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)

Lower the MRT fares

DIE HARD III

Herman Tiu Laurel

10/29/2012

The O&M (Operation and Maintenance) cost of the MRT is now shown to be actually lower than MRT fares now charged, based on data obtained from the RILES Network, Ibon Foundation, Agham and Bayan Muna research. Using the "farebox method," i.e. the proportion of the fare revenues to the total operational costs of the trains, they found the MRT O&M per passenger costing only P9.11 compared to fares ranging from P10 to P15 per passenger. Agham's Giovanni Tapang writes: "…an MRT customer is already paying P0.89 to P5.89 more than what is necessary to maintain the MRT." Each MRT passenger today is paying more than enough for the O&M of the MRT, plus an excess that likely goes to the so-called "subsidy." The subsidy clearly does not go to commuters as the Aquino III government claims; rather, it has gone and continues to flow to a train of financial oligarchs that have scammed the country.

Data from the RILES Network research are reliable. Among their members and leadership are former employees and workers of the LRT and MRT who have the inside info. RILES lead convenor Sammy Malunes is a former worker and union leader of the LRT. With Malunes, we launched the anti-MRT fare hike signature campaign last week. The RILES Network and its allied groups have solid information on the O&M of the MRT. Their research used the "farebox ratios" for the LRT1 and LRT 2 showing an average of 1.39 and 1.01, respectively, meaning their respective revenues cover already the total O&M cost of running the trains, and more. So where goes the "P7-billion" annual subsidy the DoTC claims it provides? Certainly, not to the commuters! The MRT and LRT fares can and should actually be lowered now, given the figures presented by the RILES Network.

If the DoTC will dispute the figures put forth by the RILES Network, it should bring out its own O&M data to prove its claims that the MRT is losing money in its operations and the government annual subsidy of around 7-billion really goes to the commuters whom they constantly blame and fault for the losses. The fact is the DoTC has never presented the complete picture and/or convincing data to explain the MRT losses, preferring to engage the public with propaganda and sowing intrigue — repetition of the unsubstantiated claim of "subsidy" to commuters and trying to distract by sowing discord between "spoiled" Metro Manila MRT commuters who take away from rural folks who neither benefit from riding the "subsidized" MRT-LRT and deprived of similar benefit. Now it's clear the millions of MRT commuters are not subsidized.

Where then is the P 7-billion annual subsidy — plus the P0.89 to P5.89 MRT commuters are paying over the O&M cost — where is all these going to? By simple reckoning, the financial burden taxpayers and MRT commuters are paying can be calculated by deducting the "farebox ratios" from the guaranteed P60/pax fare. The balance of P50 is the subsidy the people are paying. That burden started with Fidel V. Ramos, Sobrepenas, Ayala, Agustines and Campos groups that contracted the P60 MRT fare, onerous passenger quota, 15 percent profit guarantees; with advertising, concession and real estate revenues were meted out. The "investors" have since sold and resold four times over the projected MRT profits — to MRTC3FC, MPIC (Pangilinan), Goldman Sachs, Bobby Ongpin, back to government with profits made at each turn.

In the last reselling of the MRT to the government it got 80 percent MRT ownership, but without demanding or obtaining a single voting right on the board controlling the MRT operations. How in heaven's name does any buyer accept such an arrangement, owning 80 percent and having no say in any of the operations of the entity? That transaction involving Ongpin and the GMA administration using DBP and LBP funds seem to be an incontrovertible case of graft and plunder, but the Aquino III administration is no without it shady deal in the MRT case. The current DoTC chief is proposing now a complete buyback supposedly to "refinance and lower the cost of the 15percent profit guarantee," but still pressing the MRT (and LRT) fare hike and committed to re-privatizing the entire operation under the PPP (Public-Private Partnership) with government footing 50 percent of the investment.

Far from being subsidized, MRT commuters are hit with a triple whammy: paying overpriced MRT fares of which 30 percent goes to subsidizing a series of financial scammers, paying as taxpayers to the yearly P7-billion subsidy to the financial scammers, and getting blamed by government for a the subsidy that as commuters they never enjoyed. The public must put an end to the government and oligarchs' pressure to raise the MRT fares, MRT fares must be reduced to what is just and productive for all, and the serial financial scammers starting with FVR, Gloria Arroyo and oligarchs must all be investigated and prosecuted.

(Watch GNN's HTL show, GNN Channel 8, Saturdays, 8:15 to 9 p.m., 11:15 p.m. and Sunday 8 a.m., and over www.gnntv-asia.com. Tune to 1098AM radio Tuesday to Friday 5 to 6 p.m. or visit http://newkatipunan.blogspot.com)

BAT-man and 'robins'

DIE HARD III

Herman Tiu Laurel

10/22/2012

Department of Finance Secretary Purisima is pushing to raise P40 billion by raising the excise tax on domestic, Filipino-made and produced tobacco and cigarette products by five times while leaving taxes on luxury and imported brands practically untouched. The real backer of the "Purisima Sin Tax" bill, is the British American Tobacco (BAT) Corp. Here's a headline from Philippine Star, Oct. 15 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…" Leveling can be read to mean "bulldozing" the Philippine tobacco industry. As a sales pitch, BAT promises to invest in a $200-million cigarette plant in the Philippines, but what need would BAT have of a plant if the taxes of tobacco products produced in the Philippines already increase by five times?

It is vital to take the warnings that tobacco smuggling will ensue massively if the "Purisima Sin Tax," the BAT-man, is approved. 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..."

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 multimillion-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…."

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." Sen. 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 euros lobbying the European Union 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 for Action for Economic Reforms, $300,960 for "HealthJustice" Foundation, $234,794 for UP College of Law, among a list of over 20 local NGOs and institutions.

(Watch Destiny Cable GNN's HTL edition Channel 8, Saturdays, 8:15 to 9 p.m., replay 11:15 p.m. and Sunday, and on www.gnntv-asia.com: this week "Bangsamoro ap-piece-ment" with lawyers Bono Adaza and Alan Paguia; tune to 1098AM radio Tuesday to Friday 5 to 6 p.m. http://newkatipunan.blogspot.com)