Academic journal article Journal of Australian Political Economy

Expropriating Public Health Policy: Tobacco Companies' Use of International Tribunals to Sue Governments over Public Health Regulation

Academic journal article Journal of Australian Political Economy

Expropriating Public Health Policy: Tobacco Companies' Use of International Tribunals to Sue Governments over Public Health Regulation

Article excerpt

Supra-national legal institutions like Investor-State Dispute Settlement (ISDS) can be analysed through a critical analysis of their social origins and histories, and the power relationships between their advocates and critics. This involves analysis of different interests of social forces and their relationship to governments and other state and non-state institutions. These forces include corporations and business organisations on the one hand, and public health groups and other organisations which seek to defend the interests of the less powerful, on the other. Legal institutions at national and international levels are influenced, but not simply determined by dominant economic interests. Institutions also develop their own histories which in turn shape the development of policies. State policies towards these institutions can be influenced by contests between social forces. (Cox 1994; Schneiderman 2008, 2013).

Transnational corporations like tobacco companies exert powerful influences on states to support global regulatory frameworks and policies that create a favourable environment for their trade and investment strategies. However, the establishment of global institutions that can change or override national forms of regulation is not simply a matter of reducing the role of nation states relative to global corporations and institutions. The most powerful states like the US seek to use legally binding trade and investment agreements on behalf of their transnational corporations to achieve forms of global regulation that suit their interests. Other states may try to mediate the effects of supra-national regulation on their own national political constituencies. This resistance and differing state responses arise because supra-national institutions now seek to apply global rules to many areas previously regarded as the domain of national government regulation, including public health policies like regulation of tobacco. New forms of legally binding global regulation effectively remove key aspects of policy from national democratic processes. The attempted removal of policies from national democratic legitimation can itself provoke resistance from a range of social movements which can in turn influence governments (Schneiderman 2013:12; Cox 1994:52-3).

This article addresses these issues in four parts. It first presents the origins of ISDS and its development and growth through inclusion in trade and investment agreements into a supra national institution with its own culture and history. It then analyses the difference between ISDS legal principles and national legal principles and the growing critical literature about ISDS. The third part outlines the impact of critical opposition to ISDS and the responses from national governments, including Australian governments. Part Four analyses the Philip Morris tobacco company's use of ISDS as a strategy to oppose and prevent the regulation of tobacco advertising, before the conclusion discusses whether ISDS is facing a crisis of legitimacy which could limit its future.

The Origins and Development of ISDS

The regulation of transnational investment has always been controversial because it can be argued that 'foreign investment is essentially intrusive of the territorial sovereignty of the state' (Sornarajah 1995:105).

Historically there have been two major conflicting views about the regulation of transnational investment, based on different interests. The first approach stems from corporations and capital-exporting governments concerned to ensure that the host country affords foreign investors certain minimum standards of protection for persons and property. These can be traced back to agreements amongst European countries like the Treaty of Westphalia (1648), which recognised a reciprocal interest in protecting the trade and property rights of nationals in other countries. This approach sought international agreements to ensure free movement and protection of investment, and minimum standards of treatment, including compensation if property was expropriated (Raghaven 1990:143). …

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