> =======================Electronic Edition========================
> .                                                               .
> .           RACHEL'S ENVIRONMENT & HEALTH WEEKLY #677           .
> .                    ---November 18, 1999---                    .
> .                          HEADLINES:                           .
> .                CORPORATE RIGHTS VS. HUMAN NEED                .
> .                          ==========                           .
> .               Environmental Research Foundation               .
> .              P.O. Box 5036, Annapolis, MD  21403              .
> .          Fax (410) 263-8944; E-mail: [log in to unmask]           .
> .                          ==========                           .

> For many years, the potential market for baby foods and infant
> formula in the "developed" countries has been shrinking because
> birth rates have declined. Therefore, to create new demand for
> their products, baby food corporations have aggressively sought
> to "open new markets" in the Third World.
>
> A key vehicle for "opening new markets" is advertising intended
> to convince women that breast-feeding their babies isn't "modern"
> and bottle feeding is healthier. Of course the premise of such
> advertising is medically false -- breast-feeding provides
> superior benefits compared to all synthetic substitutes.
> (Breast-feeding provides an infant with significant immunity
> against disease; it creates a strong emotional bond between
> mother and child; it helps prevent breast cancer in the mother,
> and more.) Nevertheless, many women are taken in by the false
> advertising; as a result, according to the United Nations
> Children's Fund (UNICEF), only 44% of infants in the Third World
> are breast-fed. (The proportion is even smaller in "developed"
> countries.)
>
> Chiefly because of this false advertising, according to UNICEF,
> 1.5 million infants die each year because their mothers
> unwittingly prepare infant formula with contaminated water,
> causing fatal diarrhea.
>
> During the 1970s, a world-wide grass-roots campaign focused
> attention on this problem, boycotting products made by Nestle, a
> major manufacturer of infant formula.
>
> Partly because of the Nestle boycott, the World Health
> Organization (WHO) developed and published a Code on Marketing of
> Breast-Milk Substitutes. The WHO code prohibits words like
> "humanized breastmilk" and "equivalent to breastmilk."
> Furthermore, to protect illiterate women from being duped, the
> WHO code prohibits pictures on labels "that idealize the use of
> bottle feeding."
>
> In 1983, Guatemala passed a law and regulations incorporating the
> WHO code. The goal of the Guatemalan government was to encourage
> new mothers (1) to breast-feed their infants and (2) to fully
> understand the threats to their babies of using infant formula as
> a substitute for breast milk. The Guatemalan law prohibited the
> use of labels that associated infant formula with a healthy,
> chubby baby; specifically, the law prohibited pictures of
> idealized babies on packages of baby food intended for children
> younger than 2 years. Furthermore, the Guatemalan law required
> labels to carry a statement that breast-feeding is nutritionally
> superior.
>
> The law also prohibited baby food manufacturers from providing
> free samples of their products (if a baby starts taking free
> samples the mother stops lactating, thus converting mother and
> infant into full-time, paying customers). And finally the law
> prohibited baby food manufacturers from directly marketing their
> products to young mothers in the hospital.
>
> The regulations went into effect in 1988 and all domestic and
> foreign manufacturers of baby foods -- with one notable exception
> -- came into compliance. Infant deaths attributable to bottle
> feeding declined, and UNICEF began highlighting Guatemala as a
> model for what works.
>
> However, the U.S. baby food manufacturer, Gerber (motto: "Babies
> Are Our Business"), objected to Guatemala's new law. Although the
> Guatemalan Ministry of Health made numerous attempts to negotiate
> with Gerber, the company reportedly continued to market its
> infant formula directly to mothers in the hospital, and continued
> to give free samples to doctors and day care centers.
>
> Most importantly Gerber refused to remove its trademark picture
> of a chubby, smiling baby from its product labels, and it refused
> to add a phrase saying breast milk was superior. In sum, Gerber
> thumbed its nose at Guatemalan health authorities, who were
> trying to protect their most vulnerable citizens, infants,
> against harm.
>
> In November, 1993 -- ten years after Guatemala passed its law,
> and five years after its regulations went into effect -- Gerber
> lost its final appeal. A Guatemalan Administrative Tribunal ruled
> in favor of the Ministry of Health and it looked as though even
> Gerber would have to comply with the Guatemalan law.
>
> But Gerber opened a new line of attack on Guatemala, arguing that
> the Guatemalan law was illegal under international statutes
> because the law was really an "expropriation of Gerber's
> trademark." This tactic bought Gerber some time while the World
> Trade Organization was being created. Then in 1995, when the WTO
> came into being, Gerber dropped its claim about illegal
> expropriation of its trademark and began threatening to challenge
> Guatemala before a WTO tribunal.
>
> Within a short time, Guatemala realized it was now up against
> immense power and the Guatemalan government changed its law to
> allow Gerber to have its way. Gerber won without ever having to
> formally request that the U.S. take its case to the WTO. Just a
> few letters containing the WTO threat were sufficient.
>
> This example illustrates another marvelous feature of the WTO --
> the ease with which small, poor countries can be intimidated by
> transnational corporations into "opening their markets." Under
> WTO rules, countries must open their markets to foreign
> corporations and governments cannot establish, as a precondition
> of doing business, that their domestic laws will be respected. In
> effect, the WTO has given corporations a powerful new way to
> challenge the laws of any government (federal, state or
> municipal).
>
> Many poor countries, including Guatemala, cannot afford to
> support a full-time delegation to monitor the WTO in Geneva,
> Switzerland. Nor can they maintain in-house legal expertise on
> fast-changing WTO rules. They could legally hire outside counsel
> and experts to defend themselves against a WTO challenge but the
> cost of such a defense would be several million dollars.
> Countries that know the ropes in Switzerland and have money to
> burn can use procedural ploys that make the WTO a very expensive
> arena in which to litigate. For example, one country can
> challenge the credentials of another country's delegation, thus
> prolonging the proceedings indefinitely. As Ralph Nader's
> organization, Public Citizen, has written, "The WTO practice of
> allowing rich adversaries to object to the delegations of poor
> countries undermines poor countries' meaningful participation in
> the WTO -- and makes threats of WTO challenges enormously
> powerful tools to forestall the adoption of public health
> safeguards by poor countries that need them the most."[1,pg.117]
>
> The pharmaceutical corporations in the U.S. and Europe evidently
> learned an important lesson from Gerber's victory over Guatemala.
> The drug corporations have launched a campaign of threats against
> countries that are trying to make medicines more affordable and
> accessible to their citizens. South Africa, Thailand and India
> are examples.
>
> In 1997, under the leadership of Nelson Mandela, South Africa
> passed a Medicines Law which has not yet taken full effect. When
> all the provisions of the law are implemented, it will encourage
> the use of low-cost generic drugs, and it will prohibit drug
> companies from paying bounties to doctors for prescribing
> particular drugs. The Medicines Law has two additional provisions
> that the pharmaceutical corporations find particularly
> distasteful:
>
> (1) the law requires drug companies to license their products to
> other companies who must then pay a royalty fee to the drug's
> developer. Such a law encourages competition in the manufacture
> of new drugs, thus making modern drugs available at reduced cost.
>
> (2) The second provision is called "parallel importing" and it
> allows a pharmaceutical product to be imported from several
> different countries simultaneously, thus taking advantage of the
> lowest prices available. For example the antibiotic Amoxicillin
> costs 50 cents per tablet in South Africa, 30 cents in New York
> and only 4 cents in Zimbabwe.[1,pg.114] South Africa's new law
> would make Amoxicillin cheaper and thus more widely available to
> the people of South Africa, many of whom are poor.
>
> Transnational pharmaceutical corporations, with assistance from
> the Clinton/Gore administration, are now using threats of WTO
> action to force South Africa to repeal its Medicines Law. When
> AIDS activists protested the Clinton/Gore administration's role
> in trying to overturn South Africa's Medicines Law, a "senior
> Gore advisor" issued a statement defending Mr. Gore: "Obviously
> the Vice President's got to stick up for the commercial interests
> of U.S. companies."[1,pg.121] Mr. Gore is doing more than merely
> sticking up for U.S. corporations. U.S. State Department memos
> describe a "full court press," led by Mr. Gore, to force South
> Africa to "repeal, suspend, or terminate" its Medicines Law. As
> the U.S. sees it, there is simply no choice -- under WTO rules,
> the intellectual property rights of corporations have higher
> priority than human health; this is, in fact, a correct
> interpretation of WTO rules. However, Mr. Gore seems to recognize
> that his campaign against medical care for the poor in South
> Africa might come back to bite him. When pressed by the group
> ACT-UP in June 1999, Mr. Gore issued a statement denying that he
> was pressuring South Africa.[1,pg.123].
>
> The South Africa case is not unique. In 1992, Thailand
> established a Pharmaceutical Review Board which established
> compulsory licensing for medicines. A firm with an exclusive
> patent on a critical medicine was required to license other
> companies to manufacture it, with royalties paid to the
> patent-holder. This created competition and drove down the price
> of critical medicines for the people of Thailand, such as
> Pfizer's Flucanazole, used to treat meningitis. After compulsory
> licensing, the cost of treatment with Flucanazole dropped from
> $14 per day to $1 per day in Thailand. However, the U.S.
> pressured Thailand relentlessly for 7 years until the Thai
> Pharmaceutical Review Board was formally abolished. The U.S.
> argued successfully that such a Board is illegal under WTO
> rules.[1,pg.113] Under WTO rules, corporate intellectual property
> rights have higher priority than human health.
>
> For many years, India had a law making it illegal to patent a
> substance "intended for use, or capable of being used, as a food
> or as [a] medicine or drug."[1,pg.105] A WTO tribunal ruled in
> 1997 that India's law is illegal. Using the WTO as a battering
> ram, the U.S. successfully pressured India to abandon its
> prohibition against patenting food and pharmaceuticals.
>
> Now W.R. Grace has filed for a U.S. patent on a pesticidal
> byproduct made from the Neem tree, which grows only in India.
> Neem has been used for centuries in India to make medicines and
> bio-pesticides. Indeed, the Neem tree is nicknamed "the village
> pharmacy." W.R. Grace claims that it has a new method of
> producing the pesticides that indigenous people have produced for
> hundreds of years. Grace now says it deserves the exclusive right
> to sell the products that were developed by indigenous
> communities -- and Grace argues that under WTO rules the
> government of India has an obligation to enforce Grace's patent
> rights.[1,pg.110]
>
> It appears that the WTO is a nearly-perfect vehicle for extending
> corporate dominance into every corner of the world. But the
> corporations are not yet satisfied. The purpose of the WTO
> meeting in Seattle November 29-Dec. 3 is to consolidate and
> extend the WTO's power even further. To get involved, phone
> toll-free 1-877-STOPWTO.
>
> ==============
> [1] Lori Wallach and Michelle Sforza, WHOSE TRADE ORGANIZATION?:
> CORPORATE GLOBALIZATION AND THE EROSION OF DEMOCRACY (Washington,
> D.C.: Public Citizen, Inc., 1999). ISBN 1582310017; telephone
> (202) 588-1000.
>

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