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Politics of smoke

Pratyush Nath Upreti

On June 30, The New York Times ran a news report: "U.S. Chamber of Commerce Works Globally to Fight Antismoking". Chief Secretary Leela Mani Paudyal said he had received an email from a representative of US Chamber warning Nepal not to devise strict anti-tobacco measures. The reason, according to the news report, was that such measure "would negate foreign investment" and "invite instability".

In spite of such warning, Nepal introduced very strict labeling requirement in tobacco packaging. This highlights government concern about dire health effects of tobacco consumption and to some extent it could also be considered a breakthrough in resisting foreign influences.
Every year tobacco consumption results in billions of death globally. Nepal is no exception. According to National Demographic and Health Survey 201l, 52 percent of men and 13 percent of women use tobacco in Nepal. The survey also reveals increasing tobacco consumption among women, particularly pregnant women, causing serious health problems.

To minimize tobacco consumption, Nepal introduced plain packaging policy after ratifying the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), an evidence-based treaty that binds ratifying countries to maintain highest standard of health. Basically, 'plain packaging' aims to control tobacco consumption by removal of all attractive and promotional features on tobacco package. Moreover, the Convention prohibits all forms of tobacco advertising, promotion and sponsorship that promote a tobacco product by any means that are false, misleading or deceptive or likely to create an erroneous impression about its characteristics and health effects.

Even though plain packaging aims at greater public good, tobacco companies are more concerned about marketing their products. The very nature of plain packaging imposes a limitation on use of tobacco-related trademarks. Tobacco companies argue that such measures are incompatible with Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

In 2012 Ukraine, Honduras and The Dominican Republic initiated WTO dispute settlement proceeding against Australia regarding the Australian policy on plain packaging. Later, in 2013, Cuba and Indonesia joined the dispute. Basically, the allegation against Australia was based on the premise that such measures will severely limit the trademark holder's legitimate rights.

In addition, it is alleged that there is no science behind tobacco ban. Last month, Ukraine, a party to the dispute, decided to suspend its WTO dispute over Australian's plain packaging measures for tobacco products, citing the absence of 'economic logic' in the dispute.
At a time developing countries are struggling to implement strict labeling requirements, South East Asian countries have successfully incorporated plain packaging provision under domestic laws. Nepal has set an example by having a very high standard of plain packaging. Previously, the provision whereby graphic images of cancerous mouths and lungs would have to cover 75 percent of packets of tobacco products was challenged in court by Surya Nepal Pvt. Ltd. The plea was rejected by the Supreme Court on the ground of public interest.

The government has realized public health concerns associated with such measures and last year introduced a new rule requiring 90 percent of surface area of all tobacco packaging to be covered with health warning. The new rules are consistent with the Interim Constitution where the state is obliged to improve the health of its citizens.

Similarly, in India, the issue of plain packaging was challenged in Love Care Foundation v. Union of India & Anr. The court acknowledged the impact of plain packaging on public, and said that the effect of plain packaging "will spread public heath measure and could prevent the packets of cigarettes and other tobacco products from being a market tool for advertising brand image and promoting smoking as a status symbol, at no cost to the government."
In the global context, there have been several attempts by tobacco companies to protest against the Tobacco Plain Packaging, with minimum support from the government. Most recently, international tobacco companies like Philip Morris have used investment law to claim compensation under International Investment Agreements (IIAs). The companies argue that such a policy is tantamount to expropriation of investments of tobacco companies. Furthermore, limitation on trademark use reduces the value of their brands and badly affects their investment.

Additionally, plain packaging has affected the goodwill of these companies, which was generated through the use of a trademark. Such measures deprive tobacco companies of opportunity to distinguish their product from a competitor and diminish the commercial values of their intellectual property and goodwill.
In Nepal, the tobacco industry is not a significant driver of the country's development. Therefore, attempts by tobacco companies to protect their brand's goodwill didn't garner wide support, considering what was at stake: the health of the public. Nepal has laudably introduced the landmark '90 percent' labeling policy, showing it is concerned about citizens' health, thus leading by example for other countries. However, there are enormous challenges when it comes to implementing and monitoring plain packaging, not the least the unregulated small manufacturers of tobacco products. Their activities need to be curtailed too.

Republica, July 20, 2015
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