Tobacco Carve-Out From ISDS Starts To Spread: Another Nail In The Coffin Of Corporate Sovereignty
from the crack-in-the-dam dept
One of the last pieces of horse-trading that went on in order to conclude the TPP deal involved corporate sovereignty, aka investor-state dispute settlement (ISDS), and tobacco. As we reported a year ago, a “carve-out” for tobacco was agreed, which was designed to assuage fears that tobacco companies would use TPP’s ISDS mechanism to challenge health measures like plain packs — something that Philip Morris attempted against both Australia and Uruguay. Now, it looks like the idea is spreading, as Simon Lester points out on the International Economic Law and Policy Blog:
Whether or not the TPP ever gets ratified, the idea for a tobacco carveout seems to have taken hold. Via Tania Voon on twitter, I see that Australia and Singapore have agreed to amend their FTA to include a tobacco carveout.
The wording itself, inserted into the section on corporate sovereignty, is pretty simple (pdf):
Section B: Investor-State Dispute Settlement
Tobacco Control Measures
No claim may be brought under this Section in respect of a tobacco control measure of a Party
It’s worth noting that this is not just another carve-out, but a retrospective one, which creates an interesting precedent that might be followed elsewhere. After all, once the principle that tobacco companies should not be allowed to use ISDS to interfere with health programs is established, there’s no reason not to apply it more widely, to both future and existing trade and investment deals.
More generally, the appearance of this carve-out for tobacco raises a question Mike asked a year ago: if corporate sovereignty is such a bad idea for this industry, why not for others that can cause harm — like the extractive industries, for example? And once people start asking these kinds of questions, it’s not long before they realize that putting companies above national laws, and letting them sue governments in supranational tribunals, makes no sense at all for any sector. Calls to drop the entire ISDS system have been growing for a while; the latest move by Australia and Singapore is likely to make them louder.