Читать книгу Dirty Tobacco - Telita Snyckers - Страница 6

Globally, big tobacco controls more than 80% of the world’s tobacco market. An estimated 98% of all illicit cigarettes is believed to come from legal, licensed manufacturing facilities,2 and around one third of all exported cigarettes go missing somewhere along the supply chain.3

You do the math.

Indeed, British American Tobacco’s own documents, which date from the early 1990s, suggest that the company may historically have been involved in smuggling in around 30 countries; and suggest that, at the time, as much as 25% of BAT’s profits may have come from selling contraband in China.4

The tobacco trade has been dirty for centuries, effectively breeding an industry that I believe has criminality embedded in its DNA. (Mind you, I’m not suggesting that tobacco is all bad: there was a time when tobacco smoke could reportedly be applied – by way of an enema – to resuscitate drowning victims.)

I had initially written a simple thesis on the instances where big tobacco had been caught smuggling. It was meant to be a moderately academic discourse that really would have just preached to the choir – more boring than brave.

But once you start connecting the dots, you realise that there is far more to the story than just smuggling – there is an entire playbook of strategies, rhetoric and tactics behind the façade that big tobacco puts up, one that seeks to secure its continued success, the demise of its competitors and the downfall of those who stand in its way. A playbook that may, perhaps, be aimed at positioning big tobacco as too big to fail.

Just ask the team of tax investigators that tried to take on the tobacco industry in South Africa.

They faced the wrath of an industry willing to go to almost any lengths to protect its profits. When the pressure became too much, the tobacco industry played a role in the demise of those in power at the South African Revenue Service who could oppose them or expose them. The subsequent implosion at SARS can’t be blamed entirely on them, but their agents lit the match that burnt the SARS house down.

I spent most of my early career at SARS, and since then have had work assignments in more than 25 countries – mostly on tax and customs modernisation initiatives. Using this experience, I wanted to place the events in South Africa in a broader global context. And, so, while much of this story details what happened in SARS’ efforts to take on the illicit trade in tobacco, this is not a South African story – it is a story about how big tobacco acts with impunity, wherever it operates.

By 2011, tax evasion in the tobacco industry was costing SARS around R3 billion ($203 million) a year. With laundering and corruption rife, SARS launched Project Honey Badger, targeting various tobacco industry players – including British American Tobacco (BAT).5 (See addendum 1 for an extract of the letter SARS sent to the industry, where they set out in some detail what they were investigating.)

Honey Badger had the potential to make history as one of SARS’ most effective industry-wide investigations ever. Thanks in large part to Honey Badger, contraband tobacco had dropped from around 26% of the total market in 2013 to 17% in 2014.

Then, as the project’s wings were clipped, illicit trade spiked upwards, and markedly so: By 2017 – the last year for which sound estimates are available – the share of illicit cigarettes in the market had shot up to somewhere between 30-35%,6 and in the space of only two years there was a steep drop of 26% in the quantities of cigarettes declared to the taxman.7

It’s all too easy for our eyes to glaze over when bombarded with figures like these. What does ‘35% of the market is illicit’ translate to in real monetary terms? It means South Africa was losing out on tax revenue of an estimated R7 billion ($350 million) a year. That’s the equivalent of 74 000 new homes that government could have subsidised; 66 500 new policemen that could have been appointed; 277 777 pension grants that could have been paid out; or 400 000 electrical connections that could have been installed.8 But for which there now was no funding, because somebody hadn’t paid the taxes on a pack of smokes.

The data tells a story of how Project Honey Badger made a significant difference, only to lose traction once SARS came under attack, in what one might call big tobacco’s Christmas present to the underworld.

With 15 different criminal cases against tobacco manufacturers and importers ready to be prosecuted, the fiscus should have netted an extra R3 billion (roughly $200 million). But Honey Badger had come too close to the truth, and people like tax detective Johann van Loggerenberg and others had to go. To be fair, they had made enemies far beyond just the tobacco industry. All of them had both the incentive and the power to engineer their demise, but tobacco was the thin end of the wedge that pried open the door for their departure.

To fully grasp how their downfall came about, one needs to understand the power of big tobacco globally. ‘Big tobacco’ commonly refers to multinational companies that control more than 80% of the world’s market, including: British American Tobacco, Philip Morris International, Japan Tobacco International, Imperial, Reynolds. (China Tobacco controls most of the Chinese market and is a book all on its own.)

In an older internal corporate affairs presentation, one of the big tobacco companies – Japan Tobacco International – talks about the importance of ‘finding allies that cannot be ignored’, of ‘building allies across ministries’. It talks about the importance of ‘building complete political power maps’ and how ‘roadblocks are as important as solutions’.9 And it talks about having ‘the best expertise on our side: door-openers, strategists, spin doctors’.10

And in an older quote, one of RJ Reynolds Tobacco Company’s lawyers explains how they win cases: not by spending all of their money, but ‘by making the other son of a bitch spend all of his’.11

And so, when SARS had started digging a bit too close to the tobacco dung heap, it came as little surprise that the industry was ready to retaliate. Because big tobacco had, indeed, found allies that could not be ignored, and had built networks across ministries, and had the best door-openers on its side.

What happened in South Africa is simply part of a bigger story – not an isolated example of the tobacco industry gone rogue. It is a problem that plagues countries the world over, from advanced nations in Europe to those least able to defend themselves in the developing world.

I had started out with the simple hypothesis that much of the illicit trade we see in tobacco is not attributable just to tattooed gangsters, but to big, established, reputable tobacco companies, who are only too happy to pin the rise of illicit tobacco on smaller competitors. Along the way, I discovered a few things that are far, far more interesting, that lets me tell a story that goes beyond a bland academic discourse on the interpretation of rebate item 624.10 in the Customs and Excise Act or an exposition on what a ‘secure stamp’ means.

You’re here to consider the evidence that proves, in my view, just how dirty tobacco’s hands are. To test my hypothesis in the ‘real world’, I rounded up some of the biggest, baddest cigarette smugglers I could find.

And so, while much of what I’m about to tell you comes from decades of peer-reviewed research, from investigative journalists and from NGOs, and much of it from big tobacco’s own documents (either leaked or forcibly disclosed as a result of court orders, from a time when they were far more brazen about documenting their goings-on), some of it comes straight from the mouths of smugglers, and some from an incriminating thumb drive that was slipped to me in Rosebank, Johannesburg.

I should point out at the get-go, that much of the big tobacco documentation comes from the early 1990s, a time when big tobacco appears to have been much less careful in the way it recorded its activities internally.

The majority of the internal industry documents we now have access to, relate mostly to BAT, simply because PMI and other tobacco companies responded more narrowly to the courts’ disclosure orders. As a result, while the examples quoted may create the impression that BAT may have been particularly active in establishing a contraband network, this may not be an accurate reflection and conceivably understates the involvement of other tobacco companies. Indeed, PMI had to pay a lot more in EU settlements than BAT did. (Addendum 2 has more details on where the internal industry documents that are quoted extensively throughout the book come from.)

Here is why I largely believe what was on that thumb drive and what the smugglers I spoke to told me: because there is a common thread in all of their stories; because of the many lines where their allegations intersect; because they reference details that can be verified; because of the sheer volume of evidence; and because much of it simply validates tactics that are explicitly discussed in the tobacco industry’s own internal documents.

I believe it because it overlaps with serious allegations that many others have uncovered in other parts of the world, including the International Consortium of Investigative Journalists, which asked: ‘[Tobacco] executives meeting with criminals in Niagara Falls to discuss smuggling into Canada, or BAT executives in Hong Kong taking bribes to feed a Triad-backed smuggling ring, or Mafia bosses in Italy with a seemingly endless supply of Marlboros, all raise serious questions about international corporate participation in a conspiracy to defraud governments. Have BAT, Philip Morris, Reynolds, and Japan Tobacco become mafia-like organisations involved in massive illegal operations?’12

At the heart of this book sits a disturbing thought: big tobacco may just be too big to fail. Based on my research, I believe it thrives because its very own products end up on the black market, their packs being sold tax free. And they have managed to get away with it because they influence what we think by controlling the narratives and rhetoric we are fed. They get away with it because they influence the policy positions our governments take. They get away with it because of the political patronage networks they have established. They get away with it because they spy on their competitors and use our enforcement agencies as economic hitmen to put pressure on the smaller players making cheaper cigarettes.

If you only remember one thing from this book, make it this quote from George Osborne, a member of the UK Parliament’s Select Committee on Public Accounts, after hearing evidence from the big tobacco companies – because this sits at the heart of our story: ‘One comes to the conclusion that you are either crooks or you are stupid, and you do not look very stupid’.13