Health Warning

http://www.odt.co.nz/news/world/389834/tobacco-giant-loses-lawsuit-uruguay

The World Bank’s International Centre for Settlement of Investment Disputes has ruled in favor of Uruguay in a suit filed by Philip Morris International seeking compensation for economic damages caused by the nation’s anti-tobacco measures.

Uruguay imposed a ban on smoking in public spaces in 2006, as it raised taxes on tobacco products and forced firms to include large warnings and graphic images including diseased lungs and rotting teeth on cigarette packages.

It also banned the use of the words “light” and “mild” from cigarette packs to try to dispel smokers’ misguided beliefs that the products are safer.

“The health measures we implemented for controlling tobacco usage and for protecting the health of our people have been expressly recognised as legitimate and also adopted as part of the sovereign power of our republic,” Uruguayan President Tabare Vazquez said in a televised speech.

Vazquez, an oncologist, helped spearhead the measures during his first term in office from 2005 to 2010.

In a lengthy decision published on Friday, the ICSID said it had ruled to dismiss Philip Morris’ demand that the regulations be withdrawn, or not applied to the company, or that it be paid $US22 million ($NZ30 million) in damages instead.

It ordered the tobacco company to pay Uruguay $US7 million and to cover “all the fees and expenses of the Tribunal and ICSID’s administrative fees and expenses.”

Phillip Morris said it respected the tribunal’s decision.

“We’ve never questioned Uruguay’s authority to protect public health, and this case wasn’t about broad issues of tobacco policy,” Marc Firestone, Philip Morris International senior vice president and general counsel, said in a statement.

“The arbitration concerned an important, but unusual, set of facts that called for clarification under international law,” added Firestone.

The tobacco company said that it would like to meet with Uruguay’s government, to explore regulatory frameworks that would enable smokers “in the country to have informed access to reduced-risk alternatives to smoking.”

Action on Smoking and Health (ASH), the oldest anti-tobacco organization in the United States, applauded Uruguay for winning the case, but said Phillip Morris “accomplished its primary goal.”

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,” said Laurent Huber, executive director for ASH.

“This has already resulted in regulatory chill in other countries, preventing tobacco legislation that would have saved lives,” Huber said.

Uruguay won a major case against Philip Morris in a World Bank ruling that could embolden other small countries that want to deter tobacco use.

http://www.csmonitor.com/World/Global-News/2016/0709/Uruguay-The-little-country-that-changed-tobacco-laws

The Latin American nation of Uruguay, with a GDP of $50 billion, went up against a tobacco company that takes in $80 billion annually – and won, ruled an international court on Friday.

Uruguay is a small country that impacts world politics only rarely. But that is precisely the point, say its allies in the fight against tobacco.

“The lesson here is that when a small country like Uruguay gets attacked, the public health community around the world will rally behind them so that these countries don’t have to fight these cases alone,” Matthew L. Myers, president of the Washington, D.C.-based Campaign for Tobacco-Free Kids, tells The Christian Science Monitor.

That Uruguay triumphed so completely in its litigation against Philip Morris International – the court even ordered Philip Morris to pay Uruguay’s court costs – suggests packaging laws for tobacco have friends in high places.

“What the tobacco companies do in these cases is just hunker down and look ugly and say, ‘We’re going to spend more money than you’ve got,’ ” Stanton Glantz of the Center for Tobacco Control Research and Education told the Monitor in May. “So the train of losses will embolden other countries to not be so frightened.”

The case was a risky one for Uruguay, Mr. Myers says. Some suggested Philip Morris would bankrupt the country if the government refused to settle a lawsuit over cigarette packaging regulation out of court, but Michael Bloomberg, three-term New York City mayor and founder of Bloomberg Philanthropies, promised the country financial support for court fees.

In 2015, a fund was established through the Campaign for Tobacco-Free Kids to help smaller countries fight for their anti-tobacco laws in court. Bloomberg Philanthropies and the Bill & Melinda Gates Foundation contributed money, meaning future efforts by tobacco companies to litigate restrictive packaging laws could become cases of billionaires fighting billionaires.

“It shows countries everywhere that they can stand up to tobacco companies and win,” Mr. Bloomberg said in a press release. “No country should ever be intimidated by the threat of a tobacco company lawsuit, and this case will help embolden more nations to take actions that will save lives.”

With this decision, the court upheld two strict laws on cigarette packaging. Throughout the seven years of litigation, Uruguay has required graphic warnings about the health dangers of tobacco to cover 80 percent of the cigarette pack, both front and back. It also limits each company to a single pack design, undercutting color-coded brands and use of words such as “light,” and forcing the company to pull seven of its twelve brands off Uruguay’s shelves, the Financial Times reported.

“We’ve never questioned Uruguay’s authority to protect public health,” Marc Firestone, general counsel at Philip Morris, told the Associated Press. “The arbitration concerned an important, but unusual, set of facts that called for clarification under international law, which the parties have now received.”

The debate around tobacco marketing has moved into the judicial sphere, where governments and tobacco companies are fighting cases around both domestic trademark laws and international trade agreements. This marks the second case this summer in which a government has won the right to restrict tobacco packaging in court. The first nation to win such a case was Australia, and then in May a British court upheld the government’s right to require plain, green packaging on cigarette cartons, the Monitor has reported previously.

“Because Australia was successful, the UK was successful, and because the UK was successful the EU can be successful, and because of this whole cascading impact, you see a lot of countries going above and beyond,” Timothy Mackey, a professor specializing in health law at the University of California San Diego, told the Monitor at the time.

The most immediate impact could come from Latin America itself, Meyers says, where governments in Uruguay and Chile have been weighing the implications of even stricter laws to require unadorned, uniform packaging plain on cigarette cartons. The court’s decision could embolden these countries to further regulate the tobacco industry inside their borders.

Uruguay has won a landmark lawsuit against Philip Morris International, which was suing the South American country for its strict regulations on smoking in what was seen as a test case for the tobacco industry.

Friday’s decision sets an important precedent for other countries considering implementing similar legislation, with anti-tobacco campaigners accusing Philip Morris of using litigation to scare others from following Uruguay’s example.

“The attempts of the tobacco companies have been roundly rejected,” said Uruguay’s President Tabaré Vázquez, an oncologist who has made the fight against tobacco one of his flagship policies. “It is not acceptable to prioritise commercial considerations over the fundamental right to health and life,” he added in a televised address to the nation.

In its lawsuit at the World Bank’s International Center for Settlement of Investment Disputes, which marked the first time a tobacco group had taken on a country in an international court, Philip Morris argued that Uruguay had violated terms of a bilateral investment treaty with Switzerland, where it has its headquarters in Lausanne.

The world’s biggest tobacco company — whose annual revenues of more than $80bn across 180 countries far exceed Uruguay’s gross domestic product of closer to $50bn — claimed that a 2009 anti-tobacco law damaged its intellectual property rights and hit sales.

Philip Morris — which has lost lawsuits in Norway, Australia and the UK — opposed the Uruguayan anti-tobacco law’s requirements that graphic health warnings cover 80 per cent of both sides of cigarette packets, and that brands have a single image, thereby prohibiting sub-brands such as Marlboro Red or Marlboro Gold. That forced Philip Morris to withdraw seven of its 12 brands from shops in Uruguay.

“We’ve never questioned Uruguay’s authority to protect public health,” said Marc Firestone, general counsel at Philip Morris, who clarified that the company had been complying with the regulations at issue in the case for the past seven years. “The arbitration concerned an important, but unusual, set of facts that called for clarification under international law, which the parties have now received,” he added.

Some observers have remarked on the apparent irony that in 2013 Uruguay legalised marijuana, which is due to start being sold in pharmacies this month, while at the same time it is clamping down on tobacco. But others say that Uruguay’s trailblazing efforts to regulate marijuana and tobacco are consistent, arguing that both industries are insufficiently controlled.

“This is a major victory for the people of Uruguay — and it shows countries everywhere that they can stand up to tobacco companies and win,” said former New York City Mayor Michael Bloomberg, who provided Uruguay’s lawsuit with financial support. “No country should ever be intimidated by the threat of a tobacco company lawsuit, and this case will help embolden more nations to take actions that will save lives,” he added.

According to health ministry figures, the number of Uruguayans who smoke had fallen to 22 per cent of the population by 2014, from 35 per cent in 2005. The number of young smokers fell to 8 per cent in 2014, from 23 per cent in 2006, when Uruguay became the first country in the region to ban smoking in enclosed public spaces.

http://www.reuters.com/article/us-pmi-uruguay-lawsuit-idUSKCN0ZO2LZ

The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of Uruguay on Friday in a suit filed by Philip Morris International seeking compensation for economic damages caused by the nation’s anti-tobacco measures.

Uruguay imposed a ban on smoking in public spaces in 2006, as it raised taxes on tobacco products and forced firms to include large warnings and graphic images including diseased lungs and rotting teeth on cigarette packages. It also banned the use of the words “light” and “mild” from cigarette packs to try to dispel smokers’ misguided beliefs that the products are safer.

“The health measures we implemented for controlling tobacco usage and for protecting the health of our people have been expressly recognized as legitimate and also adopted as part of the sovereign power of our republic,” Uruguayan President Tabare Vazquez said in a televised speech.

Vazquez, an oncologist, helped spearhead the measures during his first term in office from 2005 to 2010.

In a lengthy decision published on Friday, the ICSID said it had ruled to dismiss Philip Morris’ demand that the regulations be withdrawn, or not applied to the company, or that it be paid $22 million in damages instead.

It ordered the tobacco company to pay Uruguay $7 million and to cover “all the fees and expenses of the Tribunal and ICSID’s administrative fees and expenses.”

Phillip Morris said it respected the tribunal’s decision.

“We’ve never questioned Uruguay’s authority to protect public health, and this case wasn’t about broad issues of tobacco policy,” Marc Firestone, Philip Morris International senior vice president and general counsel, said in a statement.

“The arbitration concerned an important, but unusual, set of facts that called for clarification under international law,” added Firestone.

The tobacco company said that it would like to meet with Uruguay’s government, to explore regulatory frameworks that would enable smokers “in the country to have informed access to reduced-risk alternatives to smoking.”

Action on Smoking and Health (ASH), the oldest anti-tobacco organization in the United States, applauded Uruguay for winning the case, but said Phillip Morris “accomplished its primary goal.”

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,” said Laurent Huber, executive director for ASH.

“This has already resulted in regulatory chill in other countries, preventing tobacco legislation that would have saved lives,” Huber said.

(Reporting by Anthony Esposito and Malena Castaldi; Writing by Anthony Esposito; Editing by Tom Brown)

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