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| Journal of the New Zealand Medical Association,
15-April-2005, Vol 118 No 1213
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Rethinking the regulatory framework for tobacco control in
New Zealand
George Thomson, Nick Wilson, Julian Crane
The Ministry of Health has recently started a process for
enhancing tobacco product regulation, and has invited public submissions to this
Review.1 While this is a very positive
development, it is part of a pattern of narrowly focusing on particular tobacco
control interventions—smokefree policies, marketing restrictions, tobacco
taxation, media campaigns, and cessation.2,3
Little thought has been given to the overall policy, regulatory, and
organisational framework in which these interventions might occur. This article
suggests a new approach to the regulation of tobacco in New Zealand.
The current Review provides us with an opportunity to
consider the setting in which new labelling, disclosure, and product control
regulations might be most effective. Given that reducing tobacco-related harm is
one of the most important means of improving health status and reducing health
inequalities in New Zealand,4 the suitability
of the regulatory framework and organisations for tobacco control is a
significant health sector issue. There is the potential to prevent thousands of
cases per year of unnecessary premature death and disability amongst New
Zealanders. A disproportionate number of these cases are amongst Maori, Pacific
peoples, and low-income New Zealanders.
Tobacco control in New Zealand has had some effect in
reducing smoking prevalence and raising awareness of the associated health
issues. However, since 1991, there has been little change in overall smoking
prevalence, and little improvement for Maori or the most disadvantaged.
The problem of an insufficiently regulated industryThe importance of the current Review
can be seen by the present situation, where neither the government nor the
public know what is in particular tobacco products, how the products are
constructed, or what the consequences are of any design change. Nor do they have
any mechanism for finding much of this information. Government also does not
have the power to make tobacco companies disclose their marketing tactics, or
the companies’ research and planning for evading regulations on packaging,
warning labels, branding, product descriptors, and product measurement. This
situation is for companies making products that kill at least half the people
that use them long-term, when used as the makers
intend.5
A particularly strong, independent and effective regulatory
framework is necessary for tobacco, given the size and nature of the tobacco
companies, the effectiveness of their marketing, the addictiveness of the
product and the danger of tobacco smoke to smokers and others. Of the companies
operating in New Zealand, in 2002, British American Tobacco was credited with
over $US 25 billion of assets worldwide, and Philip Morris with almost $US 85
billion of assets.6
Furthermore, a recent Cochrane systematic review found that
‘tobacco advertising and promotion increases the likelihood that
adolescents will start to smoke’.7
Marketing occurs wherever tobacco companies are able to make branded products
available to customers, or when the companies can interact with distributors and
retailers.
Tobacco companies have a history of combining to contest
health measures in New Zealand and
elsewhere.8,9 They have used undisclosed front
groups,10 the destruction of
documents11,12 and the evasion of
legislation.13 The tobacco industry has
demonstrated great skill in many countries and in international organisations in
resisting regulation, by exerting pressure on national and international
political processes.14–16
In 2001, the World Health Assembly of the World Health Organization (WHO) passed a resolution that recognised the subversive nature of the tobacco industry. The Assembly expressed ‘great concern [about] the findings of the Committee of Experts on Tobacco Industry Documents, namely, that the tobacco industry has operated for years with the expressed intention of subverting the role of governments and of WHO in implementing public health policies to combat the tobacco epidemic’.17 The Committee of Experts on Tobacco Industry Documents reported in July 2000 that the attempted subversion had been ‘elaborate, well financed, sophisticated, and usually invisible’.18 A possible model: marketing controlWe suggest that the regulatory
frameworks suggested by Borland19 and
Liberman20 are required for the effective
regulation of tobacco. These frameworks would enable the Government to make
tobacco companies only sell products in New Zealand to a Tobacco Authority,
would give government the ability to specify the constituents in the products,
and could remove the ability of companies to sell branded products to retailers
or customers. Essentially, such frameworks place a non-profit organisation
between tobacco manufacturers and retailers, removing the profit motive from the
marketing of tobacco to consumers (but
not from retailing). We suggest that, to cover any costs to Government, the
costs of such an Authority be fully recovered by a levy on the suppliers of
tobacco to the Authority.
Such an authority would have at least five ways of reducing
or removing tobacco-related harm. They are: modifying tobacco products; changing
the way that the products are marketed; offering substitutes (e.g. nicotine
replacement therapy); controlling tobacco prices; and changing the political,
social, and economic arena in which the tobacco industry operates.
An example of such a change to that arena would be ensuring
greater transparency for tobacco industry activities. New Zealand is relatively
suitable for the running of such non-profit marketing system, due to its
well-organised border control organisations and its geographic isolation, which
minimise the smuggling that could reduce the effect of controls on tobacco
products. Elsewhere, involvement in smuggling is a standard tobacco company
strategy to lower prices and increase
sales.21,22 Another favourable factor for the
success of bold tobacco control innovations in New Zealand is the
Government’s commitment to reducing smoking prevalence and reducing health
inequalities,23,24 demonstrated by the
Smoke-free Environments Amendment Act
2003.
If tobacco manufacturing companies were required to sell
only to an official or non-profit agency, that Authority would be able to
control both the nature of the product, and the nature of the distribution and
retail structure for tobacco. The Authority could supply current retailers with
unbranded products, could restrict the number of retailing outlets, and could
require conditions for retailing that were more appropriate to the sale of an
addictive, dangerous drug. One eventual option would be the supply of tobacco in
relatively clinical settings, where health promotion and the treatment of
nicotine dependence could be the dominant imperative.
A Tobacco Authority, such as suggested by Borland and
Liberman, could also appropriately control nicotine delivery devices or
alternative tobacco products posing less hazard than tobacco. Suitable
regulatory frameworks for such devices are urgently
needed.25 The control of modified
‘safer’ cigarettes is also an urgent
matter,26 with very large financial incentives
pushing their introduction.27
Legislative foundations for a tobacco authorityThe model would require legislative
arrangements to ensure that before the tobacco companies exited the New Zealand
market in any way, they would be required to be bonded to cover their
liabilities. Otherwise, the companies could escape their liabilities by
disolvement or bankruptcy proceedings. In New Zealand, a bond has been required
for mining operations, to cover the possibility of bankrupt companies escaping
their environmental and social
responsibilities.28
In the previous 2 years, there have been at least two
threats by very large tobacco companies to either exit a market, or to go
bankrupt. Currently, Japan Tobacco’s Canadian branch has protection
through federal bankruptcy laws to avoid a court order to pay $C 1.36 billion in
fraudulently unpaid taxes.29 In September 2003,
Philip Morris used the threat of bankruptcy in asking for a smaller court bond
in a USA court.30
A further regulatory framework option: possible disclosure powersA further regulatory approach would
be to minimise the industry’s planning and executive abilities. One avenue
towards this strategy would be to increase the ability of government and the
public to monitor the records and planning of tobacco companies.
This approach has precedents, in that the New Zealand
Government has provided powers to the Commerce Commission, under
the Commerce Act, to call for documents
and to obtain evidence from witnesses, so as to be able to better control the
financial markets.31 The Commission can also
apply to a court under the Fair Trading
Act (s.42), in circumstances where the Act had been transgressed, to get
information from those contravening the
Act.32
If our society is willing to institute controls over
financial markets, should we not equally consider similar control over market
processes that seriously affect our health? Comparable powers could be given to
the Tobacco Authority, or to the Ministry of Health. Powers similar to that
given to the Commerce Commission under the Commerce Act (ss.98-100) would more
likely be simpler and more effective to use, compared to a court-ordered process
as under the Fair Trading Act. The
practical effect of such powers is that tobacco companies could be required to
disclose all of the research and planning that they, their parent and associated
companies do on marketing and product design.
Policies to increase the Government and public’s
knowledge about the industry could have a number of benefits. Greater knowledge
about the industry’s behaviour could provide an increased public and
political willingness to control or prevent any such behaviour adverse to
health.
Such increased powers of inquiry for government would need
to be accompanied by an increased government ability to
analyse material about the industry.
The New Zealand public health sector has little apparent capacity to use
even the available court-released tobacco industry documents that are relevant
to this country, and no government reports have been published that use them.
Any Government programme to understand and control the industry would need a
greater investment in making accessible the presently available industry
document material. It would also need to ensure a better
use of the present documentary
material, for instance in getting analyses of the material published and
publicised.
Such a policy direction—increasing the information
about and analysis of the industry—might help change the reactive nature
of tobacco control in New Zealand. For instance, at present, there appears to be
no active efforts by Government agencies to establish the extent of, let alone
counter, sophisticated new marketing techniques such as Internet sales,
Internet-accessed video games, and the use of mobile phones and dance
parties.33 This is in contrast to the
monitoring of the industry efforts in such jurisdictions as
California34 and the development of such
programmes by the Victoria State Government-funded VicHealth Centre for Tobacco
Control. The tobacco industry plans well ahead, often for decades or more.
Effective tobacco control would benefit from this strategic attitude, of
‘looking upstream’, both in terms of the causes of tobacco harm, and
in terms of looking ahead in time.
However, these disclosure powers would be less necessary if
the Tobacco Authority marketing structure was adopted, as marketing and product
design could be controlled by the Authority. Manufacturers would have to fully
disclose product designs when tendering for supply to the Authority. The
disclosure powers would be only necessary to establish the tobacco
companies’ accountability for previous activity.
Creating a sustainable and effective tobacco authorityAny effective tobacco control agency
will be attacked by the tobacco industry and its allies, with skilful and well
resourced attempts at eroding its powers and
effectiveness.35 The structure of any Tobacco
Authority would need to be able to withstand such attacks, and would need
independence from political interference, a stable funding flow, and the ability
to focus on achieving health and equity
gains.36 PHARMAC, as an agency which has
successfully and consistently taken on another large and aggressive industry
(pharmaceuticals), may serve as a model for aspects of a Tobacco Authority
structure. Some of the credit for PHARMAC’s success could be ascribed to
the clear focus of the agency, and its relatively independent decision making
structure.37,38
ConclusionsTo further protect the health of New
Zealanders, the Government’s tobacco control efforts need a comprehensive
regulatory framework in order to acquire much greater control over the tobacco
industry. Because it is structural,
laying down the long-term foundations for the removal of a major cause of
disease, such a step would arguably be one of the single most important
contributions to the health of New Zealanders that any government could make.
And it could cost the taxpayer nothing.
Author information:
George Thomson, Research Fellow, Department of Public Health; Nick Wilson,
Senior Lecturer; Department of Public Health; Julian Crane, Professor,
Department of Medicine, Wellington School of Medicine and Health Sciences,
University of Otago, Wellington South
Acknowledgements:
The authors thank an anonymous reviewer for helpful comments.
Correspondence:
George Thomson, Wellington School of Medicine and Health Sciences, University of
Otago, PO Box 7343, Wellington South. Fax: (04) 389 5319; email: gthomson@wnmeds.ac.nz
References:
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