Multinational Monitor

JUN 2001
VOL 22 No. 6


Power Struggle: California’s Engineered Energy Crisis and the Potential of Public Power
by Harvey Wasserman

Hurwitz’s Power Grab
by Jim Valette

Attorneys General for Sale?
by Andrew Wheat


On Tax Cuts, Loopholes and Avoidance: Working for Tax Justice
an interview with
Robert McIntyre


Behind the Lines

Fossil Fools

The Front
The Taste of the U.S.A. - Whose Land Reform?

The Lawrence Summers Memorial Award

Names In the News


The Front

The Taste of the U.S.A.

Negotiations over a global tobacco control treaty skidded to a close in May, amid charges from anti-smoking groups that the United States is working to sabotage efforts through the World Health Organization (WHO) to work out an effective treaty to lessen the worldwide tobacco epidemic.

Responding to the awesome tobacco-related death toll, and to prodding from the WHO staff, WHO member countries unanimously agreed in 1999 to launch negotiations on a Framework Convention on Tobacco Control (FCTC). If adopted, the FCTC would constitute the first treaty negotiated through the WHO.

The second round of formal negotiations over the treaty took place in Geneva in May.

Tobacco control groups left the negotiations shaking their heads. The United States, they said, was working on multiple fronts to subvert the negotiating process. The other richest nations, the European Union and Japan, also worked to undermine a strong agreement, the activists said.

Treaty Possibilities

WHO predicts that by 2030, 10 million people will die annually from tobacco-related disease, with 70 percent of those deaths in developing countries.

The Framework Convention was conceived to establish model tobacco control regulations, which countries would agree to enact, and binding international obligations on a series of trans-border tobacco control problems, such as smuggling and the global marketing of tobacco products.

Many activists’ top priority is a binding marketing protocol that would impose a worldwide ban on cigarette advertising and marketing, or at least require countries to adopt prohibitions on tobacco advertising to the extent permitted under their national constitutions.

Not only is most cigarette advertising carried out by multinational companies, but the ads themselves cross borders. Television ads broadcast in one country appear in others, with programming increasingly delivered across boundaries by cable and satellite. Tobacco ads plastered on Formula One racing cars in one country effectively appear around the world, when the Formula One races are broadcast in multiple countries.

“The overturning in the courts of the EU ban on tobacco advertising last
year has stopped Czech tobacco control legislation from coming to fruition, and the tobacco industry is doing very strong and systematic lobbying of our politicians,” explains Eva Kralikova of the Czech Medical Association. “This is why we need a strong FCTC — as a defense against back-sliding in the West and to help us get tough national tobacco control policies implemented as soon as possible.”

Activists are also pushing for a proposed smuggling protocol that would involve a system of tracking cigarette exports, including labels indicating the intended final destination. An estimated one in three internationally traded cigarettes is smuggled — and newly emerging evidence from company documents suggests the tobacco industry is facilitating, encouraging or even directing smuggling on a massive scale.
Smuggling allows tobacco companies to evade excise taxes, which in most countries make up a considerable portion of the consumer price — and which deter smoking by keeping prices up.

The Industry Take

The biggest of the multinational companies, Philip Morris, claims to have turned over a new leaf. Philip Morris now says it supports a tobacco treaty.

“It is time for regulation,” says David Greenberg, Philip Morris International’s senior vice president for corporate affairs. “The company is ready to embrace regulation around the world whether by international institutions and/or at the national level.”

“We'd like to see a convention have as broad a reach as possible,” Greenberg says, “so we know what the rules are.”

Philip Morris would support treaty provisions on youth smoking prevention, information to adult smokers, ingredient disclosure, disclosure of the
constituents of tobacco smoke, marketing standards and smuggling. The company also supports government regulation of the tobacco product itself, so that cigarettes can be “made as safe as they can be,” Greenberg says.

Philip Morris says it supports restrictions on broadcast advertising of tobacco products, bans on the use of cartoons in cigarette ads and prohibitions on the placement of advertisement in locations with a “particular appeal to minors.” These are measures that many activists believe to be of little value, because they can be easily circumvented and leave so many marketing opportunities open to the tobacco pushers. Philip Morris says it strongly opposes a total marketing ban, which public health experts say has proven benefits in countries like Thailand.

Where once they viewed the major risk in the FCTC process seemed to be that no treaty would emerge, activists are increasingly concerned that the main danger is that the treaty that emerges may not be worth much.

“This is the week when we will find out if governments are simply making
gestures or if they have the guts to take on the tobacco industry and really deal with the world’s biggest public health epidemic,” said Clive Bates, director of ASH UK, in advance of the negotiations in Geneva. “The danger is that too many governments and the WHO just want a treaty and any treaty will do.”

U.S. Obstruction

Many of the tobacco control advocates’ worst fears were realized at the May FCTC negotiations.

The United States, in particular, played the heavy.

“The U.S. this week has repeatedly made proposals that would weaken critical provisions of the draft convention and severely undermine its potential to reduce the death and disease caused by tobacco around the world,” said the American Lung Association and the Campaign for Tobacco-Free Kids in a joint statement.

The two organizations listed five specific ways the U.S. delegation had sought to weaken the treaty. The United States, they reported, sought to:

  • Eliminate a provision calling on nations to prohibit the use of dangerously deceptive terms like “low tar,” “light” and “mild” to market tobacco products. Tobacco companies have used such terms to convey the impression of reduced risk from their products, although these products are in fact not safer.
  • Delete provisions that would prohibit tax-free and duty-free sales of cigarettes and call for “imposition of taxes on tobacco products so as to achieve a stable and continuous reduction in tobacco consumption.”
  • Reconsider a provision encouraging governments to protect non-smokers by banning smoking in workplaces and public buildings.
  • Delete a provision supporting the licensing of tobacco retailers as an effective means to enforce youth access laws. Many U.S. states already employ such measures.
  • Weaken the overall obligations of nations to implement the provisions of the proposed treaty.

Denouncing U.S. obstructionism, ASH UK called on the United States to withdraw from the treaty negotiation process altogether.

“The U.S. contribution has been entirely negative: weakening, delaying and deleting anything that might have substance,” says Clive Bates.

“In contrast to the climate treaty and anti-ballistic missile treaty, this is a case where the United States is trying to wreck the agreement from the inside,” says Bates. “We would be better with them outside.”

“It’s very unlikely that the United States will ever ratify a tobacco treaty, so why shape it around what they want?” says Bates. “Any agreement that can get through the Bush administration and Congress will be worthless from a public health point of view.”

“It would be best if the United States goes home from Geneva, adopts its increasingly familiar ostrich and stays out altogether.”

The negotiations are set to resume in November.

— Robert Weissman

Whose Land Reform?

As they seize, occupy and farm idle land, poor communities in developing countries are placing land reform on the international policy agenda.

But market-assisted land reforms, championed by institutions such as the World Bank, are threatening sustainable land redistribution in a growing number of countries, the Oakland-based Institute for Food and Development (Food First) warns.

“While we applaud the World Bank for recognizing the importance of the land issue, we fear their policy prescriptions are doomed to failure,” says Peter Rosset, co-director of Food First.

“The market responds to money, not human need, and it is hard to see how the poor will benefit” from the Bank’s policies, says Rosset, the author of a new report, “Tides Shift on Agrarian Reform: New Movements Show the Way,” which critiques World Bank-led land reforms and highlights mass movements driving alternative reforms from below.

Decades of grassroots movements have convinced institutions such as the World Bank that landlessness is an important cause of poverty. The Bank is now either financing or setting the tone for land-reform programs in many developing countries, from Guatemala to the Philippines to South Africa.

Three countries — Brazil, Colombia and the Philippines — have been most exposed to market-assisted land reforms, which the Bank has been pushing over the last five years.

“The World Bank has never pushed that model of land reform as the only model,” says John Bruce, senior counsel at the Environmentally and Socially Sustainable Development Network of the Bank. “It is a model that can produce genuine benefits where the political situation does not permit redistribution through other models.”

The Bank says its model is not a substitute to laws enabling governments to expropriate land. Expropriation has been an important instrument of breaking large landlord resistance to land reform.

“This is still a new model that is still being evaluated and we need to do more studies on it,” says Bruce.

Market-assisted reforms involve granting loans and credits to the landless to buy land at market rates from wealthy landowners and to acquire fertilizers and technical assistance for new, marketable crops.

They are often viewed as an instrument for rewarding landlords rather than for improving the livelihoods of the landless poor.

Food First says market-assisted reforms are bound to fail because they place a heavy burden on poor people to repay expensive loans, often from harvests from poor soils. Landowners often choose to sell the most marginal and ecologically fragile plots that they own.

While assisting resettled farmers with technical support is hardly opposed, some sections of the NGO community and landless people's movements such as La Via Campesina are against Bank-supported packages that rely on pesticides and chemical fertilizers and introduce non-traditional export crops into communities.

“The approach responds to the need to make land reform more demand-driven and, in addition to giving access to land, provide avenues for beneficiaries to make investments and make productive use of this land,” says Robert Thompson, director of the Bank’s rural development department, in response to an earlier NGO petition to the Bank.

One of the concerns around market-assisted land reform is that privatizing communal lands increases individual competition.

Individual profit motives — sometimes linked with outside corporations — can create an emphasis on extraction-like profit-taking, breaking down community-based resource management systems and accelerating land degradation, critics charge.

“In our research on the promotion of similar packages by the U.S. Agency for International Development in Central America during the 1980s and early 1990s, we found them to intensify land degradation and ecological problems, while leaving poor farmers in risky enterprises with high failure rates,” notes the Food First study.

Profit-driven land use often leads to the introduction of new exotic crops, often more in demand abroad. New problems may also arise with land claims of women and indigenous communities — often left out of land-titling programs because of a myriad of reasons such as traditional or discriminatory practices.

Landless people and their struggles have gained world attention. In Zimbabwe, so-called veterans of the liberation war are currently confronting white commercial farmers who control the vast majority of prime land in the country, as the government looks the other way.

In Brazil, landless workers occupy idle lands and take advantage of a clause in the constitution to legalize their claims [See “Brazil’s MST: Taking Back the Land,” Multinational Monitor, January/February 2001]. Some 250,000 families have managed to win titles to more than 15 million acres of land through the Landless Workers’ Movement (MST) in Brazil by seizing land, described by Food First as “a veritable reform from below.”

“The total cost to the state to maintain the same number of people in an urban shanty town is 12 times the cost of legalizing such land occupations,” says Rosset. “The beneficiaries are measurably better off than other poor people in Brazil.”

Yet these seizures are not without incident. Brazil's Catholic Church estimates that the number of people who have died fighting for land in the country is four times the number of those who officially disappeared during military rule in the country from 1964 to 1985.
Food First says poor families should not be saddled with high debts when they receive land and thus recommends government expropriation of idle land as the most workable solution for many of the world's landless poor.

— Gumisai Mutume, Third World Network Features/IPS


The June 2001 Lawrence Summers Memorial Award* goes to Western Fuels Association, Inc.

On March 31, a U.S. District Court judge dismissed a lawsuit filed by the Western Fuels Association against the Turning Point Project, a non-profit organization formed to place educational and advocacy advertisements in newspapers, plus various organizational signers of a Turning Point Project ad on global warming, including Friends of the Earth, Earth Island Institute, Ozone Action, the Rainforest Action Network and the International Center for Technology Assessment.

The Western Fuels Association suit alleged that the Turning Point Project ad was false and misleading (“In fact, scientific observations reveal that the impact of carbon dioxide emissions on our environment is both modest and benign,” the Association’s complaint states).

But the suit alleged much more. The Association argued further that the Turning Point Project and associated organizations are commercial competitors “with a direct financial stake in the outcome to eliminate coal-fired generation and replace it with ‘renewable’ sources of generation.”

“Defendants advocacy activities are big business,” the Western Fuels Association alleged, and the “false and misleading representations contained on the Turning Point web site and in the Global Warming ad are made in the context of commercial advertising or commercial promotion” — a solicitation for funds to support the project.

The judge dismissed the suit for improper venue and lack of jurisdiction, and did not reach the issue of Western Fuel Association’s substantive claims.

Thanks to Terry Lodge for submitting this nomination.

* In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.


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