Australia: Victorian government hired KPMG to consult on tobacco changes despite firm’s links to industry

Exclusive: transparency advocates condemn arrangement as ‘appalling’ while health department refuses to say how much consultancy was paid

The Victorian government paid a consultancy firm that has spent decades working for big tobacco to lead the state’s consultation on changes to tobacco and vaping laws, before the process was abandoned.

The state’s health department has repeatedly declined to say how much KPMG was paid for the work this year and did not answer questions about whether the international firm’s long association with big tobacco and its ongoing work for the industry were declared.

For several years, KPMG consultants based in London were paid by the world’s biggest tobacco companies to produce reports on illicit tobacco sales in Australia. The reports – which have been dismissed by public health experts – attributed a rise in illegal tobacco sales to the introduction of plain packaging laws and high tax rates.

This year, KPMG stopped producing these reports, which are funded by British American Tobacco, Philip Morris and Imperial Tobacco, but it continues to audit tobacco companies, including those seeking to influence policy in Victoria.

The recruitment of KPMG has been described as a “shocker” by Geoffrey Watson, a director of the Centre for Public Integrity, who has also criticised the department for not being upfront about the cost.

“It’s appalling,” Watson said. “It shows a lack of diligence from the government which was unable to ascertain whether the consultants were suitable for the job. The first line of questioning would have revealed they were not.”

Some tobacco industry sources were surprised KPMG was awarded the contract given the firm’s long history of working for them and ongoing audit work.

The outsourcing appears to be necessary, given the World Health Organization Framework Convention on Tobacco prevents public officials from dealing with the tobacco industry.

That same convention requires public officials to avoid and manage conflicts of interest and to protect public health policies in relation to tobacco control “from commercial and other vested interests of the tobacco industry”.

“Surely a company that has a long history of working for big tobacco is the last one you’d want to be leading a public consultation on changes to our tobacco and vaping laws,” said Geraldine Mellet, the co-chief executive director of the Australian Council of Smoking and Health.

Other public health experts have also questioned why another consultancy firm without a history of working with big tobacco didn’t get the contract.

“There is a legitimate concern about any government seeking advice about management of such a deadly product as tobacco from a company that’s had a history of working for that industry, said Prof Terry Slevin, the chief executive of the Public Health Association of Australia.

A state government document obtained by Guardian Australia shows KPMG was paid to “consult with key stakeholders to further understand the impacts of a range of opportunities to strengthen the regulatory framework for the sale of tobacco and e-cigarettes”. The firm did not make recommendations to government.

The documents show KPMG would lead discussion around topics including: “What could be done to minimise the possible burden on the industry?”, and “What should the Victorian government consider in the implementation of any changes?”.

The health department document concedes the “Victorian government has insufficient oversight and control over the sale of tobacco and e-cigarette products”. It also said the department was not seeking written submissions beyond the KPMG consultations.

The consultation process to inform “a more effective regulatory approach” was abandoned in May when the federal health minister, Mark Butler, announced several reforms. The Victorian government believed its own reforms were out of step with the federal government’s.

Theo Foukkare, the chief executive of the Australian Association of Convenience Stores, said “the proposed framework was suggested to mirror the excellent work that the Queensland government have completed which has now passed through parliament and become law”.

KPMG and the Victorian health department declined to comment.

The Greens senator Barbara Pocock, who is part of an ongoing inquiry into consultants, said KPMG should never have been given the contract.

“The bureaucrats in the Victorian government who signed up big tobacco’s go-to consultants KPMG, must have rocks in their heads if they think there’s no conflict of interest here,” Pocock said.

Tobacco industry researchers and Guardian Australia have been unable to find any government contract on the Victorian government’s database relating to KPMG’s work. The department insists the contract has been published, but has repeatedly declined to share a copy.

“It’s taxpayers’ money,” Watson said. “We are entitled to know how they are spending it, why they are spending it, it whom they are spending it upon.”

Source: The Guardian