Health

The investor-to-state dispute settlement (ISDS) provisions proposed in trade agreements give pharmaceutical corporations the right to sue governments for compensation if domestic laws negatively affect future earnings on their intellectual property or investments, and even if these laws are in accordance with public interests. Better access to medicines or preventing unsafe or ineffective medicines from entering the market could prove problematic.

Major US, Canadian and French pharmaceutical companies have recently challenged pro-public health measures through ISDS disputes brought under ISDS provisions.

Chemical corporations have also used ISDS in numerous occasions to challenge national bans on hazardous substances.

Most well-known cases include:

• Ethyl (US) vs. Canada: following Canada’s ban on the toxic petrol additive MMT, the US producer sued for US$201 million in compensation. In 1998, Canada agreed in a settlement to pay US$13 million and withdrew the ban (NAFTA invoked).

• Philip Morris Asia (Hong Kong) vs. Australia: When Australia introduced plain packaging for all tobacco products in 2011, Philip Morris sued Australia before an arbitral tribunal. In its December 2015 decision, the tribunal dismissed the case, albeit on legal grounds only. Australia spent A$24 million in legal costs but Philip Morris only paid half, leaving the Australian taxpayers to pay the other half. As a consequence of this case, countries ranging from Namibia, Togo to New Zealand decided to wait to introduce their own plain packaging for tobacco products. (Australia-Hong Kong BIT invoked)

• Dow Chemical (US) vs. Canada: the chemical corporation initiated a dispute for losses it alleged were caused by a Quebec provincial ban on lawn pesticides containing the active ingredient 2,4-D, classified as a possible carcinogen and one of the ingredients in Agent Orange, the herbicide widely used during the Vietnam war. In a settlement in 2011, the ban was sustained but Quebec was required to state that “products containing 2,4-D do not pose an unacceptable risk to human health or the environment provided that the instructions on their label are followed.” (NAFTA invoked.)

(March 2020)

IISD | 16-Apr-2020
Governments are facing an imminent threat of investor–state arbitration as they take difficult decisions to support public health systems in a time of severe economic stress.
Kluwer Arbitration Blog | 9-Apr-2020
States around the world have taken a variety of measures seeking to stem the spread of COVID-19. It is likely that some foreign investors may seek relief and/or compensation for any losses resulting from State measures.
EJIL:Talk! | 2-Apr-2020
Allegedly arbitrary or disproportionate measures, albeit in the public interest, provide regular grist for the mill of investment treaty arbitration.
Hindustan Times | 2-Apr-2020
In order to halt the spread of the coronavirus pandemic (Covid-19) and to boost the public health care system and preparedness, India has taken several regulatory steps.
Procuraduría General del Estado - Bolivia | 5-Mar-2020
En abril de 2019, Futuro de Bolivia AFP S.A notificó a Bolivia sobre la existencia de una controversia en el marco de los acuerdos de inversión que el Estado suscribió con la Confederación Suiza y con el Reino de Suecia.
CIAR Global | 30-Jan-2020
El empresario español Raimundo Santamarta, uno de los propietarios de la farmacéutica SM Pharma, ha presentado una notificación de arbitraje contra la República Bolivariana de Venezuela bajo el Acuerdo para la Protección de Inversiones entre el Reino de España y Venezuela.
Zinfos Moris | 16-Sep-2019
Deux investisseurs français, le professeur Christian Doutremepuich et Francois Doutremepuich, avait initié une action pour obtenir un arbitrage.
La Libre | 5-Jul-2019
Le combat pour défendre l’intérêt public, dont font partie la santé, l’environnement et les conditions dignes de travail, doit être mené à chaque fois qu’un traité de commerce international et de protection des investissements est annoncé.
EPHA | 3-Jun-2019
The tobacco industry has a long history of using international trade deals to force their products into new markets.
Korea Times | 18-Apr-2019
The Jeju provincial government has revoked the business license of a Chinese-owned for-profit hospital. The Chinese group may file a suit against the Korean government, using the investor-state dispute settlement system.

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