The small South American nation of Uruguay might be forced to pay a heavy price for trying to curb smoking and avert a public health disaster. The country is currently embroiled in a high stakes legal battle with Phillips Morris, the world’s largest cigarette manufacturer. The industry giant, whose annual profits outsize Uruguay’s entire yearly GDP, is suing the government of Uruguay over a 2008 law that requires cigarette packs to be 80 percent covered by health warnings.
Until Phillips Morris decided to punish Uruguay for its anti-smoking campaign, the country’s efforts to combat tobacco use looked like a success story. In 2006, Uruguay became the first Latin American nation to ban smoking in enclosed public places. The 2008 law mandating that cigarette packs feature graphic warnings depicting the consequences of smoking seemed like the logical next step in the process.
“Studies show that we really improved our cardiovascular health between 2006 to 2010,” cardiologist Eduardo Bianco, the president of the Tobacco Epidemic Research Center in Montevideo, explained in an interview with ThinkProgress. Stunningly, tobacco consumption among Uruguayans age 15 to 24 dropped 44 percent in just three years.
But Phillips Morris argues the regulations went too far. The company claims the stricter measures against smoking violate a 1988 bilateral investment treaty between Uruguay and Switzerland, where Phillips Morris is headquartered, and infringe on their intellectual property rights by forcing them to change packaging designs. Now, Phillips Morris has slammed Uruguay with a $25 million lawsuit.
That could deliver a huge setback to public health in the South American nation of 3.5 million, which Bianco told Think Progress has historically featured the highest proportion of smokers in all of Latin America. “Uruguay has the highest rates of death from lung cancer among men in Latin America. Ninety percent of these deaths are related to tobacco,” he said. “The cost of tobacco-related health care spending per year is at least triple the amount of revenue the government receives from tobacco. It is affecting our health, our economy and our development.”
Legal fees for the country’s defense are already expected to come at a hefty price of $8 million. According to Bianco, this is part of Phillip Morris’ plan to intimidate developing nations — where four out of every five smokers lives — and prevent them from enacting anti-smoking policies. He pointed to recent cases in which the governments of Australia and Norway ended up in court over their smoking prevention policies. The difference, according to Bianco, is that Uruguay doesn’t have the funds to spare — and Phillips Morris knows that. He said that if Phillips Morris wins, they will be able to “send a message to mainly developing countries that if you make tobacco prevention measures, you will be treated the same way.”
Uruguay’s top political leaders have made upholding their tobacco laws a top concern. In a May, Uruguay’s current President José Mujica told President Obama, “We are in an arduous fight, very arduous, and we must fight against very strong interests… Nobody must be distracted in this fight for life, because out of all values, the most important one is life itself.” Frontrunner candidate for the upcoming elections and former president Tabaré Vázquez, who is also a cancer expert, said Phillips Morris was attempting to use Uruguay as a “test case” to scare off other nations from acting to improve public health.
Referring to the upcoming 2015 Uruguayan presidential election, Bianco noted, “In order to avoid this kind of legal treatment, the new government could think about modifying our tobacco control procedures,” which would prohibit further progress. A decision on the case is expected in 2015.
Will Freeman is an intern with Think Progress.