A group of cigarette company executives stood in the lobby of a drab convention center near New Delhi in November last year. They were waiting for credentials to enter the WHO’s global tobacco treaty conference, one designed to curb smoking and combat the influence of the cigarette industry.
Treaty officials did not want them there, but still, among those lined up hoping to get in were executives from Japan Tobacco International and British American Tobacco PLC.
There was a big name missing from the group: Philip Morris International. A Philip Morris representative later told reporters its employees did not turn up because the company knew it was not welcome.
Illustration: Kevin Sheu
In fact, executives from the largest publicly traded tobacco firm had flown in from around the world to New Delhi for the anti-tobacco meeting. Unknown to treaty organizers, they were staying at a hotel an hour from the convention center, working from an operations room there.
Philip Morris International would soon be holding secret meetings with delegates from the government of Vietnam and other treaty members.
The object of these clandestine activities: the WHO’s Framework Convention on Tobacco Control (FCTC), a treaty aimed at reducing smoking globally.
Philip Morris International is running a secretive campaign to block or weaken treaty provisions that save millions of lives by curbing tobacco use.
In an internal document, the company said it supported the enactment of the treaty, but Philip Morris had come to view it as a “regulatory runaway train” driven by “anti-tobacco extremists” — a description contained in the document, a 2014 PowerPoint presentation.
Confidential company documents and interviews with current and former Philip Morris employees reveal an offensive that stretches from the Americas to Africa to Asia, from hardscrabble tobacco fields to the halls of political power, in what might be one of the broadest corporate lobbying efforts in existence.
Details of those plans are laid bare in a cache of Philip Morris documents, one of the largest tobacco industry leaks ever.
Reuters is publishing a selection of those papers in a searchable repository, The Philip Morris File, at http://reut.rs/2sT51xF.
Dating from 2009 to last year, the thousands of pages include e-mails between executives, PowerPoint presentations, planning papers, policy toolkits, national lobbying plans and market analyses.
Taken as a whole, they present a company that has focused its vast global resources on bringing to heel the world’s tobacco control treaty.
TARGETING THE TREATY
Philip Morris works to subvert the treaty on multiple levels: It targets the FCTC conferences where delegates gather to decide on anti-smoking guidelines. It also lobbies at the country level, where the makeup of FCTC delegations is determined and treaty decisions are turned into legislation.
The documents, combined with reporting in 14 nations from Brazil to Uganda to Vietnam, reveal that a goal of Philip Morris is to increase the number of delegates at the treaty conventions who are not from health ministries or involved in public health.
That is happening: An analysis of delegates to the FCTC’s biennial conference shows a rise since the first convention in 2006 in the number of officials from ministries like trade, finance and agriculture for whom tobacco revenue can be a higher priority than health concerns.
Philip Morris says there is nothing improper about its executives engaging with government officials.
“As a company in a highly regulated industry, speaking with governments is part of our everyday business,” Philip Morris vice president of communications Tony Snyder said in a statement in response to the findings. “The fact that Reuters has seen internal e-mails discussing our engagement with governments does not make those interactions inappropriate.”
In a series of interviews in Europe and Asia, Philip Morris executive Andrew Cave said company employees are under strict instructions to obey both the company’s own conduct policies and local law in the countries where they operate.
Cave, a director of corporate affairs, said that while Philip Morris disagrees with some aspects of the FCTC treaty and consults with delegates off-site during its conferences, ultimately the delegations “make their own decisions.”
“We’re respectful of the fact that this is their week and their event,” Cave said in an interview in New Delhi as the parties to the treaty met in November last year.
Asked in an earlier interview whether Philip Morris conducts a formal campaign targeting the treaty’s conferences, held every two years, Cave gave a flat “no.”
HEALTH IMPACT
When the FCTC delegates gather, lives hang in the balance. Decisions taken at the conferences over the past decade, including a ban on smoking in public places, are saving millions of lives, according to researchers at Georgetown University Medical Center.
Between 2007 and 2014, more than 53 million people in 88 countries stopped smoking because those nations imposed stringent anti-smoking measures recommended by the WHO, according to their study from December last year.
Because of the treaty, an estimated 22 million smoking-related deaths will be averted, the researchers found.
However, tobacco use remains the leading preventable cause of death — and by 2030 will be responsible for 8 million deaths a year, up from 6 million now, the WHO says.
There was jubilation when the treaty was adopted in 2003.
The treaty, which took effect in 2005, made it possible to push for measures that once seemed radical, such as smoke-free bars.
About 90 percent of all nations eventually joined. A big holdout is the US, which signed the treaty, but has yet to ratify it.
Since the FCTC came into force, it has persuaded dozens of nations to boost taxes on tobacco products, pass laws banning smoking in public places and increase the size of health warnings on cigarette packs.
Treaty members gather every two years to consider new provisions or strengthen old ones at a meeting called the Conference of the Parties which first convened in 2006 in Geneva, Switzerland.
However, an FCTC report shows that implementation of important sections of the treaty are stalling. There has been no further progress in the implementation of seven out of 16 “substantive” treaty articles since 2014, a report by the FCTC secretariat in June last year said.
A key reason: “The tobacco industry continues to be the most important barrier in implementation of the convention,” it said.
MORE POWERFUL
Indeed, the tobacco industry has weathered the tighter regulation.
There has been only a slight 1.9 percent decline in global cigarette sales since the treaty took effect in 2005 and more people smoked daily in 2015 than a decade earlier, studies show.
The Thomson Reuters Global Tobacco Index, which tracks tobacco stocks, has risen more than 100 percent in the past decade, largely due to price increases.
“Some people think that with tobacco, you’ve won the battle,” said former Finnish minister of health Pekka Puska, who chaired an FCTC committee last year.
“No way,” he said. “The tobacco industry is more powerful than ever.”
With 600 corporate affairs executives, according to a November 2015 internal e-mail, Philip Morris has one of the world’s biggest corporate lobbying arms. That army, and at least US$7 billion in annual net profit, gives Philip Morris the resources to overwhelm the FCTC.
The treaty is overseen by 19 staff at a secretariat office hosted by the WHO in Geneva. The secretariat spends on average less than US$6 million a year. Even when buttressed by anti-smoking groups, the secretariat is outgunned. Its budget for this year and last year for supporting the treaty clause on combating tobacco company influence is less than US$460,000.
FCTC Secretariat head Vera Luiza da Costa e Silva is the person tasked with preventing the industry from neutering the agreement.
In two interviews at her Geneva office, Da Costa e Silva, a medical doctor who holds a doctorate in public health and has a dyed pink streak in her hair, explained why the FCTC banned attendance by any member of the public at the 2014 biennial conference in Moscow.
The ban came in response to efforts by tobacco executives to use public badges to get inside the venue, she said, adding that industry representatives then started borrowing badges from delegates they knew to gain entry.
“It’s a real war,” she said.
However, she only had a partial picture of the forces ranged against her. She was not aware of the fact that Philip Morris had a large team operating throughout the convention in Moscow, or the details of its activities in New Delhi in November last year.
“This is so disgusting. These are the forces against which we have to work,” Da Costa e Silva said in May after being told about the Philip Morris documents. “I think they want to implode the treaty.”
TOBACCO OUTRAGE
The idea of a global tobacco treaty had been discussed among health advocates since at least 1979, when a WHO committee suggested the possibility.
Former Norwegian prime minister Gro Harlem Brundtland, who was director-general of the WHO from 1998 to 2003, made it happen.
She was aided by outrage over documents that surfaced as part of the landmark 1998 Master Settlement Agreement, in which the four largest US tobacco companies agreed to pay more than US$200 billion to 46 US states. The internal communications showed that tobacco executives lied for years about their knowledge of the deadly nature of cigarettes.
A 1989 document revealed one company’s plan to fight threats to the industry, saying: “WHO’s impact and influence is indisputable.”
It went on to say: “Countermeasures designed to contain/neutralize/re-orient the WHO.”
That company was Philip Morris.
In 2008, Altria Group Inc split up its Philip Morris business.
Philip Morris USA, which remains a subsidiary of Altria, sells Marlboro and other brands in the US. Philip Morris International was spun off and handles business abroad.
Since the split, Philip Morris International shares have more than doubled and Altria’s have more than tripled.
Philip Morris International’s operational headquarters are in Lausanne, Switzerland, down the street from a patch of Gallo-Roman ruins, in a sleek building with a cafeteria, gym and a patio facing Lake Geneva. From there, the company is working to hobble the treaty.
Internal company communications reveal the scope of Philip Morris’ operation during the 2014 FCTC treaty meeting in Moscow.
The company set up a “coordinating room” that could seat 42 people, said the 2014 PowerPoint presentation, titled “Corporate affairs approach and issues.”
Leading the operation was Philip Morris executive Chris Koddermann. Formerly a lawyer and lobbyist in Canada, Koddermann joined the firm in 2010. He is now a director of regulatory affairs in Lausanne.
The PowerPoint describes the ideal corporate affairs executive as someone who is able to “play the political game.” Koddermann previously worked for federal and provincial cabinet ministers in Canada, according to his LinkedIn profile.
TRADE
At the end of the Moscow meeting, on Oct. 18, 2014, Koddermann sent an e-mail congratulating a 33-person Philip Morris team on their success in diluting or blocking measures intended to strengthen tobacco controls and reduce cigarette sales.
The gains he touted at the end of the week-long conference were the culmination of a two-year effort, the e-mail said.
The documents shed light on one key objective in Philip Morris’ FCTC campaign: Keep tobacco within the ambit of international trade deals, so the company has a way to mount legal campaigns against tobacco regulations.
In Moscow, one proposal called for carving out tobacco from trade pacts.
International trade treaties often include provisions, such as the protection of trademarks, that Philip Morris has used to challenge anti-smoking measures. If tobacco were taken out of the treaties, as suggested by the proposal, Philip Morris could be deprived of many such legal arguments.
An early draft asked parties to support efforts to exclude tobacco from trade pacts and to prevent the industry from “abusing” trade and investment rules.
In the end, the proposal was watered down. The final decision only reminded parties of “the possibility to take into account their public health objectives in their negotiation of trade and investment agreements.”
There was no mention of excluding tobacco.
Koddermann, in his e-mail to colleagues on the last day of the conference, declared victory, describing the change as “a tremendous outcome.”
Overall, the company achieved its “trade-related campaign objectives,” including “avoiding a declaration of health over trade” and “avoiding the recognition of the FCTC as an international standard,” he wrote.
The win was significant. A former Philip Morris employee said the company has routinely used trade treaties to challenge tobacco control laws.
The aim, he said, was “to scare governments away from doing regulatory changes.”
Even though the tobacco industry has lost a series of major legal battles, its suits have served to discourage the implementation of regulations that curb smoking. Those delays can yield years of unimpeded sales.
As the Philip Morris PowerPoint presentation from 2014 put it: “Roadblocks are as important as solutions.”
WATERED DOWN
One roadblock was a campaign to stop the 2011 introduction of rules in Australia banning logos and distinctive coloring on cigarette packs.
The company’s litigation and arbitration against the measure ultimately were dismissed — but not before five countries filed complaints against Australia on the same subject at the WTO. The global trade body has yet to announce a decision.
The attempt to undo Australia’s regulations has had a chilling effect elsewhere.
It slowed the introduction of plain-packaging rules in New Zealand. Citing the risk that tobacco companies might “mount legal challenges,” the government announced in 2013 that it was postponing the move and waiting to “see what happens with Australia’s legal cases.”
The legislation is now scheduled to go into effect next year.
In his Moscow conference e-mail, Koddermann also expressed pleasure at the fate of a proposal on farmers.
Initial language would have recommended that nations restrict support for tobacco growers.
The proposal was “significantly watered down,” he wrote. “This is a very positive result.”
Gustavo Bosio, at the time a Philip Morris manager for international trade, chimed in a few days after the conference in an e-mail: “These excellent results are a direct consequence of the remarkable efforts of all PMI [Philip Morris International] regions and markets during the past two years and throughout the intense week in Moscow.”
Philip Morris is not alone in seeking to weaken the treaty.
Ahead of the 2012 FCTC conference in Seoul, four cigarette giants — Philip Morris, British American Tobacco (BAT), Japan Tobacco International and Imperial Brands PLC — formed an “informal industry working group” to oppose various proposals on tobacco taxation, an internal BAT document reviewed by reporters said.
The 45-page paper, the existence of which has not been previously reported, said that the group would coordinate “to the extent that these issues do not raise any anti-competitive concerns.”
The paper outlined a global campaign planned by BAT to counter the FCTC, which was “increasingly going beyond” its mandate, and listed objectives, including a bid to block discussions around the introduction of a minimum 70-percent tax on tobacco.
BAT declined to answer questions about the industry working group. Both Imperial and Japan Tobacco International said they did not want to comment on a document from a competitor. Japan Tobacco International said its tax experts met with counterparts from other tobacco companies to discuss treaty guidelines on taxation ahead of the 2012 conference. Philip Morris did not comment on the document.
WOOING DELEGATES
The Philip Morris e-mails and documents do not explicitly detail how the company pulled off the victories in Moscow, but they provide insight into the importance it places on wooing delegates.
The FCTC traditionally makes decisions by consensus, so influencing a single delegation could have outsized effects.
The treaty has a key clause meant to keep the industry from unduly influencing delegations. Article 5.3, as it is known, says nations should protect their public health policies from tobacco interests. Guidelines that accompany Article 5.3 recommend that nations interact with the industry only when “strictly necessary.”
However, the article — a single sentence — contains a loophole Philip Morris has exploited: The sentence ends with the words “in accordance with national law,” opening the door to arguments by pro-tobacco forces that any lobbying that is legal in a certain country is permissible when interacting with that country’s representatives.
They also argue that a sentence in a related document, the guidelines for Article 5.3, allows for such interactions to take place as long as they are conducted transparently.
One of the company’s targets has been Vietnam.
The day the Moscow meeting ended, Koddermann received an e-mail from his colleague, Nguyen Thanh Ky, a leading corporate affairs executive for Vietnam.
Ky said he had a “debrief lunch” with the Vietnamese delegation and had a good outcome to report: The delegation was in favor of “moderate and reasonable measures” to be implemented over a “practical timeline,” he wrote.
He did not specify which measures they discussed.
The Vietnamese delegation spoke up often during the Moscow meeting. A review of notes compiled by tobacco-control groups accredited as observers showed Vietnam’s interjections frequently mirrored Philip Morris’ positions on tobacco-control regulations.
Just like the tobacco giant, the Vietnamese said a higher tax on cigarettes would lead to more illicit sales. Like Philip Morris, they said the FCTC should stay out of trade disputes, and like Philip Morris, they opposed proposals to set uniform parameters for the legal liability of tobacco companies.
The FCTC guidelines on taxation ultimately did include a WHO recommendation for a minimum tax of 70 percent — something Philip Morris opposed, but the proposal to give the treaty more sway over trade disputes was weakened and measures to strengthen the legal liability of cigarette companies were delayed.
Vietnam’s foreign ministry did not respond to questions for comment.
Additional reporting by Joe Brock, Ami Miyazaki, Mai Nguyen, My Pham, Minh B. Ho Elias Biryabarema, Enrico Dela Cruz, Stephen Eisenhammer, Anthony Boadle, Alexis Akwagyiram, Ulf Laessing and Patturaja Murugaboopathy
This is part one of a two-part story. Part two will run tomorrow.
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