Uruguay has won the six-year legal battle launched by Philip Morris International (PMI) in 2010 before the International Centre for Settlement of Investment Disputes (ICSID) – one of the world’s smallest countries claiming a significant victory over one of the world’s largest corporations.
President Tabaré Vázquez of Uruguay made the announcement on Friday July 8, in a public broadcast over national radio and TV. The ruling has international repercussions for tobacco control, setting a precedent that favours public health over commercial interests.
PMI took Uruguay to court seeking compensation for health policies that it claimed devalued its brand and investments. Specifically, PMI argued that graphic health warnings covering 80 percent of the surface area of tobacco packaging, and limiting each brand to just one variant (for example, only one presentation of Marlboro cigarettes, and not Marlboro Red, Light, or Blue), contravened trademark and investment protections. The ICSID ruling rejected all their claims.
The government of Uruguay has won and the claims of the tobacco companies have been categorically rejected (by ICSID)," said President Vázquez during his speech. "The sanitary measures we have implemented for tobacco control have been explicitly acknowledged as legitimate," he added.
President Vázquez stressed that his country adopted strict tobacco control policies to comply with the World Health Organization's Framework Convention for Tobacco Control (WHO FCTC), in light of irrefutable evidence showing that tobacco consumption leads to addiction, illness, and death. He then ratified his country's commitment to a full-scale fight against tobacco, and summoned other nations to join in this struggle, "without any fear of retaliation from powerful tobacco corporations, as Uruguay has done." "From now on," he added, "when they try to undermine those measures adopted in the context of the Framework Convention, (countries) will be able to rely on this ruling in our favour."
"This is a victory for the sovereign right of nations to protect the health of their populations, above and beyond the economic interests of the tobacco industry. The decision of the ICSID is ground-breaking for the global advancement of tobacco control. It has proven that small countries, with comparatively limited resources, can take on the might of multinational tobacco corporations and win," said Dr Ehsan Latif, Director of the Department of Tobacco Control at The Union. "Philip Morris International are now be liable for all legal costs relating to this case – they must be held accountable."
Dr Latif said that there was now no legal obstacle to other countries moving ahead with similarly strong tobacco control measures that are proven to reduce consumption and the premature death and disease. Since Uruguay introduced its comprehensive tobacco control programme in 2003, tobacco use amongst adults dropped from 32% to 23%. Tobacco consumption among school-going youth aged 12 – 17 decreased from over 30 percent to 9.2 percent in just eight years. Ministry of Health data also indicates that since smoke-free laws were introduced, hospitalisation for acute myocardial infarction has reduced by 22 percent.
The Union has worked with Uruguay’s government since 2014, offering technical assistance and building capacity to improve tobacco control policies, evaluate policy impact, and improve enforcement, in the context of a Bloomberg Initiative (BI) grant.
A 5-year strategic tobacco control plan to guide government actions during President Vázquez's current tenure was developed as an outcome of this collaboration. The Union will continue to support the government of Uruguay, as it focuses on plain packaging and countering industry interference over the next months.