JAKARTA - The Indonesian Tobacco Industry Association (IHT) has applied for protection to President Prabowo Subianto for various regulatory plans that are considered not in line with the sustainability of the IHT ecosystem. The IHT association coalition asked the President to save the industry from regulations that are not in line with economic sovereignty.
In a press conference held on Tuesday, March 10, the IHT association coalition expressed concern over the threat to the continuity of employment and the livelihood of millions of children who will be affected by a number of regulations on the draft regulations derived from Government Regulation Number 28 of 2024 concerning the Implementation Regulation of Law Number 17 of 2023 concerning Health.
According to them, there are three draft regulations that threaten the sustainability of IHT, namely the determination of the maximum level of nicotine and tar, the prohibition of additives, and standardization of packaging (plain packaging).
The Coordinating Ministry for Human Development and Culture (Kemenko PMK) is currently drafting regulations on nicotine and tar levels based on foreign standards with very low thresholds.
"This provision cannot be met, especially by the kretek cigarette industry which covers about 97% of the total national cigarette production. This is because kretek cigarettes use local tobacco and clove raw materials which naturally have higher nicotine and tar content than imported tobacco," said a representative of the IHT Association.
They said that the regulation of nicotine and tar levels has been regulated through the Indonesian National Standard (SNI) set by the National Standardization Agency (BSN). The process of formulating SNI has involved all stakeholders, government, manufacturers, consumers, and experts, so that it becomes a valid reference.
They reminded that if the new draft regulation is enacted, it will be in conflict with Law Number 20 of 2014 concerning Standardization and Conformity Assessment, and has the potential to kill up to 97% of national cigarette manufacturers, which will have an impact on the loss of around 5.8 million jobs.
Apart from the issue of industry sustainability, this draft regulation also has the potential to reduce state revenues by more than Rp200 trillion per year from the tax sector (not including other tax contribution revenues), and will cause overlapping regulations that will confuse the public.
The Ministry of Health is currently also drafting a Minister of Health Decree on prohibited additives in tobacco products and electronic cigarettes. The draft decision prohibits the use of almost all additives, including those in the food grade category.
Until now, additives are used to improve the taste and character of the product, including cooling agents such as menthol, sugar, and other ingredients. If this ban is enforced, the legal cigarette industry will not be able to meet the provisions, so it has the potential to stop its operations. This condition will trigger an increase in the circulation of illegal cigarettes, so that the initial goal of regulation to improve the degree of public health will not be achieved.
In addition, the Ministry of Health is also drafting a draft regulation of the Minister of Health regarding packaging standardization (plain packaging) which will have an impact on the loss of the original identity of tobacco products.
"The proposal for standardization of color and packaging design is not mandated in PP No. 28/2024. In addition, the implementation of this policy will also eliminate the brand identity that has been registered with the Directorate General of Intellectual Property and is contrary to Law Number 20 of 2016 concerning Brands and Geographical Indications," said one of the speakers.
The IHT association coalition reminded the government that the plain packaging policy would make it more difficult to monitor and eradicate illegal cigarettes due to the loss of product differentiation and identity in the field.
If the three provisions above are implemented, the impact will threaten the sustainability of the IHT ecosystem as a whole, including the potential loss of state revenues of hundreds of trillion rupiah, 5.8 million jobs, and billions of dollars in foreign exchange per year.
"The disruption of the people's economy that can trigger a prolonged social-economic crisis will not achieve the initial goal of regulation to improve the health status of the community," said one of the speakers.
In this case, the IHT association coalition asked President Prabowo to:
- First, stop the plan to set the limit of tar and nicotine levels, the prohibition of the use of additives in tobacco products, and the policy of standardizing packaging. - Second, encourage the government to immediately establish a roadmap for the Indonesian Tobacco Industry as a meeting point between interests, to protect and provide legal certainty for the sustainability of the Indonesian tobacco industry.
"We ask the honorable President Prabowo to accept us for an audience so that there is legal certainty for the continuation of the national tobacco industry," concluded one of the speakers.
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