Ministers take heart from Oz tobacco win

Tariana Turia. Photo / Mark Mitchell

New Zealand ministers have been buoyed by an Australian ruling that clears the way for a law requiring cigarettes to be sold in plain packets.

But trade experts warn the decision gives no greater legal protection to New Zealand if it tries to do the same.

The Australian High Court ruled yesterday that there was nothing unconstitutional about the Government's plan to force Big Tobacco to produce standardised, olive-green cigarette packs with no branding and large health warnings.

In Wellington, Associate Health Minister Tariana Turia hailed the court's decision, saying it gave New Zealand a greater sense of security in its plan to introduce plain packaging.

"The High Court case has been seen as the first real test of the legal argument that plain packaging is a justified extension of long-running regulation of tobacco products in pursuit of public health goals, and does not diminish the property of the tobacco companies."

Trade Minister Tim Groser said NZ was "100 per cent" behind Australia's defence of the law change.

But yesterday's ruling does not make New Zealand's plan to introduce plain packs any easier.

Trade experts point out it is purely a moral victory because it is a constitutional ruling that is not directly relevant to New Zealand. Furthermore, Australia faces legal challenges on two other fronts, they say.

It is being sued for its plain-packet regime by tobacco giant Philip Morris on the grounds that it breaches a free trade treaty with Hong Kong,

Several countries are also suing Australia through the World Trade Organisation (WTO), claiming plain packaging is a barrier to trade and a breach of intellectual property rights.

Chapman Tripp trade expert Daniel Kalderimis said these legal challenges held much more importance here. "If NZ were to be sued in any respect, [an investor-state case] would be a major avenue because we also have a bilateral treaty with Hong Kong."

He said New Zealand's trade agreement with Hong Kong had similar terms to the Australian treaty, but had greater protections on health grounds.

University of Auckland associate dean of law Jane Kelsey said New Zealand could expect a WTO challenge from tobacco-producing countries if it introduced a plain-packaging regime.

If New Zealand lost a WTO dispute, it would feel strong pressure to comply and scrap plain packaging.

The Australian Government promised to fight tooth and nail for plain packets, saying it was willing to spend billions in court.

New Zealand Prime Minister John Key has been more hesitant, saying it is not a "slam-dunk" policy.

Professor Kelsey said that even if the challenges did not have solid legal grounds, they could have a "chilling" effect on other countries which were considering similar measures.

The Ministry of Health has warned the Government that lawsuits from tobacco giants could cost up to $6 million a case to contest, not including compensation if it loses.

There is also some concern that the proposed Trans Pacific Partnership Agreement would provide more direct pathways for United States-based companies to sue the Government.

PLAIN PACKETS: AUSTRALIA

* From December 1, brand names on cigarette packets will remain but colours, fonts, and print size will be standardised.
* Warning labels will be expanded to three-quarters of the front of the pack.
* In New Zealand, submissions can be made on plain packaging up to October 5.