MCTC: Malaysia must not cross tobacco ‘red line’ in TPPA

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It is unfortunate that Malaysia did not defend its carve-out proposal for tobacco and instead caved in, says the Malaysian Council for Tobacco Control (MCTC).

The Malaysian Council for Tobacco Control (MCTC) is issuing this press statement based on a preliminary review of the Trans-Pacific Partnership Agreement (TPPA) texts released on 5 November 2015.

The TPPA texts run into 6, 194 pages.

MCTC’s stand today is that Malaysia must not compromise its original position for a carve-out of tobacco control measures from the whole TPPA. Anything short of that will severely threaten public health and thus should be a ‘red-line’ in this trade deal. Linked to this statement is an analysis done by researchers (under Badan Bertindak Bantah TPPA, Action Movement to Oppose the TPPA) headed by Dr Zarihah Zain.

Malaysia had successfully tabled a total carve-out proposal for tobacco from the TPPA during the 19th round of negotiations in Brunei in August 2013, as tobacco cannot be viewed as a ‘normal’ product to be promoted in any free trade agreement. Tobacco is the only product that is controlled globally via the World Health Organisation’s Framework Convention on Tobacco Control (FCTC), to which 180 countries are parties. Among the TPP countries, only the United States is not a party to the WHO FCTC.

It is unfortunate that Malaysia did not defend its carve-out proposal, only to see Malaysia caving in at the Atlanta meeting in October 2015. Although Chapter 29 provides for countries to “choose” to exercise protection for tobacco control measures and therefore achieve an important step in preventing the tobacco industries from using the investor-state dispute settlement (ISDS) mechanism to sue governments, this so-called protection is so weak that the provisions in the texts as they are may not offer full protection as a total carve-out proposal.

Besides, many other chapters may either contravene the provisions of the WHO FCTC, or provide opportunities for the tobacco industries to hamper Malaysia’s obligation to reduce tobacco use and strictly regulate the tobacco industry.

The preamble of the TPPA itself requires the parties to “establish a predictable legal and commercial framework for trade and investment….” which runs contrary (opposite) to the WHO FCTC, which encourage governments to go beyond the basics and take necessary steps needed to save lives. Hence, governments should not accommodate and compromise with the tobacco industry’s commercial pursuits.

In Chapter 9 on investment, corporations are encouraged to conduct corporate social responsibility (CSR) activities in accordance with “internationally recognised standards, guidelines and principles”. This requirement is ludicrous when applied to tobacco because the tobacco industry violates all the seven principles of the IS026000 Guidelines on CSR. The FCTC requires governments to ban CSR activities by the tobacco industry. The TPPA therefore is an arsenal for the tobacco industry to defy the ban on such activities.

Chapter 18 has a requirement on intellectual property which conflicts with Article 10 of the FCTC, which requires disclosure to the public on information about the toxic constituents of tobacco products and its emission. The TPPA requirement intentionally requires that information be treated as a trade secret to hide possible injurious effects on the health of the public.

Chapter 21 of the TPPA encourages the involvement of private sector cooperation and capacity-building activities. This will present problems with the tobacco control efforts of governments, which may be persuaded with biased data and solutions from the tobacco industry. Such biased research promoted by the tobacco industry is well documented, presenting arguments for interventions with vested interests exposed through leaked industry documents.

Chapter 25 on regulatory coherence provides a sweeping “Engagement with interested parties” which requires governments to establish formal mechanisms for the tobacco industry to provide input when governments plan for new policies or strategies for tobacco control, including legislation. This is diametrically opposed to the requirement under the FCTC, which warns governments to protect their tobacco control policies from undue influence of the tobacco industry.

Such tactics by the tobacco industry, couched in convoluted legal jargon such as “assess the need for regulation” and “examine feasible alternatives”, will hamper tobacco control measures by the goverment. Though the FCTC already provides the international standards and rationale for action, under the TPPA , the government may be persuaded to consider industry-friendly alternative measures resulting in tedious and burdensome processes that delay and frustrate the implementation of tobacco control programmes.

Chapter 26 on transparency requires laws and regulations being proposed, to be provided to “interested persons” with “a reasonal opportunity to comment” on such proposed measures. This will open the door for the tobacco industry to challenge tobacco control measures in domestic proceedings in the country.

Chapter 29 — Exceptions and General Provisions.

Article 29.5: Tobacco Control Measures

A Party may elect to deny the benefits of Section B of Chapter 9 (Investment) with respect to claims challenging a tobacco control measure 13 of the Party. Such a claim shall not be submitted to arbitration under Section B of Chapter 9 (Investment) if a Party has made such an election. If a Party has not elected to deny benefits with respect to such claims by the time of the submission of such a claim to arbitration under Section B of Chapter 9 (Investment), a Party may elect to deny benefits during the proceedings. For greater certainty, if a Party elects to deny benefits with respect to such claims, any such claim shall be dismissed.

12 For greater certainty, this Article does not prejudice: (i) the operation of Article 9.14 (Denial of Benefits); or (ii) a Party’s rights under Chapter 28 (Dispute Settlement) in relation to a tobacco control measure.

13 A tobacco control measure means a measure of a Party related to the production or consumption of manufactured tobacco products (including products made or derived from tobacco), their distribution, labeling, packaging, advertising, marketing, promotion, sale, purchase, or use, as well as enforcement measures, such as inspection, recordkeeping, and reporting requirements. For greater certainty, a measure with respect to tobacco leaf that is not in the possession of a manufacturer of tobacco products or that is not part of a manufactured tobacco product is not a tobacco control measure.

*Analysis of Provisions in the TPPA that Impact on Tobacco Control available at http://www.ftamalaysia.org/article.php?aid=373

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