Smoke free Malawi
..for healthy, prosperous & productive malawi
Pub:1.011 Thursday , August 19, 2010
Media Release
Malawi should sign the Framework Convention on Tobacco Control (FCTC) and Government should open public inquiry on conduct of tobacco firms
Smoke Free Malawi, is the project of the Youth Alliance in Social and Economic Development (YASED) which has been established to campaign and highlight the effects of smoking in public health and lobby for the signing of the Framework Convention on Tobacco Control of the World Health Organisation.
We wish to comment on the recent developments as it relates to the tobacco industry in Malawi:
1. The recent debate on proposed restrictions on use of additives in cigarettes has seen Government jumping up and down trying to raise its voice in protest.
Smoke Free Malawi while recognising the importance of tobacco to our economy, is equally concerned with the hypocritical approach by concerned Ministries as efforts to engage them on FCTC have met rebuttals for the last three years.
In other words, the reaction from Government is late and indicates the fantasy world that Malawi continues to live in as we continue to support the tobacco industry which has exploited the country for over six decades.
Tobacco smoking kills and such a global anti-smoking lobby has been growing for since the 2000; Malawi should have started taking steps to diversify its economy in anticipation of any changes in the tobacco sector.
On our part, we retaliate that Malawi should sign the FCTC immediately and become part of the Conference of Parties whose next session is coming this summer and strive to identify alternative sources of income for its million of citizens who are bonded in tobacco without direct economic benefits.
Further the scientific argument as raised by the Minister of Agriculture will only delay Malawi’s path to a productive diversification of the economy. After all the country’s economic performance has been mainly tied to availability of maize than much of tobacco.
2. Limbe Leaf bribery case of K129.9 million
The recent ruling by the United States Securities Exchange Commissiom against Universal Leaf and Alliance One confirms our long standing argument that the tobacco industry has been unfairly influencing Malawi’s continued dependent on Agriculture.
High ranking Government officials pocketed USD500, 000 (K76million) another USD 250,000.00 (K37million) and an opposition leader USD100, 000.00 (K14 million) to influence buying contracts and legislation as cited by the US SEC.
Smoke Free Malawi wishes to register its string dismay and disgust, which while majority of Malawians working in tobacco farms earn as low as USD150 annually, Government officials and political leaders pocket over 1 million percent of the same to keep the industry going.
This is the highest betray of Malawians and we believe the practice still continues as seen by recent outbursts by some Government officials in defending tobacco.
Smoke Free Malawi calls for an immediate public inquiry to look at the matter of bribery and corruption and also review of legislation especially that has been influenced during the last two decades that it should not reflect real tobacco situation.
We strongly believe the Malawi Government can exonerate itself from this embarrassing encounter by immediately enacting the TENANCY LABOUR BILL which has been stalled since 1995. At least Malawians know the capacity of our tobacco firms to buying of Government officials to influence everything.
We ask the opposition leader mentioned in the court documents to humbly resign from public service as we have full details and all Malawians with information to report to the Anti-Corruption Bureau or to us that we can end the monopoly and influence of this shameful industry.
Government officials taking bribes from the Kanengo syndicate should be warned that their decisions will be subject to review as it has been shown that corruption by the industry is from the highest order.
Finally we make special appeal to His Excellency the State President Ngwazi Professor Bingu wa Mutharika as a champion of anti-corruption drive since he assumed office not to allow this matter die without Malawi’s name being cleared as a bribe-taking nation.
As we have highlighted before, tobacco apart from deepening poverty across the country, is also responsible for major health challenges including contributing to deaths of pregnant women in places where its produced and processed.
The United States Securities Exchange ruling should serve was a reminder, that we are dealing with an extremely dangerous industry that would continue its work without any moral feelings to the society it is operating in.
For the press, we repeat the composition of cigarettes remains one of the most dangerous to human health and includes the following
Tobacco smoke includes As found in
• Acetone Paint stripper.
• Arsenic Ant Poison
• Butane Lighter fuel
• Cadmium Car Batteries
• Carbon Monoxide Car exhausts fumes
• Formaldehyde Embalming fluid
• Hydrogen cyanide Gas for capital punishment
• Methanol Rocket Fuel
• Nicotine Cockroach poison
• Phenol Toilet bowl disinfectant
• Propylene glycol Anti freeze
• Toluene Industrial solvent
• Vinyl plastics
In actual cigarettes there are more than 4,000 chemicals.
The right to life and protection of the many thousands of women and children in tobacco estates, whether as child labourers or just living with their families should be the primary concern of a well meaning Government.
Attached is the actual ruling and for any addition documents please contact the undersigned.
Kondwani Bell Munthali
Acting Coordinator-Smoke Free Malawi
kmunthali@yahoo.com
premiermarket@ymail.com
www.tobaccofreemalawi.blogspot.com
+265 999 957 331
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21618 / August 6, 2010
Accounting and Auditing Enforcement Release No. 3170 / August 6, 2010
SECURITIES AND EXCHANGE COMMISSION v. UNIVERSAL CORPORATION, INC., Civil Action No. 01:10-cv-01318 (RWR) (D.D.C.) (filed August 6, 2010)
SECURITIES AND EXCHANGE COMMISSION v. ALLIANCE ONE INTERNATIONAL, INC., Civil Action No. 01:10-cv-01319 (RMU) (D.D.C.) (filed August 6, 2010)
SEC FILES ANTI-BRIBERY CHARGES AGAINST TWO GLOBAL TOBACCO COMPANIES
The U.S. Securities and Exchange Commission today charged two major tobacco companies, Universal Corporation, Inc. and Alliance One International, Inc., with violating, among other things, the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977 ("FCPA") for their involvement in a multi-million dollar bribery scheme with government officials in Thailand to obtain nearly $30 million in sales contracts to supply tobacco. The SEC also charged Alliance One with paying bribes in Kyrgyzstan and making improper payments in China, Greece, and Indonesia and Universal with making improper payments in Malawi and Mozambique. Moreover, the SEC's complaints alleged Universal and Alliance One engaged in books and records and internal control violations.
Universal
According to the SEC's complaint, between 2000 and 2004, Universal, in coordination with two of its competitors, Dimon, Inc. ("Dimon") and Standard Commercial Corporation ("Standard"), paid approximately $800,000 to bribe officials of the government-owned Thailand Tobacco Monopoly ("TTM") in exchange for securing approximately $11.5 million in sales contracts for its subsidiaries in Brazil and Europe. From 2004 through 2007, Universal also made a series of payments in excess of $165,000 to government officials in Mozambique through corporate subsidiaries in Belgium and Africa. Universal made these payments, among other things, to secure an exclusive right to purchase tobacco from regional growers and to procure legislation beneficial to the company's business. Between 2002 and 2003, Universal subsidiaries paid a total of $850,000 to high-ranking Malawian government officials. Universal did not accurately record these payments in its books and records.
Alliance One
From 2000 to 2004, in a coordinated bribery scheme with Universal, Dimon and Standard paid bribes of more than $1.2 million to government officials of the TTM in order to obtain more than $18.3 million in sales contracts. (In May 2005, Dimon and Standard merged to form Alliance One). Dimon characterized the payment of bribes to TTM officials as commissions paid to Dimon's agent in Thailand. Similarly, Standard personnel authorized improper payments to TTM officials and failed to record those payments accurately in Standard's books and records.
The SEC's complaint also alleges that, from 1996 through 2004, Dimon International Kyrgyzstan ("DIK"), a wholly-owned subsidiary of Dimon, paid more than $3 million in bribes to Kyrgyzstan government officials to purchase Kyrgyz tobacco for resale to Dimon's customers. Most of these payments were delivered in bags filled with $100 bills to a high-ranking government official. DIK also made improper payments to Kyrgyzstan tax officials.
Additionally, Dimon made improper payments to tax officials in Greece and Indonesia. Standard also made an improper payment to a political candidate and provided gifts, travel, and entertainment expenses to foreign government officials in the Asian Region, including China and Thailand. Dimon and Standard failed to record these payments accurately in the companies' books and records.
Without admitting or denying the SEC's allegations, defendants Universal and Alliance One consented to the entry of final judgments permanently enjoining each of them from violating the anti-bribery, books and records, and internal control provisions of the FCPA, codified as Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. Universal and Alliance One are ordered to pay disgorgement of $4,581,276.51 and $10,000,000, respectively, and each is ordered to retain an independent monitor for three years.
In related criminal proceedings announced today, the U.S. Department of Justice filed criminal actions against a Universal subsidiary and two Alliance One subsidiaries charging each of them with one count of conspiring to violate the FCPA and one count of violating the anti-bribery provisions of the FCPA. Universal and Alliance One have entered into non-prosecution agreements with the DOJ and agreed to pay criminal penalties of $4,400,000 and $9,450,000, respectively, and retain independent monitors for a period of three years.
Amybeth Garcia-Bokor, Paul Gumagay, Michael Hoess, Uta Von Eckartsberg, and Christine Neal conducted the SEC's investigation in this matter.
The SEC acknowledges and appreciates the assistance provided by the Department of Justice's Fraud Section and the Federal Bureau of Investigation.
Thursday, August 19, 2010
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