Plain packaging 'can't be delayed'

16 Aug 2012, 9:03 pm   -   Source: AAP

Big tobacco isn't giving up its fight against Australia's plain packaging laws, but international legal challenges won't delay the December start date.

RELATED

International legal challenges won't delay the introduction of plain packaging for tobacco products in Australia, but the disputes may drag on for years, legal experts say.

The High Court this week backed federal Labor's legislation requiring all cigarettes to be sold in drab olive-brown packs with large graphic health warnings from December.

But the measure continues to be challenged by Philip Morris Asia through the United Nations Commission on International Trade Law and a number of countries who've lodged complaints with the World Trade Organisation (WTO).

The UN commission case relies on a bilateral investment treaty (BIT) Australia signed with Hong Kong 20 years ago.

Australian National University (ANU) trade law expert Kyla Tienhaara says on average cases take four years to be completed.

But even if big tobacco did win the case, the government's laws were unlikely to be overturned.

"It's almost entirely a system based on monetary compensation," Dr Tienhaara told AAP on Thursday.

Labor argues that even if the government did have to cough up cash for compensation, it would still be ahead because plain packaging would help reduce smoking rates and healthcare costs.

There was also a chance big tobacco's case could be thrown out before it's really begun.

That's because Philip Morris Asia only acquired its shareholding in the cigarette manufacturer's Australian operations in early 2011, when it knew plain packaging was on the way.

The commonwealth argues the company restructured its business to access the BIT, which it says is an abuse of process.

But Dr Tienhaara says if the case proceeds, it's difficult to predict who'll win.

A UN commission tribunal will have to decide whether plain packaging has a significant negative impact on Philip Morris' investment. But in the past some tribunals have also taken into account whether a measure is for a public purpose.

Philip Morris could argue plain packaging isn't an effective health measure, but that could potentially undermine its argument that the laws will cost it millions of dollars.

Australia also faces complaints to the WTO by Ukraine, Honduras and the Dominican Republic, which all claim plain packaging breaches Australia's commitment under global trade rules.

The cases are at the "consultation" stage, with the complainants yet to request dispute settlement panels be established.

ANU research fellow Matthew Rimmer says in the past, similar cases have taken between two and eight years to be resolved.

If Australia lost, it may have to pay compensation or possibly modify its legislation.

But big tobacco is unlikely to succeed before the WTO partly because the intellectual property trade agreement contains an explicit exception for measures that "protect public health and nutrition".

Indeed, British American Tobacco admitted in a 1994 memo there was "little joy" to be had in relying on such deals.

The High Court ruled the commonwealth hadn't acquired big tobacco's brands or logos.

This strengthens Australia's case, as does the World Health Organisation's statement this week that "plain packaging is a highly effective way to counter industry's ruthless marketing tactics".

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube