The Australian Tobacco Packaging Legislation
Before Investment And Trade Tribunals
Dipartimento di Giurisprudenza
Corso di Laurea Magistrale in Giurisprudenza
Relatore Candidata
Chia.mo Prof. Paolo Carrozza Margherita Melillo
Anno Accademico
2013/2014
1
INTRODUCTION 6
1. FACTUAL AND NORMATIVE BACKGROUND 8
1.1 The WHO Framework Convention on Tobacco Control 10 1.1.1 The Origins of the WHO Anti-Tobacco Campaign and the Negotiations
Leading to the Convention 10
1.1.2 The Legal Force of the Convention and of its Guidelines 12 1.1.3 The Substantial Provisions Enshrined in the Convention 17 1.1.4 The Conference of the Parties, the Secretariat and the Further Development
of the Convention 19
1.2 The Australian Plain Packaging Legislation 22 1.2.1 From Health Warnings to Plain Packaging 24 1.2.2 Plain Packaging under the Framework Convention on Tobacco Control 30 1.2.3 The Tobacco Plain Packaging Act and Regulations 35 1.3 The Decision of the High Court of Australia 37
1.3.1 Procedural history: the Big Tobacco Companies before the Supreme
Judicial Authority 38
1.3.2 The substantive claims: Calling the Constitution into Action 41 A) Under Section 51(xxxi) of the Commonwealth Constitution, are the disputed intellectual property rights a ‘property’? 42 B) Did the TPPA result in an acquisition of such property? 43 C) Was the acquisition made in other than ‘just terms’? 44 D) Was such acquisition in other than ‘just terms’ justified by an exception to Section 51(xxxi) and was such exception proportional? 45 E) Further analysis: the nature of trademarks rights under Australian law 46
1.3.3 Appraisal 49
2. THE COMPETING DISPUTES CHALLENGING
AUSTRALIA’S TOBACCO PLAIN PACKAGING ACT 51
2.1 Introduction: the Disputes and the Competition of Disputes 51 2.2 The Proceedings before the World Trade Organization 53
2.2.1 The Importance of Trade Litigation: the Possible Relevance and
Influence of WTO Ruling 53
2.2.2 The Nature and the Features of the WTO Dispute Settlement System 55 2.2.3 Procedural History: the Blossom of Complainants, Co-Complainants and
Third Parties 62
A) The Complainants: Locus Standi and Multiple Procedures 62
2 2.2.4 The Substantive Allegations: the Growth of Claims 76 A) The Alleged Violations of the TRIPS Agreements 77 B) The Alleged Violations of the TBT Agreement 115 C) The Alleged Violations of the GATT 124 2.2.5 Conclusions on the WTO Proceedings 128 2.3 The Arbitral Tribunal Established under the UNCITRAL Rules of
Arbitration at the Permanent Court of Arbitration 130
2.3.1 Investor-State Arbitrations 131
A) The Origins of Investment Law and its Current Status 131 B) The Nature of Investment Claims between Private and Public Law 132 2.3.2 The Long, Ongoing, Procedural History of Philip Morris Asia v. Australia
136
2.3.3 Jurisdictional and Admissibility Challenges 140
2.3.4 The Substantive Claims 147
A) Expropriation (Article 6 of the BIT) 148 B) Unfair and unequitable treatment (Article 2(2) of the BIT) 151 C) Unreasonable impairment (Article 2(2) of the BIT) 153 D) Full protection and security (Article 2(2) of the BIT) 154 E) Umbrella clause (Article 2(2) of the BIT) 155 2.3.5 The ad hoc Nature of International Investment Law and the Possible
Outcome of the Dispute 157
2.3.6 The Relief Sought in Light of the Nature of International Investment Law 161
2.3.7 Conclusions on the Investment Arbitral Proceedings 163
3. THE INTERPLAY BETWEEN INVESTMENT AND TRADE
TRIBUNALS 166
3.1 Introduction: The Fragmentation of International Law and the
International Economic Law Twins 166
3.2 Previous Instances of Parallel Proceedings in Investment and Trade
Litigation 167
3.3 Competing and Overlapping Proceedings in the Plain Packaging Dispute 172 3.3.1 The Notion of Competing and Overlapping Proceedings 172 3.3.2 The Extent to Which the Proceedings Arose out of the Plain Packaging Dispute Can be Deemed to Be Competing 174 3.3 The Possibility of Applying Jurisdiction-Regulating Norms In Parallel
Proceedings 179
3.3.1 The Absence of Traditional Jurisdictional-Regulating Norms 179
3.3.2 A Lex Ferenda Approach 181
3.3.3 Judicial Comity 182
3.3.4 The Suitability of Trade and Investment Tribunals for Adjudicating the Plain Packaging and Similar Disputes 184
3
CONCLUSIONS: THE PROCLAIMED CONVERGENCE OF INVESTMENT AND TRADE REGIMES IN LIGHT OF THE
PLAIN PACKAGING DISPUTE 191
TABLE OF AUTHORITIES 195
Bibliography 195
Legal Instruments and Documents 205
4
“My job requires a certain... moral flexibility” Nick Naylor, Thank you for Smoking (2005)
6
Introduction
When the Government of the Commonwealth of Australia proposed to introduce the so-called ‘plain packaging legislation’, it probably could not foresee that this sole piece of legislation would have become the subject of so many disputes, along with numerous comments and books. The purpose of the Government was simply to enhance tobacco regulation and to reduce youth smoking, by requiring tobacco producers to sell their cigarettes and other tobacco products in standardised non-appealing packages. However, tobacco companies reacted in a very strong manner, claiming that their trademarks’1 and investors’ rights had been violated.
Nevertheless, it is critical to bear in mind that this dispute has many more stakeholders than it seems prima facie. Along with Australia, there are the World Health Organization, and all the other entities that have been engaged in the past decades in the global struggle for tobacco regulation. Along with the tobacco companies, there are instead the States who produce tobacco, as well as the other multinational corporations who wish to reduce the regulatory powers of sovereign nations in the name of freedom of markets. With these considerations in mind, it should not surprise that the political contrast soon became of a legal nature, and different judicial proceedings were commenced. For the same reasons, the ultimate outcome of the litigation is much awaited, and is likely to affect the future of similar health policies.
In the course of this work, we will discuss the current disputes challenging this legislation. In the first Chapter, an overview of the international and domestic background that led to the adoption of the plain packaging
1 ‘Trade mark’, ‘trade-mark’ and ‘trademark’ are three different spelling of the same
word. For the purposes of this work, we will use the more common ‘trademark’ spelling, except when referring to Australian legislation, which adopts the ‘trade mark’ spelling.
7 legislation will be provided. In this framework, the decision of the High Court of Australia on the claims of expropriation by tobacco companies will be analysed. This judgement proves significant because it concludes the domestic legal iter, and opens the doors (and some questions) to the international proceedings. Subsequently, in the second Chapter, the current disputes before the World Trade Organization and an investment Tribunal will be discussed. To this end, we will comment on the differences and similarities between them. Despite the analogies and the common goals of the international trade and investment regimes, these two sets of legal obligations remain profoundly different in nature. Above all, the former has an inter-governmental dispute settlement mechanism, whereas the latter hosts claims by private investors against States. Finally, some remarks on the interplay between the two international proceedings, and the possible legal tools by which they could be coordinated, will be made. Besides the implications for the dispute at hand, the conclusion cannot but express the aspiration that a more integrated framework of rules between trade and investment is established in the next future.
8
1. Factual and normative background
‘I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.’ (Warren Buffett, 1978)
The plain packaging legislation, here into discussion, is the ultimate outcome of a long historical and political global process of tobacco regulation2. This process developed in parallel with the spread of awareness of the health consequences associated with tobacco use and second-hand smoke. Nowadays, even the big tobacco companies fighting tobacco regulations acknowledge the risks associated with tobacco, to the point that they affirm that ‘there is no dispute that tobacco is harmful’3. However, it has not always been the case4. It seems that the first hypotheses and experiments trying to link smoke to health hazards date back the end of the XIX century. The spread of blended cigarettes products during the First World War and the following years exacerbated those risks. Indeed, the cigarettes were manufactured in order to taste sweeter and to be inhaled, which ultimately increased their harmfulness5. By the first half of the XX century, the scientific community was already aware that those suppositions had become something more similar to ascertained facts. Nevertheless, the
2 For a recent analysis of global struggles, see: AD Mitchell & T Voon eds., ‘The Global
Tobacco Epidemic and the Law’, Edward Elgar (September 2014) (hereinafter ‘AD Mitchell & T Voon eds. 2014’).
3 Last: Philip Morris Limited, Response to the Consultation on “Standardised
Packaging”, 7 August 2014, p. 1, available at:
http://www.pmi.com/eng/tobacco_regulation/submissions/Documents/UK%20-%20%20Standardised%20Packaging%20Submission%20PML.pdf .
4 For general literature on the history of smoking, see: R Kluger, ‘Ashes to Ashes:
America's Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris’, Alfred A Knopf (1996); AM Brandt, ‘The Cigarette Century: the Rise, Fall and Deadly Persistence of the Product that Defined America’, Basic Books (2007) (hereinafter ‘AM Brandt’); RN Proctor, ‘Golden Holocaust: Origins of the Cigarette Catastrophe and the Case for Abolition’, University of California Press (2011) (hereinafter ‘RN Proctor’).
9 risks associated with smoking have long been contested and overshadowed. As the tobacco industry today still claims, they were more ‘common knowledge’ than ‘scientific knowledge’6. The efforts to knowingly deny and hide such findings have led historians and activists to talk about the ‘tobacco conspiracy’7. Its founding act would have taken place in a meeting among tobacco moguls at New York Plaza Hotel in 1953, and would have soon included other scientific and business partners, making a ‘conspiracy on a grand scale’8. Notwithstanding, in the following decades, the publication and circulation of the scientific studies that proved the health consequences related to tobacco use continued, and eventually grew. The number of associations devoted to the fight against tobacco increased, and by the 90s, their campaigns became well-known to the general public. The tobacco industry became soon aware of this movement. In 1991, one Philip Morris internal report summarized the common perception, by stating:
‘The anti-smoking movement is a relatively new phenomenon, at least in its present form (there were always some people who thought that tobacco use is evil, but they were more or less marginal types). Originating as an organized movement about twenty years ago in the United States, it is now a powerful conglomerate of voluntary associations, political action groups, segments of professional organizations, and (last not least) government and
6 RN Proctor, Chapter 12.
7 RN Proctor. This author bases most of his arguments on the data emerged subsequent to
the Master Settlement Agreement in 1998 between the five largest tobacco companies in the United States of America, and the Attorneys General of forty-six States, five territories, and the District of Columbia. In addition to other substantial monetary obligations, the terms of the Agreement require the tobacco companies to publish and make available all tobacco industry documents. For further information, see the detailed factsheets and reports available at:
http://www.tobaccofreekids.org/facts_issues/fact_sheets/policies/settlements_us_state/un derstanding/ .
10
inter-governmental agencies. This conglomerate, through still centered in North America, is now international in scope’9.
1.1 The WHO Framework Convention on Tobacco Control
Our story begins exactly when the movement became international in scope. Soon, the World Health Organization (WHO) took the lead of the global health campaign against tobacco.
The WHO is an international organization and a specialized agency of the United Nations (UN) within the terms of Article 57 of the UN Charter10. Its funding Constitution was signed in 1946 at the International Health Conference in New York (WHO Constitution), incorporating the ambitious and ideal objective of ‘attainment by all peoples of the highest possible level of health’11. Among its functions, and significantly for the purposes of this work, it was specifically mandated to ‘propose conventions, agreements and regulations, and make recommendations with respect to international health matters’12.
1.1.1 The Origins of the WHO Anti-Tobacco Campaign and the Negotiations Leading to the Convention
The first resolution concerning ‘the health consequences of smoking’ of the WHO governing body, the World Health Assembly (WHA), dates back 197013. The same topic was subsequently re-addressed and re-discussed
9 PL Berger, ‘The Anti-Smoking Movement in Global Perspective’, Report drafted for
Philip Morris International – Madrid, available at:
http://tobaccodocuments.org/pm/2503001914-1927.html .
10 Charter of the United Nations, signed in San Francisco on 26 June 1945, entered into
force on 24 October 1945, 1 UNTS XVI.
11 Constitution of the World Health Organization, signed in New York on 22 July 1946,
entered into force on 7 April 1948, 14 UNTS 185, Art. 1 (hereinafter ‘WHO Constitution’).
12 Ibid., Art. 2(k).
13 WHO, Resolution WHA23.32, Health Consequences of Smoking, adopted at the
11 many times, taking into account the progress in scientific knowledge and growing alarm for the tobacco epidemic. Within the process of restructuring its actions and programmes, and approaching the later-called ‘global health’ issues14, the World Health Assembly took a major step in 1996, adopting a resolution requesting the Director-General to initiate the development of a Convention on Tobacco Control15. The procedural path suggested was to act – for the very first time since its establishment - under Article 19 of the WHO Constitution, which provides the organisation with treaty-making power: ‘[t]he Health Assembly shall have authority to adopt conventions or agreements with respect to any matter within competence of the Organization’, by a two-thirds vote16. Notwithstanding the landmark mandate, it took several years before the Tobacco Free Initiative Unit was established. In 1999, a WHA resolution established a Working Group and an Intergovernmental Negotiating Body to carry out this task17. Substantive coordination efforts with other UN, intergovernmental and nongovernmental institutions were made, in order to draft and negotiate the text18. For its part, the tobacco industry had the opportunity to express their concerns already at this stage19. This fact proves important because, as we would see in the course of this work, it is currently strongly trying to contrast the Convention’s implementing domestic legislation. Truly, beyond the official channels, it is now established that tobacco companies
14 TM Brown & M Cueto & E Fee, ‘The World Health Organization and the Transition
From “International” to “Global” Public Health’, 96 American Journal of Public Health 1 (2006), pp. 62–72, available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1470434/
.
15 WHO, Resolution WHA49.17, International framework convention for tobacco
control, adopted at the Forty-ninth World Health Assembly, 25 May 1996.
16 WHO Constitution, Art. 19.
17 WHO, Resolution WHA52.18, Towards a WHO framework convention on tobacco
control, adopted at the Fifty-Second World Health Assembly, 17-25 May 1999.
18 WHO, ‘History of the WHO Convention on Tobacco Control’ (2009), available at:
http://whqlibdoc.who.int/publications/2009/9789241563925_eng.pdf?ua=1 , pp. 5-8.
12 often express their concerns by carrying out concealed practices. Indeed, in the year 2000, an accurate inquiry by a group of experts shed light on some of the tactics and means implemented. It revealed an extensive and worrisome array of lobbying activities, encompassing the use and abuse of political and financial power. Finally, it firmly concluded that ‘tobacco companies had been operating for many years with the deliberate purpose of subverting the efforts of the World Health Organization to control tobacco use’20. Most likely, this background did not provide the best preconditions for negotiating the Convention. On the contrary, it probably severely affected them and their resulting outcome.
But in spite of this, the Framework Convention on Tobacco Control (FCTC) was finally adopted by consensus by the same World Health Assembly in 2003, and opened for signatures21. The Convention entered into force in 2005, having reached, to this day, the stunning number of 179 State Parties22.
1.1.2 The Legal Force of the Convention and of its Guidelines
The FCTC is often referred as an ‘evidence-based treaty’. This definition refers to the fact that its adoption and its content reflect the accepted and common understanding that tobacco use has negative health consequences. Indeed, its preamble affirms that ‘scientific evidence has unequivocally established that tobacco consumption and exposure to tobacco smoke cause death, disease and disability, and that there is a time lag between the exposure to smoking and the other uses of tobacco products and the onset
20 WHO, ‘Tobacco Company Strategies to Undermine Tobacco Control Activities at the
World Health Organization, Report of the Committee of Experts on Tobacco Industry Documents (2000), available at http://www.who.int/tobacco/en/who_inquiry.pdf .
21 WHO, Resolution WHA56.1,WHO Framework Convention on Tobacco Control,
adopted at the Fifty-Sixth World Health Assembly, 21 May 2003.
22 WHO Framework Convention on Tobacco Control, signed on 21 May 2003, entered
13 of tobacco-related diseases’23. Moreover, it recognizes that ‘tobacco epidemic is a global problem with serious consequences for public health’, and expresses serious concern about the growing consumption and the use by vulnerable groups24.
Additionally, the preamble recalls in the first place that the signatory parties are ‘[d]etermined to give priority to their right to protect public health’, to the right to attain the highest possible standard of health25. Hence, human rights have a primary role in the Convention, and they are regarded as its legal bases.
The structure of the Convention is fairly complex, as it incorporates thirty-eight articles, divided in eleven Parts. After the general introduction and a Part on ‘Objective, guiding principles and general obligations’, Part III is devoted to ‘Measures relating to the reduction of demand for tobacco’. Further on, Part IV deals with ‘Measures relating to the reduction of the supply of tobacco’, Part V with ‘Protection of the environment’, Part VI with ‘Questions related to liability’, and Part VII with ‘Scientific and technical cooperation and communication of information’. Finally, Part VIII concerns ‘Institutional arrangements and financial resources’, and Parts VIII, IX, X and XI the settlement of disputes, amendments, and the final provisions.
In discussing the FCTC and its legal force, one should always bear in mind that it is a ‘Framework Convention’. In the original intentions of its proposers, a detailed treaty was considered a too ambitious proposal, whereas a ‘framework treaty’ was seen as more attainable. It would serve
23 Ibid., Preamble.
24 Ibid., Preamble. The vulnerable groups mentioned are: children and youth, women,
indigenous people, as well as developing countries’ population.
25 Enshrined in :WHO Constitution, Art. 1; Convention on the Rights of the Child, signed
in New York on 20 November 1989, entered into force on 2 September 1990, 1577 UNTS 3, Art. 24; International Covenant on Social, Economic and Cultural Rights, signed in New York on 16 December 1966, entered into force on 3 January 1976, 993 UNTS 3, Art. 12.
14 the purpose of setting common goals, and expressing the commitment to cooperate at the international level. Only in a second time, the parties would ‘conclude separate protocols containing specific measures, designed to implement these goals’26. This is confirmed by the fact that Articles. 2, 3, 4, and 5 addressing the ‘objective and goals’ always make reference to both ‘the Convention and the protocols’, even if at the time of the negotiations no protocol was discussed. However, the negotiations partly diverged from this objective and went beyond it. At the present moment, only one Protocol has been adopted, and no further one is currently being negotiated27. Nonetheless, the Convention has been further developed and implemented. Several provisions of the FCTC are considered already sufficiently detailed and have been implemented by State Parties, as it will be discussed below. In lieu of the foreseen protocols, a pivotal role has been played by the ‘Guidelines’, mentioned by Article 7 of the Convention as one of the means of implementation of the provisions in Articles 8-13. To this day, seven guidelines have been adopted, covering Articles 5(3), 8, 9 and 10, 11, 12, 13 and 14, and additional others are in progress28. They are a very useful and flexible tool, as they provide a very detailed and updated guidance for implementation. Plus, they can be adopted without the need to follow the procedure for the adoption of an international treaty, as the protocols would require. On the other hand, their legal status is not yet clear and much debated. At the moment of ratification, the Czech Republic made the following interpretative declaration ‘The Czech Republic declares that it does not consider guidelines adopted by the Conference of the Parties as
26 A Talylor, ‘An International Regulatory Stategy for Global Tobacco Control’, 21 Yale
Journal of International Law (1996), p. 257.
27 J Liberman, ‘The power of the WHO FCTC: Understanding its legal weight and
status’, in AD Mitchell & T Voon eds. 2014, p. 4 (hereinafter ‘J Liberman 2014’).
15 instruments directly establishing legal obligations under the Convention’29. However, as it has been pointed out by scholars, the issue is more complex, for the guidelines should not be interpreted as a whole, but there would be ‘differences in legal implications between sets of guidelines and between elements of each set of guidelines according to the precise language used and its relationship with the text of the treaty’30. In this view, some of them would be mere recommendations, and others deemed legally binding interpretative rules under the Vienna Convention on the Law of the Treaties (VCLT). According to Article 31(3) of the VCLT, ‘[t]here shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provision’31.
As demonstrated by the Australian case analysed in the course of this work, the guidelines have been a useful guidance for States in the implementing practice32. Moreover, and interestingly for this work, they have been extensively analysed and taken into account by the WTO jurisprudence. The Clove Cigarettes case was particularly relevant because only one of the two disputing countries was party to the FCTC. Notwithstanding, both recognized the relevance of the Guidelines and mentioned them in their submissions. The Panel confirmed it in view of the fact that they draw on the best available scientific evidence and experience of the parties and showed ‘a growing consensus within the international community to strengthen tobacco-control policies through regulation of the content of
29 United Nations Treaty Collection, Database, available at:
https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IX-4&chapter=9&lang=en .
30 J Liberman 2014, p. 4,
31 Vienna Convention on the Law of the Treaties, signed in Vienna on 23 May 1969,
entered into force on 27 January 1980, 1155 UNTS 331 (hereinafter ‘VCLT’).
32 J Liberman, ‘Four COPs and counting: achievements, underachievements and looming
challenges in the early life of the WHO FCTC Conference of the Parties’, 21 Tobacco
16 tobacco products’33. It should also be pointed out that their importance has been indirectly recognized in the Punta del Este Declaration, discussed below. Here, it is underlined the need for the State Parties to adopt the measures set forth in the FCTC and ‘its guidelines’34, rather than the ‘protocols’, as the language from the Convention would suggest. Finally, and besides the debate on the binding or non-binding nature of the provisions, one should not forget that the articles, along with the protocols, and the guidelines, only represent a minimum standard to be applied by the Parties. As expressed in Article 2, ‘Parties are encouraged to implement measures beyond those required by this Convention and its protocols, and nothing in these instruments shall prevent a Party from imposing stricter requirements that are consistent with their provisions and are in accordance with international law’.
At this point, one may legitimately wonder whether it was really needed to have a legally binding instrument, if it was to be drafted in such a way that it could be derogated, flexibly adapted, needed to be integrated, and at the end of the day only enshrined a few minimum core obligations. One first response is that it represented an historical political event, for many States and actors of the anti-tobacco movement were convened in the same location, and eventually adopted a common document. Additionally, as evidenced in the aforementioned WTO jurisprudence, its importance lies in the fact that it enshrines the best available evidence and a shared consensus on some fundamental, albeit a few, points. In a field where scientific studies are often contradictory and accused of partiality, this can be crucial. The Convention might hence form the basis not only for judicial decisions, but
33 WTO, United States - Measures Affecting the Production and Sale of Clove Cigarettes,
Panel Report, WT/DS406/R,
2 September 2011, para. 7.230 (hereinafter ‘Clove Cigarettes Panel Report’).
34 Conference of the Parties to the WHO Framework Convention on Tobacco Control,
Decision FCTC/COP4(5), ‘Punta del Este Declaration on the Implementation of the WHO Framework Convention on Tobacco Control’, 19 November 2010, Preamble and para. 8 (hereinafter ‘Punta del Este Declaration’).
17 even for further political or legal documents, both at national and international level. However, such an explanation would not give reason for the need of a complex legal instrument. A simple declaration or any other political document would have sufficed for this purpose. In the opinion of the present author, the very importance of the Convention lies on a different, but still legal, ground. Rather than the strictly legal obligation upon the Parties to implement its substantial provisions (which, anyway, is often blurry in international law), it is the possibility that the Convention offers to States to justify the adoption of legislative measures and derogate from other norms of international law35. Indeed, international law, as it is well-known, deems domestic law irrelevant in characterizing the wrongfulness of an act36. Therefore, despite its vague content, the same existence of the FCTC has allowed Australia and other States to defend their health policies on a more firm ground.
1.1.3 The Substantial Provisions Enshrined in the Convention
Coming to a detailed analysis of the FCTC, the first relevant provisions are Articles 4 and 5, respectively enshrining the guiding principles and general obligations. The former affirms the importance of the right of the citizens to be informed of the health consequences of tobacco consumption or exposure, as well as the need to take affirmative measures in order to reduce
35 K Lannan, ‘The WHO Framework Convention on Tobacco Control: The International
Context for Plain Packaging’, in Public Health and Plain Packaging of Cigarettes, Legal Issues (T Voon & AD Mitchell & J Liberman eds.), Edward Elgar (2012), p. 26 (hereinafter ‘T Voon & AD Mitchell & J Liberman eds. 2012’); TY Lin, ‘The Status Of FCTC In The Interpretation Of Compensable Indirect Expropriation And The Right To Adopt “Stricter” Tobacco Control Measures Under Bits’, 19 Asian Journal of WTO &
International Health Law and Policy (2014), p. 125 (hereinafter ‘TY Lin 2014.1’).
36 VCLT, Art. 27; Draft Articles on Responsibility of States for Internationally Wrongful
Acts, in Report of the International Law Commission on the Work of Its Fifty-third Session, UN Doc. A/56/10 (2001), Art. 3: ‘The characterization of an act of a State as internationally wrongful is governed by international law. Such characterization is not affected by the characterization of the same act as lawful by internal law’ (hereinafter ‘ILC DARS’).
18 consumption37. Moreover, it recalls the importance of international cooperation, intersectorial measures, liability of tobacco companies, participation of civil society, and technical and financial assistance for the tobacco growers and workers from developing countries38. The latter instead provides for the most important commitment undertaken by the Parties: to ‘develop, implement, periodically update and review comprehensive multisectoral national tobacco control strategies, plans and programmes’, further defined as a) establishing a focal point for tobacco control and b) ‘adopt and implement effective legislative, executive, administrative and/or other measures and cooperate, as appropriate, with other Parties’39. Here, the stress on the ‘implementation’ and ‘effective’ measures makes clear that the standard required is quite high. Article 5 additionally provides for a more general duty to cooperate with other Parties and other actors40. Finally, but very importantly for this work, it precisely states the need to ‘protect these policies from commercial and other vested interests of the tobacco industry’41.
In Part III and Part IV are enshrined the tobacco control measures to be adopted by State Parties. The language of the single provisions differs, so that only some of them are of a binding nature, whereas others are only suggested. Part III, concerning measures ‘relating to the reduction of demand for tobacco’ is the part of the Convention most relevant to this work. The first article, dealing with price and tax measures, limits itself to demand that the Parties ‘take account’ of health objectives when considering such measures42. Article 7, concerning non-price measures, is instead more piercing, as it directly requires the Parties to adopt the 37 FCTC, Art. 4(1-2). 38 FCTC, Art. 4(3-4-5-6-7). 39 FCTC, Art. 5(1-2). 40 FCTC, Art. 5(4-6). 41 FCTC, Art. 5(3). 42 FCTC, Art. 6.
19 measures enlisted in Articles 8 to 13. These articles provide for: protection from exposure to tobacco smoke, regulation of the contents of tobacco products, regulation of tobacco products disclosures, packaging and labeling of tobacco products, ‘[e]ducation, communication, training and public awareness’, and finally ‘[t]obacco advertising, promotion and sponsorship’. Their normative content varies. Additionally, several articles contain ‘as appropriate’ clauses. Some of the articles only direct for the adoption of effective measures, whereas others prescribe the measures to be adopted in great detail.
Finally, Part IV also contains several detailed provisions, thus concerning the ‘reduction of the supply of tobacco’. It sets forth a broad array of measures, from illicit trade to sales to and by minors. The other Parts of the FCTC contain miscellaneous measures, encompassing the protection of the environment, questions related to liability of tobacco companies, scientific and technical cooperation, as well as the institutional arrangements provided for the implementation of the Convention.
Nonetheless, as we said, the agreement reached upon the substantial provisions is only part of the achievements of the Convention and its conveners
1.1.4 The Conference of the Parties, the Secretariat and the Further Development of the Convention
As already mentioned, the FCTC was supposed to be only a framework convention. The drafting of further Protocols and the guidelines was regarded as critical for the subsequent clarification of the Convention, as well as in order to boost the development of tobacco control policies. The organ designated to conduct this development was the Conference of the Parties (COP), established under Article 23 of the FCTC. According to this article ‘The Conference of the Parties shall keep under regular review the implementation of the Convention and take the decisions necessary to
20 promote it is effective implementation and may adopt protocols, annexes and amendments to the Convention’. In addition, it entrusts the COP with several further tasks, spanning from the facilitation of international cooperation, promotion of studies and strategies, to the mobilization of financial resources. The WHA resolution adopting the FCTC established a permanent Working Group, with the aim of overseeing the preparations for the first COP, and of making proposals on the Rules of Procedure, the budget and other organizational issues to be decided within the first meeting43. Furthermore, Article 24 provided that it designate a permanent secretariat, which would be entrusted with providing administrative support to the COP and the Parties, along with preparing reports on the activities performed under the Convention44. To this day, the work of the COP has generally been positively evaluated, despite some drawbacks45. Concerning international cooperation, it is worth mentioning for the purposes of this work, that relationships with the WTO have been fruitful. The COP has adopted decisions specifically enhancing coordination and exchange of information with the WTO, later extended to the United Nations Conference on Trade and Development (UNCTAD)46. Within this framework, numerous activities have been performed47.
43 WHO, Resolution WHA56.1, adopted at the Fifty-Sixth World Health Assembly, 21
May 2003, para. 7.
44 FCTC, Art. 24.
45 For a comprehensive review, see: J Liberman 2012.1; confirmed in: J Liberman 2014. 46 Conference of the Parties to the WHO Framework Convention on Tobacco Control,
Decision FCTC/COP4(18), ‘Cooperation between the Convention Secretariat and the World Trade Organization’, adopted at the Forth Session, 20 November 2010; Conference of the Parties to the WHO Framework Convention on Tobacco Control, Decision FCTC/COP5(15), ‘Cooperation between the Convention Secretariat, the World Health Organization, the World Trade Organization and the United Nations Conference on Trade and Development’, adopted at the Fifth Session, 17 November 2012.
47 Among the activities, it is important to underline the two Workshops ‘on trade and
investment issues relevant to implementation of the WHO FCTC’, held at the WHO Headquarters on 15-16 March 2012, and later on 31 March 2014. A general report on the activities undertaken has also been prepared in 2012: Conference of the Parties to the WHO Framework Convention on Tobacco Control , Report by the WHO Secretariat
21 The substantial development of the Convention has also been addressed by the COP. As for the Protocols envisaged by the Convention, we said that only one has been so far approved. It is the Protocol to Eliminate Illicit Trade in Tobacco Products, a new international treaty in its own right. It was adopted by consensus on 12 November 2012 at the fifth session of the Conference of the Parties (COP), and has not yet entered into force48. Since it does not directly relate to the subject of this work, it will not be addressed it in depth. Neither will it be done with regard to all the guidelines approved, whose topics span from the regulation of the content of tobacco products to education and awareness campaigns. Only the content of the two sets of guidelines relevant to this work will be discussed further on.
Nonetheless, for the purposes of this work, one of its greatest achievements is undoubtedly the aforementioned ‘Punta del Este Declaration’, adopted on 19 November 2010 in response to the first legal challenges initiated by Philip Morris. The Declaration was meant to be a legal tool to strengthen the arguments in favour of tobacco control measures. Plus, it was seen as a sign of solidarity towards Uruguay, the first country whose policy had been challenged, and also host of the 2010 COP meeting49. After affirming that the power of adopting tobacco control policies pursuant to the FCTC and its guidelines ‘fall[s] within the power of sovereign States to regulate in the public interest, which includes public health’, the Declaration recalls the relevant provisions in international trade law openly allowing such interventions. However, its legal effects are not yet very clear. As it has been affirmed, in the context of investment disputes, it may amount to a subsequent agreement of the parties, and therefore it may have the same legal status of the FCTC. Unfortunately, in the case concerning Uruguay,
FCTC/COP/5/12 ‘Cooperation with the World Trade Organization on trade-related tobacco-control issues’, presented at the Fifth Session, 20 September 2012.
48 WHO, FCTC Conference of the Parties, WHO Doc FCTC/COP5(1), Protocol to
Eliminate Illicit Trade in Tobacco Products, signed on 12 November 2012.
22 Philip Morris is represented by its Swiss branch, and Switzerland is not party to the FCTC50 . Similarly, it is reasonable to assume that Philip Morris and other major tobacco companies would always try to fill further disputes through their branches in States that are not party to the Convention. Moreover, according to the same author, it is unlikely that the WTO might recognize legal effects to the international trade law provisions of the Declaration, for under its Agreement only the Ministerial Conference and the General Council have the power to issue official interpretations of WTO treaties51.
A key step in the development and implementation of the Convention was also made outside the COP, at the United Nations level. The High-level Meeting of the General Assembly on the Prevention and Control of Non-communicable Diseases adopted a Political Declaration encouraging States to access the FCTC and to implement its provisions52. It also starkly affirmed that the tobacco industry and public health are in a ‘fundamental conflict of interest’53. Despite lacking binding force, the adoption by consensus of this act represents a paramount global recognition of the importance of the Convention.
1.2 The Australian Plain Packaging Legislation
One of the most significant pieces of legislation implementing the FCTC was adopted by the Australian Parliament in 2011. As it explicitly affirms, it was approved in order to ‘discourage the use of tobacco products’, and particularly to reduce the marketing power of cigarette retail packs, as set
50 B McGrady, ‘Philip Morris v. Uruguay: The Punta del Este Declaration on the
Implementation of the WHO Framework Convention on Tobacco Control’, 2 European
Journal of Risk Regulation (2011), p. 260.
51 Ibid.
52 UN General Assembly, Draft Resolution A/66/L.1, 19 September 2011. 53 Ibid., para 38.
23 forth in Article 11 of the FCTC and in related guidelines. Australia has always been one of the countries in the first line against tobacco, adopting its first legislation between 1973 and 197654. Among the most advanced pieces of legislation on tobacco control, it had enacted the Tobacco Advertising Prohibition Act in 199255. In 2004, and then in 2008, it was the turn of the Acts mandating tobacco and cigarettes packaging to display health warnings56. Other relevant legislation includes the Competition and Consumer Act of 2010, imposing a safety or information standard, further detailed in the Tobacco Information Standard of 201157.
The Bill proposed by the Government was meant to be the fundamental stag of the anti-smoking action plan under the National Healthcare Agreement58. In strengthening this legislation, it chose a drastic approach, as it was the first country in the world to demand that all cigarettes are sold in unattractive one-colour packages. In addition to being commended for its
54 J Liberman & M Scollo & B Freeman & S Chapman, ‘Plain tobacco packaging in
Australia: the Historical and Social Context’, in T Voon & AD Mitchell & J Liberman eds. 2012, p. 40 (hereinafter ‘J Liberman & M Scollo & B Freeman & S Chapman 2012’).
55 Tobacco Advertising Prohibition Act 1992, Act No. 218 of 1992 as amended, available
at: http://www.comlaw.gov.au/Details/C2012C00734 .
56 Consumer Product Information Standards) (Tobacco) Regulations 2004, Statutory
Rules 2004 No. 264 as amended,
made under the Trade Practices Act 1974, available at:
http://www.comlaw.gov.au/Details/F2007C00131 ; the Trade Practices (Consumer Product Safety Standard) (Reduced Fire Risk Cigarettes) Regulations 2008, Select Legislative Instrument 2008 No. 195 as amended, made under the Trade Practices Act 1974, available at: http://www.comlaw.gov.au/Details/F2009C00252 .
57 Competition and Consumer (Tobacco) Information Standard 2011, under the
Competition and Consumer Act 2010, available at:
http://www.comlaw.gov.au/Details/F2011L02766 .
58 Explanatory Memorandum to Tobacco Plain Packaging Bill, House of Representatives,
Circulated by authority of the Minister for Health and Ageing, the Hon Nicola Roxon MP, p. 1, available at:
http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r4613_ems_d7b0bff9-4a09-4107-8b69-002903b648af/upload_pdf/357464.pdf;fileType=application%2Fpdf
24 commitment in implementing the FCTC59, Australia has been praised as an example of the possible critical impact of the Convention even in countries already considered ‘advanced’ in terms of tobacco control regulations60.On the other side, ever since its announcement in 2010, the proposed measures triggered a fierce response by tobacco industry. More than a simple diminution of their retail market in Australia, tobacco companies perhaps fear that a successful implementation of the law might lead other countries to adopt similar legislation61.
The presentation of the Bill was preceded by consultations, in which tobacco companies could already state their concerns, but ultimately were mainly not received by the Government62. Additionally, some companies initiated massive campaigns directed to controvert the effects of plain packaging measures63. The adoption of the Act ultimately led to the proliferation of the competing procedures challenging the Australian legislation, focus of this work.
1.2.1 From Health Warnings to Plain Packaging
Packaging is a critical element in the business of cigarettes. After the banning of tobacco advertising, the companies invested in this ultimate form of marketing, which aims at increase the attractiveness of cigarettes and encourage the irrational impulses behind their purchase64. It has also been documented that the colourful design of cigarette packages targets
59 For all, see: Submission by the Convention Secretariat WHO Framework Convention
on Tobacco Control (FCTC) in respect of Australia's draft Tobacco Plain Packaging Bill 2011, 6 June 2011, p. 2, available at:
http://www.smoke-free.ca/plain-packaging/documents/2011/FCTC.pdf .
60 J Liberman & M Scollo & B Freeman & S Chapman 2012, pp. 46-47. 61 J Liberman & M Scollo & B Freeman & S Chapman 2012, pp. 31-32. 62 Explanatory Memorandum to Plain Packaging Bill, p. 2.
63 J Liberman & M Scollo & B Freeman & S Chapman 2012, pp. 43-46. 64 RN Proctor, p. 132.
25 especially starters and young smokers65. The first step undertaken to reduce the appeal of packages has been the adoption of laws mandating health warnings on cigarettes packs66. Well-known in Italy and Europe, health warnings mainly consist in both disturbing images of consequences of tobacco-related diseases and informative written signs. Nonetheless, tobacco companies continued to introduce colourful, attractive, and targeted packages in numerous countries, sometimes with the specific intent of disguising health warnings67. For example, British American Tobacco in Australia marketed a double pack that could be split so that one half would not bear health warnings. Imperial Tobacco in Canada designed octagonal packs that also partially obscured the health warnings. In opposition to these strategies and as a way to reinforce their campaign, the movement against tobacco started supporting a more radical measure, the so-called ‘plain’ or ‘generic’ packaging. The idea was that tobacco companies should be compelled to sell their products in anonymous, unattractive plain-coloured packages, so that their marketing power would be completely thwarted. As it has been pointed out, a similar, thus de facto and voluntary, scheme is already virtually worldwide applied by pharmaceutical companies with regard to the pharmaceuticals requiring prescriptions68.
It seems that the first proposal to reduce the attractiveness of cigarettes by selling in generic packages was made by the Canadian Medical Association in 1986, in 1989 by the Toxic Substances Board, and the New Zealand-based Coalition against Tobacco Advertising and Promotion. This brief history has been spelled out in a fax ascribed to British American Tobacco
65 A Pottage, ‘No (More) Logo: Plain Packaging and Communicative Agency’, 47 UC
Davis Law Review (2013), at 517 (hereinafter ‘A Pottage’).
66 In Europe, European Parliament and Council Directive 2001/37/EU, recently amended
by European Parliament and Council Directive 2014/40/EU.
67 For these and further examples, see: B Freeman & S Chapman & M Rimmer, ‘The case
for the Plain Packaging of Tobacco Products’, 103 Addiction 4 (2007), p. 583 (hereinafter ‘B Freeman & S Chapman & M Rimmer’).
26 in 1994, which concludes by saying: ‘the rest is history’69 – meaning that, by the first years of 1990 the proposal was already under the scrutiny of several political bodies. In fact, the proposal was applauded by several health and anti-tobacco organizations, which promoted it before international and national fora, making it swiftly spread70.
Once made the proposal, its viability substantially depended on the possibility to demonstrate its positive effects. Ever since the ‘80s, several studies have been conducted in order to ascertain whether the proposed plain packaging scheme would be effective71. They are financed either by Governments considering to adopt it or by tobacco companies contrasting it. Thus, unsurprisingly, their conclusionshave often been opposite. In recent years, the most comprehensive and reliable study has still been regarded to be the Expert Panel Report prepared at the request of Health Canada in 199572. Based on qualitative and empirical analysis, the report encompasses a review of available literature as well as six different research methods. Surveys and behavioural experiments were submitted to thousands Canadian teenagers and adults. They either addressed direct questions on smoking habits, or indirectly deduced answers by reactions to the display of tobacco-related diseases or other influencing factors such as change in price. The objective of the research was to determine how youths
69 Tobacco Documentation Centre, Plain Packs History, Legacy Tobacco Documents
Libr. 1-3 (2007),
http://legacy.library.ucsf.edu/tid/jxd28a99/pdf;jsessionid=18FC67EEC6B5F23F316297D 5F8329E21.tobacco04 .
70 For an accurate timeline, see the one available on the Smoke-free website, at:
http://www.smoke-free.ca/plain-packaging/history.htm .
71 ME Goldberg, G Kindra, Lefebvre, L Tribu, J Liefeld, J Madillmarshall, et al., ‘When
Packages Can’t Speak: Possible Impacts Of Plain And Generic Packaging Of Tobacco Products’, available at:
http://legacy.library.ucsf.edu/documentStore/r/c/e/rce50d00/Srce50d00.pdf , p. 3, where four group studies published from 1987 to 1993 are mentioned, including those
conducted in the first-line countries such as New Zealand, Australia, Canada, plus one financed by Marlboro (hereinafter ‘ME Goldberg, G Kindra, Lefebvre, L Tribu, J Liefeld, J Madillmarshall, et al.’).
27 would react, in terms of their smoking behaviour (reduction of uptakes and increase of cessations), to a sudden change in cigarettes’ marketing through packaging. The results of the different studies almost converged on the same conclusions: plain packaging‘[…] through its impact on image formation and retention, recall and recognition, knowledge and consumer attitudes and perceived utilities, would likely depress the incidence of smoking uptake by non-smoking teens, and increase the incidence of smoking cessation by teen and adult smokers’73.
The limits of this and similar reports are equally manifest. First, there are inherent flaws related to social sciences’ research findings, which encompass possible errors, erroneous presumptions or underestimated concurring factors. Second, the findings’ universal validity in time and space should not be unquestioned and presumed. As explicitly stated in the report, all the conclusions are subject to a sort of rebus sic stantibus clause74. Tobacco industry would presumably, and probably, respond to any plain packaging measure by adopting alternative marketing strategies. If well implemented, they would alter, if not impair, nullify, and even reverse, the positive effects connected to the plain packaging legislation. Even more radically, some reports commissioned by tobacco companies maintain that the marketing power of packaging (if acknowledged to exist) would merely encourage brand loyalty and have no influence on smoke uptakes75: a matter of ‘market share rather than the size of the market’, as synthetized76. Quite the opposite, it was suggested that plain packages could have a marketing appeal on youths, for they would become an antiauthoritarian symbol77.
73 ME Goldberg, G Kindra, Lefebvre, L Tribu, J Liefeld, J Madillmarshall, et al., p. 14. 74 ME Goldberg, G Kindra, Lefebvre, L Tribu, J Liefeld, J Madillmarshall, et al., p. 15. 75 J Liuk, ‘Plain Packaging and Marketing of Cigarettes’, Admap Publications (2008)
(hereinafter ‘J Liuk’).
76 AD Mitchell, ‘Australia’s Move to the Plain Packaging Initiative and Its WTO
Compatibility’, 5 Asian Journal of WTO and International Health Law and Policy (2010), p. 404 (hereinafter ‘AD Mitchell 2010’).
28 Furthermore, and beyond marketing arguments, tobacco industry has raised a number of additional policy arguments. One particularly interesting is that competition between tobacco companies would not diminish, but only be transformed, switching from branding to costs. This would result in a reduction of retail prices, possibly causing an increase in consumption78. Lastly, a report submitted to the Irish Government on behalf of Philip Morris made a quantitive analysis out of previous behavioural studies. It estimated the economic costs related to job losses and decreased tax revenues that would stem from the announced forthcoming adoption of plain packaging legislation79. In times of deep economic crisis, this argument sounds pretty persuasive.
After years of guessings and experimental researches, any established belief is currently challenged by on-going observational studies on the implementation of the plain packaging legislation in Australia. A research praising its immediate positive effects was published80. Although it is necessarily only sympotomatic and indicative of possible long-term actual effects, it provided an interesting view. Its conclusion was based on the sudden and substantive increase of calls to ‘Quitline’, the Australian helpline for cessation of smoking. A first ‘trend analysis’ was instead published early this year, based on the comparison of two data sets on smoking prevalence of minors: one going from 2001 to 2012, and another from December 2012 to December 2013 (the first 13 months of TPPA’s
78 AD Mitchell 2010, p. 404.
79 Roland Berger Strategy Consultants, ‘The Potential Economic Impact of Plain
Packaging for Cigarettes and Fine-cut Tobacco in Ireland’ (2013), prepared at the request of Philip Morris International, submitted to the Irish Minister of Health, and available at:
http://health.gov.ie/wp-content/uploads/2014/07/Philip-Morris-iii.pdf .
80 JM Young & I Stacey & TA Dobbins & S Dunlop & AL Dessaix & DC Currow,
‘Association between tobacco plain packaging and Quitline calls: a population-based, interrupted time-series analysis’, 200: 1 The Medical Journal of Australia (January 2014), available at: https://www.mja.com.au/journal/2014/200/1/association-between-tobacco-plain-packaging-and-quitline-calls-population-based .
29 entry into force)81. The authors firmly concluded that there is no evidence of any significant ‘plain packaging effect’. Also, it is made clear that Philip Morris provided funding for the research. With this in mind, some British scholars reviewed the reliability of the data sets and the analysis provided, and harshly criticized the study, affirming that ‘in view of the short time span since the measure was introduced, the variability in the measure, and the small sample size, this is neither an unexpected nor a meaningful conclusion’82.
Another study83 has recently received publicity especially by reason of its employment by an Indian court. The research mainly consisted in a survey conducted at the time of the roll-out of the Australian legislation, in November 2012. Several adults smoking either from branded or plain packs were asked to compare their satisfaction and thoughts on quitting to the previous year. The results showed that those who were in the latter group were less happy with their habit than those who were in the former. Hence a decrease in smoking rates was predicted as a result of the enacted legislation. Albeit valuable, in comparison to the above-illustrated studies, this research does not seem to be neither decisive nor revolutionary. Yet, the Allahabad High Court in India exstensively relied on it, whilst ruling in favour of a non-governmental organization that petitioned the Indian Government to enact plain packaging legislation84.
81 A Kaul & M Wolf, ‘The (Possible) Effect of Plain Packaging on the Smoking
Prevalence of Minors in Australia: A Trend Analysis’, University of Zurich Working Paper Series Department of Economics No. 149 (first draft March 2014, revised version May 2014), available at: http://www.econ.uzh.ch/static/workingpapers.php .
82 AA Laverty & HC Watt & D Arnott & NS Hopkinson, ‘Standardised packaging and
tobacco-industry-funded research’, 383: 9926 The Lancet (April 2014), p. 1384, available at: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(14)60499-2/fulltext .
83 MA Wakefield & L Hayes & S Durkin & R Borland, ‘Introduction effects of the
Australian plain packaging policy on adult smokers: a cross-sectional study’, 3 BMJ
Open 7 (2013), available at: http://bmjopen.bmj.com/content/3/7/e003175.full#ref-1 .
84 Love Care Foundation v. Union of India and Others, Writ Petition No.1078 (M/B) OF
30 With the above-illustrated examples in mind, one should not forget that even observational studies are still subjected to the inherent flaws of social sciences’ research. Therefore, at the present moment, despite the empirical evidence becoming available, one should not excessivly rely on the expectation that the plain packaging dispute will be solved by indisputable, incontrovertible sound scientific studies.
Finally, it is worth mentioning that serveral countries are considering to follow Australia’s path, including New Zealand, India, South Africa85. Ireland and the United Kingdom have started public consultations in this regard86. The European Union, with the recent adoption of the Directive 2014/40/EU on 3 April 2014, has also started to pave this way.
1.2.2 Plain Packaging under the Framework Convention on Tobacco Control
The FCTC negotiators could not agree on such a drastic measure as the plain packaging. They rather agreed on a softer approach, including scattered indirect references. First, Article 11 on ‘tobacco packaging and labelling’ reads:
1. ‘Each Party shall, within a period of three years after entry into force of this Convention for that Party, adopt and implement, in accordance with its national law, effective measures to ensure that:
http://www.tobaccocontrollaws.org/litigation/decisions/in-20140721-love-care-foundation-v.-union- .
85 As of 2013, as reported by: J Liberman, ‘Plainly Constiutional: the Upholding of Plain
Tobacco Packaging by the High Court of Australia’, 39 American Journal of Law and
Medicine (2013), p. 363 (hereinafter ‘J Liberman 2013’).
86 Which were shared at the European regional meeting on implementation of the WHO
Framework Convention on Tobacco Control held in Budapest in March 2014. A summary of the meeting is available at:
http://www.who.int/fctc/implementation/workshops/summary_of_discussions_with_com ments_from_the_parties.pdf .
31
(a) tobacco product packaging and labelling do not promote a tobacco product by any means that are false, misleading, deceptive or likely to create an erroneous impression about its characteristics, health effects, hazards or emissions, including any term, descriptor, trademark, figurative or any other sign that directly or indirectly creates the false impression that a particular tobacco product is less harmful than other tobacco products. These may include terms such as “low tar”, “light”, “ultra-light”, or “mild”; and (b) each unit packet and package of tobacco products and any outside packaging and labelling of such products also carry health warnings describing the harmful effects of tobacco use, and may include other appropriate messages. These warnings and messages:
(i) shall be approved by the competent national authority, (ii) shall be rotating,
(iii) shall be large, clear, visible and legible,
(iv) should be 50% or more of the principal display areas but shall be no less than 30% of the principal display areas,
(v) may be in the form of or include pictures or pictograms.[…]’87.
As it is evident, Article 11 of the Convention mainly demands to the Parties to adopt and implement effective measures to ensure that tobacco companies do not use packages to convey false messages regarding the consequences of smoking. Additionally, it requires that companies be obliged by law to display specific health warnings. Thus, it does not require Governments to adopt measures generally restricting the branding power of packages.
Nonetheless, a general provision concerning advertisement can be found in Article 13 of the FCTC, as it provides that:
‘1. Parties recognize that a comprehensive ban on advertising, promotion and sponsorship would reduce the consumption of tobacco products.[…]
4. As a minimum, and in accordance with its constitution or constitutional principles, each Party shall:
32
(a) prohibit all forms of tobacco advertising, promotion and sponsorship that promote a tobacco product by any means that are false, misleading or deceptive or likely to create an erroneous impression about its characteristics, health effects, hazards or emissions;
(b) require that health or other appropriate warnings or messages accompany all tobacco advertising and, as appropriate, promotion and sponsorship; (c) restrict the use of direct or indirect incentives that encourage the purchase of tobacco products by the public; […]
5. Parties are encouraged to implement measures beyond the obligations set out in paragraph 4. […]’88.
It is interesting to point out that Article 13 converges with Article 11 in requiring that States ban deceptive messages and mandate health warnings. However, neither Article 13 explicitly mentions plain packaging as a measure to reduce the ultimate advertising practice. Nonetheless, its general terms requiring to reduce the advertisement of tobacco, as well as the provision demanding to ‘restrict the use of direct or indirect incentives that encourage the purchase of tobacco products by the public’, are broad enough to encompass such a measure. Accordingly, the guidelines to Article 13 explicitly refer to ‘packaging and product features’ as an important tool for advertising and promotion89.
The plain packaging measure was rather foreseen a few years later, in the course of the adoption of the guidelines. In the guidelines to Article 11, in non-binding terms, it is provided that:
‘Parties should consider adopting measures to restrict or prohibit the use of logos, colours, brand images or promotional information on packaging other
88 FCTC, Art. 13.
89 WHO Framework Convention on Tobacco Control, ‘Guidelines for implementation of
Article 11 of the WHO Framework Convention on Tobacco Control Tobacco advertising, promotion and sponsorship’, available at:
http://apps.who.int/iris/bitstream/10665/80510/1/9789241505185_eng.pdf , para. 15 (hereinafter ‘Guidelines to Article 11 of the FCTC’).
33
than brand names and product names displayed in a standard colour and font style (plain packaging). This may increase the noticeability and effectiveness of health warnings and messages, prevent the package from detracting attention from them, and address industry package design techniques that may suggest that some products are less harmful than others’90.
Here, a legal definition of plain packaging is given, and its adoption proposed. We have already discussed the unclear and disputed legal force of the guidelines. However, despite the lack of binding effects, we should remark that this language suggests that plain packaging might be a way to increase the effectiveness of the measures under Article 11 of the Convention. As we said, the FCTC has several clauses (including in Article 11 and Article 13) demanding that the measures adopted are effective, and Article 2 also reminds that States ‘are encouraged to adopt measures beyond those required’. The guidelines openly recognize this function, as they affirm that ‘these guidelines are intended to assist Parties in meeting their obligations under Article 11 of the Convention, and to propose measures that Parties can use to increase the effectiveness of their packaging and labelling measures’91. In this view, the non-binding nature of the language of the guidelines gains more legal force.
Similarly, and in addition to an explicit reference to the guidelines to Article 11, the guidelines to Article 13 provide that:
‘The effect of advertising or promotion on packaging can be eliminated by requiring plain packaging: black and white or two other contrasting colours, as prescribed by national authorities; nothing other than a brand name, a product name and/or manufacturer’s name, contact details and the quantity of product in the packaging, without any logos or other features apart from health warnings, tax stamps and other government-mandated information or markings; prescribed font style and size; and standardized shape, size and
90 Guidelines to Article 11 of the FCTC, para 46. 91 Guidelines to Article 11 of the FCTC para 1.
34
materials. There should be no advertising or promotion inside or attached to the package or on individual cigarettes or other tobacco products [...] Parties should consider adopting plain packaging requirements to eliminate the effects of advertising or promotion on packaging […]’92.
The language of these guidelines does not differ in terms of their binding value, as they limit themselves to propose the plain packaging measure. The reference to the potential increased effectiveness of all the measures aimed at reducing tobacco advertising or promotion is also present. It is nonetheless more subtle, as it only stems from the inherent advertising power of packages, and is not openly reaffirmed. According to the FCTC Secretariat, the link is made clear by the broad definition of ‘tobacco advertising and promotion’ set out in Article 1(c) of the Convention, which demands their ban in all forms93. Anyhow, any doubts are partially dissolved by the fact that these Guidelines also contain a reference to their function of assisting the Parties in meeting their obligations under Article 1394.
Unlike the Guidelines to Article 11, however, the Guidelines to Article 13 contain a more detailed list of the prescriptions that should be adopted by Governments in order to implement the measure, from the nationally prescribed colour to the standardized font style.
92 WHO Framework Convention on Tobacco Control, ‘Guidelines for implementation of
Article 13 of the WHO Framework Convention on Tobacco Control, Packaging and labelling of tobacco products’, available at:
http://apps.who.int/iris/bitstream/10665/80510/1/9789241505185_eng.pdf ., paras 16-17 (hereinafter ‘Guidelines to Article 13 of the FCTC’).
93 Submission by the Convention Secretariat WHO Framework Convention on Tobacco
Control (FCTC) in respect of Australia's draft Tobacco Plain Packaging Bill 2011, 6 June 2011, p. 2, available at:
http://www.smoke-free.ca/plain-packaging/documents/2011/FCTC.pdf .
