For years, the big tobacco companies have alleged that tobacco control laws breach international trade and investment agreements. This has been part of a coordinated strategy to reframe the arguments away from public health issues and towards unfounded international law concerns.
They have bombarded governments with threats and allegations through letters and written submissions to consultations, and have funded proxy or third-party organizations to make their arguments as well. These can have a real impact, or ‘chilling effect’ on government decisions to move forward with stronger tobacco control laws.
Yet the industry arguments are almost universally unfounded. The two investment law challenges brought by Philip Morris against Uruguay and Australia’s tobacco control laws were both dismissed, one being found to be ‘an abuse of rights’. The World Trade Organisation dispute against Australia’s plain packaging is reported to have been won by Australia (although the final panel report has not yet been published).
Examples of Threats and Allegations
Below are just a few examples of the threats and allegations made by the tobacco industry and their impact:
Namibia
In 2011, Namibia proposed regulations for 60% pictorial health warnings. BAT wrote to the Namibian government threatening that the proposed tobacco control act “risks violating important WTO obligations of Namibia” under WTO Agreements. Namibia’s Health Minister, Dr. Richard Kamwi, reports that “[w]e have bundles and bundles of letters from [the tobacco industry].” Namibia did not adopt health warning regulations until 2014, and these regulations required smaller health warnings covering 50% of packaging.
Togo
In July 2012, Togo passed a Decree which included requirements for text health warnings on 65% of packaging, a retail display ban and plain packaging. While the decree was still under consideration, British American Tobacco (BAT) wrote to the Ministry of Health in May 2012 claiming that the draft decree violated various regional and international trade rules. Philip Morris West Africa wrote to the Minister of Commerce in June 2013. The letter threatens an “incalculable amount of international trade litigation.” This letter was used on the John Oliver show which highlighted the intimidation tactics used by the industry against small countries. Togo has not yet implemented the plain packaging requirement.
Gabon
In 2012, Gabon proposed a decree that would require text-only health warnings on 50% of the front of packs. BAT wrote a letter that stated the proposed law breached various trade and investment agreements including the WTO Agreements and bilateral investment treaties. The decree was not adopted until 2016, although the requirement is now for improved pictorial health warnings.
United Kingdom
In 2012, BAT, along with all the other tobacco companies, wrote lengthy submissions to the UK’s consultation on standardized or ‘plain’ packaging. The submission by BAT claimed that plain packaging is “unlawful” and would require the Government to pay “very significant compensation.” It cited breaches of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and other WTO agreements and states that the proposed measure would “expose the UK Government to numerous claims from foreign investors under Bilateral Investment Treaties.”
The UK received submissions from many other organizations promoting the tobacco industry’s interests, including the American Chamber of Commerce (see below), making similar allegations. The UK did not adopt its standardised packaging regulations until March 2015.
New Zealand
In 2012, New Zealand held a consultation on standardized or ‘plain’ packaging. Philip Morris’ submission stated that “Plain packaging violates NZ’s international obligations under the rules of the WTO.” Similar submissions were made by other tobacco companies and their proxy organizations, in particular those associated with the American Chamber of Commerce. In December 2013, a bill was introduced to Parliament. The American Chamber of Commerce again wrote stating that the law would breach WTO agreements. In February 2014, the Prime Minister announced that the bill would be put on hold pending the outcome of an international investment arbitration challenge by Philip Morris against Australia’s plain packaging laws. The bill did not progress to a second reading until June 2016, after the Philip Morris v. Australia arbitration claim had been dismissed, resulting in a delay of over two years.
Note: All countries that have run consultations or government committees on tobacco plain packaging have received multiple similar submissions from the tobacco industry and the organizations that promote the industry’s interests alleging that the policy breaches international trade and investment agreements. This includes Australia, Ireland, Slovenia, Norway and Singapore. The UK and New Zealand are given as typical examples.
Jamaica
In 2013, the Jamaican government passed a law requiring pictorial health warnings covering 75% of the front and back of cigarette packs. The American Chamber of Commerce wrote to the Prime Minister asserting that the pictorial health warnings “erode the IP rights of trademark owners,” breach the WTO Agreements and alleged, incorrectly, that “the proposed measure is currently the subject of numerous disputes under the [WTO TRIPS] Agreement.” In 2014, Jamaica amended its regulations and reduced the size of the pictorial health warnings from 75% to 60%.
Moldova
In 2014, Moldova proposed a tobacco control bill which included large health warnings and plain packaging. The U.S. Chamber of Commerce wrote a letter to the President of Parliament warning that the proposed measures would “[call] into question Moldova’s commitment to observing its international trade agreement obligations.”
Pakistan
In February 2015 Philip Morris (Pakistan) Ltd wrote to the Prime Minister’s Office objecting to proposed law that would require 85% graphic health warnings. Philip Morris alleged the law would be a violation of Pakistan’s constitution as well as international obligations under WTO GATT and TRIPS agreements, highlighting in particular Art 20 TRIPS. The letter alleges that large health warnings have been proposed elsewhere then rejected after consultation. To date, the law requiring 85% warnings has not been implemented in Pakistan.
Ethiopia
In February 2015 Philip Morris South Africa wrote to the Ethiopian Minister of Health objecting to a Directive issued by the regulatory agency (EFMHACA). The Directive bans the use of characterizing flavors (including menthol) and other ingredients and prohibits the sale and manufacture of electronic cigarettes. The letter claimed that a ban of flavors created an obstacle to international trade and referred to international agreements such as the WTO TBT Agreement. The letter concluded that the Directive would mean the government of Ethiopia would be “non-compliant with various international instrument” and would create “barriers to free trade”.
Resources
The New York Times has run a number of articles highlighting the threats made by big tobacco companies and the U.S. Chamber Of Commerce: