11.05.15

Is the Trans-Pacific Partnership a win for tobacco control? A first look at the tobacco carve-out

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gavelcrushFinally, after years of negotiation, speculation, anticipation and/or trepidation, the full text of the Trans-Pacific Partnership (TPP) has been released. Undoubtedly, lawyers around the world will be pouring over the details over the next weeks and months, as will the US congress in order to decide whether to approve or reject the agreement in its current form.

As I’ve written about before, many people working in public health and tobacco control have been concerned about how tobacco will be treated under the agreement. Particularly, whether Big Tobacco will be able to continue to use trade and investment lawsuits to bully and intimidate countries that try to enact tobacco control laws. Laws that are trying to address the horrifying reality that tobacco kills six million people every year – more people than alcohol, AIDS, car accidents, illegal drugs, murders and suicides combined.

After much negotiation and lobbying by health, human rights and tobacco control organizations, a provision excluding tobacco claims from investor-state disputes has been included in Chapter 29 of the TPP. It’s contained in Article 29.5 and states that a “Party may elect to deny the benefits of [investor-state dispute resolution] with respect to claims challenging a tobacco control measure of the Party.” Parties can elect to deny benefits before or after such claims are have been initiated. A tobacco control measure is defined very broadly and applies to a wide range of tobacco control interventions, possibly even the regulation of e-cigarettes.

This kind of tobacco-specific carve-out is certainly unprecedented in the history of trade and investment agreements and sets a strong precedent for tobacco control and public health. An international trade treaty expressly recognizing tobacco products as uniquely harmful and tobacco control measures as requiring specific protection is an incredibly important step which, ideally, would set a floor for future agreements. But is it enough?

A win against investor-state disputes?

The carve-out applies to the dispute resolution part of the Investment chapter of the TPP (Chapter 9), and specifically to the controversial mechanism that allows corporations to sue a government of another country when they feel they’re being treated unfairly. Sounds crazy that we even need this, right?

Except that this is exactly what Philip Morris is currently doing to the Australian government for passing laws requiring the plain-packaging of cigarettes. After setting up shop in Hong Kong solely in order to sue Australia under the Australia-Hong Kong investment treaty, Philip Morris is arguing that plain packaging hurts its investment in Australia and that the Australian people have to pay. Even if Philip Morris ends up losing this ridiculous case, the sad part is that Australia has already spent over $50 million dollars in legal fees just on the jurisdiction issue (to see whether the treaty can even apply in such a contrived circumstance). Regardless of the outcome, Philip Morris knows that its ability to bring the claim is enough to scare off many other countries considering enacting tobacco control laws. This is what this carve-out is trying to address by letting countries elect to stop corporations from bringing tobacco claims under investment agreements.

What about state-state disputes?

This carve-out may stop future suits by tobacco companies, but it unfortunately that’s only a part of the story. As a footnote to the provision makes clear, it only applies to corporations suing countries, not one country suing another. And as I’ve written about before, convincing and funding a government to file a lawsuit on their behalf is something Big Tobacco is very good at. For example, despite not actually being an exporter of tobacco to Australia, the Ukraine was one of five countries that sued Australia alleging that its plain packaging laws breach WTO law. Why? Well we now know that British American Tobacco and Philip Morris paid the legal costs of at least three of the countries involved in that dispute.

Still, the state-state dispute process does make it harder for a tobacco company to initiate claims than being able to sue a state directly. Many governments (including those party to the TPP) may not agree to bring such actions, and would face significant criticism or ridicule for agreeing to act for Big Tobacco so blatantly (in fact, Ukraine ended up eventually withdrawing from the lawsuit).

Unfortunately, it still doesn’t seem like this carve-out will do anything to prevent these kinds of practices if they were to occur. Even more frightening is the prospect that industry could also try to dissuade some governments from opting in and “electing” to trigger this provision in the first place. This entire provision rests entirely on what a government chooses to do.

Maybe TPP negotiators weren’t ready to carve-out all claims related to tobacco, regardless of whether they are brought by a tobacco company or a state. Though it’s very difficult to believe that any government that isn’t being manipulated and funded by Big Tobacco would genuinely want to sue another country for trying to protect its citizens from tobacco-related disease and death.

This anti-tobacco industry provision certainly looks like a great step in the right direction. What do you think? Is this good enough?

 

Posted in Tobacco, Trade ; Tagged: , , , , .

Comments

Great article. The WTO action on Australia’s plain packaging has been put on hold. Basically it was seen as too hot by the clique of investment arbitrators and the WTO I-S dispute settlement process. They are widely perceived as operating outside the rule of law. Finding for Big Tobacco would really have exposed the ridiculous nature of this pro-corporate system.

Thinking that replacing state protectionism on vital domestic concerns with corporate protectionism is simply a quick way to destroy democratic decision-making. A carve out of ISDS on tobacco products (not even including the agricultural product) is a small step ignoring a giant leap backward, especially as the world starts the ambitious sustainable development goals (SDGs) that will already be challenged by corporate interests. Why not choose the SDGs rather than a corporate governance that destroys worthy goals for a more sustainable world?

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