Indonesia's tobacco industry is warning that moves to adopt international laws to limit smoking would lead to massive job cuts and billions of dollars in lost tax revenue. Critics in Indonesia say the government is bowing to the tobacco companies in the hope of seeing a reward at the ballot box.

Presenter/Interviewer: Marion MacGregor

Speakers: Mia Hanafiah, vice-president, Indonesia's National Committee on Smoking Control; Budi Primawan, corporate communications manager, British American Tobacco Indonesia

MacGregor: Smoking may have become passe in some countries, but not in Indonesia. Here, in a bid to attract more young smokers, the tobacco industry has been recruiting musicians like the popular boy band 'Padi' to promote the message that smoking is most definitely 'in'. While government restrictions on tobacco advertising do exist, the vice president of the national committee on smoking control, Mia Hanafiah says they're being ignored.

Hanafiah: In 1999 when Mr Habibie was president, these government regulations were issued for the very first time and it was quite strong it was prohibited at all ... any sort of advertising was prohibited. But then we changed president, and it was weakened, and then we changed another president and it was totally ...it's just there's no implementation, no enforcement at all.

MacGregor: The ubiquitous cigarette advertising certainly seems to be working. Currently over sixty per cent of Indonesian men smoke, and more are starting. Indonesians are the fifth highest consumers of tobacco products in the world today. Despite this, the country's 155-plus tobacco companies have been complaining of declining sales, which they blame largely on increased taxes on cigarettes. Budi Primawan is the corporate communications manager at British American Tobacco Indonesia.

Primawan: We can say that excise do have impacts on the industry. That's why the industry in general are keen to have a good co-operation with the government in finding a good excise system which will provide a win-win solution to all relevant parties.

MacGregor: In other words, no higher duties in the future?

Primawan: I'm not saying that (laughs)... All we are seeking, all the industry, not only BAT, is a win-win solution with the government.

MacGregor: Tobacco excise contributes around eleven percent to government revenue in Indonesia. It's been increased five times since 1999, but still it remains among the lowest in the region. Anti-tobacco lobbyists have been pushing for higher prices, which they say would ultimately reduce rates of smoking, easing the massive burden on the health system. They also want the government to force the makers of kretek, the aromatic mix of tobacco and cloves preferred by ninety percent of Indonesian smokers, to cut tar levels. But in an election year, there's little chance of that. Mia Hanafiah again.

Hanafiah: This sort of cigarette is produced in the regions where a lot of constituents of the majority parties are there, so the farmers, the industry is mainly in these regions where the ruling party has its constituents.

MacGregor: With the July fifth presidential election approaching, the clock is also ticking for countries to sign on to the first international treaty on smoking, the Framework Convention on Tobacco Control, by the 29th of June. Mia Hanafiah says the tobacco industry has made unrealistic threats of mass lay-offs of farmers and factory workers to pursuade the government not to come to the party.

Hanafiah: You know there's a very strong lobby, and they use an exaggerated concern that if the FCTC is signed it will immediately have a disruptive influence on the industry including tobacco farmers. Well in the long run of course it would take years and years so the government actually has ample time to do something about it. But the problem is there's no political will. And we should start somewhere, that's what we always say.