Sat, Aug 22, 2015 - Page 4 News List

Group calls for a stop to Japan tobacco investment

INVESTMENT PACT:An anti-smoking group continues to protest against government approval of Japan Tobacco’s plans to build a plant in Tainan, its largest outside Japan

By Abraham Gerber  /  Staff reporter

John Tung Foundation chief executive Yau Sea-wain, left, and other members of the foundation protest yesterday in Taipei against Japanese firms building tobacco factories in Taiwan.

Photo: Lin Hui-chin, Taipei Times

The Taiwan-Japan bilateral investment agreement should be amended to stop Japanese firms from building tobacco factories in the nation, the anti-smoking John Tung Foundation said yesterday.

Soochow University law professor and foundation chief executive officer Yau Sea-wain (姚思遠) questioned the government policy of including Japanese tobacco firms in the Arrangement for the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment (投資自由化、促進及保護協議) negotiated in 2011.

The foundation has repeatedly protested against the government’s approval of the construction of a large Japan Tobacco plant in Tainan earlier this year.

The foundation said that the 7.6-hectare factory would be Japan Tobacco’s largest offshore base when it is completed, saving the firm an estimated NT$3 billion (US$91.3 million) in tariffs by producing about 35 percent of local demand for cigarettes, with plans to export to Southeast Asia.

As a foreign investor, Japan Tobacco is also entitled to exemptions from land, house and business taxes for two to five years.

“Japan placed tobacco products on a list of reserved industries, in effect preventing Taiwanese investment,” Yau said, calling on the government to add tobacco firms to its list of reserved industries under the investment agreement, while simultaneously revoking the factory’s operating license.

Under the terms of the agreement, investments can be expropriated for a “public purpose” as long as compensation is provided, he said.

Under the WHO Framework Convention on Tobacco Control (FCTC) ratified by Taiwan, the national government is forbidden to provide incentives and benefits to encourage the development of the tobacco industry, he said.

“It is very difficult for Japanese [tobacco firms] to set up business in Malaysia and Thailand because they are all signatories to the FCTC and have high entry barriers to protect the local tobacco industry and the health of their citizens,” he said.

“The only reason [Japan Tobacco] chose to invest in Taiwan rather than Indonesia or Singapore is because our government is willing to cooperate,” Yau said.

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