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ITEM 6.2 DEVELOPING COUNTRIES GROUP Progress Report Covering Projects and Action Plans Since the Board of Directors Meeting on March 30th 1981 Although some of the projects in this report had their origins at the DCG meeting on March 3rd/4th, in most cases the strategy and method of implementation decisions were taken at the DCG meeting on June 16th/17th. At this latter meeting the recommendations on priorities for projects, made at the meeting of the Chairing Company, Secretary General and Committee Chairmen on May 26th, were of course taken fully into account. 1981 Projects 1. EIU Leaf Tobacco Monograph Condensed Version The English condensed version was published early in June and action plans for making the optimum use of it were agreed at the June 16th/17th DCG meeting. The initial print run was 2000 copies at sale prices of B7 to the industry and E15 to the public. The main objectives of the strategy developed were: (a) To use the condensed version to alert developing countries, particularly those with leaf growing interests, to the very serious effects on their economic and social development which would result if the WHO recommendations on reducing or eliminating leaf growing and manufacturing were to be implemented. (b) By selective placement of copies of the condensed version in developing countries to stimulate objections to current WHO pressures on the FAO by national delegations from developing countries attending the FAO Council Meeting on November 5th/6th and the FAO Biennial Conference on November 7th-26th, both of which are being held in Rome. (c) To obtain as much publicity as possible on a world wide basis for the findings of the monograph, as summarised in the condensed version, which demonstrate the positive benefits to the community of leaf- growing and the contribution made by international companies in this sector. Action plans for the achivement of objectives (a) and (b) above were set out by the Secretary General in her memorandum to developing country NMAs of 9th July (pleasee see Appendix A attached) - in particular the placement of copies in each country with key officials, ministries, opinion leaders, etc. in line with the Placement Programme agreed at the DCG meeting on June 16th/17th.

Simultaneously the Secretary General sent the same memorandum to all DCG members requesting them to send a copy of it to all their affiliates in developing countries and to ask the affiliates to follow up on the action plans in support of the recommended strategy. Particular cooperation was sought from NMAs or affiliates in 10 countries, which the DCG had identified as having significant influence in international organisations. In addition NMAs in developed countries were sent a copy of the memorandum by the Secretary General and asked to assist by placing copies of the condensed version with key people in their own countries. As regards objective (c) a small task force was designated by the DCG to liaise with EIU and with its help the EIU embarked on a Phase 1 press campaign towards the end of July. This consisted of:- (1) EIU sending review copies of condensed version to 16 leading journals with specific interests in economic subjects. (2) EIU sending copies to a further list of journals giving particular coverage to developing countries. (3) EIU sending copies to lists of key journalists in developing countries (obtained from affiliates). This involved of course the dispatch of hundreds of copies. (4) EIU sending copies plus an 1800 word synopsis to a number of agencies providing syndicated material on a world wide basis. (5) EIU also provided copies and synopses to the Foreign Press Association and the Central Office of Information (Overseas Section): (6) Dr. Burley of EIU was interviewed by the BBC Money Programme on the study and the interview was taped. It is thought that tapes will be distributed by the BBC to its overseas regional offices. A transcript is being sent by the Money Programme to EIU. In September a Phase 2 press campaign will start. This will concentrate on selected journalists in Europe, to whom EIU will send copies - to be followed by personal visits from Dr. Burley if reactions are favourable. In addition during September consideration will be given to the development of a Phase 2 Placement Programme. This, if agreed, will probably involve the placement of copies, through the good offices of NMAs, with academic circles, key faculties in Universities, etc.

The Spanish condensed version, which has a different text to the English condensed version and concentrates in the main on the case studies in Brazil and Costa Rica, will be published at the end of August. Copies will be sent by the Secretariat to Latin American NMAs and by member companies to their Latin American affiliates - all of whom will already have received the Secretary General's memorandum of July 9th and who hopefully will place large orders for placement in their own countries in furtherance of the main strategy outlined in that document. The overall timetable for the action plans can be summarised as follows:- Placement Programme - Initiated in July - completion by October (by end of October in Latin America) Special Placement Programme - This involved the placement through personal contact of copies of the condensed version and the original monograph with key officials in UNCTC and UNDP in New York. It was completed at the end of July. Press Campaign Phase 1 - Initiated end of July - completion by mid-September (mid- October in Latin America) Press Campaign Phase 2 - If agreed, completion by mid- November. EIU Press Meeting in Rome - Plans are under consideration by EIU for holding such a meeting, if deemed advisable, in October. The above timetable does not include action plans for the Portuguese condensed version, which will be handled by Abifumo (the Brazilian NMA). At the time of writing the publication date of this version is not fixed but it is expected within the next 2 to 3 months. II. Formation of new NMAs and Strengthening of Existing NMAs The Chairman of the Board of Directors requested the DCG at its June 16th/17th meeting to identify those countries to which priority should be given in the strengthening of existing NMAs. This was done and the Chairman wrote to all his fellow directors on this subject on July 15th.

- 4 - It should perhaps be emphasised in this Report that when identifying these priorities the DCG was well aware of the excellent work which member company representatives, working through their affiliates when visiting these countries, had already done towards the objective of forming new NMAs, There was no question of the DCG attempting to interfere in this area or to take any separate initiative. As regards the countries identified, information received from member companies indicates the following:- Chile - It has now been found possible to form a Tobacco Sub Committee within Sofofa (the national multi- industry organisation) and this is being implemented. Ghana and Panama - Discussions have begun between the affiliates concerned. Venezuela - Following a visit by member company represen- tatives in July a Smoking and Health Committee is being set up. Mexico - The member companies concerned are closely in touch but the issue is a delicate one in the local context. Zambia - Although there is a small growers association, there is only one affiliate (Rothmans/BAT). The local view is that little advantage would accrue from forming a NMA, but the affiliate is willing to cooperate fully with Infotab Secretariat. At the June l6th/17th DCG meeting two papers were tabled covering factors to be considered when forming a new NMA, suggestions for the role of a NMA and some guidelines for its structure and organisation. It was agreed that the two papers should be amalgamated in a final version, incorporating the comments and suggestions of member companies and that the Secretary General should then circulate the final paper to member companies and to NMAs. In the matter of strengthening existing NMAs, member company representatives will be visiting Brazil in November to assist Abifumo in this respect. At the time of writing, no information is available about follow-up action in Indonesia and the Philippines. It will be appreciated that no firm timetable can be produced from the above action plans, because each project is inevitably dependent on local circumstances.

5 III. Lead Companies The Chairman's letter of July 15th also dealt with the resuscitation of lead companies and the nomination of lead companies in countries where there had been no previous lead company. The DCG had been asked to recommend nominations for the latter category, which it did, while appreciating that this could be an area of sensitivity and that member companies might understandably have dissentient views. IV. DCG Paper "Threats to the future of the tobacco growing and manufacturing industry in the Developing Countries" The Secretary General sent this paper to developing country NMAs on March 24th and followed this with a letter dated April 24th asking for their reaction to the action plans suggested in paragraph 18 of the paper, which referred. to the need to alert the government departments concerned and the leaf growing industry to the serious implications of the WHO recommendations for the running down of the latter. From the replies received it would appear that one of Infotab's problems is to convince people that, even if their own country's industry is not threatened by WHO pressures in the short term, it is nevertheless in the longer term interest of all leaf growing countries to oppose and object to such pressures. This DCG paper has been re-written in article form with suitable additions and it is planned to arrange for its publication in a leading leaf-growing country and for its use elsewhere after publication as third-party evidence. Estimated publication by November. V. Economic Impact Model for Developing Countries As will be remembered, Mr. George Berman was commissioned to produce a descriptive model for the above purpose. The second and final questionnaire was recently sent to respondants in 8 countries who completed the first quetionnaire. It is hoped that the model will be near enough in final form by the end of October so that a brief presentation on it can be made during Session 5 of the NMA Workshop on November 5th. Thereafter the model will be field tested in one selected developing country before being offered as a viable product to all developing I countries. Completion date of the testing is estimated as ~- mid-1982. ~ ~ ~ C -Z Ca Cz co

- 6 - VI. Follow-up of WHO Inter-Agency Meeting on February 9th, 1981 in Geneva The following steps have been or are being taken to pursue the strategy of establishing contact with selected inter- national organisations and provide them with information:- (a) FAO Messrs. Mylonas and Hauser are keeping in touch with their contacts in such matters as the placement of copies of the EIU condensed version. It is hoped that the Secretary General and/or Mr. Hauser will be calling on the permanent representative of certain countries based at the FAO in Rome. Timing September/October. As regards contact with FAO Regional Offices, the Regional Office in Bangkok has been contacted through a third party and the reaction was reported as favourable. In Chile an affiliate has made contact and invited the FAO representative to visit a leaf area. In Cairo, the Regional Office is reported as being relatively inactive. However the recently appointed Infotab Regional Coordinator may wish to consider the possibility of an approach to it. In Ghana an affiliate has investigated the situation, but the Regional representative is violently anti- smoking and for the present it is not deemed wise to make any move. (b) UNIDO (United Nations Industrial Develo ment Organisation) The Secretary General has made contact with a UNIDO official. UNIDO's main interest as regards tobacco is of course the transfer of technology to developing countries. This contact is currently away but after his return the Secretary General is arranging for an experienced manager in the field of technology (nominated by BAT) to meet him in Geneva to discuss such matters. The Secretary General will also provide her contact with background briefing papers on tar deliveries and the issue of consumer preference. In addition, if member companies agree, it is planned that they should submit to the Secretariat lists of their low tar brands (under 20 mg of tar) with brands of 15 mg and under starred and indicating which brands are export and which are local manufacture. The list would then be collated and, without disclosure of brand names, passed to the Secretary General's contact. Completion date October.

(c) International Trade Centre (ITC) Mr. Hauser has called on the.ITC. Among other interests ITC is concerned with helping developing countries to export tobacco and the DCG feels that it is important to get over to the ITC the positive role the industry plays in this area. The DCG considers that this could best be done by a leading leaf merchant and Mr. Mercer will be seeking the agreement of Universal to do this, when he visits Universal in the USA in September. VII. UNCTC Tobacco Research Study Mr. Hauser visited the UNCTC/ESCAP (Economic and Social Commission of the Asia-Pacific) Joint Unit in Bangkok when en route home from the DCG meeting in Kuala Lumpur. He established useful contacts with the officials who carried out the UNCTC/ESCAP study of transnational companies' involvement in the tobacco industry in Thailand, published in October 1979. This visit, followed by a subsequent visit to UNCTC in New York by Mr. Hauser at the end of July provided valuable information about the forthcoming inter-regional commodity study by UNCTC on tobacco. As already mentioned, the UNCTC now has copies of the EIU original monograph and the condensed version. The final decision on the country or countries in which the UNCTC study will be carried out will be made in September. Information from one source suggests that it will be carried'out in one country only - Zimbabwe. In the meanwhile the DCG has agreed that Mr. Ghaus should visit Mr. Hauser's Bangkok contact in September and Mr. Enahoro should make contact with the Economic Commission of Africa (ECA). PMI and BAT are investigating the possibility of a similar contact with the Economic Commission of Latin America (ECLA) in Santiago de Chile. In view of Mr. Hauser's excellent work in this area and in other matters mentioned in this report, the DCG strongly recommends that his consultancy, which finishes in October 1981, should be renewed on similar terms for one year from that date. The approval of the Board of Directors for this renewal is therefore requested. VIII UN Conference on Renewable Sources of Ener y This was held in Nairobi from August 10th-21st. In case the issue of wood-fuel use in curing came up, the DCG arranged for the local BAT affiliate, which has a very good record in reafforestation, to be provided with background industry information on the subject. The

- 8 - affiliate arranged for the industry's position to be stated, if circumstances made this desirable. At the time of writing no report on the outcome has been received, but it is expected shortly. IX. UICC Smoking Control Worksho s The first UICC Gulf Regional Smoking Control Workshop is being held in Kuwait from November 22-25th. A member of the DCG is investigating the possibility of a scientist being present to represent the industry's views. In July an ASH delegation under the auspices of UICC visited Kenya, Nigeria and Zimbabwe. This was led by Dr. K. Ball, Chairman of ASH UK. Its objective was to set up working groups of anti-tobacco elements. At present however there is no information available about the location or date of a UICC workshop in Africa. X. The Roemer Re ort At the last DCG meeting this report was reviewed. The point was made that the report makes clear the areas in which future attacks on the industry in developiong countries can be expected - in particular double standards, marketing and advertising practices and warning labels. While appreciating fully the factors which inhibited industry action in these areas, the DCG's unanimous opinion was that there was an urgent need, if possible, to develop a new strategy in these areas, based on action seen by governments and the public to be initiated by the industry itself. The meeting therefore agreed that the DCG should set out its views in this respect in a letter to the Secretary General, who reported that action in these areas would be recommended to the Board of Directors by the Secretary General. X. Malaysian Qualitative Research Study On June llth the Secretary General sent to all developing country NMAs the methodology and discussion guide used in this study commissioned by the Council of Malaysian Tobacco Manufacturers, together with a note describing how it was felt that the study could be used in Malaysia. The main objective of the study was to identify the unwritten rules of smoking behaviour that exist in Malaysia, that could be presented as a rationale to preclude restrictions on smoking in public places. At present, however, there is no report of other developing country NMAs planning to commission similar studies.

9 XI. DCG Participation in SAWP NMA Workshop In addition to the short presentation on the Economic Impact Study for developing countries, which it is hoped to give in Session 5, in the same session the Executive Director of the Council of Malaysian Tobacco Manufacturers will make a presentation on "The Role of Leaf Growing: Presenting the Facts to Government" and the Director of the Nigerian NMA will speak on the strategy employed in Nigeria for cooperation with allies. x x x 1982 Projects A. EIU Study on Consumer Preference in a Developing Country or Countries In facing the allegation that the industry uses double standards in the deliveries of brands sold in developed and developing countries, industry spokesmen have pointed out the great difficulty of changing the preferences of smokers who favour the higher delivery brands in developing countries where the per capita consumption is very low -or at least the difficulty of achieving this on anything but a very long term basis. To support this fact it is submitted that what is needed is reliable and objective third party evidence. Such evidence could be provided by an EIU Research Study in a developing country or countries where several relatively low delivery brands are available to the consumer and are supported by advertising not conspicuously lower in volume than that for the higher delivery brands. It is realised of course that before the Board of Directors approved such a project they would wish to have a more detailed plan. At the time of writing this is not available, but it is hoped to present this at their meeting on October 5th/6th and,'if approved, the research could start early in 1982. It should also be noted that one member company questions the appropriateness of including this project in the DCG's program for 1982. B. Follow up on Economic Impact Model for Develo ing Countries Further to item V in the 1981 projects, the test run of this model should hopefully start towards the end of 1981 in one selected country. If the test proves that the model is a viable tool and the results are successful, the model will then be ready for offer to NMAs or affiliates in other developing countries - assistance being provided, as required, by a specialist known to DCG. As regards timing it is hoped that, given satisfactory test results, the model should be on offer by June 1982. U1

C. Regional Workshops for local NMAs and Affiliates At the DCG meeting on June 16th/17th it was agreed that NMAs and affiliates in developing countries should be encouraged to hold their own regional workshops, where regional problems could be studied in greater depth than the overall problems covered at SAWP workshops. In this connection it was pointed out that the European NMAs meet every 6 months. The project of regional workshops will be discussed further at the DCG meeting on October 28th/29th and the aim is to produce a plan for consideration by developing country NMAs and affiliates, which if acceptable to them could lead to regional workshops being held in 1982 - with the assistance, if required, from the Secretariat. D. First NMA Workshop in 1982 It was agreed at the DCG the DCG would in any case allocate an extra day for for developiong country NMAs. E. UNCTC Tobacco Research Study Further to Item VII in the 1981 projects, as soon as the chosen country or countries are known in September, liaison will be established with the contacts mentioned in Item VII and during 1982, if deemed desirable depending on the circumstances, cooperation with the study team will be arranged together with the provision to it of appropriate industry information. F. Contacts with International Organisations The contacts mentioned in Item VI in the 1981 projects will be followed up and expanded, as appropriate, during 1982. At the DCG meeting on October 28th/29th consideration will be given as to which additional international organisations should be contacted during 1982. meeting on June 16th/17th that ask the Secretary General to subjects of particular relevance x x x x x x x x x