Tobacco farmers remain poor in ILO-Big Tobacco partnership

12 November 2017:

The International Labour Organization (ILO) postponed the decision on whether to end its ties with the tobacco industry to next March following a deadlock. Instead, the Governing Body concluded two weeks of deliberations in Geneva with a call on the Director-General to present an ‘integrated ILO strategy to address decent work deficits in the tobacco sector’ at its next meeting in March.

It is truly disappointing that despite international resolutions to put a firewall between inter-governmental agencies and the tobacco industry, the ILO is struggling to make a decision. The ILO remains the only UN agency to still maintain ties with the tobacco industry.

Over the past several years, the ILO has received about USD15.4 million from Japan Tobacco International (JTI) and the Eliminating Child Labour in Tobacco Growing Foundation (ECLT), which is an NGO funded by Big Tobacco. The ILO Office has provided no details on how exactly this money is being used. ILO’s contract with the tobacco industry will end in mid-2018.

This is a paltry sum compared to the huge profits the transnational companies reap by shifting their operations to the developing world and paying low prices to tobacco growers in poor countries. This industry continues to exploit poor workers especially in Asia and Africa.

Tobacco companies are among the richest businesses in the world, earning billions in revenue and profits for their stockholders. Ironically its workers – 40 million – are among the poorest in the world, an indication that something is seriously wrong.

In 2016, the CEO of Japan Tobacco Inc. earned about USD1.6 million in remunerations, which works out to more than what JTI is currently handing out to the ILO per year. In 2013, the CEO of Philip Morris International received remunerations of USD16.3 million, which is more than the total amount Big Tobacco paid to the ILO for its multi-year partnership programme. The ILO office must wake up to the stark reality of who really is benefiting from this unhealthy partnership with the tobacco industry.

The Japanese Ministry of Finance determines the price of tobacco for Japanese growers ensuring the prices are fair in order to protect them. For 2017, the price was fixed at USD16.52 (¥1,877.57) per kg. However tobacco companies pay pittance for leaves from developing countries (see table).

Leaf Price
per Kg (USD)
1.       Cambodia $0.10
[400 Riel]
2.       India-Andhra $2.27
3.       Indonesia $2.25-3.00 Farmers Refrain from Planting Tobacco
4.       Japan $16.90
5.      Malawi $1.84
6.       Philippines $1.55
P82 ($1.64) per kilo for Grade AA; P57 ($1.14) for F2
7.       Tanzania $2.20
8.       Zimbabwe $2.95
(Auction price 2017)

Tobacco growers in developing countries have remained poor because they earn so little from the low prices they are paid for their leaves. This is reflected in children having to work on tobacco farms as free labour, or paid next to nothing, and being exposed to harms and exploitation. 

Many member states of the ILO have already banned tobacco related corporate social responsibility (CSR) activities, such as Thailand, Ethiopia and Uganda, in accordance with the WHO FCTC Guidelines (Articles 5.3 and 13).

Recent international decisions have also ruled on the tobacco industry exposing it for what it really is – a harmful industry responsible for 7 million deaths worldwide every year. Since 15 October 2017, the UN Global Compact has delisted tobacco companies.

In June 2017, the UN Economic and Social Council (ECOSOC) in its resolution (E/2017/L.21) encouraged UN agencies to develop policies that would place a firewall between the UN and the tobacco industry. However the ILO is of the view it is not under any legal obligation to adopt this important resolution.

The longer the ILO waits to end its partnership with the tobacco industry, the more its reputation is being tarnished, while growers remain poor.