David triumphs over Goliath - Uruguay wins lawsuit against Philip Morris!
When Tabaré Vázquez, the current Uruguayan president and an experienced oncologist, began his first term as president in 2005, his anti-tobacco campaign was one of his core concerns:
In 2006, Uruguay was the fifth country worldwide to ban tobacco from all enclosed public areas. But beside that, Vázquez´ government passed a law prohibiting tobacco brands from commercializing sub-brands such as ¨light¨, ¨mint¨ etc. that suggested some cigarettes might be ¨healthier¨ or less damaging than others. Also, since 2009, 80% of each cigarette box has to be covered with - very explicit - anti-smoking pictures and health warnings.
The implemented measures appear to have been effective: According to the Uruguayan Ministry of Public Health, the percentage of smokers in Uruguay has dropped from 35% in 2005 to less than 22% in 2014. Also the percentage of young smokers, older than 15, dropped from 22,8% in 2006 to 8.4% in 2014.
However, in 2010, Philip Morris, one of the biggest tobacco companies worldwide, sued Uruguay for 25 million US-Dollars claiming the strict anti-tobacco legislation caused the Swiss-based company profit-damages and violated a bilateral trade agreement signed with Switzerland in 1988.
On July 8th 2016 the International Center for Settlement of Investment Disputes (ICSID) decided in favor of Uruguay: Philip Morris now has to pay 7 million USD in legal fees to the Uruguayan State.
President Tabaré Vázquez reacted to the decision saying (freely translated):
¨We have shown through this arbitration, that it is not acceptable to prioritize commercial aspects above the defense of fundamental rights such as life and health. (...) From now on, when the tobacco industry tries to tone-down regulations of the framework-agreement threatening with litigation, you will find our precedent.¨
Now in his second mandate (2015-2020), Tabaré Vazquez´ government raised taxes on cigarettes by another 15% and is planning to allow only plain packaging for all cigarette boxes!
- Uruguayan Ministry of Public Health: www.msp.gub.uy
- Newspaper ¨El Observador¨: http://www.elobservador.com.uy/caso-philip-morris-fallo-favorece-uruguay-y-tabacalera-debera-pagar-costos-del-juicio-n938654
- Speech of Tabaré Vázquez: