A weak defence for global tobacco

PUBLISHED : Friday, 17 August, 2012, 12:00am
UPDATED : Tuesday, 16 October, 2012, 4:50pm

The threat by a global tobacco company to invoke its Hong Kong-derived rights in Australia carries about it a strong whiff of desperation. The warning was made by Philip Morris, owner of Marlboro, which along with other companies has lost a court challenge in Canberra against the world's first law banning cigarette branding.

Instead of packaging that manages to be familiar despite health warnings and obscene images, in Australia cigarettes will be sold only in "generic packaging" - making all varieties indistinguishable from one another and bearing images of the dead and dying. Along with the Marlboro cowboy, billions of dollars worth of branding is about to head off into the sunset, starting in Australia.

Philip Morris says it will seek compensation under the terms of Australia's bilateral investment protection treaty with Hong Kong. In reports on this week's hearings in Canberra, it emerged that Philip Morris' brands in Australia are owned by Philip Morris Asia, which has been incorporated in this city since 1994.

Article 1 (e) (iv) of the 1993 Hong Kong-Australia bilateral investment treaty does offer protection for trademarks, but subject to the laws of either country, which in the case of Australia have now been changed and will take effect in December. Article 5 allows for compensation but only in the case of losses owing to war, revolution, insurrection "or other similar events". It says nothing about compensation for losses caused by legislation which has been constitutionally enacted by a democratic country acting out of concern for the health of its citizens.

Much to the horror of Big Tobacco, Australia's new law will be copied by other countries if it is shown that such legislation can overcome the hurdles thrown up by tobacco companies. If not, an obscure treaty with Hong Kong will have served as global tobacco's last line of defence. That's a dubious honour for this city, but an unlikely one, with the tobacco industry showing all the signs of someone who should have stopped smoking ages ago: shortness of breath and a haunted, deathly pallor.

Alex Lo is on leave