Australia: International Lobbying

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Mobilising Tobacco Growing Countries Against Plain Packaging

There is direct and indirect evidence that the tobacco industry has tried to mobilise tobacco growing countries in its fight against plain packaging.

On 27 May 2011, ABC's Lateline programme revealed that a former ambassador to the World Trade Organization (WTO) had been lobbying Malaysia to oppose plain packaging.[1] Peter Allgeier – a former deputy trade representative to George Bush, and then at the Washington-based consultancy firm C&M International- reportedly met with a Malaysian government minister as part of his efforts to derail the legislation.

According to Lateline:

"C&M International has a history of working with the tobacco industry. In 2000 they offered their services to British American Tobacco when the framework convention on tobacco control was being negotiated in the US. C&M's legal firm also has a long-term relationship with the largest American tobacco company, Philip Morris."

It detailed the contact between Allgeier and Malaysia:

"An email sent to a Malaysian official shows Mr Allgeier has been lobbying Malaysia to put pressure on Australia over plain packaging, and refers to a meeting he had with Malaysia's trade minister. 'There are several opportunities forthcoming for Malaysia and other like-minded governments to persuade Australia not to proceed,' he said. 'One option is to raise concerns in response to Australia's notification to the WTO TBT Committee, which meets on June 15-16. A second option is to address this issue at the next WTO TRIPs Council meeting on June 7-8. A third option is to respond to Australia's request for comment on its draft legislation, which is open for comment until June 6.'"

The following month, several tobacco growing countries attacked the plan at a WTO meeting. The Dominican Republic led a push backed by eight countries, saying it had "serious and grave concerns" that the plain packs would hurt tobacco producers in small and vulnerable economies. An official WTO report of proceedings said "support or sympathy" for the Dominican Republic argument came from Honduras, Nicaragua, Ukraine, the Philippines, Zambia, Mexico, Cuba and Ecuador. [2]

International Objections to Australia's Plain Packaging Legislation

On 21 November 2011 the Australian Parliament passed the world's first plain packaging legislation. Hours later a Philip Morris Asia press release announced that it had started formal legal proceedings under the Arbitration Rules of the United Nations Commission on International Trade Law 2010, claiming the legislation did not comply with The Australia – Hong Kong Bilateral Investment Treaty.[3]

This was contentious because Philip Morris Asia only became a large shareholder of its Australian counterpart after the Australian government announced that they would be considering plain packaging. International law expert Andrew Mitchell highlighted that the timing of Philip Morris Asia’s acquisition of shares in Philip Morris Australia on 23 February 2011, 14 months after the Australian Government announced its intention to introduce plain packs, is a concern. It suggests the acquisition was a strategic move in order to make this argument.[4] “It will be very difficult to argue that at the time of making that investment they had a legitimate expectation that plain packaging wasn’t going to be introduced when the Government had already announced it was going to do exactly that,” he said.[4]

On 18 December 2015, the Permanent Court of Arbitration issued a unanimous decision that it had no jurisdiction to hear Philip Morris's claim.[5][6][7]

In addition to the challenges made by Philip Morris Asia under the auspices of The Australia – Hong Kong Bilateral Investment Treaty other legal challenges have been made via the World Trade Organization (WTO).

On 5 May 2014, panellists were appointed to examine the complaints of the Ukraine, Honduras, Dominican Republic, Cube and Indonesia.[8] These countries argue that plain packaging law breaches the WTO’s General Agreement on Tariffs and Trade (GATT), Agreement on Technical Barriers to Trade (TBT Agreement) and Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS Agreement) because plain packaging is discriminatory, more trade restrictive than necessary, and unjustifiably infringes upon trademark rights.

It is claimed that Philip Morris is covering some legal costs for the Dominican Republic and Cuba and British American Tobacco are doing the same for both Ukraine and Honduras.[9][10]

TobaccoTactics Resources

Notes

  1. Steve Cannane, "Malaysia being lobbied to derail cig packaging laws", ABC, 27 May 2011, accessed 7 June 2011
  2. Mark Metherell, "Developing nations hit at tobacco pack plan", The Age, 9 June 2011
  3. Philip Morris Asia Limited, Philip Morris Asia Files Lawsuit Against the Australian Government over Plain Packaging, News Release, 21 November 2011, accessed December 2011
  4. 4.0 4.1 L. Mezrani, Tobacco challenges unlikely to succeed, 17 August 2012, accessed October 2012
  5. J. Mather, Philip Morris loses case against Australia’s plain packaging law, Financial Review, 18 December 2015, accessed December 2015
  6. D. Hurst, Australia wins international legal battle with Philip Morris over plain packaging, The Guardian, 18 December 2015, accessed December 2015
  7. G. Hutchens, Australian government wins plain packaging case against Philip morris, The Sydney Morning Herald, 18 December 2015, accessed December 2015
  8. McCabe Centre for Law and Cancer, Dispute in the World Trade Organization: Latest developments, accessed December 2015
  9. A. Martin, Philip Morris leads plain packs battle in Global Trade arena, Bloomberg Business News, 22 August 2013, accessed December 2015
  10. Andrew Martin, Philip Morris Leads Plain Packs Battle in Global Trade Arena, Bloomberg, 22 August 2013, accessed July 2014