Indonesia continues to adamantly challenge Australia’s law on cigarette plain packaging.

In March 3, 2014 Indonesia filed a request to the WTO Dispute Settlement Body (“DSB”) to establish a single panel after failure to reach a mutually agreed solution through consultations with Australia. Indonesia had requested to the DSB that the panel request be placed on the agenda of the meeting of the DSB that is scheduled for March 26, 2014. As of March 26, 2014, the panel was established but not yet composed. 

Indonesia challenges the following measures:

• The Tobacco Plain Packaging Act 2011, Act No. 148 of 2011, “An Act to discourage the use of tobacco products, and for related purposes”;
   
• The Tobacco Plain Packaging Regulations 2011 (Select Legislative Instrument 2011, No. 263), as amended by the Tobacco Plain Packaging Amendment Regulation 2012 (No. 1) (Select Legislative Instrument 2012, No. 29);
   
• The Trade Marks Amendment (Tobacco Plain Packaging) Act 2011. Act No. 149 of 2011, “An Act to amend the Trade Marks Act 1995, and for related purposes”; and 
   
• Any related measures adopted by Australia, including measures that implement, complement or add to these laws and regulations, as well as any measures that amend or replace these laws and regulations.

Indonesia claims that the measures above are inconsistent with:

• Articles 2.1, 3.1, 15.4, 16.1, 16.3, 20, 22.2(b) and 24.3 of the TRIPS Agreement;
   
• Articles 2.1 and 2.2 of the TBT Agreement; and
   
• Article III:4 of the GATT 1994.

Further, it should be noted that Guatemala, Nicaragua, New Zealand, Uruguay, Ukraine, European Union and Honduras are among some of the third parties who have requested to join the consultations earlier throughout September-October of 2013.

Indonesia is known to be a key player in the cigarettes industry. It was reported that last year, Indonesia has exported a $666 million worth of cigarettes. Although Indonesia’s export of cigarettes to Australia is not significant, Iman Pambagyo, the Trade Ministry Director General For International Trade Cooperation, believes that such measure would trigger other countries to adopt the same restrictive measure. Consequently, this would adversely affect the global sales of cigarettes from Indonesia.

Indonesia objects to the plain packaging rule because it would impact negatively for small and medium sized cigarette producers as they lack the ability to conform to the plain packaging rule. Moreover, Imam Pambagyo has also stated that Australia’s measure is not grounded upon concrete scientific evidence and is its effectiveness is yet to be proven. Thus, Australia should have adopted an alternative measure that is less trade restrictive to achieve its health policy objective.