A commitment to openness and transparency
We have always done our utmost to uphold high standards, openly engage with our stakeholders and work to strengthen our approach to align to their expectations.
Multinational businesses have long been subject to stakeholder scrutiny and allegations – especially one like ours in a controversial sector and with global operations and supply chains in challenging and diverse environments.
So if we do receive any reports of unethical behaviour, we conduct detailed investigations, take appropriate action to address any issues identified, and report transparently on the progress and outcomes. We take any allegations relating to human rights extremely seriously, openly engaging with the relevant stakeholders and responding to the issues raised.
In June 2016 the NGO Swedwatch published a report entitled ‘Smokescreens in the supply chain: the impacts of the tobacco industry on human rights and the environment in Bangladesh ’.
We conducted our own internal review in Bangladesh which did not raise any significant concerns and indicated that the report as a whole is not representative of the reality on the ground. However, we recognise the serious nature of the allegations and also commissioned an independent assessment of the human rights-related impacts of tobacco growing in the country.
A summary of the independent review findings can be found below. We are pleased that the outputs from the review were aligned with the outcomes of our own investigations and that DNV- GL found no evidence to support the allegations in the Swedwatch report, including claims of child and bonded labour.
Equally, we are grateful that the review highlighted some procedural and control issues that can further help us manage human rights risks in-country. Furthermore, BAT Bangladesh has already implemented a number of initiatives that will strengthen our approach, particularly around preventing child labour, bonded labour and gender discrimination.
In September 2016, there was a fire at the factory of one of our third-party packaging suppliers in Bangladesh, in which 39 people tragically lost their lives. From the time of the accident, we worked closely with the Bangladesh Government which co-ordinated both the investigations into the cause of the fire and compensation for the victims and their families.
Although the outcomes of the formal investigations are yet to be disclosed, there has been no suggestion that BAT was to blame for this tragedy.
The Government has provided compensation to the victims and their families through its Workers Welfare Fund – to which we have contributed more than £2.21m since 2011. We have been informed that the compensation equates to approximately £2,000 per victim. As a reflection of our long-standing relationship with the supplier and our commitment to supporting human rights throughout our supply chain, we have also contributed an additional £1,000 allocated for each victim’s family. We understand the owners of the factory will also be required to pay £1,000 per victim once court proceedings have been finalised.
In parallel, and as part of our ongoing improvement of our processes, we brought forward on-site independent audits, conducted by the global audit firm Intertek, for all priority suppliers in Bangladesh, including all direct materials suppliers. Some suppliers performed below our expectations on health and safety criteria, so the local team worked tirelessly in 2017 to support the suppliers’ corrective action plans, and provide specialist training and advice. We also organised Intertek training for both our own and suppliers’ employees.
When the suppliers were re-audited by Intertek, they achieved significant improvements in their audit scores. Ultimately, this not only improved the working conditions for our suppliers’ employees, but also made sound business sense in enabling us to maintain our existing supply base in the country and contribute to the local economy.
BAT takes its commitment to human rights seriously and seeks to comply with all related national and international frameworks. In addition to enhancing our own due diligence processes, we will continue to offer our support to the Government as they finalise their response to the tragedy.
In May 2016, the NGO Human Rights Watch published a report entitled, ‘The Harvest is in My Blood: Hazardous Child Labor in Tobacco Farming in Indonesia ’.
The report into tobacco growing in Indonesia highlighted a number of issues that result from the way in which certain types of tobacco are traditionally grown and sold in the country. We are pleased that it acknowledges the collective responsibilities of the Government, the tobacco industry and NGOs, and we support many of the recommendations on how these groups can tackle this issue. The report findings have been fed into an existing review of our practices in Indonesia and have contributed to our ongoing plans.
For example, in 2017 our business in Indonesia continued its work with ECLT on a multi-stakeholder project to address child labour in tobacco growing. This included developing a new collective strategy, involving national and local governments, farmers’ associations, tobacco companies, civil society, international organisations and development agencies.
There have been ongoing allegations of human rights abuses on unspecified tobacco farms in our US supply chain, including concerns raised regarding migrant workers’ awareness of their rights for freedom of association and unionisation.
We have planned a supplier review, as part of STP, for 2018, which will include RJ Reynolds Tobacco Company in its capacity as a BAT leaf operation, following our acquisition in July 2017. Prior to this, in 2015, we brought forward an independent, on-site review of our US tobacco leaf suppliers. It found no evidence of any wrongdoing, but did highlight some areas for improvement, which the suppliers addressed.
We believe that the most effective and practical way of dealing with the issues is by encouraging all the parties in the US to get around the table and talk. This is why RJ Reynolds and other US suppliers have been participating with other stakeholders in the Farm Labour Practices Group, and together they are working on initiatives to improve workers’ experiences and promote compliance with the laws that protect workers’ rights.