British American Tobacco's erosion of health legislation in UzbekistanBMJ 2006; 332 doi: https://doi.org/10.1136/bmj.332.7537.355 (Published 09 February 2006) Cite this as: BMJ 2006;332:355
- Anna B Gilmore, clinical lecturer in public health ()1,
- Jeff Collin, lecturer in global health policy2,
- Martin McKee, professor of European public health1
- 1 European Centre on Health of Societies in Transition, London School of Hygiene and Tropical Medicine
- 2 Centre for International Health Policy, University of Edinburgh
- Correspondence to: A B Gilmore
In 1994 Uzbekistan's tobacco industry was privatised in a closed deal enabling British American Tobacco (BAT) to establish a production monopoly.1 While completing this deal, BAT learnt that Uzbekistan's chief sanitary doctor, Mr Iskandarov, had issued Health Decree 30, a potentially highly effective piece of tobacco control legislation that would have banned tobacco advertising and smoking in public places and introduced health warnings. BAT responded aggressively, delaying completion of its investment until the decree was replaced with a voluntary advertising code.
Until now BAT has implied that it developed the code without prompting and presented it as an example of “the company's responsible attitude to its advertising practices.”2 We have obtained evidence from BAT corporate documents released after litigation in the United States3 that shows how BAT in fact developed this code when overturning health legislation that would have served to protect the health of the Uzbek population. Its behaviour highlights broader concerns about the influence of transnational tobacco companies over health policy when they invest in low income countries. A description of our methodology is available on bmj.com.
The regime of Uzbek President Islam Karimov has held power since independence in 1991, gaining notoriety for serious human rights abuses.4 5 Despite largely rejecting international advice to pursue rapid and extensive privatisation,6 7 President Karimov aligned himself closely with the BAT deal, then Central Asia's largest foreign investment.8–10 He hoped to use it to project Uzbekistan as a safe investment environment.11
BAT, in turn, considered Uzbekistan a remarkable opportunity. After a company visit in July 1993 identified only one electronic billboard in the country,12 a marketing report described Uzbekistan as, “unique in the world in terms of its singularly unexploited advertising and promotional environment,” arguing that trade and consumer loyalty could be established rapidly as advertising costs were “cheap enough to allow multinationals almost unrestricted market spend.”13
BAT's plans projected a 45% increase in annual cigarette consumption between 1993 and 1999.14 15 The increased supply of cigarettes, assisted by an exclusive arrangement with the state distributor, would be a key driver of market expansion alongside population and economic growth.13–18 BAT expected a “growth in incidence among women as cultural stigma on smoking recedes,”19 claiming that “females can be drawn into the market via menthol offers or lighter brands.”13
But marketing activities were also key to efforts to “stimulate” consumption14 18 with objectives predicated on an unrestricted advertising environment.15 19–21 As William Wells of Schroders, BAT's financial advisers in Uzbekistan, noted: “BAT would require an undertaking from the government not to impose restrictions on the advertising of tobacco products for a period of (seven) years from the agreement to invest”19
Health decree 30
As negotiations progressed swiftly, BAT was shocked to discover, in August 1994, that the Ministry of Health had recently issued a tobacco control decree. Health decree.22–24 Although BAT had seemingly already overturned22 a decree banning street advertising in the capital Tashkent,25 Mr Wells warned that the ministry would prove “an altogether more difficult animal with which to deal.”w1 The decree, unprecedented in the region, banned filterless cigarettes and those high in tar and nicotine, banned tobacco advertising and smoking in public places, required outlets to be licensed, and introduced health warnings.23 It also noted, in contrast to BAT's reports just one year earlier, that “large scale” tobacco advertising was undermining health promotion efforts.23
BAT described the decree as a “deal stopper”w2 that infringed its agreement with the Uzbekistan government22 w1 and immediately pursued its reversal or deferral.22 w3-w5 Within 24 hours BAT had coordinated counter arguments from its corporate affairs and smoking issues teams22 w6 w7 and met with Mr Mahsudovw3 from the Cabinet of Ministers. It then met Mr Iskandarov and other health officials a few days later.w4
BAT sought to counter each section of the decree (see table A on bmj.com), repeatedly claiming to be a responsible manufacturer of a legal productw4 and making three key assertions. Firstly, BAT depicted the decree as jeopardising foreign investment in Uzbekistan,11 w3 w4 while warning the health ministry that it would lead to “the immediate demise of the domestic cigarette industry” and threaten an investment supported by Karimov.w4 Secondly, BAT refuted the health effects of smoking as accurately described in the decree,24 w4 w6 w8 suggesting an ongoing controversy in which “smoking has not been proven to actually cause” diseases.w6 Thirdly, the company portrayed Mr Iskandarov's intended restrictions as “seriously interfering with…commercial freedom”w4 and denied that advertising affected consumption: “World wide experience consistently shows that advertising bans do not reduce consumption. Advertising a mature product like cigarettes is not intended to increase the overall market but to expand company market share.”w4
Additionally, BAT portrayed Russia's recent voluntary code as epitomising the industry's responsible approach in working with governments to agree adverting standards.w4 This code was actually developed collaboratively by tobacco companies and entailed only modest and ineffective restrictions.w9
BAT's amended decree
BAT's version downplayed claims about the health impacts of smoking, repudiated proposed interventions, and nullified its regulatory impact (table).26 Thus the intended total advertising ban was replaced with a voluntary code. The ban on smoking in public places was replaced with a ban confined to institutions dealing with health and children, specifying that elsewhere smoking areas would be provided.26 Despite BAT's claims not to encourage young people to smoke,w4 the original ban on smoking in colleges and universities was removed, consistent with BAT's marketing plans.13 14
In September, when Mr Iskandarov still refused to concede,11 BAT abandoned negotiations with the Ministry of Healthw10 and shifted focus to the first deputy prime minister, Mr Djurabekov, whom President Karimov had charged with implementing the proposed joint venture.w11 BAT seemingly enjoyed a good relationship with Mr Djurabekov and seemed confident of presidential support, expecting a satisfactorily amended decree despite the health ministry's intransigence.11 w12
An order to be issued by Mr Djurabekov on the Cabinet of Minister's behalf, requiring the Ministry of Health to amend decree 30 was faxed from BAT's Tashkent office.w13 Documents suggest it may have been drafted by BAT.w10 It incorporated BAT's main concerns, with the tar and nicotine limits and the bans on smoking in public places, filterless cigarettes, and advertising all cancelled.w10 w13 The advertising ban was replaced with a new code,w13 which seems to be an even less restrictive version of the Russian voluntary code.w9
The Cabinet of Ministers approved BAT's proposal,w14 agreeing that “Djurabekov will write to the Minister of Health formally requesting amendment, hopefully on the terms discussed with BAT”, with the expectation that “the political situation will lead to a satisfactory amendment to the decree.”w14
In response, the health ministry reportedly offered BAT a two year exemption,w15 a compromise BAT dismissed as insufficient. This rejection triggered the direct involvement of President Karimov: “Djurabekov/Chzehen are writing to Karimov to inform him of this response and make him aware that unless the decree is suitably amended it is unlikely that BAT will invest, the Uzbek cigarette industry will collapse with the domestic market being flooded by imports, there will be a leaf farmer crisis and Uzbekistan will have its reputation as a place in which to invest very materially damaged. This letter is to be delivered to Karimov's home and it is likely that it will received [sic] prompt attention.”w15
Although there were concerns about the president's formal authority to amend the decree,11 once the dispute reached presidential level resolution seemed inevitable. BAT cited 31 October as a date when the decree would be “amended and in force,” noting that this was a condition for further progress.w16 Within a month the deal had been completed,w17 with BAT transferring its first payment in November 1994.w18
After the deal
From the mid-1990s, tobacco advertising in Uzbekistan became ubiquitous.1 w19 Tobacco consumption has reportedly increased by 7% to 8% annually, primarily among young people,w20 and cigarette sales rose by 50.5% between 1990 and 1996.w21 By 1999, BAT had achieved a market share of over 70%,w22 w23 not far short of its 80% target.14 In the 10 years since BAT's investment, further legislation has been confined to a partial ban on direct advertising, introduced in 1998 and amended in 2002,w24 which can serve only to maintain BAT's dominant market position.
Discussion and international implications
By successfully overturning bans on tobacco advertising and smoking in public places as well as significantly reducing cigarette excise rates (as detailed elsewherew25), BAT removed the three most effective means of controlling tobacco consumption.
Documents suggest that such policy influence has not been confined to Uzbekistan. When BAT was considering manufacturing in Kyrgyzstan, proposed conditions for the deal included a voluntary code and agreement that no advertising restrictions would be introducedw26 alongside extensive excise reforms.w27 Documents also suggest that reversal of a Soviet decree banning tobacco advertising was a precondition for the deal by R J Reynolds and Philip Morris to import 34 billion cigarettes to the Soviet Union in the early 1990s.w27
Our findings highlight the difficulties in developing tobacco control measures in the context of industry privatisation and investment by transnational tobacco companies. They support our previous contention that former Soviet countries with major tobacco company investments and highly centralised one party systems of government faced the greatest challenges in implementing effective tobacco control policies.1 Between 1992 and 2000 BAT's investment accounted for over a third of total foreign direct investment into Uzbekistan.1 The chief sanitary doctor was powerless next to BAT, particularly given its close alliance with President Karimov.
Effective control policies are much needed during privatisation because growing evidence, supported by our findings, suggests that liberalisation of investment fuels consumption.w28-w30 International financial organisations should therefore reconsider their support for privatisation of the tobacco industry.w28 w31 If privatisation does proceed, it should be conducted openly and preceded by implementation of effective tobacco control legislation. In countries where privatisation has already occurred, every effort should be made to implement comprehensive, enforceable tobacco control policies.
The ability of tobacco companies to shape public policy assumes particular importance in the context of the World Health Organization's first public health treaty, the Framework Convention on Tobacco Control. Now ratified by 119 countries, though not by Uzbekistan,w32 the convention has already accelerated policies on tobacco control in participating countries. Although this move is extremely promising, it may also, perversely, heighten opportunities for tobacco companies to shape legislation or to encourage the pre-emptive adoption of ineffective measures. If the potential of the convention is to be realised, participating states must develop binding protocols rapidly and provide adequate funding to low income countries to facilitate development of effective tobacco control policies. This requires development agencies to recognise the contribution that cost effective tobacco control measures can make to the millennium development goals.w33
In 1994 the Uzbekistan tobacco industry was privatised and British American Tobacco (BAT) established a production monopoly
BAT's investment plans predicted a 45% increase in cigarette consumption
As part of its investment conditions, BAT overturned tobacco control legislation that banned advertising and smoking in public places
Safeguards are needed to prevent transnational tobacco companies influencing health policy when investing in low income countries
The Framework Convention on Tobacco Control could help but needs to be enhanced with binding protocols
Editorial by Sebrié and Glantz
Details of the methodology, decrees, and references w1-w33 are on bmj.com
We thank Yuri Loshmanov for helping with interviews in Russian and for those who were willing to talk to us despite the obvious risks. We also thank Nadja Doyle for administrative help.
Contributors and sources This article is based on a search and analysisof company documents contained in the Guildford depository. Key informants substantiated our findings, although they must remain anonymous since people involved in tobacco control in Uzbekistan have been tortured. ABG developed the concept of this paper, undertook the background work, document searching, indexing and analysis, drafted and revised the paper. JC contributed to document searching and initial indexing, drafting and revision of the paper. MM contributed to the drafting and revision of the paper. All authors approved the final version. ABG is guarantor.
Funding This work was supported by the National Cancer Institute, US National Institutes of Health, grant number R01 CA91021.
Competing interests ABG is an unpaid board member of ASHUK. JC is an unpaid board member of the International Agency on Tobacco and Health. ABG, JC, and MM receive funding from the National Cancer Institute, US National Institutes of Health. ABG and JC have received funding for tobacco document related work from the Wellcome Trust, Cancer Research UK and Health Canada. JC has received funding from the Rockefeller Foundation for tobacco document related work.