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HALF-HEARTED TOBACCO CONTROL

http://www.thejakartapost.com/news/2016/10/04/half-hearted-tobacco-control.html

With the current government aiming high on health development, its decision to raise cigarette excise by an average of 10.54 percent starting next year shows otherwise. The incremental increase affirms the government’s lackluster effort to build a healthy nation to say the least.

When the Finance Ministry regulation takes effect in January, cigarette retail prices will only go up by 12.26 percent from the current price. History beckons that excise rate hikes on cigarettes have so far failed to force smokers to quit the habit.

Many of them did not even reduce their cigarette consumption either. That happened because the cigarette retail price remained affordable for everybody, including teenagers who relied on pocket money from their parents to indulge their smoking habit.

We could have expected a far different story had the government taken a bold move by setting an extremely high duty that would double or triple the cigarette retail price. The considerably low cigarette prices is one of the reasons why the smoking population in the country keeps growing.

The latest UN Office of Drugs and Crime data found that Indonesia’s average cigarette price of US$1.32 per pack is among the cheapest in the world. In Southeast Asia, Indonesian cigarette prices are only more expensive than in fellow developing countries Cambodia, the Philippines and Vietnam.

In developed countries, apart from enforcement of regulations and legislation discriminatory against smokers, retail cigarette prices are set very high so as to deter people from smoking.

A few months ago, a study conducted by a University of Indonesia medical doctor sent shockwaves after finding that the majority of 1,000 respondents he surveyed said they would consider giving up smoking if pack of cigarettes increased to Rp 50,000 (US$3.80).

The Central Statistics Agency (BPS) has found that 70 percent of Indonesian smokers come from the poor families. It can be safely said had the government taken the survey into consideration in setting the new cigarette excise, the country’s population of smokers would likely dramatically decrease.

There is a risk, however, of rampant trade of illegal cigarettes if the excise is set too high. But it will boil down to the government’s commitment to improve monitoring. The Trade Ministry and Industry Ministry will contribute a lot in fighting illegal trade in cigarettes through registration of all cigarette machines operating in the country.

Various studies have discovered that the costs of treating tobacco-related diseases, not to mention production loss, outweigh state revenue from cigarette excise. The Global Adult Tobacco Survey (GATS) in 2014 revealed that cigarette consumption killed 190,260 people in Indonesia that year, or 500 lives lost every day. The number would skyrocket if it includes passive smokers, who are more vulnerable to cigarette-related diseases than smokers themselves.

The question that remains unanswered is why the government, despite the evidence of cigarette harm, has for a long time acted in favor of the tobacco industry and all multiplier effects it has created that go against the noble goal of promoting good health for all.

Enact Total Ban on E-Cigarettes and Enlargement of Pictorial Health Warnings Promptly

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Tonight with Tim Modise | A Billion Lives

Tobacco addiction has led to the deaths of millions around the world with South Africa is joining the cause to have smoking banned.

According to a new documentary, e-cigarettes and vaporizers are a solution to kicking addiction but they aren’t made accessible & this info is kept secret by large corporations because they st and to lose billions.

Tim Modise talks to Aaron Biebert, ‘A Billion Lives’ Film Director & Medical Expert, Dr Delon Human.

Anti-tobacco law to be upgraded with harsher punishments, fines

One decade after a law to control tobacco use went into effect, the government is finally pledging to give teeth to the legislation. Violators could face increased fines and even prison time, health officials warn.

http://www.mmtimes.com/index.php/national-news/22333-anti-tobacco-law-to-be-upgraded-with-harsher-punishments-fines.html

Dr Thuzar Chit Tin, director of the Ministry of Health and Sport, said the 2006 Control of Smoking and Consumption of Tobacco Products Law is in the process of being updated, with fines raised to reflect the current economy and act as a bigger disincentive.

Under the existing law, advertising tobacco products, distributing cigars, cigarettes or other tobacco products free of charge, sponsoring sports and other exhibitions, or publicising tobacco by any means is subject to a fine ranging from K20,000 to K50,000 for the first offence, rising to a maximum of K200,000 or two years in prison for subsequent offences. Penalties also apply to anyone who tries to obstruct or assault officials trying to prevent smoking in a no-smoking zone.

“Amendments will be made to the law to upgrade the punishments” and bring them into conformity with current conditions, said Dr Thuzar Chit Tin on September 1.

Myanmar launched a tobacco-free program in 1980, after introducing its first anti-smoking legislation in 1959 with an act that banned smoking in theatres.

Though the consumption of cigarettes and tobacco products decreased in 2007 after the control of smoking law came into effect, usage subsequently increased, apparently in part because of lax enforcement, particularly with regard to the ban on selling cigarettes within 100 feet (30.5 metres) of a school, or selling single cigarettes. Tobacco companies were among the first to quickly enter the country after the government began relaxing import restrictions.

According to a 2014 survey, the rate of tobacco use in Myanmar is 26.1 percent of the population, including 43.8pc of men and 8.4pc of women. About 80pc of smokers use tobacco every day. About 7pc of students smoke, and 17pc use cigars or other forms of tobacco.

The rate of betel use is higher, with 43pc of the population consuming betel, including 62pc of men and 24.1pc of women.

One of the problems in countering consumption, Dr Thuzar Chit Tin said, is that tobacco, betel and pickled tea leaves are considered traditional leisure activities, and their use seems to be rising. “We need to educate the public about the dangers of smoking,” she said.

However, she said, the tobacco industry is very powerful and influential compared to the resources available to the government. “The tobacco industry influences policymakers and the media. They have the financial resources to ensure that what the industry says gets better media coverage than the information we provide.”

She added that the updated law could also apply some of the tax derived from tobacco products to the health sector and to public education drives intended to reduce smoking.

In 2010 the government doubled the tax on cigarettes to 100 percent, while taxes on other tobacco products, including cheroots, were raised to 50pc in 2012. Additionally, shops are required to charge a 5pc sales tax. But according to the Internal Revenue Department, most cigarette producers do not pay the tax because of a lack of enforcement.

But measures to scale up the warning labels on tobacco products have gained traction. In 2014, the Myanmar Cigarette and Tobacco Products Consumption Controlling Central Committee added picture and text health on packaging and branding tobacco products. In June, the Ministry of Health announced that warning labels must appear on all brands of tobacco products in Myanmar from September.

The ministry released a notification in February calling for the implementation of the 2006 law. But the six-month period that was to have elapsed before enforcement began has been extended a further six months following appeals from the industry. The law is now expected to come fully into force in March 2017.

Translation by Thiri Min Htun

Cigarettes & Tobacco in Indonesia: A New Roadmap Needed

http://www.indonesia-investments.com/news/news-columns/cigarettes-tobacco-in-indonesia-a-new-roadmap-needed/item7130

The Indonesian government is advised to make a new roadmap for the cigarette (and tobacco-related products) industry that includes targets for the short, middle and long-term. Moreover, the roadmap should involve strategies that aim to find a middle way between reducing cigarette consumption (protecting citizens’ health) in Indonesia while at the same time optimizing lucrative state revenue from this industry (as well as safeguarding the jobs of the nearly six million of Indonesians who are working in the cigarette supply chain).

The government of Indonesia is still discussing whether to raise the excise tax for cigarettes. This hike would help the government to reduce its looming tax and budget shortfall in 2016, while discouraging people from consuming the notorious “death sticks”. Last week it was reported that the government might even raise the price of a package of cigarettes from around IDR 20,000 to IDR 50,000 per pack. However, this is most likely a false rumor as such a drastic hike would in fact jeopardize state revenue, jobs in the tobacco-related sectors and would also give rise to a blossoming illegal cigarette market. In 2015 cigarette prices had already risen by an average of 11 percent.

Balancing between the safeguarding of high state income (from the tobacco excise) and protecting people’s health is key for the government. This year the government targets to gain IDR 140 trillion (approx. USD $10.6 billion) from the cigarette excise. As such, cigarettes account for about 95 percent of total excise income for the Indonesian government in 2016. This illustrates the importance of the cigarette industry in terms of state revenue. In 2017 the government targets to raise IDR 150 trillion worth of cigarette excise.

On the other hand, having a big population that is addicted to cigarettes also gives rise to economic costs for the government, particularly now it is serious to expand its universal healthcare program. Smoking-related physical illnesses (such as heart diseases) cause costs that need to be carried by the government and society. Meanwhile, having many ill people also implies that Indonesia does not make optimal use of its human resource potential.

To protect the millions and millions of passive smokers in Indonesia, authorities should undertake more efforts to encourage smoke-free areas in buildings and public facilities (both indoor and outdoor). On the other hand, the domestic tobacco industry should be able to boost production of cigarettes for export purposes. Falling domestic cigarette consumption but boosting cigarette exports (trying to become the cigarette production hub of the Asia Pacific) would be a win-win solution for Southeast Asia’s largest economy.

The tobacco industry is one of the largest industries in Indonesia, reflected by the fact that two cigarette manufacturing companies are positioned within the top ten of largest Indonesian companies (in terms of market capitalization) listed on the Indonesia Stock Exchange. The main reason is that there exists a huge market in Indonesia, while the government has not been eager to implement measures that aim at curtailing tobacco consumption in society. For example, Indonesia is one of the few Asian countries that is yet to ratify the World Health Organization (WHO)’s Framework Convention on Tobacco Control (FCTC).

All the above-mentioned matters need to be considered when creating a new roadmap for Indonesia’s tobacco industry.

Facts about Smoking in Indonesia

There are about 91 million (active) smokers in Indonesia (roughly 36 percent of the population)

About 70 percent of Indonesian smokers are part of the poorer segments of Indonesian society.

These poor families spend about 12 percent of their disposable income on cigarettes (making these death stick the second-most popular item for low-income families, after rice). A price hike would discourage the men in these families to purchase cigarettes

Every day an average of 1,172 people die because of smoking-related illnesses

Some IDR 7 trillion or approximately 30 percent of funds that are available to Indonesia’s National Health Insurance (Jaminan Kesehatan Nasional, or JKN) program are spent to combat tobacco-related diseases

In Indonesia the cigarette excise is still relatively low at a maximum of 57 percent; abroad this maximum is 80 percent. Therefore, Indonesian cigarettes remain among the cheapest worldwide and thus tempting for consumers

House Approves Gov’t Plan to Raise Tobacco Excise

http://en.tempo.co/read/news/2016/08/23/056798216/House-Approves-Govt-Plan-to-Raise-Tobacco-Excise

TEMPO.CO, Jakarta – Chief of Commission IX of the House of Representatives Dede Yusuf said that his Commission will support the government’s plan to increase tobacco excise tariff. However, Dede underlined that revenues from tobacco excise must be channeled to provide medical services.

“If the government increases tobacco excise tariffs, we will agree, but revenues from the excise must be used for medical funds, building hospitals,” Dede said on Tuesday, August 23, 2016.

In addition, Dede also stated that the government must provide protection for tobacco farmers. “Not the cigarette industry,” Dede said. Dede said that even today, many laborers in the cigarette industry are being paid low wages.

Dede asserted that tobacco excise has large contribution in generating state revenue, with a total contribution of Rp 120 o 140 million. Based on available records, the number of active smokers in Indonesia had reached 90 million people, 10 percent of which are children. “This is very concerning,” Dede said.

Dede said that Commission IX is focusing on discussing tobacco control effort, which is considered to be an addictive substance. Moreover, Dede stated that the government needs to protect Indonesian tobacco farmer and Indonesian tobaccos. “In the cigarette industry, they only use 40 percent local tobacco,” Dede said.

Protecting plain tobacco packaging against industry influence

https://www.sciencedaily.com/releases/2016/08/160822140526.htm

Source:
Canadian Medical Association Journal

Summary:

Canada’s public consultation on plain packaging for tobacco requires strict guidelines to protect against interference by the tobacco industry, and media must also be wary, according to a new report.

Canada’s public consultation on plain packaging for tobacco requires strict guidelines to protect against interference by the tobacco industry, and media must also be wary, according to a commentary in CMAJ (Canadian Medical Association Journal).

The Canadian government’s public consultation on plain packaging of tobacco products, as a public health measure, will close Aug. 31, 2016. In the past, the tobacco industry has tried to thwart plain packaging initiatives using threats of legal action and by influencing public opinion through biased research — for example, in Australia in 2011, when its government introduced this type of packaging. Troubling tactics are now being deployed in Canada, with individuals and organizations linked to the tobacco industry speaking against plain packaging in the media.

Plain packaging requires the removal of all branding (colours, imagery, corporate logos and trademarks) on tobacco products, so that all packaging is standardized.

Manufacturers may only include the brand name in a mandated size, font and location on the package. According to the Australian government, which was the first to implement plain packaging, this move has contributed to a decrease in smoking.

The authors of the commentary call for vigilance by several sectors.

“The Canadian media should remember their important role in challenging industry-affiliated sources regarding their conflicts of interest, and should guard against simply becoming vehicles for industry misinformation,” write Drs. Julia Smith and Kelley Lee, Faculty of Health Sciences, Simon Fraser University, Burnaby, British Columbia.

“The [Canadian] government must require any individual or organization making a submission to the federal consultation to declare potential conflicts of interests, including funding sources, and must require that any claims made in submissions be substantiated by peer-reviewed evidence, with transparent methodologies, non-industry-linked data sources and clear funding declarations.”

Medical sector heavyweights go head-to-head for functional constituency place

Former president for the Public Doctors’ Association Dr Pierre Chan Pui-yin, is facing private psychiatry specialist Dr John Wong Yee-him

Competition is expected to be fierce among candidates vying for functional constituency seats in the upcoming Legislative Council elections [1] on September 4. With 12 candidates in 10 functional constituencies being returned unopposed, 43 candidates will run for seats in 18 trade-based constituencies – four more contested functional constituencies than the 2012 Legco polls. Here, we look at the medical sector.

Two doctors actively involved in a recent battle against a government bill to reform the Medical Council are locked in a two-horse race for the medical sector seat in Legislative Council vacated by Dr Leung Ka-lau.

A young rising star in the medical sector, former president for the Public Doctors’ Association Dr Pierre Chan Pui-yin, is facing private psychiatry specialist Dr John Wong Yee-him.

Two other heavyweights who were eyeing the position, University of Hong Kong microbiologist professor Ho Pak-leung, and Medical Association president Dr Gabriel Choi Kin, decided not to run for the position in the last minute.

Chan, 38, a public gastroenterology specialist, gained fame last October when he led the biggest protest in the medical sector in eight years at public hospitals to fight for an extra 3 per cent rise for some senior doctors.

The battle against the authorities was a short one as the hospital chiefs soon bowed to the pressure and agreed to their demands. He stepped down as the president of the association in January.

An insider believed major supporters of Chan would be the public doctors, especially the younger ones.

Chan has been associated with younger groups of doctors in the sector who, unlike elder doctors who were in general more indifferent towards politics, adopted a more active and pro-democracy stance.

On the day he submitted his application on July 26, Chan said he objected to Chief Executive Leung Chun-ying being re-elected, and supported the accounting of the truth of the June 4 crackdown.

He would not rule out adopting filibuster tactics in the Legco again, but stressed such radical moves could be avoided if the government had enhanced its communication with all stakeholders.

The other hopeful, Wong, is more likely to draw votes from private doctors.

Wong, who gained his nomination from two vice presidents of the Medical Association, the city’s largest doctors’ group, said he aimed to assist the association in reforming the medical watchdog once he was elected.

The two are eyeing the seat left vacant by Leung, who has been occupying the position since 2008, before being re-elected again in 2012.

Ho, a former president for the association for public doctors and a highly respected scholar in the university, would have been Chan’s major rival if he decided to challenge him. But Ho announced he was backing off on Friday due to family reasons.

Dr Choi also decided to opt out because of multiple concerns.

“In the end I got cold-feet and decided not to go for it,” said Choi, 67, a well-respected private nephrologist. “Someone reminded me that entering the Legco might be a conflict of interest for my role as the president of the Medical Association.

“Also, I am a super-patient myself with all kinds of diseases and ailments one could ever imagine for an elderly [person]. I do not think I can shoulder the workload in the Legco without the likelihood of dying.”

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Source URL: http://www.scmp.com/news/hong-kong/politics/article/2000381/medical-sector-heavyweights-go-head-head-functional

Philip Morris Gets Its Ash Kicked in Uruguay; Where Will It Next Blow Smoke?

http://www.truth-out.org/opinion/item/37106-philip-morris-gets-its-ash-kicked-in-uruguay-where-will-it-next-blow-smoke

Philip Morris International just lost a six-year battle to block Uruguay’s strong cigarette warning labels, which cover 80 percent of the front and back of cigarette packs, including graphic photos of the damages of smoking.

The decision was made by the World Bank’s trade tribunal, the International Centre for Settlement of Investment Disputes (ICSID), the world’s the leading body to settle international investment disputes.

Philip Morris became the first tobacco company to take on a country in an international court, and it took on one of the smallest. The company argued that Uruguay had violated terms of an investment treaty with Switzerland by enforcing anti-smoking laws. The operational headquarters for Philip Morris International is in Lausanne.

Philip Morris, with gross revenues of US $64 billion in 2010, sued Uruguay, with a GDP of US $32 billion that year, under the investor-state dispute settlement (ISDS) provisions of international trade deals. The tobacco company claimed Uruguay’s health warnings reduced the value of its investment and trademark rights to sell cigarettes in Uruguay. The ICSID trade tribunal upheld Uruguay’s right to protect its people’s health.

Small Country, Easy Prey

Uruguay, nestled between the southern tip of Brazil and the northern part of Argentina, has a small population — 3.4 million — but a big desire to cut tobacco usage. Its president, Tabaré Vázquez, is an oncologist.

Among other anti-smoking efforts, it bans tobacco advertising and smoking in public places.

Such efforts have paid off. A study published in 2012 in The Lancet praised Uruguay’s “substantial, unprecedented decrease” in adult cigarette smoking. The number of adults who smoke in Uruguay fell from 35 percent in 2005 to 22 percent in 2014.

At one level, Uruguay’s win seems to contradict opponents of trade deals like the proposed Trans-Pacific Partnership Agreement (TPP) and Transatlantic Trade and Investment Partnership (TTIP). These opponents say the pending trade agreements would give multinational corporations, such as Philip Morris, the ability to directly challenge public health, worker safety and environmental laws through ISDS provisions.

In this case, however, Uruguay was able to resist Philip Morris because of financial help from Michael Bloomberg in faraway New York. Indeed, before international health groups appeared, Uruguay was considering weakening the health warnings to avoid an even longer battle with Philip Morris.

Neither Bloomberg nor Uruguay disclosed the amount of Bloomberg’s financial help. It is safe to say that Uruguay would have not prevailed without this financial and international political support.

A History of Bullying

Philip Morris’ legal bullying of Uruguay is nothing new. It has bullied other countries, states and cities for years. It does this by filing lawsuits that exhaust the resources of governments that enact anti-smoking laws.

Tobacco companies routinely sued US communities in the 1980s and 1990s to deter them from enacting smoke-free laws, despite the companies almost always losing in court. This strategy often succeeded by using the mere threat of litigation to deter localities from adopting similar laws.

Although tobacco companies almost always lost in court, most localities did not go to court for fear of being sued. Few have the money and ability to hire the expensive lawyers — some of whom are paid as much as $1,000 an hour — to stay in a legal battle with tobacco companies. The threat of legal action was powerful to stop localities. More importantly, the threat of incurring expensive legal fees was enough to deter other cities from enacting laws that ban smoking.

Laurent Huber, the executive director for Action on Smoking and Health, the oldest anti-smoking group in the US, hinted at the effectiveness of this strategy in his post-trial comments. Phillip Morris “will no doubt shed some public crocodile tears, but their main goal in launching the suit has been realized, six years and millions of dollars have been spent defending a nondiscriminatory law that was intended purely to protect public health,” Huber said.

Likewise, in the 1990s when Australia and Canada first started thinking about requiring cigarettes to be sold in plain generic packaging, tobacco companies threatened to sue them. Standardized plain packaging, as Simon Chapman notes, removes the emperor’s clothes. The companies claimed that these proposals violated their trademark rights, one of the same claims Philip Morris made against Uruguay.

This was despite their own lawyers privately telling them that international treaties permitted governments to require such packaging. The tactic worked; both countries dropped their efforts for two decades. Canada has resumed its efforts, and Australia implemented plain packaging in 2012.

In response, Philip Morris sued Australia in domestic and international trade courts. After a four-year battle, Australia prevailed. The country still faces an industry-inspired challenge in the World Trade Organization, however.

Uruguay’s and Australia’s victories provide some legal precedent about a country’s sovereign right to implement public health regulations for other countries. Indeed, it is just these kinds of precedents that Philip Morris was trying to block. As then Philip Morris Vice President Hugh Cullman observed in 1985, “a sneeze in one country today causes international pneumonia tomorrow.”

He was right to be worried. UK, Ireland and France recently enacted plain packaging, and New Zealand, Canada, Norway, South Africa, Malaysia, Turkey, India and Chile are moving forward.

US Lagging Behind Other Countries

Uruguay’s and Australia’s wins against Big Tobacco are important reminders of how much the United States is lagging. Despite being required by the 2009 Family Smoking Prevention and Tobacco Act, we still do not have pictorial health warnings, much less plain packaging, on tobacco products.

The FDA issued a rule requiring pictorial warnings (albeit smaller than Uruguay’s) in 2011. The tobacco industry blocked this rule in court. That was in no small part because the Obama administration grossly underestimated the benefits and overstated the cost of including the pictorial warnings, including the “pleasure” that smokers would lose if they broke their addictions to nicotine or never started.

The FDA still has not issued new graphic health warnings despite the fact that 91 countries have pictorial health warnings on cigarette packages.

The administration is still pushing the TPP and TTIP, both of which will provide new avenues for Big Tobacco and other corporate interests to sue governments over strong public health policies. It also opposed excluding tobacco, also known as a tobacco “carve-out” in the TPP, and was willing to support only mild limits on Big Tobacco’s ability to use ISDS provisions to directly sue governments over their tobacco control policies.

TPP members would still need to “elect to deny” the ability of tobacco companies to sue directly, creating a loophole for them to continue intimidating governments with potential ISDS challenges.

With both the Republican and Democratic presumptive nominees for president opposing the TPP, it is time for the next president to start removing provisions of trade agreements that empower big companies to sue governments over health and environmental protections.

And, in the meantime, the administration should follow Uruguay, Australia and the rest of the world and require 21st-century warning labels on tobacco products.

Disclosure statement: Eric Crosbie receives funding from the National Institute of Health, and Stan Glantz receives funding from the National Institutes of Health and Truth Initiative. He is the president of the University of California Council of Faculty Associations.

The Significance Of Uruguay’s Win Over Philip Morris International

http://www.ip-watch.org/2016/07/21/the-significance-of-uruguays-win-over-philip-morris-international/

The tobacco industry’s global efforts to use bilateral and multilateral agreements to challenge the spread of tobacco control measures such as trademark-minimising plain packages were dealt a significant blow last week when the World Bank dispute settlement body dismissed a case brought by Philip Morris against the government of Uruguay.

The decision is seen a landmark for those who view the company as using test cases to continually challenge and delay public health protection measures and discourage other countries, particularly those with fewer resources, from strengthening their health regulations. Additionally, the case reasserted that trademarks are subject to government regulations and also illustrated the role that international organisations and actors can play in support of national governments defending their health measures.

Facts & Arguments

Philip Morris initiated legal proceedings through its Swiss subsidiary against Uruguay at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) early in 2010. Among many firsts, this was the first time a tobacco group challenged a state in front of an international court and the first investment arbitration concerning tobacco control.

ICSID aims to support voluntary conciliation and arbitration of international investment disputes upon consent of both the investor and state. Once such consent is given, it cannot be withdrawn unilaterally and it becomes a binding undertaking. Independent arbitrators and conciliators appointed to each case hear the evidence and determine the outcome of the dispute.

Philip Morris claimed that the health measures imposed by the Uruguayan Public Health Ministry infringed on its intellectual property rights and breached Uruguay’s obligation under the bilateral investment treaty (BIT) between itself and Switzerland.

The case and related documents can be found here.

Two specific measures were contested. The first was the Single Presentation Requirement introduced by the Uruguayan Public Health Ministry in 2008, where tobacco manufacturers could no longer sell multiple varieties of a brand. In having to pull 7 out of its 12 products, Philip Morris alleged that only being able to market one variety substantially affected its company value.

The second measure concerned the so-called “80/80 Regulation.” Under a presidential decree issued in 2009, the graphic health warnings on cigarette packages should cover 80 percent instead of 50 percent, of the packaging, leaving only 20 percent to the tobacco companies’ trademarks and other information.

Uruguay was the first to go beyond the 50 percent surface requirement, but since the proceedings began, 58 other countries have also increased the requirement for the size of graphics. Nepal even calling for 90 percent of a cigarette package to be covered. The claimants contended that this further deprived them of their IP rights, causing further loss to their investments.

In its defence, Uruguay countered that “both regulations were applied in a non-discriminatory manner to all tobacco companies, and they amounted to a reasonable, good faith exercise of Uruguay’s sovereign prerogatives.”

The case moved to examine whether Uruguay had failed to observe its commitments on the use of trademarks under the BIT and the scope of such commitments.

Upon submitting a registration application and being granted trademarks, Philip Morris argued that an investor should be able to hold and exercise the full range of rights available to trademark holders and that Uruguay would be committed observe these rights. Within these rights was notably the right to use its trademarks.

Ruling

The tribunal found that “under Uruguayan law or international conventions to which Uruguay is a party the trademark holder does not enjoy an absolute right of use, free of regulation, but only an exclusive right to exclude third parties from the market so that only the trademark holder has the possibility to use the trademark in commerce, subject to the State’s regulatory power.”

This reflects and falls in line with the general concept that trademarks confer their holders only the right to prevent others from using their marks and are still subject to state regulations.

Furthermore, with regard to the scope of commitments, it was held that “a trademark is not a unique commitment agreed in order to encourage or permit a specific investment” and that Uruguay had no commitment nor obligation in relation to an investment under the BIT.

Ultimately, “a trademark gives rise to rights, but their extent, being subject to the applicable law, is liable to changes” subject to a state’s decided health measures. With no commitment to enable Philip Morris to use its trademark and with trademarks being subject to national laws and regulations, the tribunal found that Uruguay had not violated the BIT and dismissed the case.

Implications of the Decision

The case is highly significant given the polarity between actors and the debate on the use and application of domestic and international intellectual property laws.

Many hail this case as a significant victory in a series of tobacco companies fighting control measures, and others such as former New York Mayor Michael Bloomberg applauded Uruguay for standing up to the tobacco industry and showing others they can win.

The decision reinforces that states have a sovereign right to decide on their laws and regulations to protect their population.

Philip Morris General Counsel Marc Firestone, meanwhile, said the company “never questioned Uruguay’s authority to protect public health,” but sought to clarify international law.

Some critics, such as Laurent Huber, executive director for Action on Smoking and Health, contend that this was a public relations case for Philip Morris, aimed at discouraging other countries from imposing stronger public health regulations with the threat of a lengthy lawsuit by an opponent with deep resources. The annual revenue of Philip Morris in 2013 was reported at $80.2 billion, in contrast to Uruguay’s GDP of $55.7 billion.

Already in 2010, international lawyer and practitioner in investment treaty arbitration Todd Weiler stated in a legal opinion that:

“PMI’s BIT claim against Uruguay is emblematic of its long standing strategy to vehemently oppose the adoption of measures that might some day lead to plain paper of their products, or other measures that substantially interfere with the use and enjoyment of its crucial investment in its tobacco brands.” He added that “the claim is nothing more than the cynical attempt by a wealthy multinational corporation to make an example of a small country with limited resources to defend against a well-funded international legal action….”

The Bloomberg Foundation lent substantial financial support to Uruguay’s legal expenses.

Overall, given the definitive outcome of the present case in addition to cases where domestic, regional and international courts upheld measures to impose plain packaging and new tobacco regulations (see United Kingdom, European Union and Australia), other countries will perhaps no longer feel pressured and act on their own accord with regards to strengthening their public health measures.

International Organisation Support

Another significant aspect of the case is that the World Health Organization and the WHO Framework Convention on Tobacco Control (WHO FCTC) secretariat submitted an amicus brief during the proceedings which provided “public health on Uruguay’s tobacco packaging and labelling laws and detailed state practice in implementing similar measures.” Further details can be found in the WHO’s press release.

According to the FCTC, “The Tribunal accepted submission of the amicus brief on the basis that it provided an independent perspective on the matters in the dispute and contributed expertise from ‘qualified agencies’.”

This is not only affirmative that the FCTC provides legal backing to states who seek to provide protective health measures, but illustrates the success of international organisations in supporting national governments in their health efforts.

Lastly, in view of the place of arbitration some might question the existence of investor-state dispute settlement bodies such as the ICSID.

In Karen Hansen-Kuhn’s view as international program director at the US-based Institute for Agriculture and Trade Policy, these bodies empower companies to sue governments in private tribunals over measures that undermine their expected profits. In doing so, companies gain a chance for a “second bite at the apple,” which also “undoubtedly sends strong political signals to other local or national governments considering new programs.”

Hansen-Kuhn argued that rather than allowing investor-state dispute settlement bodies to decide, global governance rules should be given priority to lead the way on public health discussions.