PMI IMPACT

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PMI IMPACT is a $100 million funding initiative launched by Philip Morris International (PMI) in 2016.[1] It describes itself as “a global initiative to support public, private, and nongovernmental organizations to develop and implement projects against illegal trade and related crimes”.[2]

Background

Funding Process

PMI IMPACT funding allocation is split into several funding rounds, each with a distinct theme.[1]

The selection of successful projects involves a three stage process. First, applicants submit an expression of interest which PMI conducts “initial due diligence checks” on.[3] Second, selected applicants submit full proposals for review and approval. And the final stage involves successful applicants signing a grant agreement with PMI, which includes the following requirement:

“When making public its Project’s work product or any deliverables, to be transparent about PMI’s financial support of the Project, Grantee shall disclose the fact that the Project was funded by PMI IMPACT. Before Grantee makes any of its work product or deliverables public, PMI and Grantee shall agree on the precise language of disclosing PMI’s financial support, ensuring that such language complies with applicable laws, PMI transparency and disclosure policies, and other applicable ethics rules.”[4]

Expert Council

The funding applications are judged by an Expert Council of individuals with close links to United Nations (UN) agencies and INTERPOL.[5] The Council members are financially compensated for their time, [6] and in May 2018 included:

Suzanne Hayden

Hayden worked as a PMI consultant on "law enforcement matters", and is the former Senior Advisor to the UN Office on Drugs and Crime (UNODC) and the International Anti-Corruption Academy (IACA). She also established the UN’s first financial investigation unit.[5] Hayden was also involved in an Anti-Contraband Tobacco Working Group meeting, partly-funded by Dawson Strategic[7], a consultancy registered under the Senate Office of Public Records as a PMI lobbying firm.[8]

Alain Julliet

Julliet served as Intelligence Director for the General Directorate for External Security (DGSE) of the French Ministry of Defence, and later took the role of Senior Official in charge of economic intelligence to the Prime Minister’s office, holding this position until 2009.[5] In 2009 he became President of the Académie de l’Intelligence Economique, and in 2011, President of the Club des Directeurs de Sécurité des Entreprises (CDSE). From 2016, he worked with INTERPOL as chair to the International Forum of Security Technologies (FITS).[9]

Paul Makin

Makin served in the UN Industrial Development Organization (UNIDO) and is a former Director of the UNIDO Regional Office in Egypt.[5]

Luis Moreno Ocampo

Moreno Ocampo was the first Chief Prosecutor for the International Criminal Court (ICC) from 2003-2012, and he also served as Chairman of the World Bank Expert Panel on the Padma Bridge project.[5] On 11 June 2015, he hosted a workshop for the Global Order Project on the Philip Morris vs. Uruguay lawsuit, though its content is unknown.[10]

Navi Pillay

Pillay was elected by the UN General Assembly to be a judge on the International Criminal Tribunal for Rwanda serving from 1995-2003, and was UN High Commissioner for Human Rights from September 2008 to August 2014. Pillay was added to the expert council in 2017.[11]

Jürgen Storbeck

Jürgen Storbeck is a former head of the Central Bureau of INTERPOL and was the first Director of Europol between 1999 & 2004. More recently he has been consulting for governments, public authorities as well as private organisations, including PMI, in the field of crime prevention and enforcement.[5]

Former expert council members include Catherine Volz[11] and Professor M. Cherif Bassiouni (deceased).[12]

Who Is Funded?

To date, PMI IMPACT has had two funding calls.

The most recent one was opened on 29 September 2017 and called for initiatives that addressed "converging forms of illegal trade and related crimes, such as corruption, money laundering, and organized criminal networks", and had to have an impact in one or more of these geographic areas: Eastern Europe, Middle East, North Africa, Tri-Border Area in South America, Central America, South and Southeast Asia. [13] The funding call received 157 expressions of interests, and an announcement is yet to be made which projects will be funded.[14]

First Funding Call (2016)

Image 1. Snippet from PMI IMPACT website, as seen 11 September 2017.

The first funding call focused on projects with an impact in the European Union (EU). PMI announced that it would spent $28 million over two years to fund 32 approved projects (Image 1).[15][16][17][18][19]

Some of the successful applicants have worked with the tobacco industry before, including:[19]

Belbrand

Philip Morris is listed as a ‘partner’ on the Russian version of Belbrand’s website.[20] In addition, Grodno tobacco factory Neman, which occupies 72% of the tobacco market in the Republic of Belarus, is also listed as a member.[21][22]

BOTEC Analysis

Produced several reports funded by Cornerstone Research “under contract to Altria Client Services”, including Unintended Consequences of Cigarette Prohibition, Regulation, and Taxation (2015)[23], Cigarette Taxes and Illicit Trade in Europe (2016)[24], and Empty Discarded Pack Data and the Prevalence of Illicit Trade in Cigarettes (2017), co-authored by Alberto Aziani of Transcrime.[25]The company's chairman, Mark Kleiman, was a speaker at the Global Tobacco and Nicotine Forum 2017, a tobacco industry event.

The Center for the Study of Democracy (CSD)

The CSD and the Balkans’ Customs Agency held an international conference in 2011 named “Counteracting Cigarette Smuggling in the Balkans”, attended by representatives of PMI, Japan Tobacco International (JTI), British American Tobacco (BAT), Imperial Tobacco, and Bulgartabac Holding.[26] In 2010, the CSD hosted a round table on the Bulgarian cigarette market, attended by PMI, British American Tobacco, Japan tobacco International and Bulgartabac.[27]

The CSD project funded through PMI IMPACT is titled "Illegal Trade in Tobacco Products and the Balkan Route: Overcoming Institutional Gaps and Corruption". Its websites states that ”The research team involves experts from Bulgaria (CSD), Italy (Intellegit), Romania (SCE), as well as three independent criminology researchers from Greece. Over the next two years, the project will elaborate tools for performance evaluation and corruption risk assessment of law enforcement and revenue authorities with regards to illegal tobacco trade.”[28] As part of this project, the CSD organised a round table discussion in March 2018 on “The illicit tobacco market: limits to institutional enforcement”.[29]

GLOBSEC

GLOBSEC’s website, accessed in September 2017, listed Philip Morris Slovakia as one of its partners.[30] In addition, PMI’s Vice President of Illicit Trade Strategy & Prevention, Alvise Giustiniani, was a panellist at the May 2017 GLOBSEC Bratislava Forum, titled ‘Threat-financing: money, illicit trade and (in)security’.[31]

Kazazi Consulting

An Albanian tax, financial, accounting and legal services consulting firm, which according to its website, has Philip Morris Albania as one of its main clients.[32]

KPMG

Has a history of undertaking research on the illicit tobacco trade on behalf of the tobacco industry. For more information on this relationship see KPMG.

Lithuanian Free Market Institute (LMFI)

The LFMI is a member of the European Policy Information Center (EPICENTER), a group of eight think tanks, spanning multiple countries within the EU. EPICENTER is entirely funded by the Institute of Economic Affairs (IEA) which has a history of close collaboration with the tobacco industry. See: Institute of Economic Affairs.

Oxford Economics

Has a history of producing tobacco industry-commissioned reports on illicit tobacco trade in Asian markets. Click here for more information on these reports and the company's relationship with tobacco companies.

Panta Rhei Research Limited Company

In December 2017, Zora Hauser was one of the Directors of Panta Rhei Research Limited Company.[33][34] Hauser worked in corporate affairs for PMI between 2014-2017.[35] Panta Rhei Research Limited Company should not be mistaken for Pantarhei, an Austrian public relations company.

Royal United Services Institute for Defence and Security Studies (RUSI)

In July 2017 KPMG released the first report from its annual Project SUN series on EU illicit tobacco that was not directly commissioned by tobacco companies, but instead commissioned by RUSI.[36] RUSI received funding from BAT, Imperial Tobacco, and PMI to provide “additional qualitative research” to the study.[37][38]

Siracusa International Institute (SII)

Until his death in September 2017, M. Cherif Bassiouni of PMI IMPACT's Expert Council was SII's Honorary President.[39]

Southeast European Law Enforcement Center (SELEC)

In 2013, SELEC held an event on ‘combating illicit trade’ in conjunction with JTI.[40] For several years, SELEC have held annual meetings on fraud and smuggling which often feature representatives from tobacco companies.[41]

Transcrime

PMI has funded a series of reports, several focussed on illicit tobacco trade, by Transcrime academics. For more information on these reports and Transcrime’s links to the tobacco industry, see: Transcrime.

Illicit Trade Conference Hosted With Financial Times

In September 2017, PMI IMPACT and the newspaper Financial Times held a joint event titled Combating Illicit Trade: Progress, Challenges and Collaborative Solutions.[42] The conference included panel discussions, dialogues, presentations, and interviews, including talks about the projects accepted through PMI IMPACT's first funding round, and an address from PMI’s Chief Executive Officer André Calantzopoulos.[42]

Other speakers included members of PMI IMPACT's Expert Council, academics, and representatives of the EU Commission, Europol, Her Majesty’s Revenue & Customs (HMRC), Organization for Economic Cooperation and Developments (OECD), World Customs Organization (WCO), World Trade Organization (WTO), and UNODC.[42]

United Nations Global Compact Used To Promote PMI IMPACT

Image 2. Page on PMI IMPACT, taken from PMI’s year-2015 ‘communication on progress’ for the UNGC.[43]

PMI has used its former membership of the UN Global Compact (UNGC) to promote PMI IMPACT and attempt to portray this association as evidence that PMI is in collaboration with the UN and supports “broader UN goals”.[43]

In 2016 and 2017, when it was still a member of the UNGC, PMI published two UNGC ‘communications on progress’ reports. The first report outlined the launch of PMI IMPACT as a “catalyst for a more holistic approach against the illegal tobacco trade, corruption and organized crime” (Image 2).[43] The second report described PMI IMPACT as “a global initiative governed by independent experts to sponsor third-party initiatives”.[44]

Using the association with the UNGC, is a Corporate Social Responsibility (CSR) tactic, whereby PMI tries to enhance its reputation and present themselves as a good corporate citizen, despite the harms caused by its products.

Controversy: Funding Of Science

One of the successful recipients of the first PMI IMPACT funding round was Professor John Vervaele, an academic at Utrecht University School of Law in the Netherlands.

Vervaele was awarded €360,000 to examine how enforcement could be improved to combat illicit tobacco trade in the EU, particularly ‘cheap whites’ from Belarus, Russia and Ukraine.[45]

The funding attracted widespread criticism from health organisations including the Dutch Cancer Society (KWF), which said that “the tobacco industry is not a normal industry, and that’s why they should not be funding scientific research”.[46]

Following the criticism and subsequent pressure in the media, the university decided to no longer accept PMI's funding and fund the project themselves.[46]

TobaccoTactics Resources

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Relevant Link

Notes

  1. 1.0 1.1 Philip Morris International, Press Release: Philip Morris International Launches New Initiative to Fight Smuggling and Related Crimes; Pledges USD 100 million to Fund Projects, 27 May 2017, accessed October 2017
  2. PMI IMPACT, PMI IMPACT: Supporting projects with lasting impact against illegal trade, 2017, accessed October 2017
  3. PMI IMPACT, Application Terms and Funding Rules, Second Funding Round, 2017, accessed October 2017
  4. Key Terms of a PMI IMPACT Grant Agreement, 2017, accessed October 2017
  5. 5.0 5.1 5.2 5.3 5.4 5.5 Philip Morris International, Expert Council, accessed June 2016
  6. tabaknee, Stichting Philip Morris Impact is lang niet zo onafhankelijk als ze zich voordoet, 20 December 2017, accessed May 2018.
  7. MacDonald Laurier Institute, Photos and Video: Anti Contraband tobacco working Group meets in Ottawa, 1 December 2014, accessed June 2016
  8. Dawson Strategic, Lobby Registration, accessed June 2016
  9. FITS, La lettre du président Alain Juillet, accessed June 2016
  10. L. Moreno Ocampo, A. Eibelshäuser, Workshop on the Investment Dispute between Philip Morris and Uruguay, Global Order Project website, 2017, accessed December 2017
  11. 11.0 11.1 Philip Morris International, Expert Council, 2017, accessed October 2017
  12. A. Calantzopoulos, In memory of Professor M. Cherif Bassiouni, Philip Morris International, accessed October 2017
  13. Philip Morris International, Philip Morris International Calls For Proposals In Second Funding Round of PMI IMPACT, a Global Initiative to Fight Illegal Trade and Related Crimes, 29 September 2017, accessed October 2017
  14. Philip Morris International, Press Release: Philip Morris International Welcomes Strong Interest for PMI IMPACT Global Initiative Against Illegal Trade and Relates Crimes Receives 157 Applications In Second Funding Round, 28 November 2017, accessed December 2017
  15. Philip Morris International, Explore: Funding Theme, accessed June 2016
  16. Philip Morris International, PMI IMPACT September 2016 Press Release, 15 September 2016, accessed October 2016
  17. Philip Morris International, The Expert Council of PMI IMPACT selects 41 proposals for final review as part of global initiative to fund projects dedicated to fighting illegal trade, 14 December 2016, accessed December 2016
  18. Philip Morris International, Philip Morris International Announces First Round Of Projects To Be Funded Through PMI IMPACT, A USD 100 Million Global Initiative To Fight Illegal Trade, 7 September 2017, accessed September 2017
  19. 19.0 19.1 PMI IMPACT, Selected Projects: First Funding Round, 2017, accessed September 2017
  20. Belbrand Partners, 2018, accessed May 2018
  21. JSC Grodno Tobacco Factory Neman, About company, accessed December 2017
  22. Members of the Association, 2017, accessed September 2017
  23. J.D. Kulick, J.E. Prieger, M. Kleiman, Unintended Consequences of Cigarette Prohibition, Regulation, and Taxation, January 2015, accessed September 2017
  24. J.E. Prieger, J. Kulick, Cigarette Taxes and Illicit Trade in Europe, 20 January 2016, accessed September 2017
  25. A. Aziani, J. Kulick, N. Norman, J.E. Prieger, Empty Discarded Pack Data and the Prevalence of Illicit Trade in Cigarettes, 26 January 2017, accessed September 2017
  26. Center for the Study of Democracy, International Conference: Counteracting Cigarette Smuggling in the Balkans, undated, accessed December 2017
  27. Center for the Study of Democracy, Round Table: Cigarette Markets in Bulgaria: Current State and Trends, undated, accessed December 2017
  28. Center for the Study of Democracy, The illicit trade of tobacco products along the Balkan route: addressing institutional gaps and corruption, undated, accessed May 2018.
  29. Center for the Study of Democracy, The illicit tobacco market: limits to institutional enforcement, undated, accessed March 2018
  30. GLOBSEC, Partners in detail, undated, accessed December 2017
  31. GLOBSEC, Panelist: Alvise Giustiniani, 2017, accessed September 2017
  32. Kazazi Consulting, main clients are:, 2017, accessed December 2017
  33. Endole Suite, Panta Rhei Research Limited, 1 September 2017, accessed December 2017
  34. Companies House, Panta Rhei Research Limited, undated, accessed December 2017
  35. Z. Hauser, Zora Hauser LinkedIn Profile , undated, accessed October 2017
  36. KPMG, Project SUN: 2016 Results, 2017, accessed December 2017
  37. RUSI, Project SUN: A Study of the Illicit Cigarette Market in the European Union, Norway and Switzerland, 4 July 2017, accessed October 2017
  38. Illegal cigarette market costs UK taxpayer nearly £2bn, study finds, The Telegraph, 4 July 2017, accessed October 2017
  39. Siracusa International Institute, Board of Directors, undated, accessed October 2017
  40. SELEC, Croatia led the regional combat against illicit trade of tobacco products, 2016, accessed December 2017
  41. SELEC, Anti-Fraud and Anti-Smuggling Task Force, 2016, accessed September 2017
  42. 42.0 42.1 42.2 Financial Times Live, Combating Illicit Trade: Progress, Challenges and Collaborative Solutions, undated, accessed October 2017
  43. 43.0 43.1 43.2 Philip Morris International, PMI UNGC Communication on Progress, 2015, 2016, accessed October 2016
  44. Philip Morris International, Communication on Progress, 2016, 12 September 2017, accessed October 2017
  45. Universiteit Utrecht, Research project into improvement of fight against illicit tobacco trade, 7 September 2017, accessed May 2018
  46. 46.0 46.1 Universiteit Utrecht, Utrecht University severs financial ties with PMI Impact, 17 January 2018, accessed May 2018