Adopting a real track-and-trace system

Many may not be aware of it but Republic Act no. 10351 otherwise known as the sin tax reform law fulfills one of the Philippines’ key commitments as a signatory to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), a global initiative by WHO that aims to protect public health and  significantly reduce health costs from tobacco usage.

The Philippines and over 140 other FCTC country-signatories adopted a landmark accord – the Protocol to Eliminate Illicit Trade in Tobacco Products (Protocol) – in  November last year in South Korea, committing them to adopt an industry-independent track-and-trace systems for a more effective monitoring of the supply and sale of tobacco products in their respective countries.

Acting swiftly on this Philippine government commitment, the Bureau of Internal Revenue (BIR) has unveiled plans to bid out—through the state-run Asian Productivity Organization (APO)—a  cigarette security stamp tax project this April—with an eye on completing this process in a month’s time or just before or after the summer elections.

Concerned Filipinos are keeping their fingers crossed that the eventual selection and adoption of an independent track-and-trace system will be a win-win for the Aquino administration (in terms of higher revenues) and the citizenry (in terms of better public health programs) and an irreversible loss for unscrupulous groups thriving on an illicit trade responsible for the deaths of millions.

Once the Aquino government confirms the effectiveness of this advanced track-and-trace system, these same concerned Filipinos are hoping the Palace would expand its monitoring efforts to include beer and liquor to ensure that the alcohol industry accurately pays its taxes too.

They are hoping, moreover, that this foolproof technology would also cover medicines to guarantee their authenticity and prevent unscrupulous retailers from tampering and selling expired  stocks.

BIR chief Kim Henares has announced that cigarette companies like Philip Morris Fortune Tobacco Corp. (PMFTC) will be barred from the public bidding, which is in sync with the FCTC mandate to bar tobacco companies from actively participating in tobacco-control policy-making by governments.

The PMFTC had earlier offered its own technology dubbed “Codentify” to monitor the supply and sale of locally produced and sold cigarettes and help curb smuggling.

Given that industry-independent solutions that rely on multi-layered security features have thus far proven to be the most successful in fighting illicit tobacco trade elsewhere in the globe, experts believe that the BIR would do the Philippines a lot of good by selecting, through its upcoming APO public bidding, the best track-and-trace technology that is not only fully compliant with FCTC guidelines but also independent of any influence from Big Tobacco.

Because the traditional paper-based tax stamps are easy to fake and only opens a lot of opportunities for manufacturers to easily cheat governments, modern technologies now being offered by various independent players in the market should  be considered by the BIR and APO when this security stamp tax project is put on the auction block.

Experts stress that the Aquino government should make sure that the technology offered by the would-be winning bidder can monitor all quantities of local and imported tobacco products being sold in the country and overseas;  securely mark, via a unique identification system, each and every product manufactured at every stage of the production line so that the BIR can accurately count the number of cigarettes being made, distributed and sold by tobacco companies; install a mechanism for concerned parties to authenticate genuine and tax-paid products; and have the same multi-layered security features currently used to prevent the counterfeiting of bank notes and currencies such as security inks and specialized printing techniques, covert information-based encryption algorithms that trace the origin of the product and track its path of transport; and overt security features such as holograms and color-changing inks.

In a special report, tobacco control experts revealed that far from just being a Philip Morris International (PMI) project, Codentify is actually a joint initiative of Philip Morris and three more tobacco transnational companies—British American Tobacco (BAT), Imperial Tobacco Group (ITG) and Japan Tobacco International (JTI)—that account for a combined 71% of global cigarette sales (excluding China).

Bottom-up approach

I don’t know Senator Alan Peter Cayetano personally.

What I know is that he has the guts to go against the likes of Senator Juan Ponce Enrile, something younger politicians won’t dare do.

As chairman of the Senate blue ribbon committee, he has shown that he is totally against corruption, and that he fully supports the principle that public office is a public trust.

He has also gone down from the high pedestal that is the Senate. He has organized the “Listening Tours” which are actually venues to talk to ordinary people and elicit directly from them their problems and concerns, something that is unprecedented in Philippine political campaigns.

Cayetano has gone to Baguio, Cebu, and as far as Cagayan de Oro to understand what people really think and feel. This is the first step in drawing up an honest-to-goodness reform program.

Cayetano even brought his Listening Tour online last April 12 via the first-ever Google Hangout with five OFWs. The event was moderated by ABS-CBN celebrity host Bianca Gonzalez.  The OFWs shared their experiences working abroad as OFWs as well as the difficulties they face in applying for permits, assistance and in fulfilling other requirements. In response to this, Cayetano itemized his various plans to address their concerns.

The OFWs complained about the need to line up at the Philippine Overseas Employment Agency (POEA) when they visit the Philippines just to get an Overseas Employment Certificate (OEC). Cayetano agreed that there is no need for the the OEC as its use as proof of the holder’s category as an OFW is being addressed anyway by other documents such as the OFW’s passport and employment certificate.

Cayetano also addressed the complaint of the OFWs regarding the long and redundant processes of POEA and the Overseas Workers Welfare Administration  by proposing the  creation of a distinct department focused on OFWs and their concerns.

Two weeks ago, Cayetano even took his Listening Tour to Hong Kong to personally listen to the concerns of domestic helpers there. The Senator had lunch with the domestic workers during their Sunday gathering at Statue Square. He also visited the Philippine Consulate in Hong Kong to personally discuss the problems that OFWs face with concerned officials.

Cayetano also told them about his plan to set up a loan facility for OFWs to encourage them to start businesses in the country upon their return.

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