Australia’s plain-packaging laws win challenge by tobacco giant Philip Morris

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Two men smoke cigarettes as they stand outside an office building in central Sydney, Australia, October 2, 2015. Governments will be allowed to block tobacco companies from suing over anti-smoking measures under a U.S. proposal being considered by Pacific trading partners as part of a free trade deal involving a dozen countries. The exemption proposed in Atlanta, Georgia, where ministers are trying to close the Trans-Pacific Partnership trade deal, would allow any of the 12 member countries to opt out of rules aimed at protecting foreign investors from harmful government policies with regard to tobacco control measures. One of the most high-profile cases using the rules that protect foreign investors involves Philip Morris suing Australia over tobacco plain-packaging laws that ban branded cigarette packs. The company said this undermines its intellectual property. Reuters/David Gray

Australia has won an international legal battle in favour of its plain-packaging laws for tobaccos, which were challenged by tobacco giant Philip Morris Asia. A Singapore-based court has refused the challenge, upholding the Australian federal government’s tobacco control measures.

The Australia’s plain-packaging laws, which were passed in 2011 under the Julia Gillard government, require all tobacco companies to remove their own branding including their own distinctive colours, company logo and trademarks from the packaging and institute a uniform colour and designs with noticeable graphic warning signs. The breakthrough judgment passed by the Singapore court would also encourage other countries to follow Australia’s footsteps to stricter laws for tobacco companies.

Philip Morris Asia launched a legal challenge against Australia’s federal government for introducing plain-packaging laws in 2011 on grounds, arguing that the legislation breached provisions for foreign investments in Australia’s 1993 Investment Promotion and Protection Agreement with Hong Kong.

However, according to a formal statement released by the company on Friday, the arbitral tribunal dismissed the appeal.

“We welcome the unanimous decision by the tribunal agreeing with Australia’s position that it has no jurisdiction to hear Philip Morris’s claim,” the Guardian quoted Nationals Senator Fiona Nash, who was responsible for the tobacco policy, as saying.

The decision of the court to not hear the case is being regarded as a major win for the country, which is already facing challenges in other forums such as the World Trade Centre and for other countries in respect to similar laws. However, it is the first country to introduce plain packaging for tobacco companies.

“There is nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else,” Marc Firestone, Philip Morris International senior vice president and general counsel said in a statement. “It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works.”

The decision has been welcomed by the Public Health Association of Australia as the best Christmas present in regard to public health both nationally as well as internationally.

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