PM trade-dispute ruling ‘victory for common sense’

While Australia has prevailed in an international legal dispute brought against it by Philip Morris, the decision is more a victory for common sense than a vindication of the government’s standardized packaging policy, according to a piece in The Age.

The writer, Dr. Kyla Tienhaara, a research fellow at the Regulatory Institutions Network, College of Asia and the Pacific, Australian National University, said the decision provided cold comfort to anyone concerned about investor-state dispute settlement (ISDS) provisions of trade treaties.

‘While much of what happened in the ISDS case remains under the wraps of a confidentiality order, it appears that Australia was able to convince the tribunal that Philip Morris should not be permitted to plead the merits of its case because it engaged in “treaty shopping”,’ Tienhaara wrote. ‘In other words, it was an American investor when plain packaging was introduced and only adopted a “flag of convenience” [Hong Kong] in order to access arbitration.

‘Treaty shopping is a serious problem in international arbitration, and tribunals have come to different conclusions about whether or not to permit it. As such, any decision that rejects a company’s efforts to shift nationality in this way is to be welcomed.

‘However, the dismissal of the case on procedural grounds means that we will never get a ruling on the substance of Philip Morris’ claims. As such, the award contributes nothing to the bigger debate about the conflict between investment protection and public policy.’

Tienhaara’s piece is at http://www.theage.com.au/comment/the-dismissal-of-a-case-against-plain-cigarette-packaging-is-good-news-for-taxpayers-20151218-glrb53.html.