10A.7Mechanisms of influence—political lobbying

Last updated: May 2018     

Suggested citation: Greenhalgh, EM., Hagan, K., Freeman, B., and Winstanley, M. 10A.7 Mechanisms of influence— political lobbying. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2018. Available from http://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10a-7-the-mechanisms-of-influence-political-lobbyi       


Exerting influence on government decision making in Australia, and elsewhere, is an ongoing concern for the tobacco industry. Once legislation is in place, it is difficult to overturn. If shown to be effective in one part of the world, tobacco control legislation is often replicated in other jurisdictions. It is a general rule of thumb in tobacco control advocacy that the more effective a particular initiative is going to be, the more aggressively the industry will oppose it—often referred to as the ‘industry scream test’.
1 Conversely, regulation that gains industry support is not likely to be a serious threat to the industry.

The earliest tobacco industry resistance in Australia related to the introduction of restrictions on advertising2-4 and later, health warnings on tobacco packages.5 Regulatory initiatives to introduce restrictions on smoking6 and increase tobacco taxation7 have also provoked vigorous response. This strategic opposition continued with the well-funded tobacco industry campaign against plain packaging.8, 9  

Since the 1990s, in light of the industry’s corporate social responsibility agenda, the tobacco companies, to varying degrees, espouse appropriate regulation of their products. For example, the Philip Morris International website states, ‘to be effective, tobacco regulatory policy must be evidence-based. Regulations must be applied to all tobacco products and all tobacco manufacturers, and should take into account the views of all legitimate stakeholders including public health authorities, government finance authorities, tobacco manufacturers and other members of the legitimate tobacco supply chain, tobacco farmers, and consumers’.10

The adoption of the WHO FCTC Article 5.3 guidelines is designed to help governments protect tobacco legislation from tobacco industry interference.11, 12 Implementation of the 5.3 guidelines at a national level is already proving a challenge for key international philanthropic organisations that fund tobacco control and other health projects due to organisation executive ties to the tobacco industry.13-15  

10A.7.1 Pre-emptive self-regulation

Arguing for self-regulation provides the industry with a means of avoiding strong and effective governmental regulation by taking the initiative to introduce its own voluntary code of conduct. The industry reaps the dual benefits of appearing responsive to government and public concerns, while simultaneously ensuring that any such voluntary code is harmless to its own interests. In contrast, legislation carries penalties for non-compliance, is difficult to rescind, and closes the door on further negotiation.

Philip Morris introduced its own system of placing ineffective health warnings on its packaging for use in countries (particularly the developing world) where regulation was weak or not in place. Internal documents show that Philip Morris deliberately gave the appearance of responding to public health concerns (while doing so very much on its own terms) and simultaneously earned positive publicity for its responsible stance.16  

Until superseded by state and federal legislation, tobacco advertising in Australia was in large part subject to a series of voluntary agreements struck between the tobacco companies and the federal government. The elasticity of the voluntary agreements and the many and varied ways in which they were flouted by the tobacco companies have been well documented.17, 18 (See Chapter 11 for further discussion.)

On a global scale, the tobacco industry attempted to thwart the development and subsequent ratification of the Framework Convention on Tobacco Control (FCTC—See Chapter 19).19 Between 1999 and 2001, British American Tobacco, Philip Morris and Japan Tobacco International worked together on ‘Project Cerberus’, an initiative intended to devise an alternative voluntary code for advertising and other industry conduct, which it hoped governments could be persuaded to accept instead of signing up to the WHO FCTC.20  

Companies also conducted their own offensives against the WHO FCTC. For example, Philip Morris employed a public policy and issues management firm (Mongoven, Biscoe and Duchin) in 1997 to advise on the process for formulating and ratifying the WHO FCTC and how this might be subverted. An analysis of industry documents shows that Mongoven, Biscoe and Duchin gained high level access to the process within the WHO. Among its recommendations, Mongoven, Biscoe and Duchin advised Philip Morris to delay the process; to attempt to steer the convention towards a focus on children (thereby leaving the rest of the market open for ‘adult choice’); and to seek allies among non-government organisations. It was deemed especially important to influence the content of the convention, and to engage with individual member states with a view to nurturing wider regional support.19  

The tobacco industry was unsuccessful in its attempts to prevent WHO FCTC ratification and subsequently attempted to influence WHO FCTC guidelines and to block local and national implementation of the WHO FCTC.21 There is strong evidence that the industry engaged in lobbying on a regional basis, attempting to influence governments to comply with the least stringent options stipulated in the WHO FCTC.22-25

10.17.7.2 Political advertising

Tobacco companies have expended considerable resources on campaigns aimed at influencing political decision-making on issues of importance to the industry, including plain packaging and tobacco taxes. The Australian Government’s announcement that it would develop legislation to introduce mandatory plain packaging of tobacco products in 2012 prompted the formation of a new retail sector body, the Alliance of Australian Retailers, which launched a counter mass-media campaign with the goal of stopping the plain packaging legislation. Advertisements featuring portrayals of concerned retailers, saying that plain packaging would not work and would damage their business, appeared nationally in newspapers and on television and radio.

Australian Broadcasting Corporation television program Lateline revealed the full extent of tobacco industry influence on the Alliance of Australian Retailers campaign, using leaked internal documents, e-mails and contracts. On the day the alliance was formed it received funds from Imperial Tobacco Australia ($1 million), British American Tobacco Australia ($2.2 million) and Philip Morris ($2.1 million). (See Chapter 11, Section 11.10.5.3)

In the UK, Japan Tobacco International led an advertising campaign against plain packaging. An advertisement in daily newspapers including the Financial Times claimed plain packaging was “not worth the paper it’s written on” and questioned why the Department of Health would consult on a proposal that “a/ has no evidence to support it and b/ common sense says won’t work”. The advertisement also claimed that plain packaging would lead to illicit trade in a theme that continued in a second wave of the campaign, together with claims that plain packaging would have a detrimental effect on small businesses. The UK’s Advertising Standards Authority later ruled that both the first and second wave of JTI advertisements were misleading, with claims that could not be substantiated and breached the UK advertising code.26

In California, tobacco companies spent tens of millions of dollars to defeat proposals to raise taxes on cigarettes in 2006 and 2012, despite the measure attracting longstanding support from the public. Most of the money raised was to go towards boosting Medic-Cal, the state’s healthcare program for low-income residents. The tobacco industry’s counter-campaign claimed that voters should be wary of gains to be made by doctors groups and insurance companies backing the measure. The proposal succeeded on a third attempt by backers in 2016.27, 28  


10A.7.3 Political donations 

In Australia it is a legal requirement that donations of more than $13,500 made by individuals or entities to registered political parties are declared to the Australian Electoral Commission.29 The Australian Electoral Commission posts on its website donor annual returns dating back to the financial year 1998–99. Tables 10A.7.1 and 10A.7.2 show the total amounts of tobacco money received by the three major political parties in Australia since then. 

Table 10A.7.1
Donations to Australian political parties by Philip Morris Limited, 
1998–99 to 2016–17 

Source: Australian Electoral Commission, Donor annual return search,30, 31  

Table 10A.7.2 
Donations to Australian political parties by British American Tobacco Australia Limited, 1998–1999 to 2016 – 2017 

Source: Australian Electoral Commission, Donor annual return search,30, 32   

In February 2004, the then leader of the Australian Labor Party (ALP) opposition, Mark Latham, announced that the ALP would no longer accept donations from tobacco companies. In August 2013, when Kevin Rudd was leader of the ALP, he pledged that if re-elected he would amend the Electoral Act to ban donations from tobacco companies to all Australian political parties and candidates. The leader of the Liberal Party of Australia, Tony Abbott, then quickly announced ahead of the September 2013 election that his party was banned from accepting tobacco company donations from August 2133. However the Nationals and Liberal Democrats have continued to receive tobacco industry donations on an ongoing basis. 

The Australian National Party remains the last major party to accept donations from the tobacco industry. The Nationals have received $41,280 from Philip Morris since their Coalition partner the Liberals rejected tobacco industry donations in 2013.30 There have been reports that senior party figures are pushing for a ban on donations from tobacco companies, however the party’s then federal director, Scott Mitchell, told the Sydney Morning Herald in October 2016: “…the view of the executive is they are legitimate companies and they’re as entitled as anyone else to make a donation if they choose to do so”. Former party leader and Deputy Prime Minister Barnaby Joyce reportedly left the door open for change but said tobacco industry donations should be considered as part of broader donations reform.34

The Liberal Democratic Party has accepted $75,140 from tobacco companies since 2013-14. Party senator David Leyonhjelm told the Sydney Morning Herald in 2014 that he had no qualms about accepting donations from companies that produced products that could kill users, because smokers could "freely choose" to take up the habit. He said donations from Philip Morris had influenced his stance on plain packaging: "I've gone from being strongly opposed to totally opposed to plain packaging”.35

The Australian Greens33 do not accept tobacco company donations as a matter of policy. In 2014, the party introduced to the Senate its Donations Reform Bill which would ban political donations from property developers and the tobacco, alcohol, gambling and mining industries.36 At the time of writing (March  2018), the bill was still before the Parliament37, as was a Labor bill which would  introduce various reforms including reducing the disclosure threshold to $1000; banning all anonymous gifts to registered political parties and candidates; and introducing new offences and penalties.38 Despite the Labor Party’s ban on tobacco industry donations, investigations are underway into donations by a Chinese tobacco company executive, Peter Chen, of $200,000 each to the party’s NSW and federal branches.34

Prior to the ALP's official refusal of donations from tobacco companies in 2004, all three major political parties received significant contributions from Philip Morris Australia and British American Tobacco Australia. Imperial Tobacco Australia does not appear to have made political donations. In general, substantially larger amounts of funding have been directed by both tobacco companies towards the conservative parties (the Liberal and National parties) even prior to the ALP ban, which is likely to reflect preference by the tobacco companies for conservative politics, as well as the fact that the Liberal–National Coalition was in power for the entire period shown in the tables.

As of 2016–17, in total since 1989–99 Australian political parties had received over $2.06 million in donations from British American Tobacco Australia, and $2.1 million from Philip Morris Limited. 

Figure 10A.7.1 
Donations to Australian political parties by Philip Morris Limited, 1998–1999 to 2016 – 2017 

Source: Australian Electoral Commission, Donor annual return search  

Figure 10A.7.2 
Donations to Australian political parties by British American Tobacco Australia Limited, 1998–1999 to 2016 – 2017 

Source: Australian Electoral Commission, Donor annual return search  

In December 2005, under the Coalition federal government led by John Howard, rules concerning the minimum value of donations requiring disclosure were changed and the threshold for reporting  increased from $1,500 to “more than $10 000”. This amount is indexed from 1 July each year, based on increases in the Consumer Price Index.29 According to The Age newspaper, this has simultaneously led to an increase in political donations from all sources as well as opacity in tracing their origins. For example, investigations by The Age showed that although the donor annual return filed by the Liberal Party for the financial year 2005–06 detailed income directly received by the party from tobacco companies, it could not be ascertained from the return that some of the Liberal Party's closely allied fundraising organisations such as The 500 Club and the Bayside Forum were also in receipt of tobacco money.39 Although these donations were declared by the tobacco companies in their own annual returns to the Australian Electoral Commission, the current system of reporting does not guarantee clear, one-stop disclosure of funding sources. There are also concerns about the timeliness of disclosure, since under the Australian Electoral Commission’s system of annual disclosures, it can take more than 18 months for large donations to be made public.40

 

Tobacco companies may also influence the political process by making donations to third-party groups such as trade associations and think tanks. The Alliance of Australian Retailers, recognised as a front group for the tobacco industry41, donated a total of $90,000 to the Liberal Democratic Party in 2015-16. The Alliance has also declared high amounts of “political expenditure” which includes printing, broadcasting and polling and research on electoral matters. In 2010-11, prior to the introduction of plain packaging on December 1, 2012, the alliance’s declared political expenditure was more than $9 million.30

The University of Bath’s Tobacco Tactics website notes that the Institute of Public Affairs, one of Australia’s leading right wing think tanks, has long been a strong opponent of tobacco control and has put forward arguments similar to those of the tobacco industry. On the day the Australian Government announced its plain packaging policies, the IPA’s Tim Wilson took part in several national and local broadcast interviews. He supported the industry claim that the new law violated tobacco companies' intellectual property rights and said that taxpayers would have to compensate the firms for the loss of their trademarks. While arguing the tobacco companies' position, the IPA did not disclose receipt of any funding from the tobacco industry. In April 2002, the IPA's Don D'Cruz wrote an article for The Australian newspaper’s opinion page, disclosing that the Institute "receives support from tobacco companies". When asked in 2010, the IPA refused to say if it was still accepting industry money.42

At the time of writing (March 2018), a federal parliamentary inquiry is considering how to improve the integrity of political decision-making. The Senate established the Select Committee into the Political Influence of Donations on 17 August, 2017, to inquire into and report on:

a. the level of influence that political donations exert over the public policy decisions of political parties, Members of Parliament and Government administration;

b. the motivations and reasons why entities give donations to political parties and political candidates;

c. the use of shell companies, trusts and other vehicles to obscure the original source of political donations;

d. how to improve the integrity of political decision-making through our political donations regime and the public funding of elections;

e. any other related matters.

The closing date for submissions was ​9 October 2017, and the committee was due to report on 28 March 2018.43 In its submission, the Public Health Association of Australia argued that political donations should be banned, particularly from companies whose products cause demonstrable public health damage such as tobacco. If political donations were to be maintained, the association called for a single national online register of all donations, regardless of the amount, updated daily to achieve real-time disclosures.44

The Joint Standing Committee on Electoral Matters is also conducting an inquiry into political donations as part of its review of the conduct of the 2016 federal election. The inquiry will cover the current donations, contributions, expenditure and disclosure regime, its application and timeliness, and alternative approaches available to Parliament. Submissions were due by 20 September, 2017, but the committee had not yet reported on political donations at the time of writing.45

The tobacco lobby is also a powerful presence in government decision-making elsewhere. The tobacco industry contributes millions of dollars each election cycle to candidates for Congress in the US, and has influenced the obstruction of many tobacco control policies.46, 47 Both Democrats and Republicans accept donations from tobacco corporations, and for decades members of both parties have in turn voted pro-tobacco.48, 49 Tobacco companies have also provided hospitality and entertainment for MPs in the UK,50 and a higher percentage of MPs who voted against plain packaging in the UK had received hospitality from the tobacco industry, compared with those who either voted in favour of it or abstained from the vote. Although it cannot be definitively established that these gifts swayed MPs’ votes, researchers have expressed concern that any influence of tobacco industry hospitality on politicians’ decisions may demonstrate the industry’s ability to undermine Article 5.3 of the Framework Convention on Tobacco Control, which requires signatory states to restrict tobacco industry interference in tobacco policymaking.51  

Although the tobacco control community is unable to match the financial resources of the tobacco industry in promoting its goals, non-government and community organisations have managed to advance tobacco control at least to some degree through persuading decision makers to counter the tobacco lobby.52  

Some countries have banned corporate donations to parties and candidates, including Belgium, Canada, France, Israel and the Republic of Korea.53 In Poland, the Tobacco Control Law of 1995 included a total ban on tobacco ads, promotion and sponsorship (including of political parties) beginning in 2000.54 Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control requires that “in setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry”.55 In particular, guidelines for implementation of Article 5.3 recommend that “parties should not allow any official or employee of government or of any semi-quasi-governmental body to accept payments, gifts or services … from the tobacco industry”.55

10A.7.4 Links with individuals and the ‘revolving door’ 

One of the most important ways that industry lobbying can influence political decision making is the ‘revolving door’; that is, when politicians and public officials take up lobbying jobs, or when industry lobbyists take up roles in government. These employees may be regarded as particularly valuable due to their connections and unique knowledge of internal processes.56 These movements have been described by research groups as creating significant conflicts of interest, with the potential to undermine democratic decision making that benefits public health.57 For example, during the lead up to revision of the EU Tobacco Products Directive, a number of former EU officials worked or consulted for the tobacco industry, and played key roles in fighting the proposal. They were able to use existing contacts within the EU institutions to lobby on their behalf, and to contribute to the delaying and weakening of the proposal.58 A number of public officials in the UK have also gone on to hold high profile positions in the tobacco industry, or even held these positions simultaneously.59 Following a delay in plain packaging in England, claims were made that the Conservative Party's election strategist had close links with several major tobacco companies and that his PR company was involved in lobbying against the introduction of plain packaging in Australia.60 Another person involved in the campaign against plain packaging in Australia, Chris Argent, was formerly an adviser to former Australian Prime Minister John Howard, and subsequently became Philip Morris’ corporate affairs director.61  

The UK High Commissioner faced criticism in 2015 after meeting with Pakistani officials to advocate the tobacco industry’s stance against large pictorial health warnings, contrary to guidelines that state that diplomats must not engage foreign governments on behalf of the tobacco industry.62 Controversy has also been sparked when commercial ties between the tobacco industry and politicians or leaders have been revealed. It was reported in 2014 that the chief executive of the UK civil service had commercial links with both the alcohol and tobacco industries; a large number of medical professionals and charities argued that these roles are incompatible.63 A leading Conservative backbencher in the UK, who had a history of arguing against tobacco control measures, was reported to Parliament's standards watchdog in 2014 for failing to disclose that he was also a founding partner and director of a management firm whose funds hold investments worth £23m in tobacco companies.64 The director of the US Centers for Disease Control and Prevention (CDC) reportedly bought shares in a tobacco company one month into her leadership of the agency.65

Use of third party actors has also become an important part of tobacco industry lobbying. Indirect engagement of seemingly independent interest groups has been used by the tobacco industry to add weight and credibility to pro-tobacco arguments.66 A range of retail groups, trade bodies, think tanks, and organisations representing big business have direct links with and serve the interests of the tobacco industry, while ostensibly representing their own agenda.67  For example, internal documents have revealed that third party lobbying was a fundamental part of the tobacco industry’s strategy to influence decision making concerning the EU Tobacco Products Directive.58 This strategy is used to overcome the tobacco industry’s poor credibility and trust with the public; instead, the anti-tobacco control message is delivered by an ally of the industry, though this alliance may be unknown to the general public.68   

10A.7.5 Allegations of bribery and corruption

The tobacco companies have at times used their extensive financial resources to fight new regulations and expand their markets, particularly in developing countries, through corruption and bribery attempts. In the 1970s, RJ Reynolds paid millions of dollars to foreign officials as bribes.69 Philip Morris paid US$16,000 to a Dominican Republic tax officer for a favourable ruling, spent US$12,000 in order to have a significant law enacted, and made legal contributions of about US$200,000 to the President’s political campaign during the late 1990s.70 In 1998, there were allegations that Philip Morris had funnelled donations to the largest political party in the Czech Republic through a fictitious company, with the scandal resulting in the resignation of the environment minister.71 In Nigeria, British American Tobacco allegedly attempted to undermine tobacco control by bribing journalists with cash prizes for favourable media coverage (e.g., the “British American Tobacco Industry Reporter of the Year” award provided reporters with a new laptop and 100,000 Nigerian Naira) and by giving expensive gifts to regulatory agencies and government officials.72

More recently, Universal and Alliance One (two American tobacco companies) paid nearly US$30 million to settle charges that they bribed foreign officials to secure lucrative overseas tobacco sales contracts. Universal was accused of bribing officials in Thailand, Malawi and Mozambique, while Alliance One was accused of bribing officials in Thailand, China, Greece, Indonesia, and Kyrgyzstan.73 In 2012, the EU health commissioner, John Dalli, resigned over allegations that he had entertained a bribe in exchange for weakening the Tobacco Products Directive.74 British American Tobacco is being formally investigated for allegations that it engaged in widespread bribery and corruption in Africa to gain advantage over competitors and stifle government efforts to reduce smoking.75 Tobacco companies generally defend these actions through claims that they are adapting to local business norms and customs. An alternative interpretation of these practices is that they contribute to the instability and undermining of governments and economies in favour of their own agenda.70   


Relevant news and research

For recent news items and research on this topic, click here.(Last updated November 2018)  

 

 

References 

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