Investor-State Dispute Settlement and Tobacco Control: Implications for Non-communicable Diseases Prevention and Consumption-Control Measures

Abstract

Public health advocates and policy makers have long considered how to translate the successes of tobacco control measures to address alcohol abuse and the excessive consumption of ultra-processed and nutrient-poor foods. Correspondingly, the strategies adopted by tobacco companies to prevent or delay regulation often parallel those adopted by the alcohol and food industries. Philip Morris, a leading tobacco company, has recently used investor–state dispute settlement (ISDS) mechanisms as a new strategy to hinder or prevent tobacco control measures in the form of plain packaging requirements. The cases that followed may have implications for the development of novel consumption-control measures, like plain packaging laws, aimed at preventing non-communicable diseases such as cancer and cardiovascular disease. This paper considers how the challenges to tobacco control measures through ISDS mechanisms could affect the development of consumption-control measures aimed at reducing alcohol abuse and unhealthy food consumption for non-communicable disease prevention. Using the recent ISDS challenges by Philip Morris as case studies, this paper draws out lessons and issues for the future development of consumption-control measures.

International investment liberalization, transnational corporations and NCD prevention policy non-decisions: a realist review on the political economy of tobacco, alcohol and ultra-processed food

“…A number of legal analyses found investment law interpretation and arbitral outcomes in cases with relevance to public health have been somewhat unpredictable and inconsistent, and point out that this makes it challenging for governments to assess their risk of attracting or losing an investor-state dispute [ 57 , 58 , 69 ]. A 2013 UNCTAD report observed “divergent legal interpretations of identical or similar treaty provisions and differences in the assessment of the merits of cases involving the same facts” [ 70 ].…”

“…This leads to different interpretations of the law and different assessment of cases involving the same facts, in turn generating competing case law which provides the basis for future tribunals to continue to reach different conclusions in almost identical cases [ 58 , 60 , 63 ]. For example, Johnson (2017) points out that while Australia’s win on jurisdiction made it more politically viable for other states to also introduce similar standardized tobacco packaging regulations, future tribunals are not required to follow previous decisions, and therefore tobacco companies may pursue investment arbitration for similar regulations elsewhere [ 69 ]. Various analyses also argued that uncertainty may be compounded by the lack of an appeal mechanism in investment arbitration through which parties can seek review of the interpretation of a law [ 16 , 60 , 63 , 69 , 72 ].…”

“…Other studies report that even if a government is confident that they can win a dispute, experienced investment lawyers cost millions regardless of the outcome [72, 74,75]. The literature widely reported that on average an investment arbitration case costs upwards of US$8 million for a defending state, of which legal fees account for approximately 80% [60,63,69,71,76,77]. Jarman (2019) reported that in Phillip Morris Vs Uruguay the defendants incurred expenses of US$28.5 million however this was reimbursed when the tribunal dismissed the claims [17].…”

“…Jarman (2019) reported that in Phillip Morris Vs Uruguay the defendants incurred expenses of US$28.5 million however this was reimbursed when the tribunal dismissed the claims [17]. Various analyses suggest that the chilling effect on a regulation due to the cost of arbitration may occur regardless of a government's perception of their ability to successfully defend proposed legislation [13,52,55,63,69,78].…”

Global action, but national results: strengthening pathways towards better health outcomes for non-communicable diseases

“…This includes building capacity to identify and resist misinformation about the constraints imposed by such agreements, while emphasising the benefits of obtaining legal advice early in the process of negotiating or joining such agreements (Barlow, Labonte, McKee, & Stuckler, 2019). Recent trade disputes involving tobacco control laws have led to growing confidence that countries can pass effective and evidence-based laws without violating trade obligations (Voon, 2019(Voon, , 2013; legal skills and knowledge gained from tobacco control disputes are readily transferable to measures addressing other NCD risk factors, such as alcohol, unhealthy foods, and sugarsweetened beverages (Johnson, 2017;Mitchell & Casben, 2016).…”