CSR awards given to Tobacco Industry COVER its ‘ugly face’

A recent study conducted  by W.D.Aruna Shantha de Silva of the National Poison Centre of Malaysia, University of Sains, Malaysia, Penang, Malaysia and Ministry of Health, Sri Lanka, appeared in Asia Pacific Journal of Medical Technology in December 2012.  It had said the following;

“The prevalence of smoking among males was 29.9 percent and 0.4 percent among females in Sri Lanka, in 2006. The prevalence of smoking any tobacco product among adults over 15 years was 32.4 percent and among females it was 2.1 percent”.  

A recent study by Katulanda et.al. revealed that the prevalence of smoking among males was 38 percent and among females it was 0.1 percent.

The highest prevalence of tobacco smoking (44.6 percent) was found in the 20-29 age group, while the adolescents less than 20 years had the lowest prevalence (15.6 percent). Moreover, they found that smoking was commonly associated with lower income and lower education. Among adolescents aged 13 to 15 years in Sri Lanka, the prevalence of current tobacco use is 15.7 percent among males and 5.4 percent among females.

In Sri Lanka, 65.9 percent of youth (13-15 years old) are exposed to secondhand smoke in public places. A significant high particulate level due to secondhand smoking in indoor public places was detected in Sri Lanka by Lee et al. Meanwhile, in 2011, it was reported that 35.4 percent of the youth was exposed to secondhand smoke in home.”

A few years ago Verite Research Executive Director, Dr. Nishan de Mel pointed out that if the gap between income levels and taxes on cigarettes had been bridged by the government would have earned Rs. 100 billion.

According to a research on tobacco taxation in Sri Lanka, the price of a cigarette had not increased according to the income level in the country. If the gap is bridged today the government will earn revenue of Rs. 16 billion every year.

The researchers pointed out that a 50 percent price increase on cigarettes is needed from 2009 onwards to correct the past lapses in affordability adjustments.
Economist Dr. de Mel points out that tax on cigarettes should be increased gradually in keeping with the income levels of people in the country. Increasing the prices of certain brands will encourage people to use cheaper brands which could be more harmful to health; hence prices of cigarettes should be increased across the board.
According to the research in Sri Lanka there is a clear co-relationship between prices and smoking – when price is increased by 10 percent, consumption drops by 5 percent.

In the meantime, at the end of the year 2013, the tobacco industry in Sri Lanka was placed No. 4 among the top 25 corporates by Business Today Top 25 awards.
The Corporate Social Responsibility (CSR) Programme of the tobacco industry to make Sri Lankan families economically independent through sustainable home gardening and animal husbandry practices too has been taken into consideration. According to them it has impacted on over 16,000 families benefitting over 60,000 people in Sri Lanka.

While such accolades are being showered on the tobacco industry in Sri Lanka, it would be worthwhile to look at some other disturbing facts.

Over 60 persons a day die in their productive years due to tobacco related diseases. Tobacco smoking is one of the biggest causes of all deaths and disabilities from non-communicable diseases in Sri Lanka as NATA revealed in 2009.

Tobacco companies may also seek to engage in “socially responsible” business practices (such as good employee-employer relations or environmental stewardship), which do not involve contributions to other parties. Promotion to the public of such otherwise commendable activities should be prohibited, as their aim, effect or likely effect is to promote a tobacco product or tobacco use either directly or indirectly. Public dissemination of such information should be prohibited, except for the purposes of required corporate reporting (such as annual reports) or necessary business administration (e.g. for recruitment purposes and communications with suppliers).

The guidelines further recommend that –
The government should ban contributions from tobacco companies to any other entity for “socially responsible causes”, as this is a form of sponsorship.

Publicity given to “socially responsible” business practices of the tobacco industry should be banned, as it constitutes advertising and promotion.

The newspaper article also highlighted that contributing factors towards the tobacco industry’s high ranking this year are its operational excellence, contribution to the economy and steady financial performance, which also resulted in them becoming the largest industry quoted on the Colombo Stock Exchange earlier this year.
Most of the policy makers, politicians, legislators and certain people from the public believe that government receives a huge portion of its total revenue from the tobacco company. The simple truth is that only 5.4 percent of the total revenue that the government is receiving from tobacco (Central Bank Report 2011).

“Samurdhi” is a poverty alleviation programme in Sri Lanka. While yearly rupees 8,400 have been spent by the government for this programme, the Samurdhi beneficiaries have spent rupees 18,250 million only for cigarette smoking.

Therefore, Parties should consider having regular (automatic) adjustment processes or procedures for periodic revaluation of tobacco tax levels.
Regional particularities (e.g. cross-border trade) should be taken into account when formulating policies.

In order to avoid negative consequences, such as product substitution or an increase in illicit trade as well as to ensure that health objectives are met, all tobacco products should be taxed in a comparable way, where appropriate with a similar tax burden, and should be accompanied by strong policies and measures against illicit trade in tobacco products.

Therefore, it is necessary that the government consider including CSR in the NATA Act and fully implement WHO FCTC guidelines on tobacco advertising, promotion and sponsorship, before considering them for Awards!

It is very unpleasant when an industry getting an award for their so-called ‘corporate social responsibility’ and as a corporate contributing significant revenue to the nation, while the same industry which produces and sells to around 31 percent (males and females) of our population, a product which if used as intended causes death, disease and suffering which is many times a disaster, harmful and loss to the country.