Policy Brief 12, November 2012

Trade and Investment Agreements—Barriers to National Public Health and Tobacco Control Measures.

An arbitral tribunal is expected to issue soon a decision on jurisdictional matters in a case brought by Philip Morris against the government of Uruguay. The claim, based on a bilateral investment treaty (BIT) between that country and Switzerland, challenges packaging and labeling requirements for cigarettes adopted by Uruguay to reduce tobacco’s consumption.

In February 2010, Philip Morris had also initiated similar arbitral proceedings against Australia, claiming that Australia’s proposed plain cigarette packaging legislation – the Tobacco Plain Packaging Bill, 2011 – is in breach of Australia’s 1993 BIT with Hong Kong.

Tobacco companies had also unsuccessfully challenged the Australian rules on plain packaging requirements in the High Court of Australia. Dismissing the challenge, the Australian High Court held that the laws were constitutional and did not breach trademark rights as the legislation involved regulating and imposing controls on the packaging and presentation of tobacco products and “ … did not confer a proprietary benefit or interest on the commonwealth or any other person.” Claims against Australia relating to the use of trademarks on cigarettes’ packaging were also filed, under the WTO dispute settlement mechanism, by Ukraine, the Dominican Republic and Honduras.

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