Regular readers of this blog are no doubt aware that I have a dim view of smoking. So it is with great joy that I can report that the Australian High Court have just dealt Big Tobacco a huge blow by confirming the legality of the Australian government’s initiative to require cigarette companies to use plain packaging for their products.
As I mentioned in my earlier post about smoking in Japan, JT International initiated a legal challenge against the Commonwealth of Australia on 14 December 2011 “[i]n order to protect its ability to use its brands and key trade marks on the packaging of tobacco products sold in Australia”. According to the Sydney Morning Herald article:
“During the hearings in April the companies – British American Tobacco, Philip Morris, Imperial Tobacco, Van Nelle Tabak Nederland and JT International SA – argued the measure breached the constitutional requirement that the acquisition of property by the government be on just terms.
But to make that case, the companies had to show that the government gained a measurable benefit as a consequence, which is apart from the claimed benefits to population health.”
It would seem that they were unsuccessful in making that point. The text of the decision of the High Court has yet to be released, but it will likely be influential on other jurisdictions (namely the UK) hoping to implement the same packaging requirements.
It would seem that the webpage on the JT domain re: the Australian challenge has been taken down
On the plus side, they’ve replace it with a webpage now attacking the UK initiative. Curiously, the webpage says:
“The campaign, a first for JTI, questions the consultation process and targets both government and decision makers.”
Not sure why this is a “first” for JTI… they obviously don’t think anyone notices… I do
The Nikkei has a report noting that the story will likely not end with the Australian High Court. The article suggests that Philip Morris will take the matter to a “United Nations tribunal” claiming that “the law breaches a 1993 trade deal between Australia and Hong Kong that safeguards each country’s respective offshore investments”.
The details of this action can be gleaned from its press statement of last year, where it outlines its argument as follows:
The Australia – Hong Kong Bilateral Investment Treaty (BIT)
The Treaty was entered into by the Governments of Hong Kong and Australia in 1993 and seeks to create favorable conditions for greater investment and promote economic cooperation, by providing reciprocal protection for investments made in one country by investors from the other.
Australia is in breach of the BIT because plain packaging:
• Amounts to unlawful expropriation of PMA’s investments and valuable intellectual property without compensation (Article 6(1))
• Fails to provide fair and equitable treatment to PMA’s investments in Australia (Article 2(2))
• Unreasonably impairs PMA’s investments in Australia (Article 2(2))
• Fails to provide full protection and security for PMA’s investments in Australia (Article 2(2))
• Breaches Australia’s international obligations in relation to PMA’s investments (Article 2(2)) by violating The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), the Paris Convention for the Protection of Industrial Property and the WTO Agreement on Technical Barriers to Trade (TBT)
Steps to date
On June 27, PMA first notified the Government that it would take legal action under Australia’s Bilateral Investment Treaty with Hong Kong if Australia proceeded to pass plain packaging legislation. In accordance with the terms of the BIT, the notice triggered a three month mandatory negotiation period between PMA and the Australian Government. With the passage of the legislation, it is clear that PMA was unable to resolve the dispute with the Government during this time. The notice served on the Australian Government today begins the formal legal proceedings under the Arbitration Rules of the United Nations Commission on International Trade Law 2010. PMA is proposing Singapore as the seat of arbitration and that the appointing authority be the Secretary-General of the Permanent Court of Arbitration at The Hague.
WATCH THIS SPACE!