US-ASEAN Business Council

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The US-ASEAN Business Council is an American trade organisation that promotes American private sector business interests in Southeast Asia, including Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.[1]

Relationship with the Tobacco Industry

Membership

Historic tobacco industry documents reveal that Philip Morris International (PMI) has been an US-ASEAN Business Council member since the 1990s, initially to “enhance the image and reputation of the company, its people and business leadership” in the Asian region.[2][3][4]

PMI’s former President for the Asia Region, Matteo Pellegrini, represented the tobacco company on the Business Council’s Board of Directors from at least 2010 to 2015.[5][6] In 2015, PMI’s representation on the Council was taken over by Jon Huenemann, PMI’s Vice President U.S. and International Affairs.[7] Huenemann also served as Secretary to the Council from 2015-2017.[7]

PMI’s membership of the US-ASEAN Business Council is consistent with the company’s strategy to grow its presence in Asian markets to secure ‘sustainable volume and margin growth’.[8] In 2015, PMI was cigarette market leader in several Southeast Asian countries, including Indonesia (35% market share)[9], the Philippines (74%)[10], and Singapore (48%)[11].

Donations

In 1999, the US-ASEAN Business Council was one of 33 business organisations sponsored by PMI.[12][13]

The year before, the Business Council had received a PMI donation of US$6,500 for so-called “general support”.[14] In 1995, the Business Council had received a similar donation of US$5,000 from the tobacco company.[15]

Facilitating Access to Decision Makers in Southeast Asia

The US-ASEAN Council’s influence in the Asian region is cemented by its official status as ‘supporting organisation’ of the Association of Southeast Asian Nations (ASEAN), an intergovernmental organisation that promotes further political and economic integration in the region.[1] ASEAN membership includes the region’s Ministers of economy, energy, finance, forestry and agriculture, and the region’s most senior customs officials. As one of ASEAN’s ‘supporting organisations’, the Business Council is allowed to raise member company concerns directly with ASEAN Ministers and senior officials.[1]

Health advocates have accused the Business Council of giving PMI “direct access to lobby government officials”.[16] The Council organises regular ‘business missions’ to specific countries where it facilitates meetings between its members and Ministers and senior officials.[1]

Access to Senior Government Officials

In March 2017 a Business Council delegation, including PMI, met with Vietnam’s Prime Minister H.E. Nguyen Xuan Phuc to discuss trade and investment.[17] This visit was preceded by an earlier meeting hosted by the Business Council in August 2016, soon after the Vietnamese Parliamentary elections, aimed at forging bonds between the Business Council’s members and the newly elected government.[18] PMI was present at this meeting. Similarly, in 2016 and 2017 PMI took part in US-ASEAN Business Council meetings with senior Government officials in the Philippines [19], Singapore[20], Malaysia[21], Thailand[22], and Indonesia.[23]

Access to Senior Custom Officials

In May 2016, PMI was part of a Business Council’s delegation to Cambodia to attend the 25th Meeting of the ASEAN Directors-General of Customs.[24] Herman Cheung, PMI Manager Illicit Trade & Prevention, represented PMI at this occasion. KPMG, an accountancy firm who was funded by PMI to carry out research on tobacco illicit trade, was also part of the delegation. Academics have criticised KPMG’s research methodology and data. For more information, see our section on PMI’s Project Star.

Lobbying Against Tobacco Plain Packaging

The US-ASEAN Business Council, like its member PMI, actively opposed the introduction of tobacco plain packaging legislation in several countries, which would see tobacco companies prohibited to use brand logos, colours, and promotional text on their tobacco packaging.

The Business Council lobbied against this tobacco control measure on its own, and as part of a lobby group made up of US business organisations including the US Chamber of Commerce, the National Association of Manufacturers, the Emergency Committee for American Trade, the United States Council for International Business, the National Foreign Trade Council, and the Transatlantic Business Council.[25]

Importantly, in all its correspondence with government officials on plain packaging, the Business Council failed to declare its relationship with PMI.

In December 2015, the Business Council responded to a public consultation launched by Singapore’s Ministry of Health on new tobacco control measures, including plain packaging.[26] In its consultation submission, the Business Council claimed that plain packaging would “violate Singapore’s obligations to protect IPR”, and serve as “unnecessary obstacles to trade”.[27]

In earlier submissions to the Australian and New Zealand governments[28][29] the Business Council had used the same arguments. In addition, in its submission to the Australian government, the Council also argued that it would encourage illicit tobacco trade and that there was little evidence to suggest that the measure would have a public health benefit.[28] In its New Zealand submission, the Business Council also voiced ‘slippery slope’ concerns, suggesting that the law would eventually be replicated to other industries.[29]

Arguments raised against plain packaging by the Business Council, mirrored those used in the anti-plain packaging campaigns run by the tobacco industry. For more information on the tobacco industry arguments, and a critical assessment of their validity, go to Countering Industry Arguments against Plain Packaging.

Lobbying against the Trans-Pacific Partnership’s Exclusion of Tobacco

The Trans-Pacific Partnership (TPP) is a trade agreement finalised in 2016 between 12 countries that border the Pacific Ocean and represent about 40% of the world’s economic output.

In 2013, Malaysia proposed that tobacco be excluded from the agreement.[30] This exclusion was designed to prevent tobacco companies from taking legal action against TPP member countries if countries decided to enact tobacco control measures.

The Business Council, and other US trade organisations, lobbied against Malaysia’s proposal for a tobacco exclusion, calling it ‘unnecessary’ as it supposedly ‘lacked any public-interest justification’, and was ‘highly damaging’ to ‘job-creating sectors’.[31][32] Despite their lobbying efforts, the tobacco exclusion was adopted in October 2015.

TobaccoTactics Resources

Relevant Link

TCRG Research

Lobby groups associated with US-ASEAN Business Council submitted joint statement to UK Consultation on plain packaging. US-ASEAN Business Council was not involved.

Notes

  1. 1.0 1.1 1.2 1.3 US-ASEAN Business Council, What we do, US-ASEAN Business Council website, undated, accessed May 2017
  2. Unknown, Unknown, 1998, Truth Tobacco Industry Document, Bates no: 2065260042-2065260050, accessed June 2017
  3. Unknown, Proposed Itinerary US-ASEAN Council Members Mission Week of September 25,1995, Truth Tobacco Industry Document, Bates no: 20469112113-2046911215, accessed May 2017
  4. D. Nelson, Your Vietnam trip, 14 September 1995, Truth Tobacco Industry Document, Bates no: 2046911212, accessed May 2017
  5. SEATCA, Industry surveillance handout 1: Tobacco Industry Front Groups & Activities, October 2010
  6. US-ASEAN Business Council, Board of Directors 2013, US-ASEAN Business Council website, 10 May 2013, accessed June 2017
  7. 7.0 7.1 US-ASEAN Business Council, Board of Directors 2015, US-ASEAN Business Council website, 19 September 2015, accessed June 2017
  8. M. King, Transcript of Remarks by Martin King President, Asia Region Philip Morris International Inc. Investor Day 29 September 2016, Lausanne
  9. Euromonitor International, Indonesia Cigarette Company Shares Retail Volume (%) 2015. Available from www.euromonitor.com by subscription (accessed May 2017)
  10. Euromonitor International, Cigarettes in the Philippines. Category briefing 12 October 2016. Available from www.euromonitor.com by subscription (accessed May 2017)
  11. Euromonitor International, Singapore Cigarette Company Shares Retail Volume (%) 2015. Available from www.euromonitor.com by subscription (accessed May 2017)
  12. D. Martz, Ally Organization, 20 August 1999, Truth Tobacco Industry Document, Bates no: 2077127841, accessed June 2017
  13. Unknown, Philip Morris Washington Relations Office Initiative Ally Organizations, August 1999, Truth Tobacco Industry Document, Bates no: 2077127842-2077127843, accessed June 2017
  14. Unknown, Philip Morris International 94000 Contributions Spend, 18 January 1999, Truth Tobacco Industry Document, Bates no: 2075898468-2075898477, accessed June 2017
  15. W.G. Burrell, PMI 950000 Contributions Original Budget, 1 November 1995, Truth Tobacco Industry Document, Bates no: 2070457483-2070457491, accessed May 2017
  16. Campaign for Tobacco-Free Kids, Report: Tobacco Industry Front Group and Activities in Southeast Asia, 16 November 2010, accessed June 2016
  17. US-ASEAN Business Council, U.S. Companies Engage Government of Vietnam to Discuss Trade and Investment, US-ASEAN Business Council website, 15 March 2016, accessed May 2017
  18. US-ASEAN Business Council, U.S. Companies Explore Opportunities with New Vietnam Leadership, US-ASEAN Business Council website, 25 August 2016, accessed May 2017
  19. Philip Morris International: US-ASEAN Business Council upbeat on Philippine economic prospects, 4-traders website, accessed May 2017
  20. US-ASEAN Business Council, U.S. Business Community Expresses Support for Singapore’s Future Economy Initiatives and 2018 ASEAN Chairmanship, US-ASEAN Business Council website, 15 May 2017, accessed May 2017
  21. US-ASEAN Business Council, M’sia seen as ‘valuable business location’: US-ASEAN Business Council, US-ASEAN Business Council website, 28 March 2017, accessed May 2017
  22. US-ASEAN Business Council, U.S. Companies Engage Thai Government, Affirm Commercial Relationship, US-ASEAN Business Council website, 21 July 2016, accessed May 2017
  23. US-ASEAN Business Council, U.S. Companies Engage Indonesia on Food Security, US-ASEAN Business Council website, 30 March 2016, accessed May 2017
  24. US-ASEAN Business Council, Briefing Paper for the ASEAN Directors-General of Customs. Prepared for the 25th Meeting of the ASEAN Directors-General of Customs, 25-27 May 2016, accessed June 2017
  25. US business groups attack NZ plain-packaging, The Sydney Morning Herald, 21 February 2013, accessed May 2017
  26. Ministry of Health Singapore, Public Consultation on Potential Measures to Enhance Singapore’s Tobacco Control Policies, 7 January 2016, accessed June 2017
  27. A.C. Feldman, President’s Newsletter April 2017, US-ASEAN Business Council website, accessed May 2017
  28. 28.0 28.1 Leading Business Organizations in the U.S. Issue Joint Statement in Opposition to Australian Government’s Proposed Tobacco Plain/Standardized Packaging Legislation, PR Newswire , 8 June 2011, accessed May 2017
  29. 29.0 29.1 A.C. Feldman, Letter to the Committee Secretariat Health Select Committee Members dated 18 March 2014, New Zealand Parliament website, accessed May 2017
  30. SEATCA, Excluding Tobacco from Trade and Investment Agreements: Transpacific Partnership Agreement (TPPA), undated, accessed June 2017
  31. Coalition of American business organisations, Letter to Ambassador Kenichiro Sasae, dated 21 October 2014, accessed June 2017
  32. Reuters, U.S. business, farm groups warn on tobacco limits in Pacific trade pact, 22 October 2014, accessed June 2017