SUBMISSION ON THE TOBACCO PRODUCTS CONTROL AMENDMENT BILL
COMMENTS ON THE TOBACCO PRODUCTS CONTROL AMENDMENT BILL,
BILL 117 of 1998, AS INTRODUCED IN THE NATIONAL ASSEMBLY
Introduction
FAWU supports the development of a healthy national lifestyle. We record that there are health risks associated with tobacco consumption and support the Minister's intention of making stricter Tobacco Control legislation.
This Bill is not an amendment Bill, but rather an entirely new Tobacco Products Control Policy.
In making this submission, we reserve our right to make verbal and oral representation to both the National Assembly Portfolio Committee on Health and the NCOP Select Committee on Social Services. We have also noted the undertaking by the NCOP Select Committee to hold public hearings in the provinces and we welcome this.
The Food and Allied Workers Union (FAWU) has not been consulted in the process of formulating the Tobacco Products Control Amendment Bill. Further, none of the other unions that are affected by this Bill have been consulted. We have voiced our discontent in this regard on numerous occasions, and when the Minister did take the time to talk to us, she remained intransigent to our suggestions. Equally troubling, however, was the fact that the major reason for this Bill as outlined by the Minister (i.e. to stop children from starting to smoke) will, as demonstrated internationally, not be effected in any significant way by a ban on advertising. More public education is a better option.
FAWU regards consultation and transparency as an integral part of our democracy, and as fundamental to the development of legislation. Unfortunately, this view was ignored by the Department of Health, and FAWU has had to take the initiative of inviting all interested and affected parties to come together and discuss issues raised in the Bill.
The process of drawing up the Tobacco Products Control Amendment Bill has been seriously flawed. Participatory democracy and good governance requires the involvement of Civil Society including Labour and Business in the decision-making and the development of society.
The process of drafting the Tobacco Products Control Amendment Bill has also ignored the legislation-making precedent set by the Constitutional Assembly. The Constitutional Assembly based its Public Participation Programme on legitimacy, transparency, credibility, accessibility and accountability. This Programme is generally acknowledged to be the most inclusive constitution-making exercise that has ever been conducted anywhere in the world. It is regarded as having set new standards for public participation and inclusivity in the law-making process.
Tobacco control is an issue that FAWU takes very seriously. We support reasonable tobacco control legislation, the protection of children from the harmful effects of smoking, the promotion of health for the nation, and a clean environment. However, we also believe that in the process of developing Tobacco Control Legislation, the Government needs to carry out a detailed assessment of the economic impact the legislation will have on industry employees and the communities where the industry is located.
In drafting tobacco control legislation we can learn from overseas experience. But, we should not rush to import these policies which are the end-products of processes that have taken decades of development. Further, we should not import policies that are based on different economic conditions, for example Europe grows very little tobacco, instead the bulk of its tobacco is imported from developing countries. Regulation as a strategy of tobacco control should be based on the economic realities that prevail in Southern Africa, the world's third largest tobacco exporting region.
The rest of this document firstly outlines key facts about the tobacco industry. Secondly, it evaluates the implications of the Bill. Lastly, we conclude with recommendations that we believe are sustainable.
The Tobacco Industry and The South African Economy
· Over 35 000 people are directly employed in the tobacco industry, the majority of whom live in rural areas and the majority of whom are women:
1. Over 28 000 farm workers
2. Over 2 400 workers in co-operatives
3. Over 4 400 workers in the manufacturing sector
· There are 5 RDP small scale farming initiatives currently under way in Mpumalanga, the Eastern Cape and Bushbuckridge, namely:
1. Hoxani Irrigation Scheme (Mpumalanga)
2. Nkomazi Irrigation Project (Mpumalanga)
3. Verena Project (Mpumalanga)
4. Balfour Project (Eastern Cape)
5. New Forest Project, Mahla Area (Bushbuckridge)
These projects are developing dozens of farmers from historically disadvantaged backgrounds. These new farmers are also providing hundreds of jobs to farm workers.
· 4 Additional RDP projects are currently being planned.
· Some 150 000 people are directly or indirectly benefited by the agricultural sector of the industry alone. For example:
1. Chemical Industry
2. Packaging Industry
3. Media Industry
4. Transport Industry
· 99% of all cigarettes consumed in South Africa are manufactured locally.
· In 1997, the tobacco industry contributed approximately R3.6 billion to the national exchequer. This amount does not include the corporate and personal taxes paid by farmers, co-operatives, manufacturers and their employees.
· There are approximately 65 000 formal retailers and 460 wholesalers.
· South Africa exports 33% of its raw tobacco production.
· There are 35 000 informal retailers in South Africa. A study of spaza
shops in Tembisa found that tobacco products account for 14% of total turnover. The study found that tobacco products make the fifth largest contribution to total turnover in spaza shops. In the case of spazas in hostel sites, cigarettes constitute the most important sales.
· Thousands of people in other associated industries are also economically benefited by the tobacco industry, e.g.: the transport industry, fertiliser industry, packaging industry, hotel and catering industry and the clothing industry. For example, the trade mark clothing manufacturing operation of one cigarette manufacturer employs over 1000 people.
· In the print media and advertising industries, thousands of people are economically benefited by the money that the tobacco industry spends on advertising and promotion. Further, a number of publications will be forced to close if the advertising and promotion of tobacco products is banned.
· The social impact of job losses in the tobacco industry will have a multiplier effect in each community and in each region where they occur. In many cases, in a particular community, the tobacco industry and the associated industries that supply it are the only sources of employment. For example, in Heidelberg, the cigarette factory is the centre of economic activity and the major employer. If that factory were to experience a drop in economic activity, jobs would not only be lost in the tobacco industry, but also in the associated industries that supply the tobacco industry. This in turn would affect the family members of people employed in all of these industries. Accordingly, the social impact of a drop in economic activity at the tobacco factory would be spread throughout the entire community and the surrounding region.
· Sporting bodies, cultural bodies and emergency services such as the John Rolfe helicopter will be severely affected by the proposed ban on tobacco sponsorships. Due to the legacy of Apartheid, many people have never had the opportunity to fully develop their sporting talents. We need all the funds we can get for sports development in marginalised communities. Further, having emerged from international isolation, our sportsmen and women need financial resources in order to develop their skills to the level required in international competition.
The Tobacco Industry contributes approximately R 40 million per annum to the sponsorship of sport and cultural activities. Obtaining alternative sponsorship will take time and it is not an easy process. We must not assume that the Private Sector has unlimited resources to allocate to sponsorships. Further, sponsorship budgets are also linked to the overall economic development and growth of the country.
With the exception of the Financial Sector, those industries that have historically made funds available for sponsorships, will face similar pressures to the Tobacco Industry in terms of the possible health risks associated with the use of their products - we are referring here to the Alcohol Industry and the Cellular Phone Industry. The Minister of Health has already announced that she plans to restrict sponsorship by the Alcohol Industry and we have recently seen reports, including a resolution tabled in Parliament about the possible health risks associated with cellular phone usage.
Further, sponsorship replacement should not be done on the basis of reallocation, namely the movement of sponsorship finds from one sport or activity to another. The guiding principle should be that Tobacco Sponsorship will be replaced once there are sufficient funds to replace it, without causing a nett loss of sponsorship funding.
The Economies of other SADC Countries
· There are approximately 1 million people directly employed in the tobacco industry in other SADC countries. Several million others are indirectly benefited by the tobacco industry.
· Zimbabwe, Malawi, Tanzania and Zambia export most of their production and the foreign exchange earned in this way is critical to the economies of these countries. In the case of Malawi, 70% of foreign exchange is earned from tobacco exports and in the case of Zimbabwe, 30% of foreign exchange.
· Tanzania, through rapid increases in small scale production is becoming a major producer.
· South Africa imports approximately 40% of its raw tobacco from other SADC countries.
Economic implications of the proposed Bill
Southern Africa is the world's third largest tobacco exporting region.
South Africa already has one of the five strictest tobacco. control regimes in the world. If the proposed Bill is passed as it currently stands, South Africa will have the strictest. As a developing country, we will have the strictest tobacco control legislation in the world, but it will come at a price. The tobacco industry and associated industries in the tobacco value chain will be negatively affected. This could cause a substantial decrease in employment. Workers and their dependants in the rural areas could be the hardest hit because they have very limited opportunities for re-employment in other sectors due to the economic decline both in the rural areas and nationally.
The development and implementation of current and future RDP small scale tobacco farming projects will also be jeopardised. The impact on the rural economy as a whole, particularly in the poorer provinces, could be severe. Workers employed in the manufacturing sector of the industry in pen-urban and urban areas could be retrenched. Because of the current increase in job losses in South Africa, and because of the skill specialisation in tobacco manufacturing, many of these workers may find it very difficult to gain reemployment in other sectors of the economy.
The economies of other SADC countries such as Zimbabwe, Malawi and Tanzania which are dependent on tobacco, will be negatively affected. Unemployment in the tobacco sectors of these SADC countries could force people to seek economic opportunity in South Africa. This will place a further burden on our already limited resources.
The tobacco industry in South Africa has already undergone a process of rationalisation, which has had a negative impact on employment in the industry. Over the last decade, tobacco growers who were not able to compete internationally, were forced to stop growing tobacco. However, the industry is currently competitive and exporting 33% of its raw tobacco production.
The prescriptions of the Bill relate to three broad areas:
1. A ban on advertising.
2. A ban on smoking in public places.
3. The prohibition of sports sponsorships by Tobacco Companies. Let us examine the implications of each of these issues.
A Ban on Advertising
Even in those countries where the advertising of tobacco products has been banned, there was no evidence of an on-going decline in consumption after the ban was implemented. Where there were decreases in consumption, they were temporary, where-after consumption in fact increased.
By prohibiting advertising, no significant declines in consumption will take place, but employment will be lost throughout the tobacco value chain. The first job losses will occur in the Media, Communications and Print Industries and there-after in other related industries. Several thousand people in the Media, Communications and Print Industries could lose their jobs in a very short period of time.
In the Tobacco Industry itself, the ban on advertising will remove competition for market share. This will result in the industry having no incentive apart from cutting costs, which will lead to job losses in the agricultural, processing, manufacturing and packaging sectors of the industry.
Both the Anti-Tobacco Lobby and the Tobacco Industry acknowledge that a ban will cause job losses. The Anti-Tobacco Lobby however argue that the retrenched workers will be re-absorbed by a growing economy.
THE ECONOMY IN SOUTH AFRICA IS NOT GROWING. It would therefore be foolhardy to expect any loss in employment to be regenerated. COSATU is currently engaged in job summit negotiations - attesting to the accuracy of this statement. Our economy is too fragile and too static to make vague references to unsubstantiated and invalid statements such as employment re-absorption.
Ban on Smoking in Public Places
A ban on smoking in public places will also have unintended consequences. In those countries that have implemented such action (e.g. Canada), there was a substantial drop off in the restaurant trade. This is because consumers have chosen not to go to restaurants where they can't smoke. We can expect similar reactions in South Africa. Again, reference to employment re-absorption is unlikely to convince anyone of its validity.
An important point to note is that this impact will be immediate.
Prohibition of Sponsorships by Tobacco Companies
The prohibition of sponsorships by Tobacco Companies will not only lead to a loss of revenue for sports and cultural activities, but it will also have an impact on employment. Sports and cultural events benefit the communities in which they are held by generating increased economic activity prior to and during the running of the event. Further, they provide economic benefits to SMMEs and the Informal Sector. For example, the loss of the Gunston 500 and the Rothmans Durban July will cost the city approximately R 800 million in lost revenue.
FAWU believes that Tobacco Control is a complex issue and accordingly a holistic solution needs to be found. FAWU believes it is possible to achieve the objective of discouraging our youth from smoking and enhancing the general awareness of the health risks associated with smoking without causing the negative economic impacts described above.
Constitutional and Other Legal ImpIications
At the NCOP Select Committee on Social Services meeting on 18 August 1998, the Department motivated the violation of the constitutional right to Freedom of Expression on the basis that banning tobacco advertising was "for the greater good of society". Historical experience indicates that this is one of the most dangerous justifications that anybody could ever make. Further, who decides on what is good for society if society is not part of that decision-making process?
Our ethics and principles as a liberation movement are against banning. It is rather our position to work through things and to achieve enforcement through a process of ownership. As a new democracy, the development of a democratic culture is of critical importance. The proposed ban on the advertisement and promotion of tobacco products will not contribute to the development of a democratic culture. We need to develop sustainable solutions that are based on the development of tolerance and that seek to empower people through public education processes.
Banning the advertising and promotion of tobacco products and sponsorship by tobacco companies will not stop youth smoking. Our youth make increasing use of illegal substances that are not advertised at all. Banning advertising, promotion and sponsorship is not the solution to the problem of youth smoking, we should rather look for progressive alternatives. Banning will create more problems than it solves.
If the advertising and promotion of tobacco products is banned, legal precedent will be created which can, and in all likelihood will be used to ban or severely restrict the advertising and promotion of other consumer products. The "public interest" will be used to justify these restrictions and bans. With legal precedents based on the "public interest" established, it is a small step to advocate and implement the curtailment and banning of freedom of expression for political purposes.
Other ImpIications
The proposed Bill raises many other problematic issues, such as the clear breach of South Africa's obligations under the various international agreements on intellectual property and technical barriers to trade in the sections on the use of trade marks. There are also other constitutional problems, for example in relation to freedom of trade, the power and functions of provincial and local government, as well as issues pertaining to the scope of enabling legislation.
Recommendations
The proposed Bill has clearly not been developed in South Africa. It is a product of a "cut and paste" exercise using Australian legislation, New Zealand legislation and World Health Organisation documents as a basis. FAWU believes that we should not allow inappropriate tobacco control policies to be imposed from overseas. We are capable of formulating a policy that suits our level of economic development. We need to develop a tobacco control policy that is appropriate to a developing country in a developing region. This policy should be based on development issues and take into account the priorities of a young democracy. Many aspects of the Bill are not workable, the definitions are too wide, and the proposals are difficult to enforce. This does not result in a policy which addresses the concerns of the Minister.
Proposed Amendments
Preamble
The Preamble of the Bill should be redrafted as follows:
Acknowledging:-
(1) that there are health risks associated with the consumption of tobacco products;
(2) that there is a need to develop a healthy national lifestyle;
(3) that our society inherited the social behaviour of smoking and the local tobacco industry and it is accordingly inappropriate and unnecessary to declare the Industry smoking illegal without developing viable alternatives and phasing out of smoking.
Realising:
(1) that "life-style" advertising may contribute to the social behaviour of smoking and may accordingly affect the health of future generations.
(2) the youth should be drawn into the discussion.
Considering:-
(1) that the health risks associated with smoking call for strong action to deter people from taking up smoking and to encourage existing smokers to give up smoking;
(2) that more restrictive legislation together with public educational processes will advance the objectives of a healthy society.
Resolving:-
(1) to align the Health System with the democratic values of the Constitution and to enhance and protect the fundamental rights of citizens by progressively discouraging the advertising and promotion of tobacco products in order to reduce the incidence of tobacco-related illness and death;
(2) to develop alternative uses for raw tobacco;
(3) to limit and phase out the advertising and sponsorship of sports and other activities which particularly the Youth find attractive.
(End of Preamble)
Amendment of Section 1 of Act 83 of 1993
Clause 2 (a): This clause deals with the definition of advertisement.
The proposed new definition of advertisement is so wide that it will have many unintended consequences. Many of these unintended consequences may well be absurd. For example, it cannot possibly be the intention of the Legislature to prohibit a company from using its own name or one of its trademarks. Further, the definition as it currently stands is impractical and there will definitely be problems with enforcement.
Clause 2 (c): This clause defines hazardous "constituent".
This clause is far too wide and once again there is the risk of unintended consequences and absurdia. Something is either a constituent of a tobacco product or tobacco smoke or it is not a constituent. Further, if it is a constituent, it is either hazardous or it is not hazardous. The definition in the current Act should stand.
Clause 2 (g): This clause deals with the definition of a "public place" (it includes work place as public place).
This clause will have severe unintended consequences, because it is not true that all work places are public places and vice versa. Further, if a public place is defined to mean any indoor or enclosed area which is open to the public or any part of the public then it could in theory include Joubert Park, Greenmarket Square or the Kruger National Park. The proposed amendment also blurs the distinction between public property and private property. For example, is a restaurant a public place or a private place which the public may or may not choose to enter? This definition needs to be redrafted.
Any place used for the purposes of holding a traditional gathering should also be excluded from the definition of a public place.
Clause 2 (j): This clause defines a "trade mark".
The proposed definition needs to be redrafted in line with International Law.
Clause 2 (k): This clause amends the definition of "work place".
The proposed amendment is far too wide. Instead, work place should be defined to exclude restaurants, bars, hotels, clubs and the home environment where it is used as a workplace.
Amendment of Section 2 of Act 83 of 1993
Clause 3: This clause deals with smoking in public places and seeks to impose a ban on smoking in all public places. This proposition is problematic and may even be unconstitutional. We should instead be building a society that it is based on tolerance, respect for the rights of others and freedom of choice.
Accordingly we propose that the policy of smoking in public places should be tailored to accommodate the preferences and choices of proprietors and members of the public. We propose that a proprietor of a hotel, restaurant or bar should be able to choose from the following options:
· Zoned spaces for smokers and non-smokers;
· Total non-smoking establishment;
· Smoking establishment.
This will allow proprietors and members of the public an array of choices that will cater to everybody's needs. We believe that no non-smoker is compelled to patronise a smoking establishment or an establishment zoned both for smoking and non-smoking. In the same way no smoker is compelled to patronise a non-smoking establishment. We believe that the above-mentioned proposal will be practical, avoid confusion and be easily enforceable.
Substitution of Section 3 of Act 83 of 1993
Clause 4: This clause proposes to ban the advertising and promotion of tobacco products and the sponsorship by tobacco companies.
As indicated above, we believe that banning advertising, promotion and sponsorship will not discourage youth smoking nor will it cause adults to give up smoking. As indicated above our ethics and principles as a liberation movement are against banning. Further, the ban will cause job losses.
We believe this clause should be redrafted to:
· prohibit lifestyle advertising;
· place restrictions on advertising that relate to:
- The size of the advert;
-The location of the advert, e.g. indoors or outdoors, proximity to schools, etc;
-The average age of the readership of the publication in which the advertisement is placed;
-The age restriction which the film carries in the case of cinema advertising.
Clause 4 Section 3 (2) which seeks to outlaw tobacco sponsorships is impractical.
Instead the Minister should have the power to phase out tobacco sponsorships in consultation with sports bodies and subject to the availability of replacement sponsorship.
Clause 4 Section 3 (5) outlaws the sale of individual cigarettes - so called "stick sales". This provision discriminates against smokers who cannot afford to buy a whole pack of cigarettes each time they want to smoke.
Insertion of Section 3 A in Act 83 of 1993
Clause 5 seeks to regulate the maximum yields of tar and other constituents in tobacco products.
This clause needs to be redrafted to provide for a viable phase-in period for any new maximum permissible levels. This is necessary because any sudden declaration of new maximum levels of tar, nicotine and other constituents may result in severe economic consequences. A phase-in period is necessary in order to allow the Tobacco Industry time to make the necessary adjustments. This may include the cultivation of different types of tobacco and the purchase and installation of new machinery.
Insertion of Section 4 A in Act 83 of 1993
Clause 7 deals with the prohibition of free distribution and reward.
Section 4 A (1) of this Section is problematic because it essentially amounts to price fixing. This will have disastrous consequences for the Informal Sector because many of the vendors rely on competitive pricing in order to stay in business, i.e. if they cannot sell cigarettes at a cheaper price than the established retailers, they will be forced to cease trading altogether.
Amendment of Section 5 of Act 83 of 1993
Clause 8: This clause deals with the restrictions on vending machines.
Vending machines sell cigarettes at a higher price than any other retail outlet. It is unlikely that these machines are an attractive option to youth who wish to purchase cigarettes. The solution proposed in the Bill is impractical and this section needs to be reconsidered.
Further Recommendations
The legal age of sale should be raised from 16 to 18 years of age.
Educational programmes should be developed to discourage people in particular the youth from smoking and to encourage smokers to give up smoking.
FAWU is proposing constructive alternatives with a view to reaching a viable solution to the issue of Tobacco Control. However, if it is not possible to reconcile these views with those of the Ministry, Department, NCOP or National Assembly, a cluster initiative should be organised to evaluate the measures necessary for the industry. A cluster initiative would enable labour, business, government departments as well as other stakeholders to participate in the development of a viable policy that can be effectively implemented. The cluster initiative itself would commission research, thus ensuring objectivity and acceptability of the results.
Cluster initiatives are currently taking place in many industries. They are supported by the Department of Trade and Industry, and have provided clear success stories for co-operative decision-making, e.g. the wheat, milling and baking sector. Research needs to be conducted to assess the provincial and regional economic impact of the proposed legislation. This can also be achieved by a cluster initiative.
Conclusion
This Bill will have a severe economic impact without successfully discouraging youth from smoking or causing existing smokers to stop.
We support the intention of the Government to regulate tobacco products, but we believe that this Bill is not appropriate to a developing country. As indicated above, tobacco products control policy is a complex issue. We believe that tobacco control policy should seek to balance development issues, health issues, environmental issues and constitutional issues. The policy should be appropriate to a developing country in a developing region. We cannot adopt policies that are not in line with our development aspirations and which are destructive to our transformation agenda.
FAWU believes that through a process of consultation and negotiation with all stakeholders it will be possible to develop a tobacco control policy that is appropriate to South Africa. We are prepared to assist the Government in achieving this objective.
OVERVIEW OF FAWU
ECONOMIC SUBMISSION
Section 1. Introduction
Tobacco is an industry consisting of operations in growing and manufacturing tobacco and tobacco products, but it also includes the suppliers of inputs into these processes, as well as the marketing, distribution and selling of the final products. All of these activities contribute to the gross domestic product of South Africa and its provinces. Thus, when considering the potential impacts of the measures proposed under the Tobacco Products Control Amendment Bill, one must note that the impacts on any individual operation affect many more related and supporting operations.
When analysing the impacts of the Bill on the tobacco industry, it is useful to divide the industry into three component sectors:
1.The core sector, which includes tobacco growing, manufacturing, marketing and distribution;
2.The local sales sector, which includes general wholesale and retail trade and
3.The supplier sector, which includes a range of physical and financial inputs used by the core and sales sectors.
Each of these sectors pays wages to households and taxes to the government, and also spends part of its money on acquiring imported capital, intermediate and final goods. Each sector also receives income from households in the form of domestic expenditure, and from the foreign sector in the form of exports.
Each operation within the core and sales sector purchases inputs from the supplier sector. In turn, growing and curing operations supply intermediate products to tobacco co-operatives and manufacturing operations within the core sector. The latter operations then supply final products to specialist wholesalers (in the core sector) and general wholesalers (in the sales sector), which in turn sell them to retailers in the sales sector. Part of the intermediate products produced on the farms, and part of the manufactures output, make their way via distribution depots to various export markets.
The general operation of the industry is denoted in the diagram below.
We can see in the diagram [Ed. note: not included] that any individual operation has direct linkages to a variety of others. These linkages are vital to the competitiveness of the industry.
What is not shown in the diagram, however, though is equally important, is the fact that any activity that is undertaken operates in a variety of ways. Farming is the best example, where the operations will be differentiated into various forms of organisation, including the following:
· Co-operatives
· RDP project-led operations
· Other small-scale operations
As we can see, many important projects are included in the tobacco industry -projects that have both quantitative and qualitative value. It is imperative, therefore, that the issue of tobacco control be approached cautiously.
Section 2. Primary impacts of the proposed Tobacco Bill
· A ban on advertising.
- As mentioned above, any intervention made by the state for the purposes of controlling tobacco necessarily affects a range of operations in the industry.
- Provisional estimates would indicate that, in total, a ban on advertising would lead to a net employment loss of approximately 8000 people.
· A ban on smoking in public places.
- International evidence would suggest that a ban on smoking in public places firstly affects the restaurant trade before anything else.
- This is obviously related to tourism, which is an increasingly important factor in the equation of regional economic growth.
· A ban on sponsorships.
- Banning sponsorships has the obvious effect of limiting the development of those athletes and scholars who depend on them. This is especially troubling for the many athletes and scholars from previously disadvantaged backgrounds.
- There is also the loss of revenue associated with local economic investment in events such as the Gunston 500, which brings in millions annually to the Durban economy.
Section 3. Secondary impacts of the proposed Tobacco Bill
· A discriminatory market
- The net effect of the prescriptions imposed by the Bill will be a market that discriminates against small players and new entrants. As such, the very successful RDP tobacco farming projects will become less so. Farmers also have no other crops that compare to the revenue generating capacity of tobacco. Without viable substitutes for tobacco, many such small-scale initiatives will fail.
- Major brands will become the focal point of competition and market share will stagnate for manufacturers. Once this occurs, manufacturers will have to make every possible effort to reduce costs in order to enhance their profitability. This will include importing goods at cheaper prices than in SA. As a result, local economic development and employment will be lost.
· An increase in smuggling tobacco products
- International evidence suggests that the possibility of smuggling will increase with the more interventionist tobacco control policy is. Although this relates particularly to the level of taxation on the industry, restrictive trade practices do reinforce this trend.
· The property rights issue
- Trade related aspects of intellectual property rights (TRIPS) is an international issue currently under much debate at the World Trade Organisation. It refers to legislation dealing with discriminatory trade practices in covert forms - for example, non-tariff barriers to trade. There has been no attention given to this issue by anyone at the Department of Health, the rest of the anti-tobacco lobby or the tobacco lobby themselves. Contravention of the rules of TRIPS can cause severe diplomatic problems. More thought should be given to this issue.
Section 4. Conclusion
The tobacco industry is a diverse and beneficiated industry in South Africa. It is supported by many different institutions and in turn supports many others. It contributes to the economy in a variety of ways - both directly through investment and indirectly through sponsorships.
Any legislation dealing with tobacco control must therefore approach the issue in a sustainable fashion. The current Bill does not do this.