The Chronicles of a Capitalist Lawyer: Cigarette Industry

Showing posts with label Cigarette Industry. Show all posts

The latest Constitutional Court decision on the Health Law is very surprising. It holds that public places must provide special places to smoke on the basis that people have the human right to smoke. I find this idea as simply preposterous and I am deeply confused on how come the Constitutional Court could make such decision. There are two main issues regarding the decision. First, whether smoking can be considered as a part of human right that is guaranteed by the constitution. Second, whether private parties can be forced by the state to provide facilities for smokers.

Let us begin with the first issue. Smoking is bad for health. No doubt about that. Many countries have already banned the sale of cigarette or heavily taxed the sale, giving less incentives to people to smoke. Even further, many countries have also banned smoking in closed public areas. If you want to smoke, you do it outside, be it in a hot summer or a freezing winter. Even in the United States I can confirm that it is very rare to see people smoke, even in opened areas.

Having said that, it is puzzling that the Constitutional Court can say that smoking should be considered as an inherent part of human rights. Since when? I do see the right to live, but the right to kill yourself slowly? Well that's a new thing. Constitutional Court can of course interpret the constitution, but it does not mean that they can develop a new right out of nowhere. Every junior law students would understand that the basic texts of the laws should be respected as they are unless there is a very strong reason to deviate from using such texts.

The Constitutional Court further argues that because the law has not deemed smoking as an illegal activity, it means that smoking is a right. This is completely wrong and illogical. Saying that an act is not prohibited does not automatically mean that such act becomes an inherent right of human being. If the law says that a dangerous activity is temporarily permitted, it does not mean that the law say that people have the absolute right to do such activity all the time. Instead, it should be considered as a special case, an exemption.

People know that cigarette industry contributes a lot of incomes to the state. However it is not clear whether the benefits of having the industry outweigh the costs imposed to the citizens health and the opportunity costs in case the money used to buy cigarettes can be directed to other useful means. That will not be the focus of this article, but I can say that it can shed some lights on why smoking is still permitted in Indonesia. There are too many stakeholders involved.

Furthermore, if we can develop a right to hurt ourselves, I do not see why the law should prohibit people to use drugs or to perform euthanasia? As long as they agree to do so, why punish them. In case of euthanasia, why the criminal code punishes people who assist someone in their suicide attempt? Saying that the right does not exist because the laws deem these acts as illegal will not make any sense. If the Constitution says that the right to die or to hurt yourself exists, the Constitutional Court should declare that the above laws illegal for contravening the constitution. As simple as that. I wonder though whether the Constitutional Court will be brave enough to do that.

Now some people argue that actually smoking is not dangerous to our health, that it is a part of a bigger conspiracy, and therefore the argument that approving smoking is the same with approving the right to hurt yourself should be rejected. Again, I don't see any good reason why there should be a conspiracy for banning cigarettes. Basic economic analysis can show the flaws of this conspiracy theorist.

In a capitalistic world, profit is the most important thing. People can even produce hazardous materials for the sake of profits, as long as they compensate the victims for hurting them (due to the hazardous materials). In law and economic terms, we call this as the liability rule. If that's the case, why many developed states should bother with the cigarette industry? As long as they can compensate the victims, who cares. Furthermore, as long as they can pay a huge amount of money to the state in the form of excise tax, why restrict them from selling the cigarettes?

The answer is quite simple. From economic points of view, these states deem that the costs of having the cigarettes industry in their countries outweigh the benefits. Cigarette companies are not stupid, they have a very strong lobbying power, and yet, as an interest group, they fail to induce the developed countries to maintain their existence. This means that the costs of having them in such countries are so high that even the benefits that they provide cannot justify their existence. Each countries might have different views on this issue, but you can see the point.

Now, let us move to the second point. Can the state forces private parties to provide special places to smokers? I am a defender of people's freedom and I will clearly say this: the state should only be permitted to force private parties and its citizens to provide something for other people in special cases where the benefits are clear and outweigh the costs, and the provisions of such facilities are highly important for the sake of the people. None of these points are satisfied by the recent decision of the Constitutional Court.

And I find this fact as deeply problematic. How could we let the state force us to provide something without clear benefits? It's already perverse enough that we must acknowledge the right to smoke as a basic human right, and now the Constitutional Court says that we should also provide the facilities for the smokers? I mean, like really?

Some people say that since the majority of Indonesian people are smokers, it is fine if the state should provide facilities for them and that other non smokers should respect that. Well if you agree that the majority opinion should dictate anything in this country no matter what, you should not protest if we see cases where people using their status as a majority to oppress the minorities (like in the case of minor religious sects or LGBT groups). Hey, we're the majorities anyway, it's your task to respect us, and we should be free to do what we want since we are the majorities. You do realize that adhering to such principle would be a disaster.

Every aspiring law students realize that absolute power tends to corrupt absolutely. That is why we need a check and balance mechanism. People are not angels, and if we always let the majority to decide anything without proper counter measures, that would be a perfect recipe for oppression. In short, the latest Constitutional Court decision is regrettable. Making a wrong policy is one thing, after all not all judges are equipped with such skills. But making a wrong legal interpretation that every first year law student should know? That is absolutely unacceptable. Well, the fight is still going on. Let us see how the central and regional governments will deal with such issues.

Today, the Constitutional Court issues its decision on the Judicial Review of Article 46 Paragraph 3 (c) of Law No. 32/2002 on Broadcasting ("Broadcasting Law") which basically deals on the constitutionality of the provision of a Law that allow cigarettes advertisement in broadcasting media. You can see the complete 306 pages decision here. The constitutional claim was made by among others the National Committee of Child Protection and the Child Protection Agency of West Java.

From my quick reading of the decision, I can conclude that the main target of this claim is to banish all type of cigarettes advertisement in Indonesian broadcasting media by claiming that the above provision of the Broadcasting Law is contravening with Article 28B paragraph (2) (the right of each child to live, grow, and develop, and to earn protection from violence and discrimination), Article 28A (the right of each person to live and maintain its life), Article 28C paragraph (1) (the right of each person to develop himself through satisfaction of basic needs) and Article 28F (the right of each person to communicate and obtain information to develop himself and his society) of the 1945 Constitution.

In its decision (by 5 to 4 vote, which means that it is a very close decision), the Constitutional Court rejects such claim entirely based on the following reasons: (i) cigarettes industry is still a legal and valid industry in Indonesia and therefore has the same right with other industries to promote and make advertisement on its business activities; (ii) there is already a strict regulation on cigarettes advertisement in Indonesia and therefore, if there is a violation to such regulation, such violation must be handled through the mechanism stated by the relevant regulation, i.e. it is not an issue on the constitutionality of the disputed provision, rather an issue on the implementation of a regulation; (iii) it is not clearly evidenced that there is a causality between cigarettes advertisement and the inability of a person to develop himself and his life; and (iv) even if cigarettes advertisement in broadcasting media is deemed unconstitutional and therefore must be banned, it won't affect the ability of the cigarettes company to use other media and mechanism to promote cigarettes and therefore it would not be effective to deemed such provision as unconstitutional and it wouldn't be fair to the cigarettes industry, i.e. why are they being prohibited to advertise in the broadcasting media only?

How about the dissenting opinion? It's quite simple, they discuss the danger of cigarettes and their bad effect to the youth and also the fact that while the advertisement of any other addictive substance is prohibited in the broadcasting media, the advertisement of cigarettes (which could definitely be considered as an addictive substance) is not prohibited as long as the advertisement does not involve any visualization of cigarettes. Therefore, in their opinion, advertisement of the cigarettes in the broadcasting media should be deemed unconstitutional and should be prohibited.

I tend to support the Constitutional Court official decision. However, before I discuss my reasons to support the decision, let me tell you that I'm not a fan of cigarettes, in fact, I hate them. I can't breath normally when cigarettes are all around, they cause bad odors and will definitely ruin your health. I guess everyone knows that, after all each cigarettes advertisement contains a warning on the danger of smoking and its negative effect to human's health.

So why do I support the Constitutional Court decision? Simply because from legal point of view their analysis is correct. If the Government declares that an industry is legal to be established and operated in Indonesia, why prohibit such Industry to develop its business here, including making advertisements through various broadcasting medias? Such advertisement prohibition would be nonsense and it would be better if from the first place the Government banned the entire cigarettes industry in entirety. Further, it is also correct that rather than arguing the constitutionality of the advertisement of cigarettes in broadcasting media, it would be better to focus on enforcing the regulation on cigarettes advertising. You know, there are already many regulations in Indonesia which deal with the danger of cigarettes and the proper advertising mechanism for cigarettes. Why don't we improve these regulations instead?

Though I would love to see the banning of cigarettes in Indonesia, we need to look at a bigger picture here, as long as the benefit of having cigarettes industry in Indonesia is higher than the costs of having such industry, there would never be an end to the Indonesian cigarettes industry. The case becomes more difficult since the benefit of having the industry is easier to calculate, i.e. the amount of Government income from cigarettes duty and levies, the huge income of most of the cigarettes companies, and the amount of worker which are involved in this industry, compared to the costs of having such industry, i.e. bad development for the youth and public health which is very hard to calculate.

If we really want to prevent people from smoking in Indonesia, I would suggest that rather than prohibiting the development of the business which may also negatively affect the whole economy, we should build an industry which can provide the substitution of cigarettes in a more efficient way and can be easily accessed by all people, such as chewing gum or therapic medicines. If the Government really cares with the quality of life of its citizens, it can encourage the development of this cigarettes substitution industry by providing some incentives such as tax cut, subsidy, easier licensing, etc. Of course continuing education for the people on the danger of smoking would be always needed.

We can also use one of the most famous legal principle, i.e. people must be responsible for the externalities of their acts, or in a less complicated way, if you cause loss to other people, you need to be responsible to such loss and pay the damages. To certain extent, this has been reflected in our current regulation on cigarettes, i.e. this industry pays a huge amount of money to the Government in the form of tax and duties in order to run their business. Further discussion can be made on what kind of policy that need to be established in order to implement this principle.

In the end, our goal here is to replace the cigarettes industry through several stages in order to ensure that the transition would be smooth and would not adversely affect our economy. Remember, there are many stakeholders in this industry, and there is no easy answer when dealing with cigarettes industry. Let us hope that we can find a better solution in the future.