From Age 2 to 7: Why Are Children Smoking in Indonesia? Seven-year-old smoker: It 'tasted good, like candy.'

Sept. 9, 2011  -- He is a thoroughly modern icon: the cherubic toddler now known around the world as the "smoking baby." More than 13 million people have watched a YouTube clip of the two-year-old puffing hungrily on cigarette after cigarette, twirling them in his hands. But while many viewed this video with amusement and perhaps some shock, it appears this "smoking baby" is just the tip of the iceberg.

Indonesia, the fourth most populous country on earth, appears to be in the throes of an uncontrolled tobacco habit. It is a place where domestic and international tobacco companies are able to operate ways they haven't been able to in the U.S. for 41 years.

This is a country where, as soon as a visitor steps off the plane, he is bombarded with cigarette ads on billboards and logos; and where, as "2020" found out, there is more than one "smoking baby."

In a tiny fishing village in Eastern Java, lives an adorable two-year-old boy named Chairul. Soon after awaking from a nap, he lights up with the help of his own grandfather. The grandfather says he allows Chairul to smoke because it tastes good, "like bread with chocolate."

As Chairul smokes beside him, his grandfather said he doesn't think it is a problem.

"He sometimes smokes two packs a day," he said, though it appears Chairul does not inhale. Yet he puffs away, exposed to the smoke around him.

When warned about the health effects of cigarettes, Chairul's grandfather said: "If the boy doesn't smoke, he doesn't feel good." It's all right, he said, "as long as he drinks enough coffee with his cigarettes."

As strange as that may seem, Chairul is no fluke. In a town a few hours to the south, "20/20" found a seven-year-old boy who also smoked while his family looked on.

His name is Maulana, and his mother said he has been smoking since he is two, but she hopes he quits when he goes to school this year.

As to why she allows her son to smoke, Malauna's mother said: "I can't just stop him abruptly, because he gets weak and cries. It has to be done slowly."

It is estimated that about a million children in Indonesia under the age of 16 smoke, and that one third of Indonesian children try smoking before the age of 10. In Indonesia, it is perfectly legal for a child of any age to buy and smoke cigarettes.

This, despite hundreds of international studies showing tobacco is addictive and harmful. The World Health Organization says tobacco kills more than five million people annually.

In the U.S., tobacco companies haven't been allowed to advertise on TV in 41 years. So, unable to market freely at home, big tobacco has increasingly turned overseas, where they are using the very tactics to reach young people that have long been banned in America.

Marketing Cigarettes to Young People

In 2008, Altria, the parent company of Philip Morris USA, spun off its international operations, Philip Morris International. In 2005, PMI had acquired Indonesia's third largest tobacco company, Sampoerna. Selling a mix of Philip Morris brands and popular Sampoerna brands, PMI is now the number one tobacco company in Indonesia, with an estimated 30 percent of the market.

But to what extent does PMI market to young people? ABC News obtained internal documents from 2005, when PMI was acquiring Sampoerna. These documents target one Indonesian brand, A-Mild to become the "destination brand… for aspirational young adult smokers."

A-Mild "does not just understand the spirit of the new generation of Indonesians, but it is also their spirit / their voice!" said another document.

ABC News wanted to talk to Philip Morris International, whose headquarters are in New York. After they declined, they sent this e-mail:

"We support the strict regulation of tobacco products. In Indonesia we have repeatedly urged the government to introduce tobacco regulation that bans sales to minors, restricts advertising and sponsorship and mandates stronger health warning requirements."

Critics say that PMI's advertising, packaging and marketing is seen by children. Tobacco companies in Indonesia routinely sponsor rock shows in outdoor venues and on television, in ads that feature attractive young people.

In a second e-mail, Philip Morris International wrote to ABC News:

"We have also taken several steps in the absence of comprehensive regulation, such as restricting access to events we sponsor to people aged 18 and above, requiring proof of age with a valid ID card."

ABC News also found tobacco billboards and even a kiosk near a school, where students were able to buy individual cigarettes for about a dime.

PMI responded: "Clearly cigarettes should not be sold to minors, whether individually or in packs. This practice highlights the need to have a minimum age law in place and, importantly, enforced. We will continue to encourage the Indonesian government to introduce a ban on sales to minors in the shortest possible time frame."

"Philip Morris [International] has maintained a standard public stance, that it does not market to children, that it does not want children to smoke," said tobacco control activist Mary Assunta, who has worked in Indonesia. "But the evidence on the street says otherwise, that they need to market to children, because we know that the bulk of smokers start smoking when they are children. You've got to catch them young."

Matthew Myers, the president of the Campaign for Tobacco Free Kids, calls Indonesia "the Wild West for the tobacco industry."

"We see marketing practices that we haven't seen in the west in 20, 30 and 40 years," he said.

Anti-tobacco legislation has died in parliament, tied up by red tape, and, critics say, tobacco industry influence. This is a place where " pro-tobacco" rallies are organized by tobacco farmers and even religious groups. Recently, thousands surrounded the presidential palace protesting a new bill that would ban cigarette advertising and sponsorship, prohibit smoking in public and add graphic images to packaging.

In 2009, there was even a clause taken out at the last minute from a health bill saying cigarettes are addictive. The Center for Public Integrity's International Consortium of Investigative Journalists, in conjunction with ABC News, has reported on barriers to passing tougher anti-tobacco legislation.

"Indonesia is the perfect example of what happens when you let the industry do whatever it wants to market to young people and the government does nothing to counteract it," said Matthew Myers. "It's a deadly combination. A government who's doing nothing to protect its citizens and a tobacco industry that will market to anybody of any age."

Indonesia's Minister of Health, Dr. Endang Sedyaningsih, who studied at Harvard University, said more than 400,000 people die in Indonesia every year of tobacco-related causes. But she said she can't push too hard for change, for fear her efforts will backfire if she does.

Can Children Quit Smoking?

Referring to the tobacco companies, she said: "I just don't like them, but… I don't talk loudly about this. If I push too hard then I will get a strong reaction."

Dr. Endang cited a troubling statistic: "I can say sadly that children aged 10 to 14 who start smoking is actually rising from 2007 to 2010."

And then there is that famous "smoking baby." His name is Aldi Rizal and he is now a chubby four-year-old who lives in rural Sumatra with his family in a one-room hut.

After the video aired, embarrassed local health officials set him to rehab in Indonesdia's capital, Jakarta. Now, Aldi's mother says he is no longer smoking. At least for now, she told "20/20."

"If I don't buy him toys, he threatens to start smoking again," said his mother.

Aldi promised not to smoke, though his mother said she caught him with a cigarette recently because people in town offer them to him when he visits.

But living in this environment, where cigarette companies have such free rein to transmit their message, quitting for the children of Indonesia may be easier said than done.

ABC News teamed with the Center for Public Integrity's International Consortium of Investigative Journalists (ICIJ) in reporting on the tobacco industry in Indonesia. This week, ICIJ released a report on the barriers to passing tougher anti-tobacco legislation in Indonesia.

Philip Morris International is the leading international tobacco company, with tobacco products sold in approximately 180 countries. In 2010, PMI captured an estimated 16 percent share of the total international cigarette market outside of the U.S., excluding China. In 2010, Philip Morris International reported worldwide revenues of $27 billion and an operating income of $11.2 billion, according to the company's annual report. PMI spends more than $200 million marketing in Indonesia, and overall sales have increased by 25 percent in the last decade. For more information about smoking in Indonesia and Philip Morris International visit these websites:

http://www.pmi.com

http://www.seatca.org/

Watch the full story on "20/20" online.