Do you have some $50 million to spare to defend your tobacco control measures? That is how much it is costing the Australian government so far to defend its plain packaging laws in the challenge brought by Philip Morris. And that is just for the first stage. If in September the three-person extraterritorial tribunal decides Australia has a case to answer, the hearing will move on to substantive matters and the bills will pile up even more.
Philip Morris has been able to bring the case despite losing an appeal against Australia’s laws in the High Court because of a so-called investor-state dispute settlement (ISDS) clause in an obscure Hong Kong Australia investment agreement. $50million is spare change for a multi-billion dollar profit making company like Philip Morris International.
Most governments don’t have much money for tobacco control let alone multi-million dollars set aside to defend their tobacco control laws. The tobacco industry knows this and that is why they file cases against governments as an intimidation tactic to scare them off. Uruguay faced uncertainty when it was sued by Philip Morris for its tobacco control measures. An American Private Philanthropy came forward to pay for its legal defence, enabling Uruguay to defend itself.
Malaysia wants to avoid being challenged for its tobacco control measures and proposed a tobacco carve-out in the Trans-Pacific Partnership (TPP) Agreement in August 2013 as a preventive measure rather than defend itself down the road. Malaysia’s proposal is a novel and brave one.