Thursday, November 1, 2012

Vampire BAT

PEOPLE'S STRUGGLE
Herman Tiu Laurel
10/29-11/4/2012



HERE is a British House of Commons presentation in 2000, "Note of Evidence by Duncan Campbell in respect of Planning, Organization and Management of Cigarette Smuggling by British American Tobacco, Plc, and related issues…the activities of British American Tobacco PLC ('BAT') and its predecessor, subsidiary and group companies during the period from 1970 to date.

It is based on enquiries made by the author and others as part of an international investigation conducted during 1999 by the International Consortium of Investigative Journalists, a project of the Center for Public Integrity ("CPI")—a Washington based public interest research group. The major issues are: A) Smuggling, the deliberate smuggling of BAT products evolved from an ad hoc activity into an organized and centrally managed system of lawbreaking…."

In the midst of the raging debate over "Sin Taxes" advocates such as DoF Secretary Purisima, pushing to raise P 60-B by raising by five times the excise tax on domestic, Filipino-made and produced tobacco and cigarette products while leaving taxes on luxury and imported brands practically untouched, it is vital to take the warnings that tobacco smuggling will ensue massively if the "Purisima Sin Tax" (HB1527) is approved. The real and main proponents of the "Purisima Sin Tax" bill, is the British American Tobacco (BAT) corporation.

Here's a headline from Philippine Star, October 15, 2012 by Iris Gonzales: "Brit-Am Tobacco backs House version of sin tax bill… In a position paper, BAT asked lawmakers to pass a bill that would level the playing field in the industry…" Levelling can be read to mean "bulldozing" the Philippine tobacco industry.

BAT's criminal activity endemic
The House of Commons report continues: "Support for criminal activity is endemic among BAT senior managers… in planning, organizing or managing criminal activity, and/or have knowingly consented to the deliberate smuggling of contraband BAT tobacco products around the world. A very substantial part of the company's revenues derives from this. BAT has provided support to narcotics traffickers and other organized crime supported the smuggling of narcotics (cocaine, crack and heroin) by providing tobacco products with which value may be returned to producer countries. This is particularly so where international controls have been developed to restrict money-laundering of the proceeds of narcotics sales. A consequence of the company's actions is and has been to remove billions of pounds annually from the income of governments around the world."

In 2005 Jamie Doward of The Observer reported, "'Smuggling claims hit tobacco giant'… Fresh allegations rock BAT as six-year investigation by the Mounties leads to publication of secret letters… it had colluded in a multi-million-pound smuggling operation. "Among its references is a research paper entitled "Complicity in contraband: British American Tobacco and cigarette smuggling in Asia. Objectives: To examine the complicity of British American Tobacco (BAT) in cigarette smuggling in Asia, and centrality of illicit trade to regional corporate strategy. Results: BAT documents demonstrate the strategic importance of smuggling across global, regional, national, and local levels. Particularly important in Asia, contraband enabled access to closed markets, created pressure for market opening, and was highly profitable…."

BAT-men's "robins"
In the heat of the "Purisima Sin Tax" bill debate the head of the Presidential Legislative Liaison Office (PLLO) Manuel Mamba alleged that the "bribe" money had circulated in the Philippine Senate to water down the radical "Purisima Sin Tax". Senator Ralph Recto felt alluded to and resigned his post as head of the Ways and Means Committee handling the "sin tax" proposal. I don't think Recto is that thin skinned to resign over such simple allegations, most of these politicians are inured to such charges as lobby money is a regular mode of transaction among them as Recto knows from the VAT on fuel taxes which he allowed to be passed on. A threat more serious than mere allegations of "bribery" must have forced Recto's resignation, something like an AMLA violation (as in Corona's case), paving the way for takeover by a pliant Drilon.

"Robin" in the urban dictionary means "nice person", BAT cultivates such "robins" or lobbyists. From Wikipedia for example, "British American Tobacco spent more than €700,000 lobbying the EU in 2008, up to four times as much as the company declared on the EU's register of interest representatives, according to a report by Corporate Europe Observatory." There are other insidious lobbies, such as Bloomberg's Tobacco Control Grants masked under "smoke free" campaigns. On Scott.net on the Internet Mayor Bloomberg of New York City, leading the Bloomberg Foundations, is quoted saying "We want to get governments to raise taxes…" some Philippine recipients: $ 255,626.00 for Action for Economic Reforms (AER), $ 300,960.00 for "HealthJustice" Foundation, $234,794.00 for U.P. College of Law, among a list of over twenty local NGOs and institutions.

Bigger sin, higher tax?
A major issue against the latest compromise version (reducing the tax goal to P 40-B) of the "Purisima Sin Tax" is its inordinately higher tax burden on the tobacco and cigarette industries and reduction of alcohol and beer taxes. Under the original HB1527 cigarettes and alcohol would share the P 60-Billion hike sought by the DoF equally, but Purisima downgraded San Miguel Corp.'s Pale Pilsen to lowest category and with proposed excise tax standing as it is at P 15.49 allowing it a four-year no tax increase holiday, while the rate for the highest tax tier for beer was reduced from P 20.57 per liter to P 18.80. The highest tax rate for top cigarettes brands was raised from P 28.30 to P30 per pack. Overall results of Purisima's maneuvers reduced projected tax from alcohol from P 30-B to P 4.48-B or 85% decrease, while tobacco and cigarettes was reduced by only 10% to P 26.8-B.

Purisima's explanation: "Based on the position of the Dept. of health there is moderate drinking but there is no moderate smoking…. Therefore, the bigger of the sin is smoking and therefore the bigger of the deterrent should be in smoking …It will allow us to… fund public health care and to discourage consumption of sin products…" Purisima and the DoH makes no distinction between smoking one stick a day and four packs a day, and the fact that a smoker in permissible places may harm only himself while drunk driving (a leading cause of death in the World) can and do cause disastrous or even fatal vehicular accidents and/or public or family altercations, mayhem, beatings or worse. Evident from the incongruous logic of Purisima and the DoH is that they are bowing to lobby pressures, whether it is form the BAT, the presidential uncle and others; while preying on the Philippine tobacco industry.

Political tax?
The advocates for the "Purisima Sin Tax" argue that the increase in tobacco and cigarette excise taxes is necessary to fund the Dept. of Health programs (though DOH has P 12-B still unspent from present sin taxes). Gut we noted the statements from budget secretary Butch Abad made before a forum on health financing: "I'm not so much worried about the difference [in the amount of revenue]. I'm more concerned about the ability of the Department of Health and PhilHealth to actually absorb that huge amount…" The report continues to say that "If the sin tax bill is passed, 85% of the expected revenue will be sued for universal health care coverage, while the remaining 15% will go to programs that will help tobacco farmers, Abad said." These statements from Abad pave the way for the DBM to be caretaker of the tax take from the "Purisima Sin Tax".

Abad's words can explain why Pres. BS Aquino III on October 16, 2012 at the FOCAP (Foreign Correspondents Association of the Philippines) said, "There are several senators who are opting to run for next year's elections …. And how can anybody say they are opposed to an effective sin tax measure? So do we need a plan B if in [case] it doesn't pass? I think I am confident that it will pass,… We have stated the same to our allies in the Senate on how important this measure is …." It's either Abad will be using the hiked tax take from the "sin tax" for the elections or the BAT and such lobbyists will fork over campaign funds only after the Purisima sin tax is approved. Will the political vampires. "Igor Purisima" and the Vampire BAT succeed in sucking the life blood out of our tobacco and cigarette farmers and manufacturers? Will we find out before the next Halloween?

(Watch Destiny Cable GNN's HTL edition channel 8, Saturdays, 8:15 to 9 p.m., replay 11:15 p.m. and Sunday, and onwww.gnntv-asia.com: this week "Bangsamoro ap-piece-ment" with Attys. Bono Adaza and Alan Paguia; tune to 1098AM radio Tues. To Fri. 5 to 6pm http://newkatipunan.blogspot.com)

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