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July, 2015:

Australia and tobacco plain packaging

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Australian government’s $50m investment in defending against Big Tobacco legal thuggery

Simon Chapman

Imagine you were about to buy a property and were advised that in two years time, a major freeway would be built two hundred metres away, greatly diminishing the value of your purchase. Then imagine you went ahead anyway, the freeway was built, and your property value went down as expected. You took the person who sold you the property and the government who built the freeway to court, seeking compensation.

Fools and their money are easily parted.

This is, in effect, what the tobacco transnational Philip Morris has done with Australia’s plain tobacco packaging laws, fully implemented in December 2012, when it started legal proceedings against the Australian government under a bilateral trade agreement between Hong Kong and Australia signed in 1993. The arrogant claim being made is that our plain packaging law breaches the agreement between the government of Hong Kong and the government of Australia for the promotion and protection of investments.

The Rudd government announced plain packaging on April 29, 2010. At that time, Philip Morris tobacco products in Australia were manufactured by Philip Morris Australia. On February 23, 2011, Philip Morris Asia purchased Philip Morris Australia and on June 27, 2011 – a full 14 months after knowing the government intended to introduce plain packs – Philip Morris Asia served its notice of claim to the Australian government.

So after 14 months of full knowledge that Australia was going to legislate for plain packs, Philip Morris Asia (PMA) knowingly “purchased” Philip Morris Australia. The case has so far run up A$50m in legal bills for the Australian government.

The proceedings in what is known as the BIT (bilateral trade) case are governed by the United Nations Commission on International Trade Law Rules of Arbitration 2010 (UNCITRAL Rules), and are being overseen by a three-member arbitral tribunal. Philip Morris Asia has requested that the case be heard in secret and only limited documents published (with redactions), as it is entitled to do under the UNCITRAL rules.

Monash University legal expert Mark Davison is convinced that its case for compensation is worthless.

Article 6 of the BIT specifically refers to how compensation should be calculated. It states that the compensation shall amount to:

the real value of the investment immediately before the deprivation or before the impending deprivation became public knowledge whichever is the earlier.

The investment is defined in Article 1 of the BIT as the investment of the Hong Kong investors, that is, PMA. So what was the value of the “investment” that PMA had before the impending “deprivation” became public knowledge? It seems that it did not have any investment at all at the time that the impending “deprivation” became public knowledge.

No doubt PMA will have some argument on the point but, as a general rule, the value of nothing is nothing.

So why has it embarked on this fool’s errand? A large part of Philip Morris’ motivation is undoubtedly to frighten other nations into shelving plans for plain packaging. Twelve nations have already either introduced plain packaging legislation or are preparing to do so. Poorer countries might well be financially bullied into not proceeding by the prospect of the legal costs.

Both the current Coalition and previous Labor government’s continuing support for the international legal attacks are truly magnificent contributions to fighting off this corporate thuggery and setting precedents for the world’s poorer nations which would be loathe to be in the front line of legal defence against Big Tobacco.

With tobacco causing 5.4 million deaths a year, with one billion forecast this century, our government’s investment to fend off Big Tobacco’s global ambitions to wreck effective tobacco control is of enormous importance in the history of controlling the epidemics of preventable non-communicable diseases such as lung cancer, respiratory and heart disease.

Since plain packaging was introduced, smoking prevalence has continued to fall in Australia. The 2013 triennial national survey shows just 12.8% of Australians aged 14 and up smoke daily. This is the lowest in the world. National accounts data for the March 2015 quarter show tobacco consumption has fallen a staggering 17.5% since the September 2012 quarter, just before plain packs were introduced.

Big Tobacco’s cracked record response to this is to repeatedly claim that one in seven cigarettes now smoked in Australia is illegally sourced. Here, we are supposed to believe that legions of Australia’s smokers all know how to source smuggled illicit tobacco every day, but the hapless federal police haven’t got a clue where they can investigate the alleged ubiquitous supply chains.

Big Tobacco’s unctuous hypocrisy about the source of large amounts of illict traded tobacco is seldom mentioned in all this. Long known to be involved in supplying tobacco to nations through which large scale international smuggling is organised, British Revenue and Customs’ recent estimate, for 2011, is that “the aggregate actual supply of some brands of hand-rolling tobacco to some countries exceeded legitimate demand by 240%”.

Simon Chapman & Becky Freeman’s recent book on Australia’s plain packaging strategy is available here for free.

US Chamber of Commerce is in Big Tobacco’s thrall

A flurry of news articles, opinion pieces and blog posts have followed a June 30 New York Times investigation detailing how the U.S. Chamber of Commerce uses its clout to undermine public health measures that restrict tobacco use, sale and uptake, as mandated by the World Health Organization’s global tobacco treaty, the Framework Convention on Tobacco Control. While the coverage has highlighted the Chamber’s faculty for undermining tobacco control internationally, it has largely omitted the organization’s political interference in the United States on behalf of Big Tobacco.

One of the clearest ways the Chamber of Commerce has peddled the tobacco industry’s interests at home is through trade negotiations. The U.S. is on the verge of completing what would be the world’s largest trade and investment treaty, the Trans-Pacific Partnership (TPP). Many critics have opposed this deal, among the U.S. and 11 other Pacific Rim countries, over concerns about its possible effects on public health, the environment and workers’ rights.

This month trade ministers from the participating countries are heading to Hawaii to negotiate the last politically contentious issues in the treaty text, including policies that concern tobacco control. Over the years-long process, the Chamber has sent representatives to most TPP negotiations, advocating for Big Tobacco’s interests while enabling the tobacco industry to remain largely silent on the TPP.

In 2012, in response to an outcry from the public health community, the U.S. trade representative at the time, Ron Kirk, proposed a safe harbor provision, which would have provided stronger legal defenses against industry litigation fighting tobacco controls (though it would not have completely prevented such litigation). Since then, the Chamber has opposed any language singling out tobacco control measures for protection in the TPP. It has used every policy avenue available, from sending threatening letters to Barack Obama’s administration to aggressively pushing for private meetings with Kirk. In 2013 the U.S. caved to the Chamber’s pressure and abandoned its safe harbor approach to tobacco control, proposing instead weakened language that paid only lip service to public health. In response, dozens of members of Congress expressed to Obama their concern over the United States’ weakened tobacco proposal. In 2014 the National Association of Attorneys General sent a letter to the Obama administration calling for complete protection for tobacco-related public health measures in the TPP.

One of the key elements of the TPP — and the one most sought after by Big Tobacco — is an investor-state dispute settlement (ISDS) mechanism. ISDS allows corporations to sue governments in foreign trade courts over regulations the corporations deem harmful to future profits. These trade courts operate largely in secret, their decisions cannot be appealed, and their judges are often lawyers for giant multinational corporations.

Allowing Big Tobacco to sue governments for passing tobacco control measures would threaten not only tobacco regulations abroad but also those at federal, state and local levels in the U.S.
Philip Morris International, the world’s largest tobacco company, is already using ISDS mechanisms in two bilateral investment treaties to sue Australia and Uruguay for their lifesaving tobacco regulations, which require tobacco to be sold in packages with large graphic health warnings. Because Big Tobacco’s vast coffers dwarf those of many countries, the $8 million average litigation cost intimidates many countries from enacting lifesaving policies. For example, Uruguay said that it would have been forced to back down from Philip Morris’ lawsuit because of its prohibitive cost, had former New York City Mayor Michael Bloomberg not stepped forward with financial support. Though Big Tobacco has yet to win any of its cases against countries, its success is measured through nations’ delaying or backing down from advancing lifesaving tobacco regulations — as New Zealand and Togo have — for fear of facing similar suits from the tobacco industry.

By allowing Big Tobacco to sue governments for passing tobacco control measures, an ISDS mechanism in the TPP would threaten not only tobacco regulations abroad but also those at federal, state and local levels in the U.S. While the federal government can likely afford to defend its regulations, many state, city and county governments — which are responsible for the vast majority of tobacco control measures in the country — are understandably nervous about deciding between people’s health and a massive legal bill.

The global community is on course to curb the tobacco epidemic, in large part because of the World Health Organization’s global tobacco treaty. The U.S. Chamber of Commerce should be ashamed to do Big Tobacco’s dirty work, and governments, including ours, would be wise to reject its lobbying on any issue.

Now that the Chamber’s relationship with Big Tobacco has been exposed, the U.S. must look skeptically on the rest of the organization’s agenda. With the tobacco industry responsible for the loss of more than 6 million lives every year, there appear to be few, if any, ethical boundaries to the Chamber’s operations.

Chris Bostic is the deputy director for policy at Action on Smoking and Health.

John Stewart is the deputy campaigns director at Corporate Accountability International. Follow him on Twitter: @jms255.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera America’s editorial policy.

New Mathematical Model Developed That Can Accurately Predict the Amount of Nicotine Emitted From E-Cigarettes

Source Newsroom: VCU Massey Cancer Center

Citations Nicotine and Tobacco Research; P50 DA036105; P30 CA016059

Virginia Commonwealth University Massey Cancer Center researchers at the VCU Center for the Study of Tobacco Products (CSTP) have developed the first ever, evidence-based model that can predict with up to 90 percent accuracy the amount of nicotine emitted by an electronic cigarette (e-cigarette). The study was published in the journal Nicotine and Tobacco Research.

The researchers, working in collaboration with investigators at the American University of Beirut, collected data about the voltage and other characteristics of various e-cigarette devices, the concentration of the liquid nicotine that could be put in the devices, and the length of time a user might inhale from the device in one puff. The team then developed a mathematical model to determine how much nicotine was emitted from the devices as the device voltage and the nicotine liquid concentration were increased and the user puff duration was extended. The model predicted that higher voltage e-cigarette devices paired with high-concentration nicotine liquids could emit greater levels of the addictive substance than those of a traditional tobacco cigarette, depending on user puff duration.

“Laboratory results showed that nicotine yields from 15 puffs on an e-cigarette varied by more than 50 times across various device, liquid and user behavior conditions,” said the research team member Thomas Eissenberg, Ph.D., director of the CSTP, member of the Cancer Prevention and Control research program at Massey and professor in the Psychology Department at the VCU College of Humanities and Sciences.

In a subsequent clinical study conducted at VCU, the researchers also observed that experienced e-cigarette users were more likely to take longer puffs than novice users, resulting in higher levels of nicotine being delivered to their bloodstream.

According to Eissenberg, these findings indicate that without federal regulation on these devices users could become more addicted to nicotine from e-cigarette use than from smoking a conventional combustible cigarette.

“When used as intended, an electronic cigarette should not produce a nicotine yield in excess of that of a combustible cigarette, a device that we already know has lethal health effects. If it does, then we are essentially making an already addictive drug delivery system even more addictive,” said Eissenberg.

Tobacco use remains the leading cause of preventable cancer incidence in the U.S., with the general assumption that e-cigarettes are a “safer” alternative as a nicotine delivery method. This could be true, Eissenberg stated, as long as the e-cigarette device and its liquid are not designed in a way that would deliver excessive levels of the addictive substance or other dangerous chemicals to the user. However, restrictions dictating safer design may only occur through federal regulation since product developers may not be inclined to self-impose such regulations.

With this novel nicotine mathematical model, researchers will now be able to predict with a great deal of accuracy how much nicotine will be delivered to an e-cigarette user before a device is even designed. These predictions will further enable researchers like Eissenberg and his colleagues to inform federal regulators about evidence-based recommendations on e-cigarette design restrictions that could potentially avoid a serious public health disaster as more people turn to e-cigarettes as an alternative nicotine delivery method.

This model also sets the framework for a clinical trial that has just opened at the VCU CSTP as well as Penn State University’s Tobacco Center of Regulatory Science in Hershey, Pa., that will evaluate novel tobacco products, including e-cigarettes, on health indicators and cigarette smoking behavior in people who are currently smoking tobacco cigarettes and who are interested in reducing their cigarette use.

Eissenberg collaborated to develop the aerosol nicotine exposure model with lead author Alan Shihadeh, Sc.D. director of Project 1, Analytic Lab Methods for Modified Risk Tobacco Product Evaluation (MRTP), member of the Executive Leadership Committee at the VCU Center for the Study of Tobacco Products (CSTP) and Professor of Mechanical Engineering at the American University of Beirut (AUB); Soha Talih, Ph.D., research scientist at the VCU CSTP and research scientist at the Department of Mechanical Engineering at the AUB; Rola Salman, B.S. analytical chemist at the VCU CSTP and manager of the Aerosol Research Lab at the AUB; Zainab Balhas, member of the Project 1 team at the VCU CSTP and graduate student in the Mechanical Engineering Department at the AUB; Nareg Karaoghlanian, B.E., member of the investigative team of Project 1 at the VCU CSTP and research engineer at the AUB Mechanical Engineering Department; Ahmad El Hellani, Ph.D., member of the investigative team of Project 1 at the VCU CSTP and postdoctoral associate in the Chemistry and Mechanical Engineering Departments at AUB; Rima Baalbaki, M.S., research assistant at the VCU CSTP and in the Department of Engineering at the AUB; and Najat Saliba, Ph.D., Professor of Chemistry at the AUB.

Funding for this research was supported by the National Institute on Drug Abuse of the National Institutes of Health (NIH) grant P50 DA036105, the Center for Tobacco Products of the U.S. Food and Drug Administration and, in part, by VCU Massey Cancer Center’s NIH-NCI Cancer Center Support Grant P30 CA016059.

The VCU Center for the Study of Tobacco Products is a World Health Organization Collaborating Center. As such, they will disseminate novel methods for evaluating tobacco products, provide research results and support evaluation of e-cigarettes, train scientists in methods to evaluate non-cigarette tobacco products, and prepare related briefing and education materials.

Malawi Will Not Feel Guilty for Growing Tobacco

Malawi: Mutharika Says Smoking Started Before Jesus Walked On Earth – ‘Malawi Will Not Feel Guilty for Growing Tobacco’

By Thom Chiumia

London — Malawian President Peter Mutharika has said the country will continue to grow tobacco and will not feel guilty about it amidst opposition from anti-smoking groups, saying people have been smoking even before Jesus Christ walked on this earth.

Mutharika saod Malawi would continue to support the tobacco industry, the mainstay of the economy and the country’s second largest employer after the government, until alternative cash crops were found.

In an interview published in the London-based New African magazine, Muthatrika asserted that Malawi cannot stop growing tobacco overnight and will continue growing tobacco based on trade requirements until when there is no demand,

He said people have the option to smoke or not to smoke.

“We are not forcing them to smoke, we are just growing tobacco so we don’t have to feel guilty,” Mutharika said

Philip Morris International Inc. (PMI) marks EU Anti-Trafficking Day 2015 through continued support for local NGOs

CTA says: it is a pity that the Hong Kong based company The Mekong Club has seemingly accepted PMI funding, giving credence to an industry whose products kill two in every three of its users
when used as directed by the manufacturers.

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Suppliers for tobacco company Philip Morris used child labour

A report that cigarette maker Philip Morris International Inc. bought tobacco from farms in Kazakhstan that used forced and child labour has prompted the tobacco company to change its policies.



There are reports that children in Malawi are forced to work producing tobacco. Tobacco estates are concentrated in the Mzimba, Kasungu, Mchinji and Mzimba districts. According to the most recently available data from the ILO and NGOs, over 70,000 children work on tobacco plantations, some of them under conditions of bonded labor. Families working on tobacco estates sometimes become bonded to their landlords, and their children are forced to work to repay their family debts. Landlords charge these tenant workers for costs such as rent, fertilizer, and seeds; these costs often exceed the profit earned from the tobacco harvest and result in debt for the worker and his or her family. Some children are also hired under deceptive terms of work and promised payment, and then are paid little, if at all, at the end of the season. Some children are forced to work long hours, including overtime, and are forced to perform dangerous tasks, such as carrying heavy loads and using pesticides. In addition, certain children work under threats and penalties including physical, verbal, and sexual abuse, and do not receive food or pay.

Tobacco control: Governments should not rest on their laurels

Taxes are effective tools to curb the global tobacco epidemic. This is the core message of the World Health Organization (WHO) 2015 report on tobacco launched this month. Tobacco-related diseases claim more lives than HIV-AIDS, malaria and tuberculosis combined.

In its recent report, the WHO welcomes commitments and efforts made in the field of tobacco control around the world. More than half of the world’s countries, covering 40% of the world’s population, have established at least one MPOWER measure at the highest level of achievement.

MPOWER is a set of measures that can be used by governments as a guide to implement the Framework Convention on Tobacco Control (FCTC) guidelines and covers six different action points to reduce Tobacco use: M for monitoring tobacco use and prevention policies, P for protecting people from tobacco smoke, O for offering help to quit tobacco use, W for warning about the dangers of tobacco, E for enforcing bans on tobacco advertising, promotion and sponsorship and R for raising taxes on tobacco.

Statistics from the WHO report show that advertising bans and cessation programmes were implemented in nearly 70% of the countries to an at least moderate intensity. A complete set of policies for warning labels is available in 20% of countries around the world, an increase in coverage of more than 5% over the last 2 years. One in four countries (covering 18% of the world population) have smoke-free environments available. Only six countries are close to having all MPOWER measures in place, of which four are low or middle income countries. Among the best examples are Latin American countries like Brazil, Uruguay and Panama, as well as Turkey and Australia. And what about EU countries? Check their status here.

Despite the emergence of positive, measurable results, the WHO points out that there is still a long way to go for governments to achieve proper tobacco control goals. Raising taxes on tobacco products, which is an extremely efficient and easy measure to implement, still remains neglected by many countries and is the least implemented MPOWER measure. Only 33 countries levy taxes on tobacco products over 75% of the retail price, even though evidence shows that this measure is very cost-effective and should be much wider used.

The main reason for this reluctance, WHO points out, is the influence of opponents to this measure, such as the tobacco industry, who claim that it represents a major economic threat and that a hike in taxes would lead to more illicit trade. However, there is no valid evidence to support their arguments. Moreover, taxes on tobacco products are generally well accepted by the population, even amongst smokers. Revenues raised from tobacco taxes can be earmarked for additional tobacco control and public health measures. Sadly, tackling tobacco use is not possible unless governments are able to stand up to the powerful voice of the tobacco industry.

‘Plain Packaging’ of Tobacco Lawsuit Likely to Be Heard in December

by Reuters

British American Tobacco (BAT) expects its legal challenge to the implementation of “plain packaging” of tobacco in Britain to be heard in court in December, with possible final resolution by the end of 2016, a senior executive said.

“We expect a hearing in December,” Jerome Abelman, BAT’s director of legal and external affairs, told reporters on Wednesday, adding that “whatever the decision, there will likely be appeals.”

Britain adopted a law in March that would prohibit tobacco products from being sold with any branding, colours or logos. This “plain packaging” rule, aimed at reducing the lure of smoking particularly to youngsters, will go into effect in May 2016.

BAT and larger rival Philip Morris International are challenging the law.

Appeals likely

Abelman said it was hard to judge exactly how long its challenge will take to move through the court system but said it was possible that any appeals could be decided by the end of 2016.

He said he thought the British government should grant a stay to the implementation of plain packaging pending a final decision.

Separately, BAT said it would do a market test this year of a next-generation product that heats tobacco without burning it. It declined to give any details about the product or the test.

Its announcement comes a day after U.S. tobacco company Reynolds American, in which BAT owns 42 percent, said it was shelving its own test of a tobacco-heating product due to poor consumer adoption.

World: US Chamber of Commerce shills for Big Tobacco

29 Jul, 15 | by Marita Hefler, News Editor

In 2009, when tobacco plain packaging legislation was first being considered in Australia, the president of the US Chamber of Commerce in Washington made a submission to the country’s preventative health taskforce, which was appointed by the Australian Government to provide recommendations about national tobacco control measures.

At the time, the move by the US group was considered highly unusual. Although internal tobacco industry documents made public during the US tobacco trials showed the US Chamber of Commerce had long had a cosy relationship with big tobacco to influence USA domestic policy, the attempt to do so in another country marked a turning point.

Now, it has been revealed that the US Chamber, which spends more on lobbying than any other US interest group, is engaged in a global, systematic approach to fight tobacco control measures. Investigative reports in the New York Times, together with a report titled US Chamber of Commerce: Blowing Smoke for Big Tobacco published earlier this month by a coalition of health and civil society organisations, have documented the extensive tactics by the both the US Chamber and its network of more than 100 local affiliates (known internationally as AmCham).

Countries that have been targeted by the US Chamber and/or local AmCham branches include Nepal, Jamaica, Uruguay, Moldova, the Philippines, El Salvador, Australia, New Zealand, Indonesia, Croatia, Estonia, Ireland, Poland, Lithuania and Ukraine. It has also been an active lobbyist for the tobacco industry in EU policy making.

The reports detailed a three-pronged approach that includes bullying governments with direct lobbying and letters from the US Chamber or its local affiliate. The letters typically open by noting that the chamber is the world’s largest business federation, which has significant investments in the country of interest. The implied threat is that it may withdraw such investments if decisions are not favourable to its interests. A second strategy is to prompt countries to initiate trade disputes against tobacco control measures by other countries – as in the case of Ukraine, where Prime Minister Arseniy Yatsenyuk recently revealed that the country initiated its case against Australia’s plain packaging legislation in response to a complaint from the Ukraine AmCham office.

The third strategy is to lobby against tobacco-related exceptions within trade policy. US Chamber of Commerce president Thomas Donohue has been personally involved in lobbying to preserve the right of the tobacco industry to sue under international trade agreements, particularly the Trans Pacific Partnership (TPP). The TPP is currently being negotiated by several Pacific Rim countries, and has attracted fierce criticism for the secrecy surrounding the negotiation process, as well as lively debate about whether tobacco should be ‘carved out’ of the agreement.

In a response to the New York Times, Donohue defended the chamber’s advocacy on behalf of the tobacco industry on the basis of protecting intellectual property and compliance with international commitments – perhaps selectively oblivious to the need for countries to comply with their commitments under the WHO Framework Convention on Tobacco Control (FCTC). His response ignores the fact that tobacco is the subject of the world’s only health treaty precisely because the unique harms wrought by tobacco justify singling out the industry. It also fails to explain why the chamber has opposed smoke free public places and attempted to discredit other policies, such as warning labels, as not being evidence-based.

Donohue also expresses concern that ‘discriminatory treatment’ (of particular industries) ‘can easily spread’ – another way of advancing the ‘slippery slope’ argument the tobacco industry has consistently used against plain packaging. On its website, the US Chamber argues that carving out tobacco is unnecessary because the TPP (like other trade agreements) won’t limit governments’ ability to enact public health regulations – conveniently ignoring the numerous disputes the tobacco industry has already initiated under just such agreements in order to delay, weaken or avert tobacco control legislation (as highlighted in John Oliver’s hilarious expose of big tobacco earlier this year).

The chamber and its local affiliates are aided in their international efforts by a misperception that it represents, or is an official part of, the US government. Given the crossover between AmCham office holders and US government officials in some countries, this is understandable. In Estonia, the US Ambassador serves as the honorary president of the local affiliate; in Australia, the Chief Executive Officer of the local AmCham, Niels Marquardt, was the US consul general in Sydney immediately prior to his appointment. Local AmCham branches also advertise membership benefits including introductions, and in some cases access, to the US embassy and government.

The chamber siding with the tobacco industry is highly problematic for businesses such as health insurers, healthcare providers and hospitals that sit on the US Chamber of Commerce board, many of which publicly promote quitting smoking and offer services to support cessation. A New York Times editorial on the issue noted that while many US businesses which are members of the US Chamber of Commerce are focused on domestic issues, tobacco companies prioritise foreign growth markets, particularly low and middle income countries with young populations. While some members have been silent in response to the revelations, US health corporation CVS – which stopped selling tobacco in its pharmacies in 2014 – withdrew from its chamber membership in protest following the NY Times reports.

Criticism of the chamber has also come from more unexpected sources. Global public relations giant Burson-Marsteller is well-known for its work to ‘shape the debate’ on behalf of controversial industries and companies, as well as governments responsible for human rights atrocities. It has also hopped on the climate change denial bandwagon; in 2014, it teamed up with the world’s biggest coal company to promote ‘coal for poor people’ in a campaign aimed at derailing policies to limit carbon pollution by changing the conversation to focus on ‘energy poverty’ and position coal-fired power as a solution. Criticisms of Burson-Marsteller are perhaps best encapsulated by its work with big tobacco; for many years it worked closely with Altria/Philip Morris, and it established front group the National Smokers’ Alliance in the US to oppose smoke free legislation.

While Burson-Marsteller continues to work on many contentious issues, in 2010 it ceased working with clients operating in the tobacco industry, and has publicly criticised the chamber’s advocacy on behalf of big tobacco. David Earnshaw, president of Burson-Marsteller’s Brussels office, told the NY Times “It’s pretty obvious that you don’t want to be seen doing the bidding of an interest which is no longer legitimate”. As WHO Director General Dr Margaret Chan said in a statement “so long as tobacco companies continue to be influential members of the chamber, legitimate businesses will be tarred with the same brush.”

Tobacco giant sues Australia

More than $50 million of taxpayer money is expected to go up in smoke defending cigarette plain packaging in a secretive international tribunal in Singapore.

But costs will pile much higher if Australia loses on its first defence that Philip Morris indulged in cynical “venue shopping” by shifting its headquarters to Hong Kong to sue Australia.

The West Australian can reveal the Attorney-General’s Department, which is running the case in defence of plain packaging, called former Labor treasurer Wayne Swan as a witness before a special tribunal sitting in Singapore back in February.

Philip Morris, which is claiming the plain packaging regime harms its intellectual property in such famous brands as Marlboro, Peter Jackson and Longbeach, called its own high-profile witnesses, also at considerable cost.

Among Philip Morris’ witnesses have been former High Court judge Ian Callinan who gave evidence on administrative law.

If the tribunal finds unfavourably against Australia in a preliminary decision, expected in September, former health minister Nicola Roxon and her former departmental secretary Jane Halton are among those likely to be hauled before the tribunal later this year.

Australia argues that Philip Morris, in anticipation of Labor’s plain packaging legislation in 2011, restructured itself so that its Australian subsidiary became wholly owned by the Hong Kong-based Philip Morris Asia.

This allowed Philip Morris to sue Australia under so-called investor-state dispute settlement (ISDS) provisions of a 1993 bilateral agreement with Hong Kong that allowed compensation for “expropriation” of investments.

ISDS provisions have been criticised by the High Court Chief Justice Robert French and the Productivity Commission which warned they gave foreigners greater legal rights than Australian companies, exposed local business to potentially large liabilities and were red tape-heavy.

There are concerns similar provisions in the yet-to-be-concluded 12-nation Trans-Pacific Partnership agreement, it would constrain the listing and pricing of medicines under the Pharmaceutical Benefits Scheme.

Trade Minister Andrew Robb dismissed ISDS concerns, stressing Australia was party to ISDS provisions with 29 other countries over three decades, “and the sun has still come up”.

Labor, which formally discontinued inclusion of ISDS provisions in free trade agreements in 2011, said Australians were understandably concerned about foreign interference in healthcare, public services and environmental protection.

“The tobacco plain packaging case highlights the dangers of ISDS provisions,” shadow trade minister Penny Wong said.

“Mr Robb has still not explained why he agreed to the inclusion of an ISDS in the China FTA when the Howard Government successfully negotiated the US FTA without one.”

Mr Robb responded: “The only case that has ever been brought against Australia was in response to Labor’s cigarette plain packaging laws. Australia was defending this case and it was not yet resolved.”

He said ISDS provided protections for Australian investors abroad in countries which may not have reliable political or legal systems.

It is understood that under the China-Australia FTA, the scope, form and content of the future ISDS mechanism is yet to be negotiated.

A spokesman for Philip Morris said governments has the right to “experiment” with taxpayers’ money but should not be surprised when companies and countries asserted their rights.

“Philip Morris is seeking compensation from the Australian Government for its plain packaging experiment which deprives us of our brands and intellectual property, and for treating Philip Morris and its investments unfairly and inequitably through changing arbitrarily our legal and regulatory environment,” the spokesman said.

“Our claims address the unlawfulness of the expropriation of property and do not question the need for comprehensive regulation of tobacco products.”