Kretek Capitalism & Tobacco Tactics: Influence, Narratives, and Regulation

The third meeting of the Sawyer Seminar on Corporations and International Law welcomed Professor Marina Welker, of Cornell University, and Professor Sergio Puig, of the University of Arizona’s James E. Rogers College of Law, to Durham on October 20, 2017. The two scholars, while hailing from the different fields of anthropology and law, both addressed the topic of international tobacco regulation.

Professor Welker, presenting her paper “Dilute and Defer: Cigarette Marketing Regulations in Indonesia,” described in incredible detail the complexities of the Indonesian relationship with tobacco, from clove farmers and hand-rolling factory workers to pro- and anti-tobacco activists and international and domestic corporations. Living in Indonesia from 2015-16, Professor Welker did a commodity-centered ethnography, which she called “kretek capitalism.” Kretek, she explained, is an onomatopoetic term based on the sound created when a clove-tobacco cigarette is smoked.  Indonesia is somewhere in the range of the second to fourth largest tobacco market, and 94% of cigarette sales are kretek (or clove) cigarettes.

Presenting his paper “Tobacco Tactics & International Courts: ‘Chill,’ Preempt, or Harmonize Regulations,” Professor Puig provided several examples of how tobacco companies have appeared (or have had their interests presented) before international courts and arbitral panels to, as his title suggests, chill, preempt, or harmonize regulations on tobacco. In some instances, like the WTO dispute initiated by Indonesia against the United States for its ban on clove cigarettes, or that by various tobacco-producing countries against Australia for its introduction of plain packaging, the role of big tobacco, here Philip Morris International (PMI), is indisputable. And it is precisely this use, or more aptly abuse, of the international dispute resolution mechanisms that Professor Puig argued as justification for the Trans-Pacific Partnership Agreement’s carve-out of the tobacco industry.

Understandably, given the wealth of information and depth of the analysis presented in both speakers’ works, the conversation during the seminar meeting ranged considerably. There were several questions relating to concerns of private actor infiltration into state-state dispute resolution mechanisms. For example, when asked PMI’s apparent influence over states was troubling, Professor Puig noted that this was not the main danger, as states consider these issues through a political filter, and generally make good decisions. He did not, however, his concerns around standing and the availability of forum-shopping. There was also discussion of the possibility of other carve-outs—possibly for public health issues. Professor Puig agreed that states should have greater discretion around issues of that nature but stressed that the carve-out at issue—for the tobacco industry—was not because of its public health implications but its use of litigation.

Professor Welker also fielded a number of questions about her work. In response to a couple, she explained the use of different messages for advertising and lobbying to different groups. The industry proponent Komunitas Kretek (Komtek), for example, promoted an understanding of the tobacco, and specifically kretek, industry as important to the cultural heritage of Indonesia. This message found a greater audience in the government, than for example, with average smokers. Anti-tobacco activists would highlight, in response, the colonial historical ties of kretek. Professor Welker also touched on the interesting fact that about 40% of the tobacco market in Indonesia is owned by foreign companies, PMI among them as purchaser of Chinese-Indonesian Sampoerna. Yet, she highlighted that few average smokers were aware of this connection.

The presentation by both scholars provided a perfect environment to consider the international and domestic interplay of a major corporate industry. Through Professor Puig’s work, we saw a global view of international dispute mechanisms (and international law) being utilized by an opportunistic corporation. And in Professor Welker’s work, we could take a deep dive into one unique market over which international and domestic influences interact and battle daily. This combination provided an excellent connection to the overall focus of the seminar: corporations and international law.

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