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A Stateless Philip Morris?

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The tobacco industry has long been at the cutting edge of corporate irresponsibility.

Not just in selling a product that when used as intended kills, but in innovating new ways to market to consumers, influence politicians, undermine citizen power and immunize itself from regulatory control and legal liability. Big Tobacco's imagination knows no bounds.

Now Philip Morris is planning a new escape from accountability. If a handful of major lawsuits break Philip Morris's way over the next year or so, Altria, the parent company of Philip Morris, plans to split into three independent companies: Philip Morris USA, Philip Morris International, and Kraft.

Philip Morris is the world's largest tobacco multinational, and although the United States remains its most profitable market, most of its business is overseas: Eighty percent of sales are outside the U.S. market.

As aggressive as Philip Morris has been in marketing its wares, it has felt at least a little constrained by public opinion in its home country and most important market, the United States, as well as by the (dormant) possibility of U.S. domestic regulation of its overseas operations and the possibility that it might be held liable in U.S. courts for what it does overseas.

Those constraints will likely no longer apply after a breakup, with Philip Morris International an independent company with no or very limited ties to the United States, or to any other single country. Philip Morris International is on the verge of becoming what amounts to a stateless corporation.

In conjunction with Philip Morris's annual meeting yesterday, more than 100 organizations from 50 countries called on Philip Morris International to "make commitments -- in advance of a breakup -- to ensure that the separation of Philip Morris International and Philip Morris USA does not worsen the tobacco epidemic." (Essential Action, a corporate accountability group I direct, helped organize this effort.) The demands, organizational endorsers and related materials are available at this link.

In the deregulated world in which corporations now operate, no government has the authority to block Altria's plans, even if it wanted to. Governments can and should adopt strong anti-smoking rules, such as those called for in the Framework Convention on Tobacco Control, and 100 percent smokefree rules. But a planned restructuring of the world's largest tobacco multinational, with potentially grave consequences, doesn't even have to face a public health review.


A happier footnote: At yesterday's annual meeting, Altria CEO Louis Camilleri was confronted by protesters, including Maori activists who came from New Zealand to denounce the company for selling a "Maori Mix" brand in Israel. Camilleri repeatedly apologized for the marketing effort.

Maori Smokefree Coalition Director Shane Bradbrook told Camilleri,

"Let me tell you, this product called Maori Mix was an absolute affront to my people.

"Your company's misappropriation and exploitation of our culture to sell your product of death and illness to Israelis was at a minimum culturally insensitive -- and at worst another form of oppression and abuse that indigenous peoples have faced for decades.

"I stand before you to hold you in absolute contempt and derision. I don't expect a weak apology or some glib rationale from you for associating our culture with Maori Mix. But I do have a message for you: do not misrepresent, do not associate our proud culture with your deceitful practices and product."

After Camilleri issued his apology, Bradbook told the Altria CEO that he would accept the apology, but that he rejected the idea that the company made a "mistake." Said Bradbook, "You spend millions of dollars on marketing and research. You never make mistakes."