Track and trace?

In July 2022, Pakistan took a significant step towards curbing the illicit tobacco trade by implementing the Tobacco Track and Trace System (T&TS).

This system aims to trace the origins of every cigarette pack, ensuring that illegal products are identified and proper taxation is enforced. Despite its noble objectives, the system faces staunch opposition from the tobacco industry, which is doing everything possible to undermine and reverse this initiative.

The industry’s relentless efforts to replace this system with their flawed alternatives highlight the desperate lengths to which they will go to protect their profits at the expense of public health and government revenue.

T&TS is designed to be a comprehensive mechanism for monitoring the production and distribution of tobacco products. By affixing unique, secure, and non-removable identification markings to every tobacco unit, the system allows authorities to track each product from its point of manufacture to its final destination. This ensures that taxes are paid on every pack and helps identify and eliminate illegal tobacco products from the market.

The importance of such a system cannot be overstated in a country like Pakistan, where the illicit tobacco trade is rampant. The World Health Organization’s (WHO) ‘Protocol to Eliminate Illicit Trade in Tobacco Products’, specifically Article 8, mandates that all parties implement such systems. This protocol, which Pakistan is a signatory to, requires that the T&TS markings reveal critical information such as the date and location of manufacture, the intended market of retail sale, and the shipment details. This level of transparency is crucial for combating the illicit trade, which not only harms public health but also deprives the government of vital tax revenue.

The tobacco industry’s resistance to the T&TS in Pakistan is not surprising. The industry has a long history of opposing any measures that threaten its profits, even if those measures are designed to protect public health and ensure fair taxation.

The industry’s preferred alternative, Codentify, developed by the tobacco industry over a decade ago, is a prime example of this. Codentify was marketed as a ‘track and trace’ system, but in reality, it was a tool designed to give the tobacco industry more control over the monitoring process.

Unlike the government-implemented T&TS, Codentify lacked the necessary security features and transparency required to effectively combat illicit trade. It failed to provide an independent, verifiable means of tracking tobacco products, thereby allowing the industry to manipulate the system to its advantage.

The government-implemented T&TS has only been unsuccessful in Ecuador. The primary reason for this failure in Ecuador was the loophole that permitted the production of cigarettes for export without tax stamps. This not only facilitated tax evasion but also undermined the entire purpose of the T&TS.

Despite being a signatory to the WHO Protocol to Eliminate Illicit Trade in Tobacco Products, Pakistan’s implementation of the T&TS has not been without challenges. The system, while a step in the right direction, still falls short of fully complying with the protocol’s requirements. For instance, the protocol mandates that all parties must ensure that the T&TS stamps reveal detailed information about all tobacco products, both intended for domestic use and exports, including the identity of subsequent purchasers and the intended shipment route. However, in Pakistan, there are still gaps in the system’s implementation, which the tobacco industry is eager to exploit.

The tobacco industry’s attempts to derail the T&TS in Pakistan are not just about avoiding taxes but about maintaining control over a system that could otherwise expose their illicit activities. Avoiding the stringent implementation of T&TS as necessitated by the protocol, and selling export cigarettes without T&TS (revealing all 10 identification markers on exports), the industry aims to create confusion (albeit thus far unsuccessfully), and weaken the government’s ability to enforce tobacco regulations effectively.

For Pakistan to truly benefit from the T&TS, it must close the existing gaps in its implementation and fully adhere to the WHO Framework Convention on Tobacco Control and the protocol. This includes ensuring that all required information is made available through the track and trace stamps and that the system is robust enough to resist manipulation by the tobacco industry both for domestic as well as export tobacco products.

The government must also remain vigilant against the tobacco industry’s attempts to undermine the system. This requires not only rejecting flawed alternatives like Codentify but also strengthening the enforcement mechanisms to ensure that the T&TS operates as intended. Public awareness campaigns can also play a crucial role in garnering support for the system and putting pressure on the industry to comply with the regulations.

Tobacco T&TS in Pakistan represents a critical tool in the fight against the illicit tobacco trade and in ensuring accurate revenue generation for the government. However, the industry’s desperate efforts to derail this system highlight the ongoing battle between public health and corporate profits.

To win this battle, Pakistan must remain steadfast in its commitment to the WHO protocol and ensure that the T&TS is fully implemented and enforced on all tobacco products intended for domestic sales as well as for export. The stakes are too high to allow the tobacco industry to succeed in its efforts to undermine this vital public health initiative.

The writer is head of policy

advocacy and outreach at the

Sustainable Development Policy

Institute, Islamabad. He can be reached at: wasif@sdpi.org