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Global Mail: Big Tobacco’s Lawsuits Of Mass Destruction

from Michael Sofi, reporting for the Global Mail:

If Big Tobacco’s ongoing legal onslaught against the Australian government is intended to intimidate other countries considering plain-packaging laws, it’s not working. Not according to the architect of Ireland’s incoming plain-pack scheme, at least.

“It makes me more determined,” Irish Health Minister Dr James Reilly tells The Global Mail.

“It indicates to me that the tobacco industry know [plain packaging] is going to work, and that’s why they fear it.”

Draft legislation modelled on Australia’s plain-packaging laws was approved by the Irish cabinet in November, clearing the way for a bill to be introduced into Ireland’s national parliament, the Oireachtas, early next year.

It follows a surprise announcement on November 28 by British Prime Minister David Cameron, of an independent inquiry into the effectiveness of Australia’s laws, with a view to implementing similar legislation in the UK before 2015 national elections. In July this year, PM Cameron had appeared to abandon the tobacco-control measure.

Since becoming the first country to scrub tobacco products of their branding — packaging them instead in drab, green cartons with graphic health warnings — Australia has successfully weathered a High Court challenge by some of the world’s largest tobacco companies, including British American Tobacco and Philip Morris. Two other cases – one brought by five tobacco-producing states (and partly financed by Philip Morris) through the World Trade Organisation, the other brought by Philip Morris directly through Australia’s bilateral investment treaty with Hong Kong – are progressing slowly.

The latter case has been especially controversial for Philip Morris’ use of an investor-state trade dispute settlement (ISDS) provision in the Australia-Hong Kong treaty. ISDS allows foreign corporations to directly sue the countries in which they invest, if they believe a government decision has unfairly impacted on their investment.

Australia is currently under pressure to accept an ISDS clause in the Trans-Pacific Partnership, a free-trade agreement involving a record 12 countries, currently being negotiated in Salt Lake City.

In the ISDS case over plain packaging, a Hong-Kong-based subsidiary of Philip Morris purchased its Australia-based counterpart, Philip Morris Australia, after the Australian government had announced its intention to introduce plain-packaging laws. From one perspective, says Melbourne University law professor Tania Voon, the purchase was simply a pretext to open a third legal front on which to challenge Australia’s tobacco laws. The precise cost so far to the Australian taxpayer of defending both cases is unknown. Costs for recent ISDS cases alone average close to $9 million, and in some cases have exceeded $30 million.

A trade-law specialist, Voon argues that neither challenge is likely to succeed. But she says winning may not be the point; rather, the industry might be seeking to bog Australia down in years-long, expensive lawsuits, to make an example.

“I think one of the purposes of bringing these cases is to drain resources of the government, and delay things as much as possible, and in that process to hope to discourage other countries from adopting similar measures,” she says.

Minister Reilly says he would be “astonished” if Ireland did not face similar legal action. “We’ll be facing the tobacco companies in court, there’s no doubt about that,” he says. “It’s their modus operandi.

“You have to remember that even within Europe they’re looking at tens of billions in profit per annum. So every year these measures are delayed is another year of excellent profit for the industry.”

In an emailed statement, Philip Morris International did not rule out a challenge to the Irish laws, saying only that legal actions are “not taken lightly”, and that it would be “premature to speculate on what legal action might be taken in the future”.

Last week the British arm of Philip Morris shared legal advice it had received with the Irish Times, warning that plain-packaging laws would not withstand a legal challenge, and would lead to an “an extremely high price” being paid to the industry in compensation.

But Reilly says he’s confident the tobacco-control measures accord with the Irish constitution and with the country’s European Union obligations.

Plain packaging similar to Australia’s is also on the cards across the Tasman in New Zealand. Although Australia’s legal tangles with big tobacco have prompted the Kiwi prime minister John Key to express reservations about such a scheme, a spokesman for the New Zealand advocacy group Action on Smoking and Health, Michael Colhoun, says a bill is expected to go before parliament in the remaining six sitting days before Christmas.

Ireland’s Dr Reilly says he welcomes other countries jumping on the plain-packaging wagon, and says that if Britain, in particular, follows through, it would mark a turning point in the fight against tobacco.

“It will worry the tobacco industry hugely, because Britain is obviously a very large market,” he says.

“If [Britain] follow the lead that Ireland have shown in Europe, and that Australia has shown to the world, then others will follow, and we will rid ourselves of this scourge.”

2 Dec 2013

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