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Phillip Morris Makes Demands of Uruguay at the International Centre for Settlement of Investment Disputes

April 13, 2010

Source: Redes-Amigos de la Tierra Uruguay

The following is a dossier of articles published in Uruguay and the United States since Phillip Morris began a lawsuit against the Uruguayan state in mid-March. There have been some extremely informative memos, published by both domestic and foreign media, as well as other more analytical and specialized articles (especially those translated from English) that delve deeper into the case. The articles facilitate a better understanding of the type of international litigation that the U.S. tobacco company is seeking and what their arguments are.

A few important points emerge from reading these memos:

Phillip Morris’ lawsuit against the Uruguayan State is viewed internationally as an extremely symbolic, unprecedented case that represents a paradigm shift, because it is the first time that a business has claimed alleged infringement on Intellectual Property Rights and then sought protection from a Reciprocal Protection of Investment Agreement.  It is also a case in which the outcome will decide between the defense of public health or the investments of a multinational corporation.

The tobacco company, which is headquartered in the U.S., is claiming protection under the Investment Protection Agreement (signed in 1988, active since 1991) held between the governments of Uruguay and Switzerland, where the company has its base of operations. It brought its case before the ICSID, the World Bank resolution tribunal, on February 26, 2010. The ICSID (International Center for Settlement of Investment Disputes) must decide whether it will hear the corporation’s petition or refuse to arbitrate in the dispute.

Uruguay is not the only country enacting strong anti-tobacco legislation; there are several European Union countries that are pushing for similar legislation (such as Norway, which is also confronting pressures from Phillip Morris). In fact, this is one of the main reasons that the tobacco companies seek to bring a suit against a country in the midst of development.

Various international specialists have stated that Uruguay has a good chance of winning eventual trial. However, according to information circulating in the press, it’s clear that the corporation “has a case”, which is to say that it has arguments that are protected by an active bilateral agreement with the force of Uruguayan law.

A Swiss law firm named “Lalive” (http://www.lalive.ch) , which has advised Phillip Morris on the international legality of the proposed anti-tobacco regulation, is in charge of the case for the corporation. In fact, one of the memos affirms that Lalive “understands” that they defend the tobacco company. Last year, Lalive concluded that the requirement that cigarettes be sold in generic packaging violates various obligations of the Agreement of the OMC in the provisions on the Rights of Intellectual Property related to Commerce.

The Central Argument of Phillip Morris

Phillip Morris argues that the tenets of the Swiss-Uruguayan Investment Protection Agreement are being violated. They argue that by demanding anti-tobacco labels large enough that brands cannot be displayed, Uruguay is indirectly expropriating—without compensation—  a Swiss investment protected by the Agreement. They also claim that one provision—which would only permit one display of a brand logo per pack— is “unjust” and forces them to stop advertising their products.

Focus

Uruguay’s 28 active Investment Protection Agreements and its participation in the ICSID, have enabled the transnational corporation to attempt to influence public politics in order to correspond with their particular interests. These agreements have also permitted the distortion of government regulations that are already in force by threat of lawsuit or by lawsuits themselves. This is what is currently taking place in various developing nations, and unless conditions change, it will continue to occur.

Uruguay signed the ICSID Convention on May 28th, 1992, ratified it in August of 2000, and began implementing it vigorously one month after that. Little is known about the activities of the Center, in spite of the fact that decisions made by its tribunals have changed the course of world economic relations.

Bolivia (2007) and Ecuador (2009) have both renounced the ICSID Agreement and left its field of influence, specifically to repudiate the threats of multinational corporations. Also, Bolivia has announced that it will renegotiate the terms of all of its Investment agreements in order to limit the resolution of disputes to its national judicial system, and in order to benefit its people as opposed to exclusively benefitting multinational corporations.

Access the file by clicking here

Translate into the English for the NJGI by Sarah Halloran

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