With the sale of its products facing a threat as a tough anti-tobacco legislation takes effect, British American Tobacco Uganda has decided to fight back, writes DERRICK KIYONGA.
After what it calls a “one year of critically studying” the Tobacco Control Act 2015 (TCA), tobacco giant British American Tobacco Uganda (BATU) has gone to the Constitutional court challenging the constitutionality of that law.
In its petition filed on December 16, 2016, BATU asserts that it’s going to demonstrate to the judges that the act, when read as a whole, has the effect of unjustifiably singling out the tobacco industry for discriminative treatment, which amounts to a ban on the right to trade in and or consume a legal product (tobacco and tobacco products).
The act was passed into law by parliament on July 28, 2015. President Yoweri Museveni signed it into law on September 19, 2015. BATU has been reducing its presence in Uganda over the last five years. The company first shifted its tobacco processing unit to Kenya, and then later stopped its tobacco growing business.
It then sold its warehouse at Old Port Bell and decided to only market its different cigarette brands. High costs of production, unfair competition practices in the leaf-growing business, and new pieces of legislations that the company described as harsh, are some of the reasons as to why BATU has down-sized in Uganda.
The backers of the anti-tobacco law rationalised its importance by arguing that, among other things, it was meant to control the demand for consumption of tobacco and its products; promote the health of persons and reduce tobacco- related illnesses and deaths.
That said, BATU challenges section 12 of the Act which prohibits smoking in mostly public places. BATU wants Uganda to copy international best practices where hotels, bars and restaurants have designated smoking areas which are properly demarcated and designed with physical planning approvals by relevant government institutions.
“This international practice has been developed to comply with the creation of a smoke- free environment for non-smokers within these premises,” the petition reads.
According to BATU, section 12(1) of the Act completely prohibits smoking without exception; it contravenes the right to use property for lawful purposes hence being contravention of article 40 (2) of the Constitution.
Through Sebalu and Lule advocates, BATU attacks section 12(2) which asks for a 50-meter radius restriction for smoking in outdoor spaces whether it is a designated smoking area or not. The tobacco firm describes the 50-meter radius as “impractical” and will prove to court that it is neither necessary nor appropriate.
“[section 12 (2)] creates an effective ban on the right and choice to consume a legal product [tobacco] exercisable by adults,” BATU says, adding that this “contravenes the right to use property for lawful purposes and business or trade by stakeholders like hoteliers, bar operators and restaurant owners, who are able and willing to designate an outdoor space for smoking.”
Furthermore, BATU says it contributes significant taxes to the economy, having paid Shs 69bn in 2014 and Shs 71bn in 2015. The Act, BATU adds, could hurt this source of revenue for government.
“It constitutes an unnecessary obstacle to trade and is more trade-restrictive than necessary to achieve that stated health objectives of the TCA [Tobacco Control Act],” BATU says, adding that “in effect, curtailing your petitioner’s right to practice a lawful trade, occupation or business, and is therefore in contravention of a guaranteed economic right under article 40(2) of the Constitution.”
EMPLOYMENT
Also, under attack are sections 25 (3) and 25 (4) of the Act. The section bars individuals who have been involved in any occupational activity with the tobacco industry from being contracted by government in a position where that person is likely to contribute to the formulation and mentoring of public health policies on tobacco control within a period of two years from the end of the engagement with the tobacco industry.
BATU takes exception to the section, claiming that no other industry or sector selling potentially-harmful products in Uganda contains the employment restrictions described under sections 25 (3) and 25 (4) of the Act.
“Your petitioner contends that the provisions of section 25(3) and 25 (4) of the TCA discriminate against the tobacco sector and are inconsistent with and in contravention of the right to practice a lawful trade, occupation or business…” the petition says.
GRAPHIC HEALTH WARNING
BATU has a grudge with section 15(2) of the Act which stipulates that the graphic health warning that appears on the unit packet, package or outside packing of a tobacco product shall occupy not less than 65 per cent of the principal display area.
The 65 per cent health graphic was an increment from 30 per cent previously described by the Uganda National Bureau of Standards.
“Your petitioner contends that section 15(2) has an effect of unreasonably restricting the space available to your petitioner in its practice of a lawful trade, occupation and business, leaving your petitioner with only approximately one third of the pack to display its trademark,” BATU says.
MANUFACTURING
Section 16(2)(c) which provides that a person shall not import, manufacture distribute, process, sell, offer for sale or bring into the country a smokeless or favoured tobacco product is also under challenge.
According to BATU, the Act fails to provide any basis for identifying and measuring what amounts to a “flavoured tobacco product” and thus imposes a vague, uncertain and unreasonable restriction.
“Your petitioner contends that the prohibition on all favoured tobacco products distorts fair competition by restricting the ability of companies to compete by way of product differentiation, creates an effective ban on the right and choice to trade in a legal product [tobacco] and deprives your petitioner of its legitimate property rights as your petitioner will be prohibited from selling certain brands, and using trademarks associated with those brands….,” the petition says.
dkiyonga@obsever.ug