WHO says Japan Tobacco, FIVB, JVA violating 2004 treaty by marketing tobacco to women, schoolgirls at World Cup volleyball in Japan
Organizers, JT say nothing wrong with action under Japanese law
by Christopher Johnson
TOKYO — Anti-smoking campaigners in Japan are accusing one of the world’s leading tobacco companies of marketing their products to fans, including teenage girls, at World Cup volleyball events in Japan.
They say Japan Tobacco’s logo is on Japan national team uniforms, court-side digital billboards, TV ads, and “gift” packages handed out to schoolgirls, mothers and children entering Yoyogi National Stadium and arenas across Japan during the World Cup, which runs until December 4.
The World Health Organization, based in Geneva, Switzerland, also says that Japan is obliged to comply with a treaty it signed in 2004, the Framework Convention on Tobacco Control, which bans tobacco advertising, promotion and sponsorship at sporting events, said WHO press officer Timothy O’Leary. Though the treaty cannot enforce punishment of violators, Japan should “uphold their obligations under the treaty,” he said.
While the United States, European Union and other countries have long banned tobacco companies from sponsoring sporting events, Japan Tobacco has been a major promoter of volleyball, helping to make the sport popular among women and schoolgirls. Japan has hosted every World Cup since 1977, and three of the last four world championships.
Japan Tobacco also sponsors a Japan league team starring Japan’s top player, Yoshie Takeshita, a five-foot tall setter who can leap high enough to block spikers more than a foot taller. Many schoolgirls in Japan call Takeshita a “kami” or “god” for her brilliant playmaking skills.
Anti-smoking campaigners, who have long accused Japanese volleyball organizations of promoting tobacco consumption, say they are concerned that JT is targeting young women, who often start smoking at age 18 in order to feel like an adult in Japanese society. About 10 percent of Japanese women smoke, compared with 40 percent for men, according to government estimates.
Manabu Sakuta, a Tokyo doctor who heads the Japan Society for Tobacco Control, says he was celebrating his 64th birthday with his children and grandchildren when the World Cup volleyball came on TV. “I was amazed to see our supposed national team wearing gear promoting Japan Tobacco. This is complete nonsense. It seems that they are not a national team, but a Japan Tobacco team.”
Mahoko Tsuchiya, manager of media and investor relations at Japan Tobacco in Tokyo, said that all JT activities “are conducted in full compliance with the law.” “It is hard to believe that you are relying on claims by ‘anti-tobacco activists’,” she said in an email.
Smoking is legal — and common — in bars, family restaurants, playgrounds, and hotel rooms in Japan. Japan’s Finance Ministry owns more than 50 percent of shares in Japan Tobacco, which have risen about 30 percent this year despite a sluggish economy.
The World Health Organization says smoking kills almost 6 million people a year, including 600,000 non-smokers. The European Union banned tobacco ads on TV in 1991, and at international sporting events in 2005.
The Lausanne, Switzerland headquarters of volleyball’s governing body, the FIVB, referred calls to chief press officer Richard Baker, who did not reply to phone and email comments over the course of a week while he was in Japan. The FIVB and JVA barred several foreign journalists from covering the World Cup, where Japanese journalists outnumbered foreigners more than 10 to one.
Hiroshi Takeuchi, FIVB press commission president, said that FIVB will study the issue “with some experts in this area in order to avoid possible further misunderstanding.”
“JT is a multi-products company and they are our sponsor as the beverage category for this World Cup,” he said in an email. “According to the Japanese national regulations, JT beverage may not be considered as tobacco category even though they have the same JT brand.”
Dr. Sakuta in Tokyo says that Japan Tobacco is “buying news time on TV and in the newspapers,” in order to prevent Japanese media from exposing a scandal involving alleged smuggling by JT’s international branch, Japan Tobacco International.
Dr. Sakuta cited a report by the Organized Crime and Corruption Reporting Project, a group of East European investigative reporters linked with the Journalism Development Network, a Maryland-based charitable organization. The group lists PBS Frontline producer Lowell Bergman (portrayed by Al Pacino on “The Insider”) on their Board of Directors, and they claim to receive funding from the United States Agency for International Development.
Their report, “Big Trouble at Big Tobacco” claims Japan Tobacco International, the overseas arm of Japan Tobacco, is doing business with repressive governments in Syria and other countries, and mobsters in Russia and across Europe and the Middle East who ship tons of cigarettes through black market channels to avoid paying taxes into state coffers. JTI spokespersons have denied these allegations.
Ms. Tsuchiya of Japan Tobacco says the company’s internal investigation, supported by a major international law firm, found those allegations unfounded. “JTI is considering all possible legal action against the ex-employees behind these allegations.”
On its website, Japan Tobacco trumpets its social activism, saying it donated 3 million yen (about $40,000) to flood victims in Thailand, and $40,000 to earthquake victims in Turkey. “The mission of the JT Group is to create, develop and nurture its unique brands to win consumer trust, while understanding and respecting the environment, and the diversity of societies and individuals.”
While JT’s site in English does not mention a policy toward youth, or the hazards of smoking, JTI’s site lists a section called “Youth Smoking Prevention Programs,” last updated on April 22, 2009.
“It is wrong for minors to smoke, and we do not engage in any activities whatsoever designed to encourage minors to become smokers,” the site says. “This principle of business behavior has been reflected in the International Marketing Standards (IMS), a comprehensive document signed in 2001 by major tobacco companies that for the first time applies worldwide, ensuring that tobacco advertising is not targeted at youth nor is appealing to young people.”
The OCCRP report cites company emails and internal memos as saying a senior JTI executive blocked an internal investigation into 13 employees and distributors who may have been working directly with smugglers. The company’s undercover investigative team included former and current officers from the CIA, US Special Forces, and the British police. “They went undercover, shut down smuggling routes and worked with European police to intercept shipments worth millions of Euro,” says the report. “The deeper they dug, the more evidence they say they uncovered against JTI’s employees and its distributors.”
But, they add, “JTI’s own investigators say JTI and its parent Japan Tobacco did almost nothing when faced with reports their distributors smuggled tobacco through Russia, Moldova, the Balkans, Afghanistan and the Middle East.”
“This year, as Syrian president Bashar Al-Assad killed his own people and faced worldwide sanctions, JTI’s Middle East business partner IBCS poured cigarettes into duty free shops, according to invoices obtained by OCCRP,” says the report. “The profits went to a company whose owner, Rami Makhlouf, according to a European Union sanctions order on May 23, ‘provides funding to the regime allowing violence against demonstrators.’ Four days after the sanctions took effect, JTI’s partner and sole Middle East distributor shipped 9,000 cases – 90 million individual cigarettes — to Syria Duty Free.”
The OCCRP report says that JTI investigators caught an Israeli distributor smuggling large quantities of cigarettes into Iraq and Belgium, but the company took no action. They also reported that alleged Russian mobsters had financial stakes in some of JTI’s largest Russian distributors.
JTI is the international arm of Japan Tobacco. Japan’s Finance Ministry owns more than 50 percent of shares in Japan Tobacco, according to local press reports in Japan.
Tobacco is the world’s most smuggled legal product. Smugglers often ship containers of tobacco from areas with low taxes such as Russia, or from duty free spots in Dubai and Panama, to avoid high taxes in
Western Europe and North America. The OCCRP report says a single container of cigarettes can net $1 million in profit.
In its annual earnings report, JTI, the international arm of JT, reported $25 billion in sales in their last fiscal year on brands including Winston, Camel and Benson & Hedges.
Tobacco makers often benefit from smuggling, since it provides relatively cheap products to established customers and new consumers. A report by the European Commission in June this year said smuggling costs government budgets across Europe about $14 billion per year in tax revenues, which states need to pay down massive debts.
Over the past decade, Japan Tobacco has drawn criticism for acquiring two companies long accused of smuggling, RJR Reynolds and Gallaher. Using U.S. anti-racketeering laws, the governments of Canada and Ecuador sued RJR in 1999 for alleged smuggling. The European Commission filed a separate suit, accusing RJR executives of laundering money with drug cartels in South America, and defying trade embargoes to ship cigarettes to Saddam Hussein’s government in Iraq. U.S. judges dismissed all lawsuits, saying they didn’t have jurisdiction over foreign tax matters.
Between 2003 and 2007, Canadian police and revenue collectors filed fraud charges against the company’s Canadian division for evading more than $1.36 billion of taxes in 2003 alone. Canada won a $1 billion award, and the company in 2010 agreed to pay about half the amount.
Meanwhile, a former director of Gallaher testified in a civil lawsuit that the company routinely enabled or turned a blind eye to smuggling.
After JTI acquired Gallaher in 2007, JTI signed an accord with the European Union calling for it to spend $400 million on anti-smuggling measures over 15 years.))
Over the past decade, tobacco makers have paid at least $5 billion in fines. Yet tobacco companies continue to reap huge profits. JT’s stock price in Tokyo has increased by almost a third this year, bucking a downward trend in Japan’s economy.