Uruguay vs Philip Morris

Uruguay's government said it may loosen up the country's tough laws on smoking to avoid a dispute with Philip Morris, drawing criticism from anti-tobacco activists.

Former Uruguayan President Tabare Vazquez, an oncologist, banned smoking in public buildings four years ago. Tobacco advertising is also banned and cigarettes' packets must carry large health warnings.

The rules, which also prevent the sale of products branded as "light," put the small South American country at the vanguard of global anti-smoking laws.

Philip Morris irked

However, the measures have irked global tobacco company Philip Morris International, which earlier this year filed for arbitration at the World Bank's International Center for Settlement of Investment Disputes.

Uruguay's government said the possible reforms to the anti-smoking law would try to invalidate the company's claim, which says the current law harms its business by preventing it from selling products advertised as "light."

"On some arguments, Uruguay is very strong from a legal point of view and changes aren't necessary. On other points, we need to make changes to the law or come up with a new law," Foreign Minister Luis Almagro told reporters.

Government wants only minor changes

The government has said that any changes would be minor. Possible reforms might include reducing the size of health warnings from the current 80 percent of the packet's size to 65 percent, and giving permission to sell "light" cigarettes.

Suggestions that the anti-smoking rules could be changed sparked criticism from health activists, who accused the government of caving into pressure from big business to avert a defeat at the arbitration panel.

Former president Vazquez, who led the crackdown during his term, accused the company of exercising "a blackmailing pressure" with the complaint, which is based on a trade deal between Uruguay and Switzerland, where the tobacco firm is based.

"The only thing that Philip Morris is trying to do with this is show its power over a small country that has set an international example on this issue," he told the state-run television network.

Anti-smoking groups give their views

The possible easing of the tobacco measures was also criticized by the country's Center for Investigation of the Tobacco Epidemic, a nongovernmental anti-smoking group.

"If the country gives way to this pressure, maybe this or some other multinational will soon try to use another (international) accord to challenge our ban on smoking in enclosed spaces or the ban on advertising," Eduardo Bianco, the group's president, told Reuters.

A representative from Philip Morris International could not immediately be reached for comment. (Reuters Health/July 2010/Conrado Hornos)

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