Bill Gates and Michael Bloomberg have set up a $4 million fund to help poor countries resist pressure from big tobacco companies desperate to offset falling sales in mature economies by expanding elsewhere.
The fund, to be backed by Bloomberg Philanthropies and the Bill & Melinda Gates Foundation, will help low and middle-income countries facing expensive legal battles with tobacco giants, which have increasingly resorted to suing under international trade agreements to ensure distribution of their products.
“Country leaders who are trying to protect their citizens from the harms of tobacco should not be deterred by threats of costly legal challenges from huge tobacco companies,” the ex-Microsoft (MSFT) CEO said in a joint statement Wednesday.
We are at a critical moment in the global effort to reduce tobacco use, because the significant gains we have seen are at risk of being undermined by the tobacco industry’s use of trade agreements and litigation,” said Bloomberg, whose tough anti-smoking regulations were a big feature of his time as mayor of New York.
The two billionaire philanthropists highlighted the plight of Uruguay, which has been fighting a case brought by Philip Morris International (PM) since 2010 over its use of graphic health warnings on cigarette packs.
They also pointed to lobbying to stop Australia’s pioneering 2011 law requiring cigarettes to be sold in plain packaging, which dramatically reduces the power of branding. Although Australia itself is a rich country, it appears to have started a trend among other countries that looks likely to spread to poorer ones in due course. In Europe, France, the U.K. and Ireland all have plans for similar legislation.
Having failed to stop plain packaging in Australia with PR campaigns and a suit in the High Court, the industry (through PMI) is now challenging it under a bilateral treaty on investment protection with Hong Kong. Australia’s law is also the subject of five disputes brought to the World Trade Organization by other countries with important tobacco industries – Ukraine, Honduras, the Dominican Republic, Cuba and Indonesia.
Tobacco advocates argue that plain-packaging laws will only encourage smuggling and fakes, risking an increase in organized crime, depriving governments of excise revenues, and creating new health risks as product standards are undermined.
The Washington, DC–based Campaign for Tobacco-Free Kids will administer the fund, coordinating resources including funding, technical assistance, PR, and support from the public health community to help countries threatened with trade litigation by tobacco companies.
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