JAPAN2020

TOBACCOINDUSTRY
INTERFERENCE
INDEX

Introduction and Background
This is the fourth country report1 on the implementation of the WHO Framework Convention
on Tobacco Control (FCTC) Article 5.3.2 This report shows that Japan is lagging far behind inpractically every aspect in the implementation of Article 5.3 Guidelines. There is strong
interference from the tobacco industry to weaken and/or delay tobacco control policy measures.
The government still owns 33 percent of Japan Tobacco Group (JT) which brings thegovernment in direct conflict situation in implementing the FCTC.
JT in its 2019 annual report describes its international brand portfolio includes both cigarettes(Winston, Camel, MEVIUS and LD) and so called ‘reduced risk products’ Ploom and Logic.3
The international arm of JT, Japan Tobacco International (JTI), sells tobacco products in over
130 countries/ regions and aims to continue to steadily grow as a global tobacco company. In
2019, while the Japanese domestic tobacco business encountered a challenging operating
environment, the international business remained strong, but overall, the tobacco businessremains the core and main driver of the Group’s profit growth.
Transnational tobacco companies showcase Japan as the world leader in heated tobacco
products however its growth has slowed. Since its introduction in Japan, it occupies 23% of JT’s
total domestic tobacco market. In 2019, JT launched Ploom TECH+ in June and Ploom S in
August domestically. JT cigarette sales volume decreased 7.9% to 75.5 billion units due tocigarette volume decline caused by a tax increase. JT launched little cigar products in 2019 as ameasure to prevent consumers from switching to other international brands sold in Japan.

JT launched new little cigar products in 2019

JT’s lunch of Ploom TECH+

To maintain sustainability of the business, Japan Tobacco wants to ensure the company is“included in policymaking leading to fair and balanced regulation and enhance our cooperation
with governments to combat illegal trade.”3 JT will also continue to engage with law enforcement
agencies. JT has identified tax increase as a risk to its business and its strategy to mitigate this is
to promote understanding among relevant authorities that “substantial or repeated tax increases
do not necessarily serve their purpose.”3
The government’s direct ownership and running of the tobacco business in Japan has a big
impact on tobacco control and undermines or delays effective measures from being adopted andimplemented. This report will illustrate where the weaknesses lie.

1 Tobacco Industry Interference Index: Asian report on implementation of WHO Framework Convention on Tobacco Control

Article 5.3. Southeast Asia Tobacco Control Alliance.
http://seatca.org/dmdocuments/SEATCA%20TI%20Interference%20Index%202018.pdf
2 WHO FCTC. Guidelines for implementation of Article 5.3; 2008
http://www.who.int/fctc/treaty_instruments/Guidelines_Article_5_3_English.pdf
3 Japan Tobacco Inc. Annual report 2019 https://www.jt.com/investors/results/integrated_report/pdf/2019/integrated2019_E_all.pdf

Summary Findings
Japan’s overall total score is 88 points
1. INDUSTRY PARTICIPATION IN POLICY DEVELOPMENT
The existence of Tobacco Business Act has a strong association between the tobacco
industry and the Government who controls 33% of Japan Tobacco Inc. (JT). Policy makers
enables JT to participate and interfere in policy development which further weakens policies
such as legislation on 100% smoke-free public places. However, in 2018, Tokyo Governor
Yuriko Koike, in consultation with experts from the public health community such as Haruo
Ozaki, Chairman of Tokyo Medical Society successfully implemented Passive Smoking
Prevention Ordinance in Tokyo before the 2020 Olympic Games. Japanese Government has
followed it through to make a law. They are fully enforced on April 1st 2020.
2. INDUSTRY CSR ACTIVITIESJT conducts numerous tobacco related CSR activities including sponsoring sports
tournaments, games, and cultural activities. The Tobacco and Salt Museum which serves topromote to the public the various aspects of tobacco over the years is partly owned by thegovernment.
3. BENEFITS TO THE INDUSTRY
The government of Japan allows the tobacco industry to advertise, sponsor activities, apply
ineffective text-only warnings on cigarette packs. The FCTC is not effectively implemented,
benefiting the tobacco industry to continue to promote its business.
Tobacco tax rate is not optimal yet. According to a news report, “Cigarette prices in Japanare kept lower than in many other countries because the government manipulates them toprevent a sharp decline in consumption.”4
JT and other transnational tobacco companies such as Philip Morris International (PMI) areaggressively propagating heated tobacco products in the media as “new tobacco productswith reduced harm.” This is highly misleading to the public as these products are notharmless, nor free from harm. Heat-not-burn products are taxed significantly lower thanconventional cigarettes. For example, while tax for cigarette brand Mevius is 63.1%, iQOS of
PMI is 49.2%, GLO of BAT 36% and Ploom TECH of JT is only 14.9%.
International travelers are allowed to bring in 400 cigarettes, 100 cigars, 20 individual
packages of heated tobacco products, or 500 grams of other kinds of tobacco or a
combination
4. UNNECESSARY INTERACTION
By virtue of the fact that the Ministry of Finance owns part of JT, the tobacco industry has aclose relationship with the Ministry of Finance and the ruling political party, Liberal
Democratic Party (LDP).
4 Sentaku. April 2017 http://www.japantimes.co.jp/opinion/2017/04/23/commentary/japan-commentary/poverty-politics-

tobacco-policy/#.WYWe51FLfIU

5. TRANSPARENCY
Meetings between top level officials, such as ministers, with the JT are not publicly disclosed.
There is no register for private tobacco companies operating in Japan such as PMI and BATor their lawyers and consultants acting on their behalf.
6. CONFLICT OF INTEREST
There is no prohibition on contributions from the tobacco industry to political campaigns.
High level officials, upon their retirement from government service, move to top leadership
position in JT.
7. PREVENTIVE MEASURES
There is no public record of effort by the government to regularly raise awareness within its
departments on policies relating to FCTC Article 5.3 Guidelines. The government has not
put in place a procedure for disclosing records of interaction with the tobacco industry andits representatives. The government has not implemented a code of conduct for public
officials, prescribing the standards they should comply in their dealings with the tobacco
industry.
While the Minister of Finance has disclosed his ownership of shares in JT, however this stillpresents a conflict of interest to tobacco control. The Ministry of Finance has jurisdiction
over the Tobacco Business Act which has provisions on tobacco control such as advertising
restrictions and health warnings on tobacco packaging.
Japan Society for Tobacco Control has made many calls on the government to take action tostrengthen tobacco control policy.5 6 We stress the importance of implementing Article 5.3 toreduce tobacco industry interference. We make the following recommendations as listed below.

Recommendations
1

2
3
4
5

The government must end all activities that promote the TI and take responsibility topromote the health and welfare of the people. The government must severe ties with thetobacco industry in order to be free to conduct public health activities the sake of Japanesepeople’s health.
The government must end all collaboration with JT’s CSR activities and sponsored events;
The government must end benefits given to JT to promote the tobacco business such as thesubsidy for smoking rooms, which violates FCTC Article 8 which requires all public andwork places to be 100% smoke-free.
The Ministry of Finance must make transparent all interactions with the tobacco industry.
The government must have a procedure for dealing with the tobacco industry.
The government must end the practice of “amakudari” as it negatively affects tobacco control
policy and public health.

5 2018/9 Made a petition concerning tobacco ads ban to the Minister of Financehttp://www.jstc.or.jp/uploads/uploads/files/information/Tobacco%20Ads%20ban%202018.9.3.pdf
6 2018/9 We offered to the Minister of Finance to stop TV advertisement of BAT Japan
http://www.jstc.or.jp/upoads/uploads/files/essay/Ads%20ban%20to%20BAT%20Japan.pdf

Japan: 2020 Tobacco Industry Interference Index
Results and Findings
0 1 2 3 4 5
INDICATOR 1: Level of Industry Participation in Policy-Development
1. The government7 accepts, supports or endorses any offer forassistance by or in collaboration with the tobacco industry8 in setting
or implementing public health policies in relation to tobacco control9(Rec 3.1)

4

The Health Ministry estimated about 15,000 people die annually in Japan from diseases related
to passive smoking.10 Indoor public places are not 100% smoke-free as required under FCTC
Article 8. In 2017, the Health Ministry was forced to scale back a proposed bill for a blanket
ban on public smoking in the face of opposition by pro-smoking politicians, restaurateurs andJapan Tobacco (JT).11 But even the weaker bill foundered, due to opposition from the ruling
Liberal Democratic Party (LDP). By June 2017, pro-tobacco members of parliament in the
LDP succeeded in blocking the introduction of legislation that would have banned smoking inbars and restaurants larger than 30 square meters.12 13 PMI, BAT and JT made their speeches
on a petition before the politicians.
2020 Smoke-free Olympic received wide public support from everyone except the tobacco
industry, who aggressively resisted it. The new national law introduced in 2018 prohibitedindoor smoking at schools, hospitals and government offices. However, it was a weakened law
due to tobacco industry interference. Smoking is still allowed at existing small eateries,
including those with less than 1,076 square feet of customer space, including more than half ofJapanese establishments. Larger and new eateries must limit smoking to designated rooms.14
In June 2018, Tokyo governor Yuriko Koike successfully passed the Passive Smoking
Prevention Ordinance in the city with the help of public health experts like Dr. Haruo Ozaki,
Chairman of the Tokyo Medical Association. In July, Japanese Government supported it andmade the smoke-free law.15

7 The term “government” refers to any public official whether or not acting within the scope of authority as long as cloaked withsuch authority or holding out to another as having such authority
8 The term, “tobacco industry’ includes those representing its interests or working to further its interests, including the State-owned
tobacco industry.
9 “Offer of assistance” may include draft legislation, technical input, recommendations, oversees study tour
10 Passive smoking kills 15,000 people a year in Japan, study finds. 1 May 2016, The Japan Times
http://www.japantimes.co.jp/news/2016/05/31/national/science-health/passive-smoke-kills-15000-people-annually-japanhealth-study-finds/#.WVRgI1FLfDA
11 Elaine Lies. Japan Health Ministry to water down proposal on restaurant smoking: media; 17 Nov 2017, Reuters;
https://www.reuters.com/article/us-japan-smokingban/japan-health-ministry-to-water-down-proposal-on-restaurant-smokingmedia-idUSKBN1DH0DR
12 Gavin Blair. A Tobacco-free 2020 Olympics … Or is Japan blowing smoke? SCMP. 18 Jun 2017;
http://www.scmp.com/week-asia/society/article/2098269/tobacco-free-2020-olympics-or-japan-blowing-smoke
13 Japan fails to ignite ‘zero tolerance’ passive smoking ban under anti-cancer law; South China Morning Post; 24 Oct 2017
http://www.scmp.com/news/asia/east-asia/article/2116777/japan-fails-ignite-zero-tolerance-passive-smoking-ban-under-anti
14 Duncan Mackay. Tokyo 2020 announce that smoking and vaping will be banned at all venues; 25 Feb 2019https://www.insidethegames.biz/articles/1076087/tokyo-2020-announce-that-smoking-and-vaping-will-be-banned-at-all-venues
15 Reuters. Tokyo passes tough anti-smoking law ahead of 2020 Olympics; 27 Jun 2018; https://www.reuters.com/article/usjapan-smokingban-tokyo/tokyo-passes-tough-anti-smoking-law-ahead-of-2020-olympics-idUSKBN1JN1LP

0 1 2 3 4 5
In April 2020 these laws are fully enforced. There are many exceptions to this rule. One issmoking room is allowed in Japanese diet, and prefectural assemblies. Japan Society for
Tobacco Control with the help of local medical associations and people, fought to reduce to55% (26/47) of prefectural assemblies to be smoke free. In April 2020, 97.7% (795/815) ofcity assemblies are now smoke free, however, Japanese diet is not.16
2. The government accepts, supports or endorses policies or legislation
drafted by or in collaboration with the tobacco industry. (Rec 3.4)

5

The Tobacco Business Act, which protects the tobacco industry, also covers regulation (or thenon-regulation) of tobacco advertising. There is no ban on tobacco advertising andpromotions, and self-regulation is based on JT’s global marketing principles. JT claims that,“the Tobacco Business Act, related acts and statutes and voluntary standards set forth theregulations for the sale and promotion activities of tobacco products in Japan that include theindication of warning labels on tobacco product advertisements and packages that urge
caution over the relationship between the consumption of tobacco products and health.” 17
After dismissing a proposal for pictorial health warning on tobacco packs in 2017, Japan still
has text-only warning. In late 2018, the Government announced the warning on tobacco
products will be increased from 30% to 50% which came into force in June 2019.18 This wasdone through a Ministerial Ordinance for the Partial Amendment of Tobacco Business Act
Enforcement Regulations (Order of Ministry of Finance No. 4) (*1).19 While JT is forced toapply pictorial warnings on so many countries around the world, Japanese people are denied
effective warning about the harms of smoking through pictures.
The Tobacco Business Act requires JT to annually enter into purchase contracts with tobacco
growers about the aggregate cultivation area for specific varieties of leaf tobacco and theprices for leaf tobacco by variety and grade. Leaf prices are decided by recommendation fromJapan Tobacco Inc. October 2019: The Leaf Tobacco Deliberative Council, chaired by Mr.
Yoshitsugu Minagawa, released its annual determinations for domestic tobacco leaf cultivation
area and grower prices for 2020, in response to a proposal submitted by JT.20 The Leaf
Tobacco Deliberative Council is a council which confers on important matters concerning thecultivation and purchase of domestically grown leaf tobacco. The council consists of about 11
members, appointed by JT with the approval of the Minister of Finance from among
representatives of domestic leaf tobacco growers and academic appointees. Mr. Yoshitsugu
Minagawa was formerly the Director General of Forestry Agency.21

16 http://notobacco.jp/pslaw/gikaikinenjokyo1911shichoson.htm
17 Japan Tobacco Inc. Annual Report 2016, Pg 64

https://www.jt.com/investors/results/annual_report/pdf/annual.fy2016_E_partition03.pdf
A1) Revised health promotion act & Tokyo Metropolitan Government Smoking Prevention Ordinancehttp://www.jstc.or.jp/uploads/uploads/files/essay/Passive%20smoking%20Regulation%20.pdf
18 Jiji. Japan to use larger health warning labels on packs of cigarettes; Japan Times; 28 Dec 2018https://www.japantimes.co.jp/news/2018/12/28/national/japan-use-larger-health-warning-labels-packscigarettes/#.XOLB18gzY2w https://www.japantimes.co.jp/news/2018/12/28/national/japan-use-larger-health-warning-labelspacks-cigarettes/#.XOLB18gzY2w
19 Japan Tobacco. https://www.jt.com/media/news/2019/0719_01.html
20 Japan Tobacco. Tobacco Council release determinants for 2020 tobacco cultivation, JT Press Release; 25 Oct 2019https://www.jt.com/media/news/2019/pdf/20191025_E01.pdf
21 2011 Public Relations Office. Government of Japan. International Year of Forests. 2011. https://www.govonline.go.jp/eng/publicity/book/hlj/html/201110/201110_09.html

0 1 2 3 4 5In 2017 the Health Ministry filed a Bill in Parliament aimed to restrict smoking in public
places such as schools, hospitals, government buildings, bars and restaurants. There is no
support for the bill from the majority ruling party. It was opposed by about 90 percent of thelawmakers in Japan’s ruling Liberal Democratic Party argue it would put bars and restaurants
out of business.22 Finally, Mr. Shiozaki who was a Minister of Health Labor and Welfare
resigned and new Minister proposed a bill which does not meet an international standard
accepting smoking in a restaurant or bar with the space less than 100 square meters. This wasin accordance with the concept of TI. The Japanese government owns 33 percent of JT.
3. The government allows/invites the tobacco industry to sit ingovernment interagency/ multi-sectoral committee/ advisory groupbody that sets public health policy. (Rec 4.8)

5Since the government part owns JT and has a Tobacco and Salt Industries Bureau in the Ministryof Finance, JT’s interests are taken into account in public health policy development.
The Ministry of Health, Labour and Welfare is championing a law to ban smoking in all public
places in preparation for the upcoming 2020 Olympic Games. A Ministry of Health, Laborand Welfare expert panel compiled a white paper on smoking in July 2016 that said "there issufficient evidence to assume a causal relationship" between smoking and lung cancer.
The Finance Ministry, which decides on tax increase, also has to consider the interest of thetobacco business for which it has a fiduciary responsibility to protect its profits. The Finance
Minister is also the Deputy Prime Minister for Japan.
4. The government nominates or allows representatives from thetobacco industry (including State-owned) in the delegation to the
COP or other subsidiary bodies or accepts their sponsorship fordelegates. (i.e. COP 4 & 5, INB 4 5, WG)23 (Rec 4.9 & 8.3)

5

There was COP 8 meeting in 2018, and the government delegation included 4 officials (Mr.
Takashi Kosakada, director, Mr. M. Chida, Deputy Director, Mr. T. Mio Officer, Mr. M. Abe
Unit Chief of Coordination) from the Tobacco and Salt Industries Office, Financial Bureau,
Ministry of Finance, Japan.24 This is an increase from the previous COP7 in 2016 where thedelegation had only 1 representative from this unit.25
INDICATOR 2: Industry CSR activities
5. A. The government agencies or its officials endorses, supports,
forms partnerships with or participates in so-called CSR activities
organized by the tobacco industry. (Rec 6.2)

22 Push towards a smoke-free Olympics by Kanoko Matsuyama and Yuki Hagiwara Bloomberg News, 25 Apr 2017https://www.bloomberg.com/news/articles/2017-04-24/japanese-restaurants-thwart-push-toward-smoke-free-olympics
23 Please annex a list since 2009 so that the respondent can quantify the frequency, http://www.who.int/fctc/cop/en/
24 FCTC/COP/8 List of Participants. 5 Oct 2018 https://www.who.int/fctc/cop/sessions/cop8/LOP_Final.pdf?ua=1
25 FCTC/CO/7/Div/Rev2 List of Participants. 12 Dec 2016
https://www.who.int/fctc/cop/cop7/COP7_LoPDelegatesList.pdf?ua=1

5

0 1 2 3 4 5
B. The government (its agencies and officials) receives
contributions26 (monetary or otherwise) from the tobacco industry(including so-called CSR contributions). (Rec 6.4)
A. Government participation in JT sponsored sports
JT sponsors many sports activities and tournaments. The best known among these is theVolleyball team. ‘JT Thunders Volley Ball Classroom’ sponsored events involve elementary
schools which involves endorsement by the Education authorities, and the events are held in
public sports avenue in cities. JT owns volley ball teams JT Marvelous (women) and JT
Thunders (male) that play league level and every year they hold Volley ball World Cup in
Japan. These events are heavily promoted online which remain unregulated.27 28

The sponsorship of volleyball is promoted online

The Volleyball team promotes JT brand name

Other sponsored activities include JT Japanese Chess Championship,29 JT Cup Golf Japan
series30 and JT Sports School.31
B. JT sponsored Tobacco and salt museum is endorsed by the Japanese Government32

Many school children visit the museum

26 political, social financial, educations, community, technical expertise or training to counter smuggling or any other forms ofcontributions
27 JT Thunders (Pro Volley Ball) http://www.jti.co.jp/knowledge/thunders/index.html
28 JT Marvelous (Pro Volley Ball) http://www.jti.co.jp/knowledge/marvelous/index.html
29 http://www.jti.co.jp/knowledge/shogi/index.html
30 http://www.jti.co.jp/knowledge/jtcup/index.html
31 http://www.jti.co.jp/csr/contribution/social/sports/index.html
32 http://www.jti.co.jp/Culture/museum/index.html

0 1 2 3 4 5
C. Government certification of JT’s CSR activities
JT is certified as an eco-rail mark industry by the Ministry of Land, Infrastructure andTransport. The JT Kansai factory received two awards from Kyoto City and Kyoto Prefecture
government for its excellent emission reduction initiatives.33
D. Local government participation in sponsored smoking space on streets
In cooperation with municipalities around the country, JT has established "smoking spaces" sothat smokers and non-smokers both can be satisfied. Currently, JT has implemented thiseffort at 943 locations in collaboration with 212 municipalities nationwide.34
E. Campaign to promote cleaning-up the district
JT conducts community level "picking up" garbage program called "campaign to promotecleaning up the district" which uses youth citizen participation in collecting trash. City officials
are involved in these activities.35
F. Other social cultural events, research, and earthquake reconstruction from JT
endorsed by government officials include JT Asia scholarships,36 JT Biohistory ResearchHall endorsed by a Japanese Government, and affiliated with the University of Osaka,Affinis Cultural Foundation37 endorsed by Japanese Government, and JT Art Hall
Affinis,38 JT Biohistory Research Hall,39 and earthquake reconstruction.40
INDICATOR 3: Benefits to the Tobacco Industry
6. The government accommodates requests from the tobacco industry
for a longer time frame for implementation or postponement of
tobacco control law. (e.g. 180 days is common for PHW, Tax
increase can be implemented within 1 month) (Rec 7.1)

3

Weak tobacco control measures have benefited JT and transnational tobacco companies
operating in Japan. Japan has not banned tobacco advertising, promotions and sponsorship, a
requirement under the WHO FCTC, instead applies self-regulation.
No pictorial health warnings on cigarette packs although JTI exports its brands with PHW to
many countries that require this. End of December 2018, the government announced plans toincrease the size of the text-only warning from 30% to 50% in time for the 2020 Olympics.
There is no penalty for violation of smoking in no-smoking areas. JT continues to conduct its‘manners campaign’.41
The national Health Promotion law, revised in 18 July 2018, will only go into effect in April
202042 43 giving a lengthened implementation period of 22 months. Meanwhile Tokyo also

33 https://www.jti.com/sites/default/files/jt-group-sustainability-report-fy-2018.pdf
34 http://www.jti.co.jp/sstyle/manners/bunen/jirei/collabo/jireishu/02/index.html
35 Clean up street

http://www.jti.co.jp/sstyle/manners/clean/index.html

36 http://www.jti.co.jp/csr/contribution/social/scholarship/outline/index.html
37 http://www.jti.co.jp/knowledge/forum/index.html
38 http://www.affinis.or.jp/
39 http://www.brh.co.jp/

40 https://www.jti.co.jp/csr/contribution/support/reconstruction/index.html
41 https://www.jt.com/about/division/tobacco/index.html

42 http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000189195.html

43 http://www.jstc.or.jp/uploads/uploads/files/essay/Passive%20smoking%20Regulation%20.pdf

0 1 2 3 4 5passed law to prevent passive smoking in Tokyo on 27 June 2018. Most of the public places
will be smoke-free by the 2020 Olympic.44
7. The government gives privileges, incentives, exemptions or benefits
to the tobacco industry (Rec 7.3)

5The existence of the Tobacco Business Act reflects how the government protects the tobacco
industry and gives it benefits to protect its business. The government’s 33% ownership of JT
gives incentives to the government to protect JT’s success and increased profits.
In 2018 the Ministry of Finance fixed the price of tobacco leaves for 2019. The leaf tobacco
grower price was set at an average of ¥1,912.32 per kilogram for all leaf types, an increase of
1.33% compared to the previous year and ensures all the tobacco leaves produced by thegrowers are purchased. This will ensure their income is protected.45
According to a Japan Times report, “Cigarette prices in Japan are kept lower than in manyother countries because the government manipulates them to prevent a sharp decline in
consumption. According to a tobacco industry insider, Japan is unique in that the government
determines the retail prices of cigarettes, and that manufacturers have no freedom to set prices
on their own. Thus, he says, the government controls supply and demand from the standpointof securing tax revenue.”46
Tax for heat-not-burn cigarettes are kept lower than conventional cigarettes.47 For example,
while tax for cigarette brand Mevius is 63.1%, iQOS of PMI 49.2%, GLO of BAT 36% andPloom TECH of JT is only 14.9%. (reference material submitted to the Diet, 7th April 2017from the Ministry of Finance for the inquiry by the Shigefumi Matsuzawa.)
International travellers are allowed to bring in 400 cigarettes, 100 cigars, 20 individual
packages of heated tobacco products, or 500 grams of other kinds of tobacco or a
combination.48
INDICATOR 4: Forms of Unnecessary Interaction
8. Top level government officials (such as President/ Prime Minister or
Minister49) meet with/ foster relations with the tobacco companies
such as attending social functions and other events sponsored ororganized by the tobacco companies or those furthering its interests.
(Rec 2.1)

3

JT was named a ‘White 500’ company in 2019, in recognition of efforts towards its employee
health. Japan’s Ministry of Economy, Trade and Industry (METI) awarded JT with the ‘White

44 http:/www.metro.tokyo.jp/tosei/hodohappyo/press/2018/04/20/19.html

45 Japan Tobacco. Tobacco Council Releases Determinations for 2019 Tobacco Cultivation Press Release; 25 Oct 2018https://www.jt.com/media/news/2018/pdf/20181025_E01.pdf
46 Sentaku. April 2017 http://www.japantimes.co.jp/opinion/2017/04/23/commentary/japan-commentary/poverty-

politics-tobacco-policy/#.WYWe51FLfIU
47 Henmi, J., Ishibashi, M. In Japan heated tobacco associated with greater risk of tax hike. Nikkei Asian Review. 23
Sep 2017. https://s.nikkei.com/300l5AE
48 https://www.iatatravelcentre.com/JP-Japan-customs-currency-airport-tax-regulations-details.htm
49 Includes immediate members of the families of the high-level officials

0 1 2 3 4 5500’ award for “making outstanding progress towards better health and productivity among
their employees.”50
9. The government accepts assistance/ offers of assistance from thetobacco industry on enforcement such as conducting raids on
tobacco smuggling or enforcing smoke free policies or no sales tominors. (including monetary contribution for these activities) (Rec4.3)

3

The Ministry of Health, Labour and Welfare and the Tokyo Metropolitan government offer a
subsidy scheme known as “Passive Smoking Prevention Measure Subsidy System”. This subsidy
is given to hotels, restaurants and local business to install smoking rooms. 51 This scheme is
promoted on Tokyo Metropolitan Government website52 and JT’s website.
Establishment of smoking room in the SME business: the subsidy rate/ grant amount is 1/2 ofthe cost (maximum 1 million yen); however, in the case of a restaurant where the establishmentof a smoking room is taken, 2/3. Equipment cost, equipment cost, equipment cost, machinery
equipment cost etc. for installation of smoking room etc.
According to JT’s website: “JT will continue to fight against illicit trade in collaboration withgovernments, including the Japanese government.”53 In 2019, JT’s Anti-Illicit Trade teamprovided 1,129 intelligence reports to law enforcement agencies, and advised 2,687 law
enforcement officers on counterfeit recognition.54
10. The government accepts, supports, endorses, or enters into
partnerships or agreements with the tobacco industry. (Rec 3.1)
NOTE: This must not involve CSR, enforcement activity, or tobacco control
policy development since these are already covered in the previous questions.

4

By virtue of the government owning 33% of JT, it also owns the Tobacco and Salt Museum
which is a promotional outfit for JT. The Museum was renovated in 2015 and holds regularexhibitions and is open to children.55
INDICATOR 5: Transparency
11. The government does not publicly disclose meetings/ interactions
with the tobacco industry in cases where such interactions are strictly
necessary for regulation. (Rec 2.2)

3

The Finance Ministry gets annual dividend of more than ¥70 billion revenue from Japan
Tobacco shares. That revenue is kept in a special account for fiscal investment and loans, andspent on industrial investment projects that are too risky for the private sector to undertake.56
50 Japan Tobacco. JT certified for 3rd year in a row as an “Outstanding Company in Health and Productivity Management 2019White 500”; 22 Feb 2019 https://www.jt.com/media/news/2019/pdf/20190222_E01.pdf
51 Japan Tobacco. Subsidy system; https://www.jti.co.jp/tobacco/bunen/subsidy/index.html
52 Tokyo Metropolitan government http://www.sangyo-rodo.metro.tokyo.jp/tourism/kakusyu/syukuhaku/
53 https://www.jt.com/about/division/tobacco/anti_illicit/index.html
54 Japan Tobacco Inc. Annual report 2019https://www.jt.com/investors/results/integrated_report/pdf/2019/integrated2019_E_all.pdf pg 27
55 https://www.jti.co.jp/Culture/museum_e/index.html
56 The poverty of politics and tobacco poverty, Commentary, The Japan Times, 23 April 2017,
http://www.japantimes.co.jp/opinion/2017/04/23/commentary/japan-commentary/poverty-politics-tobaccopolicy/#.WVSLdFFLfDA

0 1 2 3 4 5As revealed in the Reuters exposé on the tobacco industry lobbying pro-tobacco ministers in
Prime Minister Abe’s Cabinet,57 the situation has not changed since and any meetings of
Ministers with the JT are not publicly disclosed. The exposé provides evidence of Philip
Morris Fiscal Affairs and International Trade Executive meeting with Ministry of Finance andMinistry of Foreign Affairs officials on taxation issue in Japan.
Through the high rank OB meeting of the MOF. This meeting is confidential, though the tax
rate is widely discussed according to the JT's profit.
12. The government requires rules for the disclosure or registration of
tobacco industry entities, affiliated organizations, and individuals
acting on their behalf including lobbyists (Rec 5.3)

5While government officials who work for the Tobacco and Salt Industries Office are easily
identified, however there is no register for private tobacco companies operating in Japan suchas PMI, or its lawyers and consultants acting on its behalf.
INDICATOR 6: Conflict of Interest
13. The government does not prohibit contributions from the tobacco
industry or any entity working to further its interests to politicalparties, candidates, or campaigns or to require full disclosure of suchcontributions. (Rec 4.11)

5

There is no prohibition on contributions from the tobacco industry.
While the Minister of Finance has disclosed his ownership of shares in JT, however this stillpresents a conflict of interest to tobacco control. The Ministry of Finance has jurisdiction over
the Tobacco Business Act which has provisions on tobacco control such as advertising
restrictions and health warnings on tobacco packaging. According to the Ministry of Finance,
tobacco tax revenue is an important source of revenue for the government and they would
like to maintain it.58
14. Retired senior government officials form part of the tobacco
industry (former Prime Minister, Minister, Attorney General) (Rec4.4)

5High level officials, upon retirement from government service, move to top leadership
positions in JT59
Chairman of JT, Yasutake Tango, Chairman of the Board, started his career in Ministry of
Finance in 1974 rising to position of Administrative Vice Minister of MOF in 2009; being
appointed Special Advisor to the Cabinet (2012 – Apr 2014). Appointed Chair of JT in June
2014.

57 Reuters. Philip Morris Training https://www.reuters.com/investigates/special-report/pmi-who-fctc/ 13 Jul 2017 Slide 16, 17
58 Jake Sturmer, Yumi Asada. Why Japan smoking laws are stuck in the last century. ABC News. 18 March 2018.

https://www.abc.net.au/news/2018-03-18/why-japan-smoking-laws-are-stuck-in-the-last-century/9559222
59 Japan Tobacco Inc. Annual Report 2016, Pages 50-55,
https://www.jt.com/investors/results/annual_report/pdf/annual.fy2016_E_partition03.pdf

0 1 2 3 4 5Private connection between Prime Minister Shinzo Abe and Katsuhiko Honda, who is former
president of JT. Honda is said to be a private teacher when Abe studied for the entrance
examination of the University. Honda is now a second person of NHK (national broadcasting
company)60
This practice of “amakudari,” is the practice of former civil servants getting comfortable, wellpaid jobs at companies and other organisations in fields related to their ministries. Successive
governments have promised to end the practice, with limited success. It’s not just to Japan
Tobacco, but amakudari to other tobacco-related companies and there’s big money involved.61
15. Current government officials and relatives hold positions in the
tobacco business including consultancy positions. (Rec 4.5, 4.8, 4.10)

5The Finance Minister is listed as a principle shareholder of Japan Tobacco, holding 666,926,200
shares (37.6%).62 63
Officials working in the Tobacco and Salt Industries Office under the Financial Bureau of the
Ministry of Finance, represent the industry.
INDICATOR 7: Preventive Measures
16. The government has put in place a procedure for disclosing therecords of the interaction (such as agenda, attendees, minutes andoutcome) with the tobacco industry and its representatives. (Rec 5.1)

5None
17. The government has formulated, adopted or implemented a code of
conduct for public officials, prescribing the standards with which
they should comply in their dealings with the tobacco industry. (Rec
4.2)

5

None
18. The government requires the tobacco industry to periodically submit
information on tobacco production, manufacture, market share,marketing expenditures, revenues and any other activity, including
lobbying, philanthropy, political contributions and all other activities.
(5.2)

3

JT, being part owned (33%) by the government, submits records on production, manufacture,market share, revenues. However, no record is available on marketing expenditure,philanthropy and political contributions.

60 http://www.nosmoke55.jp/action/1310jt_nhk.html
61 Gavin Blair. A Tobacco-free 2020 Olympics … Or is Japan blowing smoke? SCMP. 18 Jun 2017;

http://www.scmp.com/week-asia/society/article/2098269/tobacco-free-2020-olympics-or-japan-blowing-smoke
62 Japan Tobacco Inc. Annual report 2019https://www.jt.com/investors/results/integrated_report/pdf/2019/integrated2019_E_all.pdf Page 163
63 Kuchikomi. Smoking bureaucrats find themselves on the outside looking in. Japan Today. 30 July 2019https://japantoday.com/category/features/kuchikomi/smoking-bureaucrats-find-themselves-on-the-outside-looking-in

0 1 2 3 4 5According to news reports Japan Tobacco spends ¥20 billion a year on advertising, almost allof which promotes “manners.” The real reason, according to Sentaku (magazine), that Japan
Tobacco buys space and air time is to quash anti-smoking reporting by making media
dependent on JT-related ad revenue.64
19. The government has a program / system/ plan to consistently65 raiseawareness within its departments on policies relating to FCTC
Article 5.3 Guidelines. (Rec 1.1, 1.2)

5

The government does not have a program to consistently raise awareness within its
departments on Article 5.3.
20. The government has put in place a policy to disallow the acceptanceof all forms of contributions/ gifts from the tobacco industry(monetary or otherwise) including offers of assistance, policy drafts,
or study visit invitations given or offered to the government, its
agencies, officials and their relatives. (3.4)

5

None
TOTAL

88

64 Media sidesteps calling Japan Tobacco out on advertising conflicts, Philip Brasor, The Japan Times, 14Janhttp://www.japantimes.co.jp/news/2017/01/14/national/media-national/media-sidesteps-calling-japan-tobacco-advertisingconflicts/#.WVSPzFFLfDA
65 For purposes of this question, “consistently” means: a. Each time the FCTC is discussed, 5.3 is explained. AND b. Whenever
the opportunity arises such when the tobacco industry intervention is discovered or reported.