Last updated: September 2020
Suggested citation: Lucas, A., Slattery, C., Zhou, S., George, A. & Liberman, J. 19.10 WHO FCTC in a domestic context: Case study example of Australia’s Tobacco Plain Packaging. In Greenhalgh, EM, Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2020. Available from: https://www.tobaccoinaustralia.org.au/chapter-19-ftct/19-10-who-fctc-in-a-domestic-context-case-study-example-of-australias-tobacco-plain-packaging
A practical application of the role of the WHO FCTC in Australia can be viewed in the context of Australia’s tobacco plain packaging measure. This section examines the role of the WHO FCTC both during the legislative process of developing the measures and in legal challenges defending the measures.
Plain packaging is recommended by Guidelines for the Implementation of Article 11 (packaging and labelling) and Article 13 (tobacco advertising, promotion and sponsorship) of the WHO FCTC adopted by the Conference of the Parties of the WHO FCTC.
Guidelines for the Implementation of Article 11 of the WHO FCTC provide:
46. Parties should consider adopting measures to restrict or prohibit the use of logos, colours, brand images or promotional information on packaging other than brand names and product names displayed in a standard colour and font style (plain packaging). This may increase the noticeability and effectiveness of health warnings and messages, prevent the package from detracting attention from them, and address industry package design techniques that may suggest that some products are less harmful than others.
Guidelines for the Implementation of Article 13 of the WHO FCTC state:
15. Packaging is an important element of advertising and promotion. Tobacco pack or product features are used in various ways to attract consumers, to promote products and to cultivate and promote brand identity, for example by using logos, colours, fonts, pictures, shapes and materials on or in packs or on individual cigarettes or other tobacco products.
16. The effect of advertising or promotion on packaging can be eliminated by requiring plain packaging: black and white or two other contrasting colours, as prescribed by national authorities; nothing other than a brand name, a product name and/or manufacturer’s name, contact details and the quantity of product in the packaging, without any logos or other features apart from health warnings, tax stamps and other government-mandated information or markings; prescribed font style and size; and standardized shape, size and materials. There should be no advertising or promotion inside or attached to the package or on individual cigarettes or other tobacco products.
Packaging and product design are important elements of advertising and promotion. Parties should consider adopting plain packaging requirements to eliminate the effects of advertising or promotion on packaging. Packaging, individual cigarettes or other tobacco products should carry no advertising or promotion, including design features that make products attractive.
19.10.1 Role of the WHO FCTC in development of the tobacco plain packaging measures
On 29 April 2010, the Australian Government announced that it would introduce mandatory plain packaging of tobacco products as part of a comprehensive strategy to reduce smoking rates in Australia. As part of the legislative development process, consultations occurred with the public and relevant stakeholders in a manner consistent with the Implementation Guidelines for Article 5.3 of the WHO FCTC. As outlined in section 19.3 above, Article 5.3 and its Guidelines requires Parties, in setting and implementing their public health policies with respect to tobacco control, to act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law including interacting with the tobacco industry only when and to the extent strictly necessary to enable effective regulation of the tobacco industry and tobacco products, and that any necessary interactions should be conducted transparently. The consultation process for the development of Australia’s tobacco plain packaging measures was conducted by the Australian Government Department of Health through formal public consultation processes and, in addition, through targeted consultation with stakeholders. The details of the formal consultation processes, including consultation papers and submissions to the consultations, were made publicly available 1 and a public record maintained to provide notification of meetings between the Australian Government Department of Health and the Tobacco Industry. 2
The explanatory memorandum accompanying the Tobacco Plain Packaging Bill stated that the introduction of plain packaging for tobacco products was ‘one of the means by which the Australian Government will give effect to Australia's obligations under the World Health Organization Framework Convention on Tobacco Control’, 3 citing Articles 5, 11 and 13 of the WHO FCTC in support.
The Tobacco Plain Packaging Act 2011 was passed by the Australian Parliament in November 2011 and received Royal Assent in December 2011. The objects of the Tobacco Plain Packaging Act specifically include giving effect to certain obligations that Australia has as a party to the WHO FCTC. 4 From December 2012, Australia became the first country in the world to introduce tobacco plain packaging; with all tobacco products sold in Australia required to comply with the legislation. The legislation bans the use of logos, brand imagery, symbols, other images, colours and promotional text on tobacco products and tobacco product packaging. Packaging must be a standard drab dark brown colour in matt finish. Packs are distinguished by brand and product name printed in a standard colour, position, font size and style. Cigarette packs must be rectangular and made of rigid cardboard, with no embellishments. The pack opening must be a flip-top lid, hinged at the back of the pack. The legislation also specifies maximum and minimum size restrictions for packs. Graphic health warnings, updated and expanded under the Competition and Consumer (Tobacco) Information Standard 2011, 5 are required on 75% of the front and 90% of the back of tobacco packaging.
19.10.2 Role of the WHO FCTC in defending the tobacco plain packaging measure
Australia’s tobacco plain packaging scheme has faced three legal challenges — a domestic constitutional challenge before the High Court of Australia; a challenge by Cuba, the Dominican Republic, Honduras and Indonesia before the World Trade Organization; and by Philip Morris Asia (PMA) under a 1993 Hong-Kong Australia Bilateral Investment Treaty (‘BIT’).
The High Court of Australia dismissed a domestic constitutional challenge to Australia's Tobacco Plain Packaging Act 2011 by British American Tobacco, Japan Tobacco, Imperial Tobacco and Philip Morris.6 The Court held that the Tobacco Plain Packaging Act did not constitute an ‘acquisition of property'. The Court held that although the Act regulated the tobacco manufacturers' intellectual property rights and imposed controls on the packaging and presentation of tobacco products, it did not confer a proprietary benefit or interest on the Australian Government or any other person and therefore the provision of just terms compensation was not required. 6
Whilst the WHO FCTC did not feature prominently in the High Court decision, the WHO FCTC was an important part of Australia’s defence in the investment arbitration case brought by Philip Morris Asia (PMA) against Australia’s tobacco plain packaging measure under the BIT between Australia and Hong Kong. PMA claimed that the Australian Government had breached its obligations under the treaty, arguing that the plain packaging legislation expropriated its intellectual property, and that PMA was not afforded fair and equitable treatment.
In its response to PMA’s Notice of Arbitration, for example, Australia noted that:
‘Australia’s history of progressively more comprehensive and stringent tobacco regulation is consistent with trends in countries around the world, and also international steps to combat the global health epidemic posed by tobacco smoking through the FCTC.’ ( 7 at para 16.)
At other points in its response to the Notice of Arbitration, Australia emphasised that plain packaging was intended to implement the WHO FCTC, noting that the WHO FCTC imposes a ‘comprehensive set of obligations’ in relation to tobacco control measures. ( 7 at para 17) Such obligations included the obligation to implement effective measures on packaging and labelling in Articles 11 and the obligation to implement a comprehensive ban on tobacco advertising, promotion, and sponsorship in Article 13 of the WHO FCTC. Australia also emphasised that the Article 11 and Article 13 Guidelines for Implementation recommended the adoption of plain packaging, among other measures, in order to give effect to WHO FCTC obligations.( 7 at para 17)
Finally, in emphasising the importance of plain packaging as a public health measure, Australia stated that it was ‘implementing plain packaging to protect the public health of Australia's population from an addictive and dangerous substance that causes widespread death and disease in Australia (and around the world)’ and noted that the WHO and WHO FCTC Secretariat had provided ‘strong support for plain packaging as an effective public health measure’. ( 7 at para 38)
PMA’s claim was dismissed at the jurisdictional stage and did not proceed to the merits. The tribunal issued a unanimous decision agreeing with Australia’s position that the tribunal had no jurisdiction to hear Philip Morris Asia’s claim as the initiation of the arbitration constituted an abuse of rights. 8 The Tribunal did not discuss the WHO FCTC in its final Award.
In relation to the WTO dispute, Australia repeatedly cited the WHO FCTC and its Guidelines in the integrated executive summary of Australia’s submissions to the WTO. These include references to the fact that the WHO FCTC requires comprehensive tobacco control strategies to reduce the incidence and prevalence of smoking; ( 9 at para 9) that Australia’s decision to implement plain packaging was based on the explicit recommendation of the WHO FCTC Guidelines as a means to implement WHO FCTC obligations;( 9 at paras 12 and 128) and that the WHO FCTC Guidelines reflect international scientific consensus.( 9 at para 129).
The submission states:
‘Tobacco plain packaging is a legitimate public health measure, based upon an extensive body of scientific evidence and the explicit recommendations of the Parties to the FCTC.’ ( 9 at para 161)
The WTO panel’s decision in favour of Australia cites the WHO FCTC, and the references to them in the Tobacco Plain Packaging Act and its explanatory memorandum, extensively to support its findings, including 10 :
- “to confirm that the objective of the plain packaging legislation is to improve public health by reducing the use of, and exposure to, tobacco products (7.243)
- to demonstrate the seriousness of the global tobacco epidemic (7.250) and the importance of taking action to address it (7.2596)
- to support the panel’s finding that the risks of not implementing tobacco control measures are particularly grave in light of the health risks of tobacco use and exposure to tobacco smoke (7.1310, 7.2592)
- to support its findings on the regulatory context of tobacco plain packaging, in particular that plain packaging is implemented as part of a comprehensive, multisectoral, and multifaceted approach, and that therefore different tobacco control measures were complementary elements of this comprehensive approach rather than alternatives to each other (7.1728-7.1730)
- to support its finding that packaging is a form of promotion, as stated in the Article 13 Guidelines (7.664)
- to support its finding that plain packaging, as a measure recommended under the Article 11 and 13 guidelines, is an important part of reducing the appeal of tobacco packaging and design and its use in tobacco product promotion, and therefore not an ‘unjustifiable’ encumbrance on the use of trademarks (7.2595)
- to demonstrate that Australia ‘pursued its relevant domestic public health objective in line with the emerging multilateral public health policies in the area of tobacco control’ as reflected by the WHO FCTC and its guidelines (7.2604)” 11
Two of the complainants, Honduras and the Dominican Republic, subsequently appealed the WTO panel’s decision to the WTO Appellate Body (‘Appellate Body’) on the basis that Australia’s plain packaging laws were more trade restrictive than necessary, affected the rights of trademark holders, and unjustifiably encumbered the use of trademarks.12 The appellants also challenged the WTO panel’s consideration of the evidence related to the contribution of plain packaging to public health. In addition, Honduras, claimed that the WTO panel gave “undue legal weight” to the WHO FCTC Guidelines (6.620).12
On 9 June 2020, the Appellate Body dismissed the appeal and upheld the WTO panel’s finding that plain packaging is not more trade restrictive than necessary to achieve its public health objectives (7.6),12 and that it does not violate any relevant international obligations regarding intellectual property (7.10, 7.13).12 The Appellate Body also found that the WTO panel had not failed to objectively assess the evidence and upheld the panel’s finding regarding the contribution of plain packaging to public health.
Importantly, the Appellate Body rejected Honduras’ claim that the WTO panel attributed undue legal weight to Articles 11 and 13 of the WHO FCTC Guidelines in its analysis on whether Australia's plain packaging measures were justified (6.707).12 The Appellate Body found that the WTO panel referred to Articles 11 and 13 of the WHO FCTC Guidelines as additional factual support to its previous conclusion that the complainants failed to establish that Australia acted inconsistently with its WTO international intellectual property obligations (6.707).12 Ultimately, the Appellate Body upheld the panel’s citation of the WHO FCTC Guidelines to support its finding that the public health reasons for plain packaging sufficiently supported its encumbrances on the use of trademarks (6.702-6.707).12
The Appellate Body decision concludes the decade-long litigation against Australia’s plain packaging laws, with no further appeal possible or any pending litigation, and confirms that plain packaging laws implementing the WHO FCTC may be adopted consistently with WTO obligations. This clears the path for more countries to implement tobacco plain packaging laws.
1. Australian Department of Health. Introduction to Plain Packaging in Australia. 2018. Available from: http://www.health.gov.au/sites/default/files/introduction-of-tobacco-plain-packaging-in-australia.pdf.
2. Australian Department of Health. Report on Interactions Between Health and the Tobacco Industry. Last update: 1 November 2019; Viewed 30 January 2020. Available from: http://www.health.gov.au/resources/publications/report-on-interactions-between-health-and-the-tobacco-industry.
3. Tobacco Plain Packaging Bill 2011 - Exposure draft: Explanatory memorandum. 2011; Available from: https://www.legislation.gov.au/Details/C2011B00128/Explanatory%20Memorandum/Text.
4. Tobacco Plain Packaging Act. No. 148 2011; Available from: http://www.legislation.gov.au/Details/C2018C00450.
5. Competition and Consumer (Tobacco) Information Standard 2011. Available from: http://www.legislation.gov.au/Details/F2013C00598.
6. JT International SA v Commonwealth of Australia, 2012, High Court of Australia. Available from: http://www.austlii.edu.au/au/cases/cth/HCA/2012/43.html.
7. Philip Morris Asia Limited v Commonwealth of Australia, Response to Notice of Arbitration - Australia (PCA Case No 2012-12, 21 December 2011).
8. Philip Morris Asia Limited v Commonwealth of Australia, Award on Jurisdiction and Admissibility (PCA Case No 2012-12, 17 December 2015).
9. Australia – Certain Measures Concerning Trademarks, Geographical Indications and other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (WT/DS435/441/458/467), Integrated Executive Summary of Australia's Submissions. 23 March 2016., World Trade Organization. Available from: http://www.dfat.gov.au/sites/default/files/integrated-executive-summary-aus-submissions-tobacco-plain-packaging-ds435-441-458-467.pdf.
10. Australia – Certain measures concerning trademarks, geographical indications and other plain packaging requirements applicable to tobacco products and packaging, Report of the Panel (WT/DS 435/441/458/467), 28 June 2018, World Trade Organization.
11. McCabe Centre for Law and Cancer. An initial overview of the WTO panel decision in Australia – Plain Packaging, 3 July 2018. Available from: http://untobaccocontrol.org/kh/legal-challenges/initial-overview-wto-panel-decision-australia-plain-packaging/.
12. Australia – Certain measures concerning trademarks, geographical indications and other plain packaging requirements applicable to tobacco products and packaging, Report of the Appellate Body (WT/DS 435/441), 9 June 2020, World Trade Organization.