Tobacco firm fights brand-free packaging

Philip Morris NZ executives Nenda White and Martin Inkster. Photo / Mark Mitchell

We do not want new layers of red tape. Simon Crean The "big tobacco" lobby is hoping a new free trade agreement will enable it to sue the Australian Government if it introduces plain packaging for cigarettes in mid-2012.

Philip Morris wants a clause added to the Trans-Pacific Partnership Agreement (TPPA) being negotiated - in which New Zealand is a party - which would allow the company to sue the Australian Government for damages internationally.

Health experts are calling on the Gillard Government to fight back by insisting on a counter-clause to make clear the regional agreement couldn't restrict efforts "to prevent or reduce tobacco use".

In New Zealand, Parliament last month supported the first reading of a bill to ban cigarette displays in shops.

The bill has been sent to the Parliament's health select committee for public submissions, and proposes that the ban will come into force six months after the bill becomes law, with a two-year transition period so shops can be modified.

The bill is under the name of Associate Health Minister Tariana Turia.

In Australia, Associate Professor Thomas Faunce said Philip Morris had lobbied the United States Trade Representative regarding the TPPA.

In its submission the tobacco company argued that plain packaging amounted to the theft of intellectual property.

Philip Morris also stated plain packs, devoid of brand logos, images and colours, would limit "commercial free speech" and restrict competition.

It wanted an investor-state dispute settlement provision inserted in the trade agreement that would allow it to sue governments that introduced legislation impeding foreign investment.

"Such provisions grant investors covered by them a right to initiate dispute-settlement proceedings for damages in international arbitration proceedings against foreign governments ... without having to first seek damages in domestic courts," Professor Faunce writes in the latest issue of the Medical Journal of Australia.

"The lawyers controlling such arbitral proceedings are appointed and paid at the behest of the parties and do not necessarily take account of domestic public health and environment protections."

Professor Faunce, from the Australian National University, expects final negotiations on the TPPA to conclude this year with the agreement to enter into force in 2012.

He said even if an investor-state clause finds its way into the final TPPA, the federal government can protect itself by passing legislation.

"Parties may initiate interpretive declarations restricting the applicability of any investor-state dispute settlement provision ... to their public health policies, legislation and regulations," he writes in the Journal with co-author Ruth Townsend.

Australia could also argue for a clause to be inserted in the agreement stipulating "a non-discriminatory regulation for public health that affects foreign investment is not deemed expropriatory and compensable for damages".

The article notes that last year then trade minister Simon Crean said Australia had "serious reservations about the inclusion of investor-state dispute settlement provision in this agreement".

"We do not want new layers of red tape under the guise of trade liberalisation," Mr Crean said.

Labor announced last April that cigarettes will have to be sold in plain packets from mid-2012, which would be a world first.

The Australian Government expects the change to make smoking less appealing to young people who may be susceptible to branding and packaging.

- AAP