STOP Campaign Focuses on South Africa’s Lack of Action Against Illicit Tobacco

In September, the University of Bath’s Tobacco Control Research Group, a key partner in the STOP campaign (Stopping Tobacco Organisations and Products) published a case study and profile on South Africa and the country’s handling of the illicit tobacco trade.

The STOP initiative – which is funded by Bloomberg Philanthropies – is a global industry watchdog which works to accelerate tobacco control and expose tobacco industry tactics, in particular those that undermine the implementation of the World Health Organisation’s Framework Convention on Tobacco Control (FCTC) and the Protocol to Eliminate Illicit Trade in Tobacco Products.

The case study focuses on South Africa’s efforts in relation to tobacco tracking and tracing and its longstanding close relationship with the tobacco industry. It features the fact that South Africa cancelled its tender for a track and trace system in May of this year, despite having signed the FCTC treaty in 2005 (although it is yet to ratify the Protocol).

The tender aimed to replace the country’s outdated ‘diamond stamp’ fiscal marking regime with key supply chain enhancements consistent with the Protocol. The diamond stamp is a simple impression that is applied with a die. It is perhaps one of the least effective fiscal marks used today and provides no security features against counterfeiting and no means of counting how many times the die has been used.

The case study further notes that the South African Revenue Service (SARS) engaged frequently with the tobacco industry during the development of the tender, and that the (now disbanded) Tobacco Institute of Southern Africa, which represented the largest tobacco players, was a vocal critic of SARS’ plans to implement track and trace. The study provides a concise chronology of how the tobacco industry has historically used its influence and with what success. The unfortunate reality for South Africa is that it has done little to tackle what is perhaps the largest illicit tobacco market in Africa.

The case study states that, according to the Global Tobacco Industry Interference Index, South Africa is one of the top 10 countries at risk from such interference, and it appears that ‘the country’s progress in trying to tackle illicit trade has fallen victim to such influence’.

According to one TSTN source: ‘when it comes to illicit trade South Africa is quite an enigma. On the one hand, you have perhaps more media coverage and more scandals related to the tobacco industry than anywhere else. The county’s ban on tobacco during the COVID-19 lockdown led to a surge in illicit trade according to research carried out by the University of Cape Town and the issue was in the press virtually every day.

‘On the other hand, we see a government and a revenue agency that remains essentially silent on the matter and has seemingly no real plans to deal with an issue that costs the country billions of rand in lost revenue every year.

‘Given the amount of attention and national debate this issue has generated, one would think there would be a serious effort by government – ideally led by the revenue agency – to tackle the problem on various fronts.

Track and trace is important, but the country does not even have a basic tax stamp and instead implements measures (ie. customs officers and counters in factories) proposed by the industry itself that date back to the early 1800s and before.

‘It is absolutely unfathomable, when we have so many technologies and tools at our disposal that are advocated by credible sources such as the WHO and World Customs Organisation, that SARS reverts to ancient practices that actually do not work in this day and age. It seems the only party SARS wants to engage with and listen to on the subject is the tobacco industry itself. If that is not a smoking gun of complete tobacco industry capture over government, I’m not sure what is’.

The STOP case study notes that SARS’ recent policies of placing counters on tobacco production lines and physically placing customs officers at production sites are highly susceptible to integrity breaches and are not endorsed by anyone other than the industry itself.

The case study finishes with what is essentially a call to action for SARS to ‘begin a new, open and transparent tender process that both integrates the provisions of the Protocol … or risk allowing the country’s significant illicit tobacco problem to continue’.