Questions abound over EU’s #TrackAndTrace system

| May 20, 2019

According to recent reports, the EU’s long-awaited track and trace (T&T) system for cigarettes is expected to be up and running in “maximum one year” after its official launch date of 20 May, 2019. The system was conceived under the 2014 Tobacco Products Directive, which aimed to help tackle the illicit trade in tobacco products – a problem that is estimated to generate annual losses of more than €10 billion to member states. Yet substantial problems remain with the proposed system, prompting public health advocates to question how much of an impact it will have once it is finally fully functional.

Underlying questions

As it stands now, the EU’s T&T system has spurred extensive criticism, particularly since the entry into force of the World Health Organization (WHO) Protocol to Eliminate Illicit Trade in Tobacco Products in September 2018. MEPs have claimed that the Protocol provisions excluding tobacco industry involvement in the system are breached by the EU’s regulations, which entrusts key missions to the tobacco industry. There are also questions over whether public authorities are in full control of the system, as per WHO requirements. Hopes are running high that the European Court of Justice, which is currently hearing a case challenging this very point, will put the issue to rest.

For their part, Commission officials and tobacco industry representatives have rebuffed these accusations, claiming the EU system is sufficiently compliant with the requirements set forth in the WHO regulations. They point to the fact that while the tobacco industry has the ability to appoint and remunerate some of the providers involved in the system, provisions have been adopted to ensure they retain a level of independency from industry. For example, providers must not generate more than a fifth of their annual turnover with this actor to remain financially independent.

But that 20% threshold is in itself a rather low bar compared to WHO rules that block the tobacco industry from any sort of involvement in regulatory policies. Indeed, most of the providers selected to take part in T&T, including IBM, Honeywell, and Atos/Wordline, are longtime tobacco industry partners. This question is particularly sensitive, since historic tobacco industry partners have at various points implemented or even promoted industry traceability systems, most notably Codentify.

Codentify is a pack marker system that was initially created by Philip Morris International (PMI), and later licensed to its three main competitors, who then promoted it to national governments via third parties. Though PMI and other industry players claim the system is independent, a vast web of special interests nonetheless taints Codentify. The WHO has confirmed as much, saying that this system could not be considered compliant with its own regulations.

For further proof of the insidious way in which the T&T system could end up being steered away from its stated public health goals, look no further than the appointment of Japanese giant Dentsu Aegis Network to manage the system’s data storage. In a nutshell, this is one of the central security features of the T&T system, collecting all the member states’ data on the movement of cigarette packs throughout the continent. Surprisingly, the Commission did not organize a public tender for this part of the system, awarding the contract directly to Dentsu.

But Dentsu itself has ties to the tobacco industry: in 2017, it acquired Blue Infinity, a company whose T&T system is directly derived from Codentify. For a company that has a long history working for Japan Tobacco International, Dentsu’s acquisition might have helped them diversify their revenue streams away from the tobacco industry.

No political will 

On top of all of these issues that should worry public health advocates everywhere, the EU T&T system also faces innumerable obstacles to its successful implementation. Some member states have failed to appoint the companies in charge of generating the unique codes that will be affixed on cigarette packs, choosing instead to work with providers picked by other EU countries. While this might be a convenient state of affairs for some, it falls short of WHO principles and guidelines – not to mention Member States’ own sovereignty.

In response to these issues, the Commission took yet another disturbing step during a May technical briefing: it provided an exemption that allows economic operators involved in the tobacco supply chain to choose themselves the company that should issue the T&T codes, from those already working in other member states. While the measure is meant to be temporary, this exemption appears to constitute yet another weakness of the EU system.

Taken altogether, these series of shortcomings prove the age-old saying “the devil is in the details”. While a T&T system for cigarettes has been on the wish list of public health NGOs for years, the one the EU decided to implement is weakened by many loopholes hidden in its technical standards.

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Category: A Frontpage, Cigarettes, EU, EU, Health

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