Trade & Investment Agreements Could Threaten Smokefree Goal

Media release: Professor Jane Kelsey

Wednesday 30 May 2012

New Report Warns Trade & Investment Agreements Could Threaten NZ’s Smokefree Goal

“New Zealanders are rightly surprised and indignant when tobacco companies like Philip Morris use international trade and investment treaties to oppose innovative tobacco control policies”, said Professor Jane Kelsey of the University of Auckland, the author of a report released today on the implications of such agreements for achieving an essentially smoke free Aotearoa New Zealand by 2025.

The Maori Affairs Committee inquiry into the impacts of tobacco use for Maori and the government’s response to its recommendations both recognise the need for more assertive and innovative public health policies to achieve the smoke free goal.

“Paradoxically, the more innovative and effective those policies, the greater the risk they will face threatened or actual legal challenges under free trade and investment treaties”, Professor Kelsey observes.

“More extensive obligations under new agreements will impose even more constraints on tobacco control policy options between now and 2015.”

“My report catalogues a wide range of legal arguments, and a quite frightening number of legal challenges, that have focused the attention of the tobacco control community on these treaties, and most recently on the proposed Trans-Pacific Partnership agreement”, says Professor Kelsey.

The US, which just lost a dispute over flavoured cigarettes at the WTO, is proposing a new exception for tobacco policies in the TPP, although it was not tabled in the recent Dallas round due to last-minute interventions by the tobacco industry.

“New Zealand and Australia face a quandary. Agreeing to a new exception implies that the public health defences in existing agreements do not provide adequate protection – but they are relying on those defences in the WTO challenge to Australia’s plain packaging laws’.

Professor Kelsey makes it clear that the report identifies legal issues that might be raised as the policies are developed; it is not a legal opinion on their legality.

“The tobacco industry’s strategy is to ‘chill’ government decisions at early stages of the policy process by threats of legal action. Hopefully this detailed, technical report will help inform the policy community in ways that ensure that primacy is given to public health objectives and the Government’s obligations under the Framework Convention on Tobacco Control”.

The report was commissioned as part of a research programme of the New Zealand Tobacco Control Research Turanga, co-funded by the Health Research Council and Ministry of Health. It was peer reviewed by a New Zealand public health professor and three overseas academics with expertise in investment law and tobacco policy.
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A copy of the report is downloadable here tonight. It will also be here tomorrow: http://www.turanga.org.nz/node/41

Briefing on Report: International Trade Law & Tobacco Control

International Trade Law and Tobacco Control. Trade and investment law issues relating to proposed tobacco control policies to achieve an essentially smoke free Aotearoa New Zealand by 2025 is a technical report that identifies the legal issues arising from New Zealand’s free trade and investment agreements (FTIAs) that might be raised in opposition to those policies. It does not give an opinion about the legality of those policies.

What are the smokefree policies that the report examines?

Nineteen policies that are drawn from the New Zealand government’s responses to the report of the Maori Affairs Select Committee Inquiry into the tobacco industry in Aotearoa and the consequences of tobacco use for Maori, including plan packaging of tobacco.

Which agreements does the report examine?

All New Zealand’s free trade and investment obligations at the World Trade Organization (WTO), the existing bilateral free trade agreements and bilateral investment agreements, and the proposed Trans-Pacific Partnership agreement.

Who has commissioned this report?

The research has been produced as part of a Health Research Council and Ministry of Health contract with the New Zealand Tobacco Control Research Türanga, a University of Auckland programme of innovative research to halve smoking prevalence in Aotearoa/New Zealand within a decade.

Who is the author and the peer reviewers?

Professor Jane Kelsey from the School of Law at The University of Auckland specialises in international trade and investment law was part of the original Türanga contract bid. The report has been peer reviewed by Professor Robert Stumberg from Georgetown Law, Washington DC, USA; Professor Andrew Mitchell and Associate Professor Tanya Voon, School of Law, the University of Melbourne, Australia; and Professor Richard Edwards, Department of Public Health, University of Otago, Wellington.

How is the report structured?

There are 5 parts, supported by technical annexes:
Part 1: Proposed tobacco control policies and general considerations
Part 2: Relationship between the Framework Convention on Tobacco Control (FCTC) and New Zealand’s free trade and investment agreements
Part 3: Legal issues
Part 4: Potential for legal intervention
Part 5: Issues for New Zealand’s proposed tobacco control policies

What are the key findings?

Part 1 identifies a number of general observations to be borne in mind when considering how the agreements might affect New Zealand’s policies, including:
• Achieving the government’s goal for Aotearoa New Zealand to be essentially smoke free by 2025 will require more assertive tobacco control policies than governments have adopted to date, which will carry greater risks of threatened or actual legal challenges under FTIAs.
• The policies that pose the most potent threat to the tobacco industry supply chain by creating or reinforcing international precedents will be challenged most vigorously.
• Legal arguments are rarely decisive in policy decisions and are often used strategically by tobacco industry interests and supportive states to weaken the government’s resolve to adopt strong and innovative policies.
• Some states are actively challenging strong tobacco control policies at the WTO although there are few state-initiated disputes so far under other FTIAs.
• Tobacco companies are aggressively using investor-state enforcement powers and lobbying for agreements that confer even stronger investor rights and powers.
• ‘Chilling’ government decisions at the earliest stages of policy formation can be the most effective industry intervention, although actual litigation is used to deter countries from considering similar initiatives.
• The government is bound as a party to the Framework Convention to ensure that any new international agreements it signs are consistent with its obligations under that Convention, including to restrict the influence of the tobacco industry over New Zealand’s domestic policy decisions.
• The more new trade and investment agreements the government negotiates that deepen and extend existing obligations, the more constraints it is likely to face on its tobacco control options between now and 2025.

What are the potential avenues for legal intervention?

The report examines the legal forums available for states and tobacco industry interests to challenge tobacco control policies and the history of disputes to date in the WTO and using investor-state disputes mechanisms. It also discusses the chilling effect on domestic policy decisions and the potential for policy self-censorship in the face of legal arguments and threats of legal challenges.

Are the proposed smoke free policies at risk of legal challenge?

Part 5 of the report assesses the legal arguments likely to be raised in relation to each of the nineteen policies in order of the projected likelihood of a legal dispute, noting that mandatory plain packaging is the landmark policy that will attract most attention from other states and the tobacco industry.

ENDS

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