GOOD GOVERNANCE IN THE 21ST CENTURY

Mary Assunta, PhD

Senior Policy Advisor SEATCA

Kuala Lumpur, 4 Sep 2014

Principles of Good Corporate Governance

1. Ethical approach – ethical basis to the business

2. Balanced objectives - congruence of goals of all interested parties

3. Strategic management: an effective strategy process which incorporates stakeholder value

4. Decision-making process in place - reflecting the first three principles and giving due weight to all stakeholders

5. Equal concern for all stakeholders

6. Accountability and transparency - to all stakeholders

http://www.applied-corporate-governance.com/best-corporate-governance-practice.html

seatca.org

Annual Deaths Attributed to Major Tobacco-Related Diseases (2006-2012)

seatca.org

Tobacco Industry’s Profit (in USD)

Preventable Global Epidemic – Caused by one Industry

• 6 million deaths every year globally

• 100 million deaths in 20th Century

• 1 billion deaths predicted in 21st Century

Tobacco Industry

• "Reversing this entirely preventable [tobacco] epidemic must now rank as a top priority for public health and for political leaders in every country of the world.”

Dr. Margaret Chan

WHO Director-General

Globalization of the epidemic

– restricts the capacity of countries to regulate tobacco through domestic legislation alone

– international coordination of policies is essential

FCTC: a global response

– first public health treaty under WHO – 179 Parties

Why the Framework Convention on Tobacco Control (FCTC)

FCTC Text

Art. 5.3 – General Obligations ◦ to “protect these [public health] policies from commercial

and other vested interests of the tobacco industry”

Tobacco is more than a narrow health issue

“Tobacco use poses a major health and human development threat. Avoidable and unnecessary, tobacco linked illnesses strike people in their prime, hit the poorest hardest, inhibit country productivity, burden already weak healthcare systems, and consume scarce national resources.” Douglas Webb, UNDP

Not All Industries are the Same

Tobacco Industry is Unique

1994

CEOs of 7

Tobacco

Companies –

said under Oath

“Nicotine is

not addictive”

31 years earlier…

“Nicotine is addictive. We are, then, in the business of selling nicotine—an addictive drug.”

(BAT/Brown & Williamson, 1963)

A. Yeaman, “Implications of Battelle Hippo I & II and the Griffith Filter,”

17 July 1963, Doc No. 1802.05

The Policy Making Process and TI Interference

Policy

Draft legislation

Public hearings

Higher body

Committee /Cabinet

Highest body

Approval

Implementation

Plenary

Scientific

Research Seek a seat

Scientific

Research Pro Industry version

Delay & weaken

Front Group

Manipulating

science

Deceiving

the public

Discrediting

advocates

Corporate Social

Responsibility

Image building

Make

friends

Using economics

Attack Regulation

Subverting the law

Make

friends

Make

friends

Delay & weaken

Complain Front Group

Tobacco Industry - “Isolation” & “Transparency” are Needed

• because of the fundamental and irreconcilable conflict of interest between the goals of tobacco control and that of the tobacco industry, arising from the inherently deadly nature of tobacco products.

• The tobacco industry’s longstanding actions to subvert effective tobacco control policies

Anti Corruption Laws Already in Place in Most Countries

Aren’t national anti corruption laws sufficient?

Congruency Between Corruption Indicators and Article 5.3 Guidelines

Corruption Indicators Article 5.3 Guidelines

Protecting against policy manipulation for profit Safeguarding public health policymaking from TI

Bribing/financial disclosure

Government officials should not take money from or invest

in TI.

Transparency of dealings and decision-making Interactions between TI and Gov should be transparent

Lobbying and interest disclosure Government officials disclose conflicts of interest, lobbying

register

Code of Conduct to avoid conflicts of interest A code of conduct that dictates the terms of interactions

between government officials and TI

Public access to information

TI should release information to government

Anti Corruption Laws Already in Place in Most Countries

• Groundwork already laid

• Build upon current laws to protect against tobacco industry interference in line with Article 5.3.

Tobacco Industry Requests for a Meeting

• What do you do when you are subject to, or challenged by a team of corporate lawyers?

Code of Conduct

• Many governments already have ethical Codes of Conduct for their employees; with sanctions or penalties usually overseen by an Ombudsman.

• To incorporate Article 5.3 requirements, this code of conduct need to be updated to include preventing conflicts of interest among employees with the tobacco industry

What Good Governance in Interaction with Tobacco Industry means?

Interaction of Government with Tob Industry is for Regulation

• No Partnership with the Tobacco Industry

• Interactions should be transparent, record and disclose all meetings

• Government officials disclose conflicts of interest

• A code of conduct that dictates the terms of interactions between government officials and TI

• TI should release information to government

Primer on Good Governance in Tobacco Control

Good Governance: Exclude Tobacco from Trade & Investment Agreements - TPP

Exercise Policy coherence

Malaysia has taken a bold step and proposed exclusion of tobacco in the TPP.

Step in the right direction to demonstrate this business in not like any other business. It should not be treated as one.

Thank You