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Moves by Big Tobacco to use Australia / HKG bilateral investment agreement in its favour against incoming Plain Packaging legislation – Huff and Puff threats

Tobacco giant ready to launch legal action against Govt

Alexandra Kirk reported this story on Monday, June 27, 2011 08:04:00

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TONY EASTLEY: The Federal Health Minister, Nicola Roxon says the Government is on “very strong legal ground” and can withstand a legal challenge to its plain packaging legislation from tobacco giant, Philip Morris.

Philip Morris says it will begin the process today – serving a “notice of claim” on the Government, which triggers a three-month negotiating period.

The cigarette manufacturer says if there’s no resolution, the matter will then go to international arbitration, arguing the Government is breaching a bilateral investment treaty between Australia and Hong Kong, where Philip Morris’s parent company is based.

It says if it wins the compensation bill it may run into billions.

The Federal Health Minister, Nicola Roxon spoke to Alexandra Kirk in Canberra.

NICOLA ROXON: We believe that we are on very strong legal ground. We are breaking new ground around the world. This is the first time any country has taken this step and of course our Government would take proper advice to ensure that we can do that.

ALEXANDRA KIRK: Did you take advice on this bilateral investment treaty that Australia has with Hong Kong which Philip Morris maintains your plain packaging legislation would breach?

NICOLA ROXON: Well, I’m not going to go through the details of all of our legal advice in the media. Suffice to say we are very confident that we are on strong ground and I do need to point out to the public that I think they would expect that their own government, Australians expect the Australian Government to be able to take action which are in the community’s interests and in the interest of public health.

The World Health Organization recommends that states consider taking this action. We believe that it will be an effective part of our fight against tobacco and our determination to reduce the harm caused from smoking. But obviously big tobacco is going to fight this tooth and nail and we said from day one that we expected they would.

ALEXANDRA KIRK: And how much are you willing to spend defending your position? Presumably big tobacco has very deep pockets.

NICOLA ROXON: Well, they do because they make very large profits out of a lot of misery and death caused to thousands of Australians every year. So we already spend billions of dollars dealing with the harms caused from tobacco. Of course, we can’t stop tobacco companies taking legal action. We’ll defend our determination to protect public health and try to reduce the harms of smoking and ultimately I am confident that we are on very strong ground.

ALEXANDRA KIRK: Do health reasons though, which you cite, override a company’s ability to use a brand to differentiate itself from its competitors?

NICOLA ROXON: Well, I believe that it is in the public interest for us to be able to take this step. Tobacco is unlike any other product, any other legal product in the world. We know so much about the harm it causes. We know that there is not a single safe cigarette or amount of smoking that can be done in a way which may not lead to very severe health outcomes.

So in those unusual circumstances, taking steps as we have already done in Australia to severely restrict advertising, has not been able to be challenged and similarly we think this next sensible, logical step will not be successfully challenged either.

ALEXANDRA KIRK: The notice of claim that Philip Morris is lodging today triggers a period of three months for negotiation. Will you negotiate with Philip Morris?

NICOLA ROXON: Well, I’m not going to make comments on a claim that has not even been provided to me. It is in the media and I’m happy to make general comments in the media and when these materials are served on us, we will deal with them appropriately.

TONY EASTLEY: The Federal Health Minister, Nicola Roxon speaking there with Alexandra Kirk in Canberra.

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