tobacco advertising, promotions and sponsorships.

 It also requires tobacco companies to include graphic warnings — similar to those required in Singapore and Hong Kong — covering at least 50 percent of a cigarette pack.

In addition, it bans the use of words like “mild,” “light,” “low tar” and “low nicotine” that could be interpreted as meaning those tobacco products were safer.

The draft regulation also requires the government to create smoking-free areas and enforce a total smoking ban in public places, especially indoors.

This would be a shock to the system for the Indonesian Association of Advertising Agencies (PPPI), which has said the regulation would adversely affect its members’ revenues because tobacco companies are among the nation’s five biggest advertisers, particularly on television.

Endang, the health minister, has conceded that tough tobacco control regulations would severely affect the industry, which is, after all, the point.

However, the regulations have yet to be formally issued, prompting claims that the “invisible hands” of the tobacco industry are at work behind the scenes.

“I am sure there are people somewhere out there carrying suitcases full of money, trying to stop the regulation from going into effect,” the Jakarta Globe’s lobbying source said.

Yos Ginting, director of corporate affairs at HM Sampoerna, a subsidiary of Philip Morris International, said that any allegations of bribery or illegal influence by the tobacco industry “should be investigated thoroughly.”

The Missing Clause

On Sept. 11, 2009, House Commission IX, which oversees health affairs, met officials from the ministries of health and justice to finalize the health bill, which included language classifying tobacco as an addictive substance.

Eight of nine House factions agreed to forward the bill to the House plenary session on Sept. 14, 2009, for passage.

The tiny Prosperous Peace Party (PDS), was the only faction that refused to endorse the bill.

Then deputy chairwoman Ribka Tjiptaning, from the Indonesian Democratic Party of Struggle (PDI-P), and Asiah Salekan, another former lawmaker from the Golkar Party, told a press conference in September that the commission received last-minute appeals from the Indonesian Tobacco Farmers Association, the Central Java Regional Representatives Council and the District Legislative Councils Association. “They wanted the House to take their objections about the tobacco article into consideration,” Ribka said.

She said the Tobacco Farmers Association threatened to hold a huge rally on the day the House was scheduled to pass the health bill, and noted that the growers were worried that the clause would hurt their livelihood.

Ribka admitted that she issued a written order to the House Secretariat’s office to remove the “addictive” clause from the bill, but said it was not to take effect until after further consultations with senior lawmakers.

Putting a Price on Health?

At the Sept. 14, 2009, plenary session, the clause was still in the health bill. After the House passed the bill, it was sent to the House Secretariat.

However, the clause mysteriously vanished after the House Secretariat sent it to the state secretary’s office for the president’s signature. In effect, there were two versions of the bill — only one of which declared tobacco addictive.

All hell broke loose when Hatta Rajasa, who was state secretary at the time, acknowledged in early October 2009 that the controversial cause had been deleted from the law.

The ensuing outcry resulted in the clause being reinserted.

“The missing tobacco clause is clearly not a technical problem,” said Kartono, the antitobacco campaigner. “Technically, the head of the House Secretariat’s office is responsible for that missing clause. The question is, who told [the lawmakers] to delete it?”

The Globe has obtained a copy of Ribka’s written order to the House Secretariat, calling for the language about the addictive nature of tobacco to be excised.

“The big question is: why did these [lawmakers] delete the clause? Whose interests are they defending? The probability is that it was the tobacco industry,” Kartono said.

“There’s a possibility that these [lawmakers] received money, not just for themselves, but also for their parties,” he said.

Another industry source claimed that some House members had been known to solicit bribes in exchange for passing legislation in favor of tobacco producers.

“They come up with blatant requests, or they nuance it by saying, ‘Oh, my house needs repairing’ or ‘my car just broke down,’ ” the source said.

During an investigation into the wayward clause, the House Ethics Council questioned Ribka, Asiah and Golkar’s Mariani Baramuli, another Commission IX deputy chairwoman.

The three acknowledged ordering the deletion of the clause, Kartono said, and the council later said it would follow-up the issue of the three lawmakers, but it has yet to do so.

Kartono said he suspected that “this has been subject to political bartering.”

Ribka and former legislators Asiah and Mariani were later reported to the National Police by Hakim Sorimuda Pohan, a former Democratic Party lawmaker, for removing the clause.

However, the National Police dropped the investigation “because it’s not categorized as a crime.”

Hakim, who now works on behalf of antitobacco activists, called the decision to drop the case “despicable and disgusting.”

For their part, the three lawmakers have filed a defamation lawsuit against Hakim and Kartono for accusing them of taking bribes to excise the clause.

“They said we allegedly received hundreds of billions of rupiah. That is not true,” Ribka told the Globe. “We never wanted to delete the clause.”

She denied receiving bribes or asking for money in the matter.

How Big Is Big Tobacco?

Cigarette companies are among the country’s largest employers and taxpayers. In the 2010 state budget, the government forecast Rp 55.9 trillion ($6.3 billion) in excise revenue, the vast majority from cigarette companies. The industry directly employs at least 824,000 people.

But big tobacco is also being targeted from many directions, and the voices of its opponents are getting stronger, including, surprisingly, Muhammadiyah, the nation’s second-largest Muslim organization, which had declared smoking haram, or forbidden.

The Indonesian Tobacco Alliance (Amti), an industry umbrella group, argues that controls on tobacco should be fair to all stakeholders.

“The tobacco industry is a legal business in Indonesia, and it involves millions of people. I urge the government to impose fair regulations on all parties,” Agung Suryanto, Amti’s deputy secretary general, told the Globe.

He also said the alliance wanted any regulations that limited or banned cigarette advertising to be clearly drawn up.

“We agree not to sell cigarettes to children, but as a legal business, we have the right to communicate with our adult consumers,” Agung said.

Funding to report this special package on tobacco was made possible by a grant from the Jakarta chapter of the Alliance of Independent Journalists (AJI).

To read more of this special package, follow the links below:

Talks Over New Indonesian Tobacco Regulation Continue to Drag on
Despite Tobacco Excise Rise Indonesian Tobacco Firms’ Profits Keep Increasing
Smoking and Spirituality: An Uneasy Truce