Philip Morris to compensate Australia
14 July, 2017
Tobacco giant Philip Morris has been ordered to pay the Australian government millions of dollars after unsuccessfully suing the nation over its world-first plain-packaging laws, news wires reported. In 2012, Australia imposed a law that cigarettes must be sold in unappealing packets with graphic health warnings. Philip Morris had tried to force the laws overturned, but a court dismissed its claim in 2015.
The tobacco giant has now been ordered to pay the government's legal costs. The exact amount imposed by the international Permanent Court of Arbitration (PCA) was not disclosed, but the Sydney Morning Herald reported it was as high as A$50m ($38m). In May, Bloomberg reported that the World Trade Organization (WTO) had decided Australia's laws were a legitimate public health measure.
After plain packaging was introduced, Philip Morris, Imperial Tobacco and Japan Tobacco launched a constitutional challenge in Australia's highest court. When that bid failed, Philip Morris went to the PCA to claim the legislation breached Australia's Bilateral Investment Treaty with Hong Kong. It sought an end to plain packaging, or billions of dollars in compensation. The court dismissed the company's case, calling it “an abuse of rights”.