Regulatory divergences between jurisdictions complicate the realm of international law, becoming even more complex when corporate actors are added into the equation. The study of international tobacco regulation clearly demonstrates these challenges, particularly the way in which the corporation can manipulate its power to advance self-interests. On October 20th, 2017, Duke University’s Mellon Sawyer Seminar on Corporations and International Law had the privilege of hosting both Sergio Puig and Marina Welker to speak on behalf of their work in this field.
Our conversation with Puig began with a brief presentation on his working paper, International Trade and Investment Disputes: Tobacco Tactics and International Courts: Chill, Preempt or Harmonize Regulations. Through examining the implications that a cigarette ban had on both the United States and Indonesia, Puig primarily focuses on how the American multinational corporation, Phillip Morris International (PMI), fervently lobbied for the exemption of menthol cigarettes, most likely because these cigarettes were an attractive “starter product” for new smokers.
With the tobacco industry being one of Indonesia’s top markets, PMI was able to leverage the fact that an abundance of Indonesian jobs relied upon what Marina Welker referred to as “kretek capitalism.” Later in the discussion, Puig elaborated on how a company’s subsidiaries can serve as another avenue for manipulation, yet the majority of research on this principle tends to focus on the obvious motive of tax incentives. He explained that less apparent functions of subsidiaries include their ability to gain political clout and enhance corporate lobbying strategies, particularly in the context of international regulatory regimes.
Welker’s presentation provided even further insight on how corporations are able to harp on the extent to which tobacco plays such a significant cultural, political, and economical role in Indonesian societies. She emphasized the widespread prevalence and accessibility of cigarettes in Indonesia through the fact that 70% of Indonesian men smoke and that tobacco products account for 11.5% of their household expenditures. As Welker flipped through slides depicting pervasive tobacco advertisements she personally encountered in Indonesia, one could not help but question the moral responsibilities of the corporations perpetuating this public health catastrophe. Signs riddled the town with phrases such as “Don’t Quit!” and “Never Say Maybe!,” while models and influencers encouraged young people to smoke, promoting an allure of risk-taking behavior. However, what these corporations conceal is the catastrophic health consequences that come with tobacco consumption. Welker revealed to us that in Indonesia, there are 97 million secondhand smokers with 36% of boys being active smokers. With approximately 244,000 tobacco-related deaths occurring annually in Indonesia, it is apparent that this is not a public health concern that should be taken lightly.
While the tobacco industry clearly allows the Indonesian economy to flourish, Puig raised an interesting point towards the end of the talk in drawing a parallel to the perception of NAFTA and the narratives that have been built around it. He explained that NAFTA’s actual impact on labor is relatively minimal but the near ubiquitous belief that NAFTA has this immense impact on jobs has led to strong public opinions on the matter. While living in Indonesia, Welker heard a similar panicked discourse between the locals, some even going so far as to say that Indonesia would be destroyed without the kretek industry since it employs so many people. However, with Puig’s point in consideration, one must question the extent to which international tobacco regulation would significantly harm the numerous Indonesians employed by the industry. Would the economic impact actually be that dire or have tobacco corporations and local governments convinced citizens into believing that Indonesia would not subsist without the industry? What is an even better question is whether the hundreds of thousands of tobacco-related deaths in Indonesia each year are at the hands of the individuals, the governments, or the corporations.