June 1, 2018

Why is Japan continuously violating the Framework Convention on Tobacco Control?

The primary reason lies in a uniquely Japanese structure known as the "tobacco vested interests," which is mostly unknown to the general public.

Under the Tobacco Business Act, the Ministry of Finance and Japan Tobacco Inc.(JT) have created a tightly knit vested interest structure, involving tobacco leaf farmers, tobacco retailers, and pro-tobacco politicians, that firmly secures the rights to produce, manufacture, and distribute tobacco.

Such a "national policy company" controlling the market in a wartime-like manner is unparalleled worldwide.

This uniquely Japanese tobacco vested interest structure is the biggest obstacle preventing the creation of tobacco control laws in line with the Framework Convention on Tobacco Control.

Under the Tobacco Business Act and the Japan Tobacco Inc. Act (JT Act), the Ministry of Finance and JT have colluded to establish a tobacco vested interest structure that undermines public health.

Unless this situation is resolved, eliminating tobacco from Japan will be impossible.

The jurisdiction over tobacco control measures should belong to the Ministry of Health, Labour and Welfare, which is responsible for health administration.

However, when the Ministry of Health, Labour and Welfare tries to implement measures to prevent smoking and passive smoking for public health, it is obstructed by the Ministry of Finance, which oversees the tobacco industry.

Given the Ministry of Finance's enormous power in tax and budget matters, tobacco control measures cannot advance.

Typically, different ministries oversee different industrial sectors.

However, as a special case, the tobacco industry, from tobacco leaf farmers to JT, the only domestic tobacco manufacturer, and tobacco retailers, is all under the control of the Ministry of Finance.

This means that the tobacco industry is monopolized by the Ministry of Finance.

The Tobacco Business Act stipulates:

JT purchases all domestically produced tobacco leaves,

JT monopolizes tobacco manufacturing,

The Minister of Finance approves retail prices of tobacco,

The Minister of Finance licenses tobacco retailers.

Additionally, the JT Act stipulates:

The government permanently holds more than one-third of JT's shares (i.e., the largest  shareholder),

The Minister of Finance approves JT's board members, amendments to its articles of incorporation, and business plans,

The Minister of Finance supervises JT.

These laws strongly protect the domestic tobacco industry under the Ministry of Finance, placing all tobacco production, distribution, and sales under state control, thereby monopolizing tobacco taxes and all related interests.

Since the Ministry of Finance is the largest shareholder of JT, former officials from the Ministry of Finance (formerly the Ministry of the Treasury) have consistently occupied top positions in JT.

Until recently, former officials from the Ministry of the Treasury have served as the chairman, president, vice president, and full-time auditors of JT.

JT is controlled by the Ministry of Finance and serves as a crucial post-retirement position for its officials.

To be continued.