Pakistan award of tobacco track-and-trace contract slammed

Pakistan has awarded its tender for a tobacco track-and-trace (T&T) system to National Radio & Telecommunication Corporation (NRTC), but the decision has come in for immediate criticism.

NRTC won a competitive tender run by Pakistan’s Federal Board of Revenue (FBR) for the traceability system, which is due to come into effect by the end of next March. It proffered the cheapest solution at Rs 731 per 1,000 tax stamps, although a typo in its application which set the price at Rs 0.731 almost scuppered the bid.

It has been accused of being too close to the tobacco industry, contravening the obligations of the World Health Organisation’s Framework Convention on Tobacco Control (WHO FCTC) Protocol which officially came into force last year.

The criticism comes from the International Tax Stamp Association (ITSA), a longstanding opponent of what it claims is tobacco industry’s inappropriate involvement in track-and-trace initiatives, including the traceability elements of the Tobacco Products Directive in Europe.

“Given that the NRTC’s…solution is provided by a company (Inexto) that depends on the tobacco industry for almost all of its revenue and that promotes the use of the industry’s own Codentify technology for T&T, there is a clear case here of protocol transgression,” warns the association.

Pakistan is one of the 56 parties that have ratified the protocol, which seems to eliminate entirely the illicit trade in tobacco products.

ITSA alleges that a week before the tender closed, a lobbying meeting took place between FBR and tobacco firms, which it says is at odds with Article 5.3 of the protocol, which requires governments to protect tobacco control policies from commercial and other vested interests of the industry.

Shortly after that “the FBR changed the tender selection procedures and criteria to place greater importance on price and less emphasis on technical qualifications,” it asserts.

Similar complaints have been voiced by the Campaign for Tobacco-Free Kids, whose local representative – Malik Imran – told Pakistan Today that “NRTC has no experience of installing track and trace system on a manufacturing site”, adding: “Its global partner is Inexto, a company funded by the tobacco industry.”

The illicit trade in cigarettes is estimated to cost Pakistan some Rs 40bn (around $500m) each year in evaded taxes.

Juan Carlos Yañez Arenas, chairman of ITSA, says: “This case highlights the heavy influence that the tobacco industry continues to have on certain governments around the world. Inexto derives almost all of its revenues from the industry, so can hardly be said to be operating from a position of independence or neutrality.”

He adds: “The FBR took the decision to ratify the FCTC Protocol but in practice does not seem willing to adhere to the principles set out in it, as is being highlighted by NGOs who have expressed their concerns.”