Tobacco Control Amendment Bill [B7–2008]: public hearings

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07 May 2008
Chairperson: Mr L Ngculu (ANC)
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Meeting Summary

The Committee continued with public hearings on the Tobacco Control Amendment Bill.

Massmart Holdings Ltd had one specific issue with the Bill. There was confusion surrounding their charitable contributions and whether or not it would be contrary to the Bill for this company to continue with their projects. The Department and the Committee explained the intention of the proposed amendments.

Japan Tobacco International was particularly concerned with the consultation process. They insisted that they had not been consulted. This company complained that the definitions were broad and vague and allowed for many interpretations. Japan Tobacco International suggested that the Committee reconsider the definitions and that the Bill return to the Department and resume the consultation process. Members questioned the complaints about lack of consultation, stated that some issues raised had already been legislated for, and questioned the donations.

Mr Bill Renwick gave an emotive account of the hardships and lifestyle challenges he had experienced as a result of smoking for 20 years and implored the Committee to consider his difficulties and attempt to guard others against them.

Ms Marilyn Lily called on the Committee to protect the public from harmful effects of smoking, especially those working in the entertainment industry and travelling on public transport. She stated that partitions in restaurants between smoking and non-smoking areas were not effective and suggested a move to a "smoke-free" society.

The Tobacco Institute of South Africa stated that its campaigns did not target minors, and noted that since trade in tobacco was well established there was a need for effective communication between the tobacco institutes and health department was imperative. Farmers would be affected by regulations. There had been little response to communication with the Department over the years, and there was no engagement with the industry prior to this Bill. The current legislation was not being properly enforced; particularly the bans on single unpackaged cigarettes. Legislation would be supported if communication was adequate. Members agreed that stakeholders be consulted before bills were tabled and should encompass suggestions made by other parties. Questions related to posters at the point of sale, hawker situations, and the broad regulations.

British American Tobacco acknowledged the health risks of tobacco but called for open and unemotional dialogue. Sensible and reasonable legislation would be supported. This company also did not target children and minors through MXit messaging. Areas of concern included restriction of communication at all retail levels, the restrictions on use of corporate logos, and restrictions on websites. This company was also concerned about charitable contributions not used for advertising purposes, saying that restrictions on these would serve no purpose. This company also called that the Bill be referred back to the Department for re-drafting. Members called for further comments on the charitable work and advertising

The Association for the Reduction of Tobacco related Harm supported the Bill, and called upon government to reduce dependency on tobacco and alcohol by providing greater alternative activities. He stated that business could not be conducted if identities of donors were secret. Comments were made around the smokers who did not want to quit. Members questioned the anonymity of donations and how this could be addressed.

National Council against Smoking stated that it met with the Department, and did not necessarily insist that it must only meet high-ranking officials. Laws on tobacco were necessary as the industry itself was not voluntarily addressing the issues and loopholes in the legislation had been exploited. The objectives of advertising by the tobacco industry were in direct opposition to the department of health’s aims. The presentation addressed the issue of retail displays, sales by hawkers, exploitation, the possibility of picture health warnings, and experiments on nicotine uptake. It was submitted that allowing trade communications meant there would be a loophole, and that potential problems of law enforcement could be overcome with public support. Members called for comments on the current advertising legislation, asked about the consultation process, and the relationship with the Department.

Meeting report

Tobacco Control Amendment Bill [B7 – 2008] Public Hearings
Massmart Holdings Limited (Massmart) submission
Mr Jay Currie, Group Corporate Executive, Massmart Holdings Ltd began by explaining that Massmart was the third largest supplier of consumer goods on the African continent, and included tobacco in its turnover. It recognised that tobacco use required a restrictive legislation. Massmart sustained an intensive social investment programme across nine provinces in South Africa, as well as Namibia, Botswana and Zambia. The primary focus of this investment was in education and training, with a secondary emphasis on disadvantaged children and the disabled. The Bill proposed to amend Sections 3(2) and 7(3) of the principal Act, providing now for a fine of R1million to be levied against a retailer who made any financial contribution to any person in respect of any organised activity that was to take place in the Republic. This seemed to suggest that even a retailer having a very small part of its turnover derived from tobacco products would be liable to fines. Massmart were concerned that this would prevent the company from continuing the education programme, which was financed by pre-tax profits They noted that Section 3(3) of the Act would allow for the Minister to prescribe exemptions for unintended consequences but pointed out that this could take a while and they would prefer not to take the uncertain route.  They proposed that the clause should include a participative sales mix measurement, and exclude all retailers and distributors with a tobacco sales mix of less than 10% of total sales.

Mr Thami Mseleku, Director General: Department of Health (DOH) commented that the section referred to was not being amended.

Mr Waters asked if it was against the Financial Intelligence Centre Act (FICA) or its rules if money was given anonymously.

Mr Mseleku replied that anonymous donations might be allowed within the FICA rules.

Mr Currie responded that Massmart were obliged to report all donations that were made and were unable to make donations not fully declared. They were clearly not using the activities to promote any products.

Mr Madella noted that if the organised activity was not related to the promotion of products then there would be no reason to be concerned.

Ms Madumise felt that the firm would be protected by the nature of its business. 

The Chairperson commented that the Committee and Department would look further at the concerns and the proposals raised. .

Japan Tobacco International (JTI) submission
Mr Mike Mabasa, Head: Corporate Affairs: JTI, noted that JTI was the third largest tobacco producer in South Africa. JTI’s position on the legislation was that they knew that the tobacco industry needed to be regulated because of the risks associated with tobacco products. It
therefore supported Government's primary health objectives of reducing the rate of smoking and reducing the adverse health impact of tobacco use. JTI believed that regulation should be developed inclusively and in consultation with all stakeholders within and outside of the industry. JTI supported the letter and the spirit of the Tobacco Products Control legislation in general. However, they complained that the consultation process was of concern. The manner in which the Bill was processed was unprecedented.  The timing was inadequate.  JTI’s ability to add value to the law-making process was unduly undermined.  The definitions were broad and vague and therefore JTI wished to suggest that the Committee reconsider the definitions of the prohibition of advertising and promotion, brand element and promotion.

JTI further noted that there
seemed to be over regulation in charitable financial contributions, displays at wholesalers, point of sale signage, sale of tobacco products at academic institutions and organised activity or event. Mr Mabasa requested that the legislation be returned to the Department, and that the Department then consult meaningfully with the industry and other stakeholders prior to tabling certain clauses again

Ms Mashigo asked how far did JTI want to be involved in the drafting of the legislation.

Mr Mabasa replied that it was imperative that the Committee realise the impact of the legislation and what was it suggesting. The lack of consultation on the legislation meant that companies were disempowered from giving meaningful participation in the process.

Ms Mashigo noted, in regard to the sale of products at academic institutions, that smokers would be able to purchase cigarettes at shops prior to even coming into the academic institution.

Mr Mabasa accepted that cigarettes could be bought anywhere.

Mr Waters noted that there appeared to have been some contradictory legal advice regarding advertising, and asked the presenter to elaborate on what the legal advisor for JTI had stated.

Mr Mabasa replied that advertising was a contentious issue. JTI were convinced that the legislation as currently drafted was open to constitutional challenge, as in their view a total ban did open a possibility for legal proceeding. Legislation in the current form removed the tobacco companies' right to communicate with their consumers or retailers.

Mr Waters asked how many times had JTI been consulted.

Mr Mabasa replied that through Tobacco Institute of South Africa (TISA), JTI had made numerous attempts to engage with the Department, to no avail. There was documented proof of this. The legislation was vague and broad and it would result were different interpretations.

Mr Madella noted that the Bill was long in the pipeline and that the process was effectively five years old. The industry was prepared for the matter already in 2006, and the only thing that was done was to split the Bill into Section 75 and Section 76 portions. He was having difficulty in understanding the contention that JTI had not had sufficient time to consult and comment. The dates for the public hearings were extended. JTI had not indicated clearly what their suggestion was to improve the vague definitions. Their concerns regarding the Ministerial powers to regulate were unfounded as the current legislation allowed the Minister to regulate already; all that the Bill did was to extend the Ministerial powers.

Mr Mabasa replied that the Principal Bill was passed in 1993 and then amendments were made in 1999 and 2003. Last year the Section 75 portion of the split Bill was passed. He said that he did not want to return every two years to further amend the legislation. He agreed that the Minister had an executive power to regulate.

The Chairperson proposed that the Committee look at the consultation issues during the next phase of their processes.

Ms C Dudley (ACDP) referred to the "bottom drawer" effect at the point of sale, and asked for a response.

Mr Mabasa replied that in South Africa point of sale was the only form of exposure. If products were to be placed under the counter this limited the consumers' ability to choose what they wanted from a range on display.

Ms Dudley asked if it would provide assistance to specifically exclude wholesalers and retailers from the definition of promotion.

Mr Mabasa replied that the current definition was subject to various interpretations. The exclusion of wholesalers and retailers from the definition would be appreciated.

Ms Dudley asked what would the implication be if charitable contributions were not anonymous but had no public acknowledgment.

Mr Mabasa replied was not sure how others contributed but JTI contributed through non-governmental organisations and did not seek public acknowledgment.

Mr Bill Renwick submission
Mr Renwick gave an account of his five-year battle with throat cancer due to smoking for 20 years. He gave an account of the costs required to undergo the operations and care. He gave an emotive account of the hardships and life changes that resulted from the cancer and implored the committee to consider these issues when viewing amendments to the bill.

Ms Marilyn Lily Submission
Ms Lily addressed the Committee with concerns of smoking affecting employees, especially those working in the entertainment industry, who had no choice in whether to avoid the smoking areas. The effects of smoking on children and commuters in public transport were also highlighted, since she complained that there was exposure to smoke. Ms Lily called on the Committee to protect the public from the harmful effects of smoking and stated that the future of South Africa was in the hands of the Committee.

Mr H Walters (DA) expressed his surprise at smoking not being banned throughout restaurants and expressed that employees did not have a choice as to which section they worked in.

Ms Lily added that the regulations in place were not being upheld. The doors and partitions between smoking and non-smoking sections were useless as they were left open or ineffective and that it was important, in her view, to aim for legislation that would provide smoke free environments.

Ms Lily listed the smoke free countries around the world as well as those with designated smoking rooms and reiterated that this was the area of problems for employees.

Tobacco Institute of South Africa (TISA) submission
Mr Francois van der Merwe, CEO, TISA, stated that no part of his presentation was a personal attack on any member. Mr van der Merwe stated categorically that the TISA campaigns did not target minors and were complying with all regulations of the past legislation. He stated that tobacco was an old trade in South Africa and would not abate. Thus effective communication between the tobacco institutes and health department was imperative. The regulation of the industry must be conducted with a good understanding and involvement of the tobacco industry. Regulation “at the top” whittled down to large effects on the individual farmer, and thus claims that regulations did not want to touch the farmers were futile as farmers were affected. Mr van der Merwe summarised the contributions of TISA to South Africa. A summary of letters written to the DG of the Department of Health over a number of years was presented, highlighting the lack of response to TISA’s communication with the Department. A need for effective communication between the health committee and tobacco industry was stressed. The concerns of TISA that there was no engagement with the industry prior to amending the bill were expressed. The lack of communication between the department and TISA was contrasted to the open door policy that the National Council Against Smoking held with the Department. It was demonstrated that a presentation made by the “department” was actually authored by Dr Yussuf Saloojee of the National Council Against Smoking. Mr van der Merwe expressed that it seemed as if there was a rush to pass the Bill without compliance of communication between the Department and the industry. It was stated that the current Bill was not being properly enforced; an example of hawkers selling loose, exposed cigarettes was given. Mr van der Merwe closed by saying that the legislation would be supported by the industry if communication was adequate and allowed for sufficient consultation with the industry about the legislation.

Mr L Ngculu, Acting Chairperson, ANC, opened with the statement that it was imperative that stakeholders be consulted before legislation was passed.

Mr A Madella (ANC) stated that legislation should be the product of comments from all parties.

The Acting Chairperson reiterated that the process must be consultative.

Mr M Walters (DA) asked Mr van der Merwe’s opinion on a suggestion by Philip Morris on the previous day, that there be one poster at the point of sale. He also asked if the suggestion by the South African Medical Association that the public get sufficient health warnings, such as leaflets contained in the packets, was supported by TISA.

Ms S Kalyan (DA) asked if there was a Hawkers Association and what the take on the hawker situation was by TISA.

Mr van der Merwe responded to Mr Walters that the issue around advertising could not be addressed here. All the market players had different issues around advertising that need to be addressed separately through negotiation. The issue of disclosing health warnings to the public was supported by TISA, however a workable way to do this must be found. As to Ms Kalyan's question, Mr van der Merwe commented that he could not definitely confirm the existence of a Hawkers Association but expressed that the informal sector must be considered in the legislation.

The Acting Chairperson asked Mr van der Merwe to expand on regulation by legislation.

Mr van der Merwe stated that the legislation provided the framework, with the details only following later, which was dangerous to the industry due to lack of consultation. The nine issues that were to be regulated were too broad and required consultation as they had important implications.

The Acting Chairperson reminded the Committee that regulations would be discussed next week.

British American Tobacco (BAT) Submission
Ms Fay Kajee, Director, BAT, opened her presentation by stating the support of JTI and tobacco institutes by BAT. She acknowledged the health risks of tobacco and acknowledged that the topic was sensitive, but implored pragmatic and unemotional dialogue around the issue. She stated that BAT supported sensible legislation but there was too much “finger wagging” around the issue. She also stated that BAT did not use MXit as a form of communication to target children. Ms Kajee raised four areas of concern in the legislation. The restriction of communication at the retail levels essentially would result in the ban of the product. The restrictions on advertising meant that corporate logos on letterheads and on corporate buildings would not be allowed and the use of a corporate website (on which there was no advertising) would not be possible, which was unfeasible for any company. The anonymity of charitable contributions that were not used for advertising purposes had no impact on the health objectives of the bill and thus served no purpose.  Ms Kajee stated that BAT did not wish to stall or defer the process but suggested that the legislation be referred back to the Department so that the Bill be restricted to health objectives, and be reworded in such a way that would allow business opportunities to be carried out properly.

Mr Madella commented on the charitable work done by BAT. He addressed the claim that the BAT supports the Bill but that the FCTC was calling on a comprehensive ban on advertising and asked Ms Kajee's opinion on this.

Ms Kajee replied that the current legislation allowed for enough leeway and control over advertising. She stated that the issue of point of sale was contentious and required consultation. She reiterated that the BAT did not propose to delete everything was the legislation, but that many provisions in the legislation were irrelevant to the health objectives.

The Acting Chairperson thanked Ms Kajee for help in the further processing of the bill.

The Association for the Reduction of Tobacco related Harm (ARTH) Submission
Mr Chan Makan, Director, ARTH, opened his address by stating full support of government’s regulation of a harmful legal substance. He stated that his address would cover two main points. He noted that alcohol and tobacco were the most abused substances in South Africa and the most vulnerable sectors of the population were that of minors, low socio economic status groups and the homeless. By engaging in these substances individuals were exposed to gangs. Mr Makan presented the projects addressing these populations to provide alternative activities such as sport. Mr Makan stated that business could not be conducted while keeping the identities of donors secret. The second focus of Mr Makan’s presentation was on those smokers who did not want to quit.

Ms R Mashigo (ANC) commented that the presentations of these projects (although good) were irrelevant to the health objectives of the tobacco committee.

Mr Madella commented that it appeared BAT was funding its own extinction as BAT required replacement smokers but the objectives of the ARTH was to reduce this number.

Ms C Dudley (ACDP) asked if donations must necessarily be kept anonymous and if there was a better way to investigate this.

Mr Makan replied that amongst the stakeholders these projects need to be funded, due to the social responsibility of the companies. The reason for this presentation was that as an organisation ARTH felt that the identity of the corporate donors did not need to be kept anonymous.

National Council Against Smoking (NCAS) Submission
Dr Yussuf Saloojee, Executive Director, NCAS, addressed TISA's previous claim that the NCAS had an open door policy with the Department of Health. Dr Saloojee stated that this was not the case and that the National Council Against Smoking met with the Department in the same manner as the tobacco industry. Dr Saloojee stated the NCAS did not agree that it should meet only with the DG and high ranking officials, and would meet with whomever they were appointed to meet. Dr Saloojee stated that the NCAS had the same agenda as the Department of Health, that of protecting the health of South Africans. This did mean that the relationship differed from that between the Department and TISA< but it was not superior.

Dr Saloojee opened his presentation by stating that the laws on tobacco were necessary as the industry did not voluntarily address these issues. He stated that on 12 occasions the point of sale of tobacco had been illegal and the loopholes in the legislation had been exploited. Dr Saloojee stated that the objectives of advertising by the tobacco industry were in direct opposition to the Department of Health’s aims. Due to advertising bans an emphasis was now being placed on retail displays and viral marketing. The NCAS was clear on the point that out of sight was out of mind, and that if the industry was addressing these issues then hawkers would be provided with cabinets so they complied with the legislation. The law stated that the selling of single unpackaged cigarettes was illegal. If single cigarettes were sold, this meant that minors and the poor could afford cigarettes and that the dangers of smoking were not advertised as no packs were provided. Dr Saloojee, on the claims around corporate social responsibility, stated that the funding given by tobacco companies effectively resulted in the harm of many as against benefits to only a few. The example of exploitation of farmers, workers and children in Malawi by the tobacco industry was given as an example. Cr Saloojee stated that the causes being sponsored by the tobacco industry were genuinely deserving, but not at the expense of the health of so many. Dr Saloojee presented the countries that required picture health warnings, giving examples from Brazil, and stated that South Africa should follow this. He stated that people must get better warnings so as to make better choices. Dr Saloojee addressed the experiments on nicotine uptake, showing reports from England that there was no difference between the nicotine delivery from regular and light cigarettes. Dr Saloojee concluded by stating that allowing trade communications created a loophole in advertising. He stated that the tobacco laws worked because they were supported by the public and that the potential problems of law enforcement could be overcome.

Ms Madumise asked why the NCAS did not also have clever lawyers to close the loopholes so that the bills did not continually need to be amended.

Ms M Matsemela (ANC) asked for Dr Saloojee's comments on the current legislation that required adverts to be one meter square in size but which placed no restrictions on where the advertising was placed.

Ms Kalyan asked Dr Saloojee if, assuming that he did not have a totally "open door" relationship with the Department, he too was concerned with how the consultations were conducted. She also asked for comment on the provision of information by Dr Saloojee to the Department, as it had been alleged that he had provided information to it that was used in a presentation. She also asked for more objective discussions by Dr Saloojee.

Mr Madella asked Dr Saloojee to elaborate on whom the NCAS was in contact with.

Mr Walters asked if the Nicotine testing machines were not working as Mr van der Merwe stated. He also asked whom the NCAS was meeting for consultation and if they were more open to the approaches of the NCAS.

Ms Dudley asked for more insight into the marketing and advertising issue and stated that the weight of what Dr Saloojee had stated should be addressed.

Dr Saloojee gave a general response to these questions. He answered the questions around lack of clever lawyers by stating that lack of funds prevented this. The testing of nicotine was useless as the results were “not worth the paper they were printed on”. On the question of advertising, he responded that the law required the advertisements to be placed one square meter from the till/pay point. In response to a comment that he had been too emotive in his responses, he stated he was a scientist by training and hoped to remain objective. As to the questions of communication between the Department and the NCAS, Dr Saloojee stated that the relationship between the Department and the NCAS was different because they had a common purpose. This however did not mean that the NCAS had a special relationship with the Department. He stated that communication was conducted through email and letters. Dr Saloojee stated that he was outside the consultation process between the Department of Health and the tobacco industry, and could thus not comment on their communication process.

Mr Walters (DA) asked if Dr Saloojee had written the presentation for the Department of Health.

Dr Saloojee (NCAS) responded that he had provided the Department with information relevant to the Bill but stated that he did not pretend to speak for the Department of Health.

Closing remarks:
The Acting Chairperson said that advertising was now a non-issue and had been stopped in South Africa, since the loopholes in this area had now been made clear. Processing of the amendments to the Bill would continue next Tuesday.

The meeting was adjourned

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