Development & Aid, Headlines, Health, Latin America & the Caribbean, Population

MEXICO: Deal With Tobacco Firms Violates Int’l Treaty, Say Health Officials

Diego Cevallos

MEXICO CITY, Sep 20 2005 (IPS) - A deal struck between the Mexican government and tobacco companies violates the Framework Convention on Tobacco Control, maintains the National Public Health Institute (INSP), although the World Health Organisation has failed to address the matter.

Through the agreement in question, the government has pledged not to raise taxes on the sector, in return for tobacco industry donations to a health care fund.

Mauricio Hernández, director of the public but independent INSP, told IPS that the donation scheme was first implemented in mid-2004 as “a measure used by the tobacco companies to put an end to the firm hand used against them in Mexico.”

In his opinion, the agreement indicates that his country has dropped its guard against the national and transnational companies that produce and sell tobacco products. Consequently, the government is not living up to its commitment to prevent tobacco consumption.

Official figures reveal that the harmful effects of tobacco are suffered by 13 million smokers in Mexico, as well as 35 million “passive” smokers who regularly breathe in second-hand smoke. According to health authorities, between 114 and 122 people die from smoking-related causes every day.

In mid-2004, President Vicente Fox announced with considerable fanfare that the Philip Morris, British American Tobacco and Tabacalera Mexicana tobacco companies would contribute a portion of the price of every package of cigarettes sold to a health ministry fund aimed at providing treatment for sick children and building health care infrastructure.

Fox expressed his “appreciation” to the tobacco companies for these contributions, which were to continue until the end of 2006.

What was not mentioned at the time, but leaked out this year, partly due to Hernández’s loud complaints, is that the government promised the tobacco companies that these donations would be tax-deductible, and that there would be no increase in the taxes paid by the companies before December 2006.

Hernández and others argue that this agreement violates the World Health Organisation (WHO) Framework Convention on Tobacco Control, an international treaty signed by Mexico in 2003, which entered into force in February of this year.

Countries that are parties to the Convention have the obligation to implement tough taxing and price policies aimed at curbing tobacco consumption. The treaty also establishes restrictions on advertising and tobacco company sponsorship of cultural and sporting events.

The INSP consulted WHO regarding Mexico’s possible violations of the Convention. In July, the organisation sent a letter in response, stating that it could not pass judgement on the matter, and that any pronouncements would have to come from the Conference of Parties, made up of representatives of the states that have signed the treaty.

Attempts by IPS to obtain a statement from WHO representatives in Mexico were unsuccessful.

In the section dealing with the settlement of disputes, the Framework Convention stipulates that any disagreements on compliance with the treaty should first be addressed through negotiation, but if this fails, the parties are bound to submit to arbitration.

“We believe that by accepting donations from the tobacco companies in exchange for a tax break, (the Mexican government) is violating the Framework Convention, but the health ministry maintains that the money they donate should be considered a de facto tax. We have opposing viewpoints, and perhaps arbitration will be needed to resolve the matter,” declared Hernández.

Until now, however, no steps have been taken to implement these mechanisms within the framework of the WHO.

The controversial agreement between the government and the tobacco firms is scheduled to remain in effect until December 2006. But the agreement itself stipulates that it could be cancelled earlier, if the government decides to impose new taxes on the companies that manufacture cigarettes.

Hernández said the tobacco companies are the big winners in this deal, since their donations help create a positive image that overshadows the serious damage to human health caused by their products.

The efforts of tobacco companies to clean up their image and underplay the accusations that smoking leads to illness and death have been documented since the 1990s.

“Profits Over People”, a study released in 2002 by the Pan American Health Organisation (PAHO), revealed that throughout the previous decade, active strategies were applied in Latin America and the Caribbean to co-opt journalists, disseminate incomplete and biased reports, and negotiate with the authorities to avoid restrictive measures against the tobacco industry.

The report concluded that British American Tobacco and Philip Morris International, which together control most of the cigarette market in region, acted with little or no ethics in actively promoting tobacco consumption.

The PAHO study showed that tobacco companies secretly hired scientific researchers in Latin America and the Caribbean to misrepresent the scientific evidence linking secondhand smoke to serious diseases, while paying the travel costs for journalists to cover this purported research.

The companies “had detailed knowledge of smuggling networks and markets and actively sought to increase their share of the illegal market by structuring marketing campaigns and distribution routes around it,” PAHO added.

They also designed “youth smoking prevention” campaigns and programmes that were basically public relations exercises, while continuing to target young people in their advertising.

Mexican Health Secretary Julio Frenk maintains that Mexico has not given up the fight against smoking and that the agreement on tobacco company donations was the best possible strategy.

According to Frenk, if the taxes paid by the companies had been raised, the funds thus collected would have gone into the general state coffers and perhaps been used for other purposes, while the donations contributed to the fund established are directly earmarked for health care initiatives.

In effect, the money donated for each package of cigarettes sold is an additional tax, and complies with the objective of raising the cost of cigarettes to discourage smoking, said Frenk.

When Fox took office in December 2000, the sales price of a pack of cigarettes included a 100 percent tax. And by 2004, the share of the sales price represented by taxes had risen to 151 percent.

The government insists that the arrangement challenged by the INSP does not violate the WHO Framework Convention, because in addition to having been adopted before the treaty entered into force, it also helps fulfil the commitment to make cigarettes more expensive, and thereby discourage consumption.

In Mexico, cigarette advertising has been banned on radio and television and in most print media since 2003. Smoking is prohibited in public buildings, public transportation and educational facilities, as well.

The INSP director acknowledged that these measures are steps in the right direction. However, he stressed, prevention campaigns are weak “and almost non-existent,” and this has led to an increase in smoking, especially among young people, “which is very troubling.”