Uruguay Wins Its Tobacco Case Against Philip Morris International

FOR IMMEDIATE RELEASE

Contact: Megan Arendt

Office: 202-659-4310

STATEMENT BY LAURENT HUBER, EXECUTIVE DIRECTOR OF ACTION ON SMOKING AND HEALTH

Uruguay Wins Its Tobacco Case Against Philip Morris International

But PMI Accomplished Its Primary Goal

WASHINGTON, D.C. – July 8, 2016 – After more than six years, this morning an arbitration panel ruled against Philip Morris International (NYSE: PM) in its case against the government of Uruguay over tobacco packaging laws. Action on Smoking and Health (ASH) salutes President Tabaré Vázquez for prioritizing the health of his people and standing up to the bullying tactics of the tobacco industry.

This is a moment to celebrate, but also a moment for sober reflection. PMI will no doubt shed some public crocodile tears, but their main goal in launching the suit has been realized – six years and millions of dollars have been spent defending a nondiscriminatory law that was intended purely to protect public health. This has already resulted in “regulatory chill” in other countries, preventing tobacco legislation that would have saved lives.

PMI launched the case in 2010 in response to Uruguay’s move to require large graphic health warnings and limit the number of individual brand variants under a clause in the Uruguay-Switzerland bilateral investment treaty (BIT) that allows corporations to directly sue governments. The arbitration took place under the auspices of the International Centre for Settlement of Investment Disputes (ICSID) rather than a court in Uruguay or Switzerland. The clause allowing this, called investor-state dispute settlement (ISDS), is now common in trade agreements. This is not the first time the tobacco industry has used ISDS to intimidate governments, and it will not be the last.

The global community needs to look in the mirror and ask itself – why do we give tobacco multinationals special rules and special courts to sue governments?

The argument in favor of ISDS is already thin. In theory, it bolsters the confidence of investors that they will have meaningful legal recourse if their investments are expropriated or damaged, thus increasing foreign direct investment (FDI), especially in developing countries. In practice, the correlation between ISDS and FDI flows is mixed at best. And for tobacco, ISDS makes no sense at all.

The purpose of free trade is to increase material wealth – to lower prices, which boosts consumption, which boosts production, which boosts jobs. All of these goals are laudable, but all of these goals are antithetical to what the world is trying to accomplish with tobacco. Countries all around the world adopted the UN Sustainable Development Goals (SDGs) which call on reductions in tobacco use. It is time to exempt tobacco from the benefits of global trade rules.

ACTION ON SMOKING AND HEALTH

Action on Smoking and Health (ASH) is the nation’s oldest anti-tobacco organization dedicated to health for all. ASH was formed in 1967 in response to the U.S. Surgeon General Report in order to use legal action to fight tobacco and protect nonsmokers. Today, because tobacco is the leading cause of preventable death worldwide, ASH uses global tools to counter the global tobacco epidemic. Learn more about our programs at www.ash.org.