Detrimental Effects Of Financial Sector Lobbying By Regulated Firms In UK, US, Or Europe On Societal Stakeholders

You are required to write an essay o:

Lobbying

by regulated firms from the financial sector in the UK, US or Europe to illustrate your arguments, discuss the detriment that might arise to societal stakeholders from such actions/ transactions.

Lobbying - Definition

The essay is evolved with certain lobbying matters of Philip Morris, an international tobacco manufacturing company that has around 180 branches spreading over several countries. The company is recognized as the producer of the leading product Marlboro (Pmi.com 2018). The said company was worked under the supervision of Altaria Group until the year 2008and after that year a spin off has been taken place in the group regarding the corporate ownership of the US sales market. All the shareholders of the Altaria groups were investing their capital in the Philip Morris, while the Group wanted to concentrate over the sales market of USA. Therefore, a conflict has been cropped up to this regard. Headquarter of the company is situated in the New York and the operational headquarter of the company is being situated in Switzerland. Controversies over the killing nature of tobacco made the company worried for it and the company has to face several litigations regarding the same (Bennett et al. 2017). Most of the controversies are made regarding the packaging process of the company and the qualities of product the company is using for the products. in United Kingdom, dispute arises in the year 2014 due to the plain packaging system. However, many litigations are pending against the company due to the same and the company has to face damage for the same. However, the company has also filed cases for asking compensation from the government of United Kingdom for the introduction of plain package for their product. According to a report, the company is deploying its resources that are in operation on a large basis against the global efforts for the reduction of smoking. In the year 2014, the company has spent million to a lobby control department for maintaining transparency in their activities. According to the media relation manager of Philip Morris, the financial discrepancies imposed on the company is very fateful as the company always contributed their views with the decision making process of European Union (Crosbie, Sosa and Glantz 2018). Further criticisms have been made against the rules that regulate the contract in between the policymakers and the tobacco manufacturing industries.

Lobbying is an act that attempts to influence the actions or policies made by the officials in their daily life. Most of the time, lobbying is taken to influence the work of the regulatory agencies (Berry 2015). According to the ethical principle of lobbying, if any socio-economic power of someone attempts to corrupt the law for securing his or her own interest that specified action is treated as lobbying (Griffin and Thurber 2015). It has been observed that the professional lobbyists are influencing the legislation for progressing their commercial interest. Certain conflicts of interest have been raised at the time when the officials are trying to shape the laws according to their own perspective (McCambridge, Hawkins and Holden 2014). The process of lobbying is treated as agent misdirection when any government official or private company fails to serve their duties in favor of the public interest. Therefore the word lobbying can be defined as an advocacy that is intended to influence the decision made by the government for certain special interest. Considering the nature, the term lobbying is regarded as amicus curiae and the governments are sometimes treated it as a part of the law to prevent the chances of political corruption and establish transparency according to the lobby registers (Kim 2017). For an instance, certain rules have been made to provide advantages to the colored people by the National Association for the Advancement of Colored People, which has been challenged in 1950 by the process of lobbying and the Supreme Court of USA had declared the policies of the organization as unconstitutional. In United Kingdom, most of the lobbying is made from the corporate side and the purpose of it is to amend the government rules through advocacy (Borisov, Goldman and Gupta 2015). Lobbying is considered as legal process in case the practice has been professed to influence the political decision.

Scenario of the Case

In this present case, it has been observed that one of the leading tobacco manufacturer of the world have to face lots of trouble due to the policies taken by World Health Organization and the company has made certain protests regarding the same. In the year 2003, WHO has taken certain framework to control the tobacco and the treaty has been adopted under Article 19 of the constitution (de Godoy Lusso et al. 2017). The operation of the treaty has been come into force in the year 2005. The main purpose of the treaty is to protect the current generation from the detrimental effect of smoking consumption. This treaty has also given much concentration over the societal and environmental effect of the smoking in this case. A universal standard has been taken to curb the danger of consume ashes by way of limiting its utilization. The standard is known as FCTC standard and after the issuance of the standard, many tobacco manufacturers had denied to abide by the regulations. An increment in the tobacco related diseases has been observed and Professor Ruth Roemer has taken all the possible steps to apply legal provisions to control the use of tobacco worldwide basis. However, lobbying has been made by the tobacco industry against the tobacco control policies taken by World Health Organization. The purpose of the lobbying process was to shift the concentration from health issue to financial loss suffered by the tobacco industries (Roache, Gostin and Fonsalia 2016). With this intention, the tobacco industry has tried to influence the member state delegation. The tobacco industry has taken several policies to sloth the implementation process of FCTC by filing more cases before the court against it. It has also been pointed out by the tobacco industry that they are the stakeholder of the tobacco control process and they should get the permission to be a member in the decision making process. It has been observed that the tobacco industry has always made interference in the in the policy implementation process on the tobacco control. It has been observed that the tobacco industry is opposing the steps that are taken to regularize the price and marketing of the tobacco. In this present case, it has been observed that Philip Morris has also made certain steps to oppose the policies taken by World Health Organization and filed several cases to delay the implementation process of the issues on tobacco control. However, it has been proved scientifically that tobacco causes detrimental effect on the various classes of society. According to the policy makers of the World Health Organization, the strategies taken by the tobacco industry are undermining the tobacco control process (Armus 2016). Further, a major part of our society is victimized by the tobacco consumption. On the other hand, the tobacco industry is raising their voice regarding the financial features of the tobacco industries. They are not intending to look into the health issue and it has been observed that the steps and policies taken by the tobacco industries affect the societal stakeholders.

Detrimental Effects of Financial Sector Lobbying on Societal Stakeholders

According to a report published in 2000 by the World Health Organization reveals the fact that the effect of the tobacco consumption creates serious implication on the society. The detrimental substances of the products are hampering the lungs and other physical part of the human being. It has been observed that the same affect the major part of the society. World Health Organization has taken several policies for protecting the interest of the society and according to them the tobacco industry should have to follow all the guidelines regarding this. Matter of conflict has been arisen when clashes have been cropped up regarding the policy implication for tobacco control. It has been observed that the tobacco industries are contravening the process of implication by adopting many steps (Davidson and de Silva 2017). Many of the leading industries are making pact with the leading authorities to secure their own interest. It has been observed that Philip Morris has chalked out many plans with an intention to block the framework of the tobacco control policies. Further, it has been observed that three tobacco companies such as British American Tobacco, Japan Tobacco International and Philip Morris International have made pact to make opposition against the policy. The main intention of FCTC was to implement all the rules from the grass root level to minimizing the effects of the tobacco consumption and in this effect, the tobacco control board wants to introduce all the policies at the domestic levels (Elias and Ling 2018). However, the increasing lobbying made by the industry has delayed the process and it has been observed that in Kenya, the lobby board has able to make the provision of the tobacco control policies weak. Therefore, it becomes a hard task for the World Health Organization to curb the tobacco related problems or implementation of proper policies regarding the same (Bruckner 2017). The policy implementation process has been mentioned under Article 5.3 of the constitution of World Health Organization. The tobacco industry are trying to make a change in the Article and wanted to come under the membership list of the decision making body. It has been stated by the President of the International Tobacco Growers’ Association that the policies of the WHO on the tobacco control policy are vague in nature, the policies are affecting the financial criteria, and the tobacco stakeholders are facing serious loss due to the same. According to the tobacco industries that if all the policies are implemented, certain classes of the societies will be very much affected by it. It has been stated that in the continents of Asia and Africa, tobacco is one of the most dominant cash crop and almost 50% tobacco is exporting from China, Africa and India. The cultivation of tobacco is profitable and large sections of farmers are involving into the same. Therefore, if the cultivation will be controlled, the farmers will be affected by that at the domestic level. If the tobacco consumption rate will be reduced, the manufacturing companies will face loss, deployment will be taken place, and the new generation could have to face unemployment (McCarthy 2015). Tobaccos are one of the main exporting materials for many countries and in case of any reduction in the consumption; the financial source will be affected by it. However, excessive use of tobacco causes disease among the poor people and it has been observed that the tobacco consumption is also affecting the family of those people. Deaths are very frequent among the poor people regarding tobacco consumption and therefore efforts should be taken at the domestic level and the authorities should have to adopt economic policies also with an intention to lower the disease burden without hampering the interest of the tobacco industry.

Conclusion

It has been discussed in the previous occasion that the tobacco industries are lobbying against the policies taken by the tobacco control board and in this case, many leading companies are influencing the government official to secure their own interest. It has been observed that one of the leading tobacco companies, Philip Morris had invested €5 million in this regard in the year 2014. However, according to a report, the tobacco industries of USA have invested $5 billion to the political influential parties (Bennett et al. 2017). The commercial banks are investing near about $154 million to certain registered lobbying authorities. Various campaigns have been concocted to this effect and it has been observed that the insurance companies to this effect have invested $220 million. It has been observed that approximately 7 million people are dying due to tobacco consumption in a year worldwide. It has been estimated that almost US$1.4 trillion has been expended per year as the health care cost.

Source: (Politics 2018)

Source: (Politics 2018)

The tobacco control boards are very much concerned about the policy implementation. However, many tobacco companies are spending more monies in the lobbying process for securing their own interest and it has been observed that the leading companies like Philip Morris has invested lots of money in this process. According to a report published by the Forbes in 2013 that the company is the highest payer to the lobby members of European Parliament (Forbes.com 2018). According to the directives of the European Union, the tobacco companies are required to advertise the anti-smoking features in the packets and health warning should be framed on the cigarette packets. Further, it has been mentioned in the directives that menthol flavors should be excluded from the lists of the cigarette manufacturing process. It has also been observed that the tobacco control board is willing to impose certain taxes on the e-cigarette. All these regulations are hampering the commercial process of tobacco companies and therefore, allegations have been made to this regard. Further, it has been observed that the tobacco companies are filing different cases in the court with an intention to make the process of implementation slower in nature and monies are investing in this process. The European Union has taken certain backdoor policies to make discussion with the tobacco companies and talk about the mal-administrative process of the tobacco control boards regarding this issue. It has been alleged by Philip Morris that the policies and decisions taken by the World Health Organizations are opaque in nature and they have filed petitions in the court to become a member in the decision-making committee. This mentality of the tobacco companies have been reflected in a leaked mail of the Philip Morris when it has been revealed from the message that the company is investing £1.25 million that are expected to be used in the lobbying bodies and the organization for the farmers. In the year 2013, the European Union with an intention to decide the pros has conducted vote and cons of tobacco regulation and the implementation process of the tobacco policies were delayed for more periods. It has been presumed that the tobacco companies are investing the monies for instigating this process and the future of the regulations become uncertain for the same. It has been observed the company has made various steps in order to nurture its voice regarding the decision making process and it has been observed that the director of the company has taken steps to make the nature of the policies more clear and fair for the tobacco companies (Cowlishaw and Thomas 2018). It is obvious to state that the effort of the company is made with an intention to secure its own interest. Philip Morris has advised the regulatory board to modify the rules of the measures taken by the World Health Organization. According to the annual production report of Philip Morris, the production of the company will be reduced if all the policies are applied and the sales market of the company will be hampered for the same (Griffin and Thurber 2015). It is expected that the market reduction will be 375 billion by 2021 comparing to its current market criteria of 450 billion.

Source: (Corporate Europe Observatory 2018)

According to a report made by the Reuters in 2017, it has been revealed that Philip Morris is conducting a secret campaign to oppose the anti-smoking treaties of the World Health Organization (Reuters 2018). It has further been revealed that the company has invested lot of green notes in order to influence the decision of the members of the regulatory board and according to a report, the company has spent $6,260,000 behind tobacco lobbying. This investment has helped the company to hold the first position among all the members of the tobacco companies in the European Union.

Source: (Corporate Europe Observatory 2018)

Conclusion:

It has been observed that the company has made certain decisions over the tobacco controlling process and the company made a wish to regulate the tobacco control policies by the intervention of the government. The main aim of the company is to secure the interest of the tobacco companies in respect of the products and the markets. Phillip Morris is regarded as one the most nemesis companies of the anti-smoking announcements. However, the recent initiative taken by the company has remained the lobbying industries silent (Malone 2018). The company has decided to go with the policies and in this regard, the company has rescheduled its policies over the tobacco market selling. However, it has been observed that the policies taken by the tobacco committees are delayed by pending lawsuits. The tobacco industry has made a demand of $74 billion from the tobacco regulatory board and therefore, the committee has to rethink about its policies and strategies (McCarthy 2015). Philip Morris is intending to maintain the policies of the FDA regulation and the company is raised its voice for the uses of safe cigarette. However, it has been pointed out that the US Tobacco industry has to face 2% loss regarding the sale of tobacco product. It has been stated by the chair person of the company that the consent of the FDA will become a major asset for the tobacco companies in future. The company has confessed the fact that the US tobacco market has earned $20 billion from the cigarette market only and the nature of the market was domestic. The company is concentrating on the sustainable process of tobacco consumption. However, the company has asked its investors to endow their capital in the government project by making the public health leaders its target. The tobacco companies are opposing the implementation processes that are mentioned in the Article 9 and 10 of the strategies where the term “reduced harm” has been mentioned. The regulatory board bans all the e-cigarettes of UK and the tobacco companies are obviously made protest against such steps, as it affects their selling criteria. It has been pointed out by the companies that tobacco related products are quite profitable and if any contradictory provisions are imposed on it, the financial market can be crashed. Considering the profitable marketing criteria, the wealthy investors are investing their capital in the market with a hope to get more returns from this.

Reference:

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