[Ip-health] NYT: U.S. Chamber Works Globally to Fight Antismoking Measures

Thiru Balasubramaniam thiru at keionline.org
Tue Jun 30 03:54:34 PDT 2015



U.S. Chamber Works Globally to Fight Antismoking Measures


KIEV, Ukraine — A parliamentary hearing was convened here in March to
consider an odd remnant of Ukraine’s corrupt, pre-revolutionary government.

Three years ago, Ukraine filed an international legal challenge against
Australia, over Australia’s right to enact antismoking laws on its own
soil. To a number of lawmakers, the case seemed absurd, and they wanted to
investigate why it was even being pursued.

When it came time to defend the tobacco industry, a man named Taras Kachka
spoke up. He argued that several “fantastic tobacco companies” had bought
up Soviet-era factories and modernized them, and now they were exporting
tobacco to many other countries. It was in Ukraine’s national interest, he
said, to support investors in the country, even though they do not sell
tobacco to Australia.

Mr. Kachka was not a tobacco lobbyist or farmer or factory owner. He was
the head of a Ukrainian affiliate of the U.S. Chamber of Commerce,
America’s largest trade group.

>From Ukraine to Uruguay, Moldova to the Philippines, the U.S. Chamber of
Commerce and its foreign affiliates have become the hammer for the tobacco
industry, engaging in a worldwide effort to fight antismoking laws of all
kinds, according to interviews with government ministers, lobbyists,
lawmakers and public health groups in Asia, Europe, Latin America and the
United States.

The U.S. Chamber’s work in support of the tobacco industry in recent years
has emerged as a priority at the same time the industry has faced one of
the most serious threats in its history. A global treaty, negotiated
through theWorld Health Organization, mandates anti-smoking measures and
also seeks to curb the influence of the tobacco industry in policy making.
The treaty, which took effect in 2005, has been ratified by 179 countries;
holdouts include Cuba, Haiti and the United States.

Facing a wave of new legislation around the world, the tobacco lobby has
turned for help to the U.S. Chamber of Commerce, with the weight of
American business behind it. While the chamber’s global tobacco lobbying
has been largely hidden from public view, its influence has been widely

Letters, emails and other documents from foreign governments, the chamber’s
affiliates and antismoking groups, which were reviewed by The New York
Times, show how the chamber has embraced the challenge, undertaking a
three-pronged strategy in its global campaign to advance the interests of
the tobacco industry.

In the capitals of far-flung nations, the chamber lobbies alongside its
foreign affiliates to beat back antismoking laws.

In trade forums, the chamber pits countries against one another. The
Ukrainian prime minister, Arseniy Yatsenyuk, recently revealed that his
country’s case against Australia was prompted by a complaint from the U.S.

And in Washington, Thomas J. Donohue, the chief executive of the chamber,
has personally taken part in lobbying to defend the ability of the tobacco
industry to sue under future international treaties, notably the
Trans-Pacific Partnership, a trade agreement being negotiated between the
United States and several Pacific Rim nations.

“They represent the interests of the tobacco industry,” said Dr. Vera Luiza
da Costa e Silva, the head of the Secretariat that oversees the W.H.O
treaty, called the Framework Convention on Tobacco Control. “They are
putting their feet everywhere where there are stronger regulations coming

The increasing global advocacy highlights the chamber’s enduring ties to
the tobacco industry, which in years past centered on American regulation
of cigarettes. A top executive at the tobacco giant Altria Group serves on
the chamber’s board. Philip Morris International plays a leading role in
the global campaign; one executive drafted a position paper used by a
chamber affiliate in Brussels, while another accompanied a chamber
executive to a meeting with the Philippine ambassador in Washington to
lobby against a cigarette-tax increase. The cigarette makers’ payments to
the chamber are not disclosed.

It is not clear how the chamber’s campaign reflects the interests of its
broader membership, which includes technology companies like Google,
pharmaceutical giants like Pfizer and health insurers like Anthem. And the
chamber’s record in its tobacco fight is mixed, often leaving American
business as the face of a losing cause, pushing a well-known toxin on poor
populations whose leaders are determined to curb smoking.

The U.S. Chamber issued brief statements in response to inquiries. “The
Chamber regularly reaches out to governments around the world to urge them
to avoid measures that discriminate against particular companies or
industries, undermine their trademarks or brands, or destroy their
intellectual property,” the statement said, adding, “we’ve worked with a
broad array of business organizations at home and abroad to defend these

The chamber declined to say if it supported any measures to curb smoking.

The chamber, a private nonprofit that has more than three million members
and annual revenue of $165 million, spends more on lobbying than any other
interest group in America. For decades, it has taken positions aimed at
bolstering its members’ fortunes.

While the chamber has local outposts across the United States, it also has
more than 100 affiliates around the world. Foreign branches pay dues and
typically hew to the U.S. Chamber’s strategy, often advancing it on the
ground. Members include both American and foreign businesses, a symbiotic
relationship that magnifies the chamber’s clout.

For foreign companies, membership comes with “access to the U.S. Embassy”
according to the Cambodian branch, and entree to “the U.S. government,”
according to the Azerbaijan branch. Members in Hanoi get an invitation to
an annual trip to “lobby Congress and the administration” in Washington.

Since Mr. Donohue took over in 1997, he has steered the chamber into
positions that have alienated some members. In 2009, the chamber threatened
to sue if the Environmental Protection Agency regulated greenhouse gas
emissions, disputing its authority to act on climate change. That led Nike
to step down from the chamber’s board, and to Apple’s departure from the
group. In 2013, the American arm of the Swedish construction giant Skanska
resigned, protesting the chamber’s support for what Skanska called a
“chemical industry-led initiative” to lobby against green building codes.

The chamber’s tobacco lobbying has led to confusion for many countries, Dr.
da Costa e Silva said, adding “there is a misconception that the American
chamber of commerce represents the government of the U.S.” In some places
like Estonia, the lines are blurred. The United States ambassador there,
Jeffrey Levine, serves as honorary president of the chamber’s local
affiliate; the affiliate quoted Philip Morris in a publicationoutlining its

The tobacco industry has increasingly turned to international courts to
challenge antismoking laws that countries have enacted after the passage of
the W.H.O. treaty. Early this year, Michael R. Bloomberg and Bill Gates set
up an international fund to fight such suits. Matthew L. Myers, president
of the Campaign for Tobacco-Free Kids, an advocacy group that administers
the fund, called the chamber “the tobacco industry’s most formidable front
group,” adding, “it pops up everywhere.”

In Ukraine, the chamber’s involvement was no surprise to Hanna Hopko, the
lawmaker who led the hearing in Parliament. She said the chamber there had
fought against antismoking laws for years.

“They were against the tobacco tax increase, they were against placing
warning labels on cigarettes,” she said. “This is just business as usual
for them.”

Country-by-Country Strategy

More than 3,000 miles away, in Nepal, the health ministry proposed a law
last year to increase the size of graphic warning labels from covering
three-fourths of a cigarette pack to 90 percent. Countries like Nepal that
have ratified the W.H.O. treaty are supposed to take steps to make
cigarette packs less appealing.

Not long afterward, one of Nepal’s top officials, Lilamani Poudel, said he
received an email from a representative of the chamber’s local affiliate in
the country, warning that the proposal “would negate foreign investment”
and “invite instability.”

In January, the U.S. Chamber itself weighed in. In a letter to Nepal’s
deputy prime minister, a senior vice president at the chamber, Tami Overby,
wrote that she was “not aware of any science-based evidence” that larger
warning labels “will have any discernible impact on reducing or
discouraging tobacco use.”

A 2013 Harvard study found that graphic warning labels “play a lifesaving
role in highlighting the dangers of smoking and encouraging smokers to

While Nepal eventually mandated the change in warning labels, cigarette
companies filed for an extension and compliance has stalled.

“Since we have to focus on responding to the devastating earthquake, we
have not been able to monitor the state of law enforcement effectively,”
said Shanta Bahadur Shrestha, a senior health ministry official.

The episode reflects the chamber’s country-by-country lobbying strategy. A
pattern emerged in letters to seven nations: Written by either the
chamber’s top international executive, Myron Brilliant, or his deputies,
they introduced the chamber as “the world’s largest business federation.”

Then the letters mention a matter “of concern.” In Jamaica and Nepal, it
was graphic health warnings on packages. In Uruguay, it was a plan to bar
cigarettes from being displayed by retailers. The Moldovan president was
warned against “extreme measures” in his country, though they included
common steps like restricting smoking in public places and banning
advertising where cigarettes are sold.

A proposal to raise cigarette taxes in the Philippines would open the
floodgates to smugglers, the government there was told. Tax revenue has
increased since the proposal became law.

“We are not cowed by them,” said Jeremias Paul, the country’s under
secretary of finance. “We meet with these guys when we’re trying to
encourage investment in the Philippines, so clearly they are very
influential, but that doesn’t mean they will dictate their ways.”

Protecting tobacco companies is portrayed by the chamber as vital for a
nation’s economic health. Uruguay’s president is warned that antismoking
laws will “have a disruptive effect on the formal economy.” El Salvador’s
vice president is told that “arbitrary actions” like requiring graphic
health warnings in advertisements undermine “investment and economic

On the ground, the chamber’s local affiliates use hands-on tactics.

After Moldova’s health ministry proposed measures in 2013, Serghei Toncu,
the head of the American Chamber of Commerce in Moldova, laid out his
objections in a series of meetings held by a regulatory review panel.

“The consumption of alcohol and cigarettes is at the discretion of each
person,” Mr. Toncu said at one meeting, adding that the discussion should
not be about “whether smoking is harmful.”

“You do not respect us,” he told the health ministry at another.

At a third, he called the ministry’s research “flawed from the start.”

His objections were not merely plaintive cries. The American chamber has a
seat on Moldova’s regulatory review panel giving it direct influence over
policy making in the small country.

“The American Chamber of Commerce is a very powerful and active
organization,” said Oleg Chelaru, a team leader on the staff that assists
the review panel. “They played a very crucial role in analyzing and giving
an opinion on this initiative.”

Mr. Toncu, who has since left the chamber, declined to comment. Mila
Malairau, the chamber’s executive director, said its main objective was to
make sure the industry “was consulted” in “a transparent and predictable

After recently passing in Parliament, the long-stalled measures were
subject to fresh objections from the chamber and others, and have not yet
been enacted.

Fighting a Trade Exception

In Washington, the U.S. Chamber’s tobacco lobbying has been visible in the
negotiations over the Trans-Pacific Partnership, a priority of the Obama
administration that recently received critical backing in Congress.

One of the more controversial proposals would expand the power of companies
to sue countries if they violate trade rules. The U.S. Chamber has openly
opposed plans to withhold such powers from tobacco companies, curbing their
ability to challenge national antismoking laws. The chamber says on its
website that “singling out tobacco” will “open a Pandora’s box as other
governments go after their particular bêtes noires.”

The issue is still unresolved. A spokesman for the United States trade
representative said negotiators would ensure that governments “can
implement regulations to protect public health” while also “ensuring that
our farmers are not discriminated against.”

Email traffic shows that Mr. Donohue, the chamber’s head, sought to raise
the issue in 2012 directly with Ron Kirk, who was then the United States
trade representative. In email exchanges between staff members of the two,
Mr. Donohue specifically sought to discuss the role of tobacco in the trade

“Tom had a couple of things to raise, including urging that the tobacco
text not be submitted at this round,” one of Mr. Donohue’s staff members
wrote to Mr. Kirk’s staff. The emails were produced in response to a
Freedom of Information request filed by the Campaign for Tobacco-Free Kids,
which provided them to The Times.

Mr. Kirk is now a senior lawyer at Gibson, Dunn, a firm that counts the
tobacco industry as a client. He said in an interview that during his
tenure as trade representative, he met periodically with Mr. Donohue but
could not recall a specific conversation on tobacco.

He said trade groups were generally concerned about “treating one industry
different than you would treat anyone else, more so than doing tobacco’s

The chamber declined to make Mr. Donohue available for an interview.

A Face-Saving Measure

In Ukraine, it was Valeriy Pyatnytskiy who signed off on the complaint
against Australia in 2012, which was filed with the World Trade
Organization. At the time, he was Ukraine’s chief negotiator to the W.T.O.
His political career has survived the revolution and he is now an adviser
to the Ukrainian prime minister, Mr. Yatsenyuk.

In a recent interview, he said that for Ukraine, the case was a matter of
principle. It was about respecting the rules.

He offered a hypothetical: If Ukraine allowed Australia to use plain
packaging on cigarettes, what would stop Ukraine from introducing plain
packaging for wine? Then Ukrainian winemakers could better compete with
French wines, because they would all be in plain bags marked red or white.

“We had this in the Soviet times,” he said. “It was absolutely plain
packaging everywhere.”

Some Ukrainian officials have long been troubled by the case.

“It has nothing to do with trade laws,” said Pavlo Sheremeta, who briefly
served as Ukraine’s economic minister after the revolution. “We have zero
exports of tobacco to Australia, so what do we have to do with this?”

Last year, he urged the American Chamber in Kiev to reconsider.

“I wrote a formal letter, asking them, ‘Do you still keep the same
position?’ ” Mr. Sheremeta said. “Basically I was suggesting a face-saving
way out of this.” But when he met with chamber officials, the plain
packaging case was outlined as a top priority.

They refused to back down. After Mr. Pyatnytskiy, a tobacco ally, was
installed as his deputy, Mr. Sheremeta resigned.

“The world was laughing at us,” he said of the case.

Shortly after The Times discussed the case with Ukrainian government
officials, there were new protests from activists. Mr. Yatsenyuk called for
a review of the matter. Ukraine has since suspended its involvement, but
other countries including Cuba and Honduras are continuing to pursue the
case against Australia.

Andy Hunder, who took over as president of the American Chamber of Commerce
in Kiev in April, said the organization was moving on, adding, “We are
looking forward now.”

Sofiia Kochmar contributed reporting from Kiev, Bhadra Sharma from
Kathmandu and Palko Karasz from London.

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