British American Tobacco
Front groups have been used for a variety of purposes, one particularly important aspect being the health implications of tobacco. ARISE (Associates for Research into the Science of Enjoyment) is one group concerned with such issues. The group describe themselves as an ‘apolitical affiliation of independent scientists and academics’ which conduct research into some of life’s pleasures including chocolate, tea, coffee, alcohol and tobacco. Their research concludes that partaking in such pleasurable experiences can be beneficial to health and lowers stress, going so far as to claim ‘higher resistance to cancer and less risk of damage to the stomach and heart’. These statements are in direct opposition to other medical studies into the consequences of tobacco use which have proven the negative impact on health. ARISE follows up their claims with criticism of such health information initiatives, arguing that the so called ‘health police’ ‘could be causing more harm than good’ (Monbiot). Furthermore, Professor David Warburton of the University of Reading, one of the leaders of the group, published a number of articles in academic journals which questioned findings regarding the addictive qualities of nicotine. Warburton also wrote of his contempt for ‘health scares’ which he claimed were often ill founded and could cause more harm than good because of the guilt and stress they cause could cause of health problems in itself. (Monbiot). The danger of such a group is the widespread coverage it received and the fact that the public were mislead into believing research was based on independent medical inquiry. In an article published in the Guardian George Monbiot found that between September 1993 and March 1994 the group generated 195 newspaper articles, radio and television interviews. Taking just one example of such coverage, the December 22, 1996 issue of the Times includes the article ‘Eat, drink and be merry!’ which discusses the research findings of ARISE. The article included a quote from Warburton saying ‘a few puffs on a cigarette’ was proven to make people happier and thus improve their health. However the same article also states that although the group admit to receiving funding from the alcohol and chocolate industries they ‘stop short of taking money from the tobacco industry’. This claim from ARISE is proven to be false by the internal documents of the BAT company.
Monbiot writes of his discovery of documents which prove the involvement of tobacco companies including Philip Morris, BAT and Rothmans in the funding of the group. Documents relating specifically to the contributions from BAT are also to be found. One example being a letter dated September 1991 from Professor Warburton giving an invoice to BAT for their donation of £13.000 to fund a group meeting in Venice. Bates number:300561846-300561847 http://bat.library.ucsf.edu/tid/maa35a99
Another way in which front groups are used is as a weapon against regulation on the premise that many countries economies are dependent upon tobacco production. ITGA (the International Tobacco Growers Association) was supported by BAT (ASH) with the aim of promoting the economic benefits of tobacco growing. In this extract from a BAT document written by Shabanji Opukah, BAT’s corporate social responsibility manager, it is clear that ITGA is being used to avoid regulation on the industry with specific reference to the World Health Organisation’s Tobacco Free Initiative (TFI). There is also declaration of the intent to undermine a study by the World Bank which argued that ‘the negative effects of tobacco control on employment have been greatly overstated’ (ASH) a claim that ITGA is used to deny.
‘our efforts to ensure we get the most from our investment in ITGA is paying back. ITGA agreed to dedicate themselves to a number of core big areas of concern TFI and the issue of economic impact…Objective is to rebut the world bank study and get third world governments on our side on the issue’ Bates number:321357061 http://bat.library.ucsf.edu/tid/vas03a99
It has now been uncovered that ITGA was funded by BAT, an internal company memo from Simon Milson, the international government affairs manager, details three payments of over £8,000 given to the group in 1999, making a total of over £24, 000 for that year. Despite this funding great efforts were made to ensure the association was seen to be independent. In another memo Milson stresses the ‘need to remember that this is an ITGA/ farmers initiative and they should be doing the writing to governments’ (ASH) referring to the tactic of using ITGA to encourage farmers to lobby governments on the importance of tobacco growing to the economy. BAT uses this method of using third world tobacco growers as a front because they are seen to have the ‘moral high ground’ (ASH) and more credibility than industry insiders.
Another angle in which front groups are used is to stimulate public support of relaxed smoking restrictions. FOREST the Freedom Organisation for the Right to Enjoy Smoking Tobacco describes itself as ‘a media and political lobbying group that defends the interests of smokers’ In a report on smoking in public places which was submitted to the GLA (Greater London Authority) the group argue that passive smoking is not a significant risk to the health of non- smokers (ASH). It is also argued that restrictions on smoking in public spaces is detrimental to business, especially the restaurant and pub sectors. The group admit that they accept ‘donations’ from tobacco companies but claim that they do not promote smoking or speak on behalf of or in defence of the tobacco industry.. Using the term ‘donation’ to describe the input of the tobacco industry gives a false impression as in 2000 the group received 96% of their funding from this source. Despite the fact the group are apparently open about their funding the organisation is still misleading as it positions itself as representative of ordinary smokers but is in fact highly influenced by the industry This idea is summed up entirely in a BAT document sent to Nick Brookes, the director of the America Pacific region for the company, in February 1981, in which shows the company wished to use FOREST as:
‘a consumer pressure group funded by the industry. There would be no attempt to conceal the funding but equally there would be no suggestion that FOREST were anything other than an independent consumer pressure group’ Bates number:303695993 http://bat.library.ucsf.edu/tid/mqs55a99
This approach is not much different than those front groups which hide their true sponsorship. Although FOREST admits to industry funding they can still mislead the public by appearing to be a consumer led group. This is obviously the intention of the tobacco companies who wish to make it appear as though they have widespread consumer support. Although undoubtedly many people agree with relaxed smoking legislation groups such as FOREST exaggerate this support and so obscure the true facts about the issue. Groups such as FOREST are often used to publicise opposition to smoking bans in public spaces. One such example is in the Scottish edition of the Daily Star, March 25, 2006: ‘Smokers urged to fight the ban’ in which FOREST spokesmen Neil Rafferty says ‘The claims about passive smoking are a calculated deception by anti-smoking groups to scare the population and manipulate weak-minded politicians.’ The article goes on to urge smokers to resist the Scottish smoking ban which is positioned as an infringement of their rights. Although this can be seen as an expression of the opinions of smokers it is also an important tactic used by the tobacco industry which stands to lose vast amounts of revenue if such smoking bans are implemented. In 1993 Philip Morris highlighted the threat from restrictions on smoking when it said: ‘[The] Financial impact of smoking bans will be tremendous.’
Front Groups can also be used which appear to represent the hospitality industry but are in fact just another tobacco industry PR exercise. Stan Glantz, a professor of medicine at the University of California wrote an article looking at tobacco industry funding of the hospitality industry (http://www.prwatch.org/node/1221) which appeared in the June issue of Tobacco Control, a specialist publication of the British Medical Journal. Glantz used internal industry documents to prove that tobacco manufacturers gave donations to more than 65 hospitality groups in the USA alone. He writes that:
‘tobacco companies made financial contributions to existing hospitality associations or, when it did not find an association willing to work for tobacco interests, created its own 'association' in order to prevent the growth of smoke-free environments. ... Through the myth of lost profits, the tobacco industry has fooled the hospitality industry… in reality 100% smoke-free laws have been shown to have no effect on business revenues, or even to improve them. The tobacco industry has effectively turned the hospitality industry into its de facto lobbying arm on clean indoor air." (http://tc.bmjjournals.com/cgi/content/full/11/2/94)
There are countless groups which represent hospitality interests, many of which reflect genuine fears within the industry about the possible effect on profits a smoking ban may have. There are also groups which have received funding from the tobacco industry and some which have been entirely invented which play on the fears of business owners by claiming that smoking restrictions lead to significant losses of profit.
As the British American Tobacco Company is the second largest tobacco company, behind Phillip Morris (http://www.prwatch.org/prwissues/2002Q4/bat.html), advertising is key in its success. The British American Tobacco Company, otherwise known as BAT, is recognized worldwide through its cigarette brands, which include Benson and Hedges and Dunhill (www.ameinfo.com/49811.html). BAT has sold hundreds of millions of cigarettes worldwide, and this is widely related to its extensive advertising and PR campaigns.
In many countries throughout the world, restrictions have been imposed on the advertising of tobacco products (http://www.essentialaction.org/tobacco/qofm/0201a.html), and this has resulted in BAT struggling to maintain awareness of their products. In 1971, the advertising of cigarettes was banned from television due to the belief it encouraged people to smoke, and disregarded the health problems related to it.
South Africa is a country that has been seen to be at the forefront of the cigarette advertisement ban. In 1993, the first legislation with regards to tobacco laws was passed. This was known as the Tobacco Control Act, and it resulted in cigarette packaging and other forms of tobacco advertising needing to display health warnings as well as smoking in public places being controlled and the prohibition of selling tobacco products to those under sixteen years old. Following this Act, South Africa introduced the Tobacco Control Amendment Act in 1999, and when it came into effect in October 2000, a “new era of public health” was well received by its population (www.multinationalmonitor.org/mm2001/01jan-feb/corp8.html). Although tobacco advertising was no longer permitted on television when these Acts came into effect, companies such as BAT had to find alternative methods in reaching the public. They did this through the use of the radio, but after a while, free air time was allocated to put out warnings about the danger of tobacco to people’s health. This consequently led to the public calling for tougher regulations on the issue and the law was revised in their favour, resulting in a complete ban of tobacco advertising (www.multinationalmonitor.org/mm2001/01jan-feb/corp8.html).
As this advertising ban meant that the British American Tobacco company could no longer reach the South African public through these popular mediums, it meant they had to raise awareness of their products in another way. Cleverly, they devised the idea of a competition with a cash prize or a trip on the “first commercial spaceship, redeemable within the next two years” after the competition. Those who entered the competition had to give their names, which were entered into BAT’s database, and used in the future for promotional purposes (www.multinationalmonitor.org/mm2001/01jan-feb/corp8.html).
Advertising costs are high, and for companies including BAT, this is why it is vital that they are as effective as possible. The British American Tobacco Company, like many other international corporations, relies heavily on support from the government. The Director of BAT is Ken Clarke, who was formerly the Health Secretary for the Conservative Party (www.ash.org.uk/html/press/050428.html) and it with the aid of the government that the tobacco industry continues to thrive. As the dangers of tobacco are widely known, the government could put a complete ban on the products, but as they benefit financially from them, this is unlikely to happen. In Britain, it was not until 1991 that a complete tobacco advertisement ban was issued with regard to the television, but non television advertisements were continually allowed until in 1997, the Labour Government promised to introduce a complete ban of the promotion of the products. The Tobacco Advertising and Promotion Act 2002 was the result of this promise (http://www.opsi.gov.uk/acts/acts2002/20020036.html). Exceptions allowed under this Act are those advertisements that are not aimed at specific kinds of people within the British population and advertisements within shops, pubs or clubs that promote the products on an area no larger than A5 paper and that include government and health warnings on at least thirty percent of it (http://news.bbc.co.uk/1/hi/health/4113297.stm). Before the 2002 Act was passed, it was claimed that in order to get around the advertising ban on television, and later on radio, the British American Tobacco Company engaged in direct marketing tactics. This meant that products such as cigarettes were handed out to individuals in order to raise awareness of their particular brands, and this is still found to occur in British society today. BAT have often been criticised for not only underplaying the health dangers linked to their products, but also for targeting specific areas of the population, especially young people. BAT dispute this idea, and argue that their aim is not to do this but rather their company is about “offering quality brands to adults who have already taken the decision to smoke” (www.bat.com). In gaining support of the government for tobacco products, it has been recognized that the British American Tobacco Company have funded political campaigns. Studies have shown that in 2004, in the run up to the election, almost $3 million was spent on candidates in the U.S. election and in this, George Bush received $168, 145, in comparison to $21, 050 received by his opponent John Kerry (www.guardian.co.uk/weblog/special/0,10672,540943,00.html). The idea behind this funding of political campaigns is that when someone is elected, they will perhaps mention where they received money, which would in turn lead to a degree of recognition from the public, but also, there is the belief amongst tobacco companies, including BAT, that as they have aided political figures gain power, they will help them in return by supporting their products. Abrie du Plessis, a spokesperson for BAT, explains why the company funds various aspects within politics and in doing so, raises awareness of their products. He claims, “We want to have a constructive relationship with government. It’s almost as if the culture of smoking is being blamed on corporations, as if smoking is a phenomenon created by multinationals and perpetuated by advertising. We don’t believe this, because before multinationals, people smoked” (www.multinationalmonitor.org/mm2001/01jan-feb/corp8.html). Sponsorship of sport is yet another way in which the British American Tobacco Company avoids the restrictions on advertising, and is connected largely to the sponsorship of Formula 1 Racing (www.bjm.bjmjournals.com/cgi/content/full/329/7457/104). When BAT initially became involved in Formula 1 in 1970, they sponsored Yardley, who were with the BRM team, but as time progressed, they became involved with other teams and this continued until 1974, when they no longer involved themselves in the sponsorship of the sport (www.grandprix.com/gpe/spon-028.html). After a period of time away from Formula 1, BAT returned to it in 1983 in order to continue with the promotion of their company and its products. BAT’s sponsorship of this masculine orientated sport is a means of targeting young men and boys and raising their awareness of the tobacco industry, and in doing this, it reaches them in an effective manner (www.bjm.bjmjournals.com/cgi/content/full/329/7457/104). Through the extent of the media coverage Formula 1 receives, the British American Tobacco Company has become recognizable on a global scale, and also as a result of their sponsorship, the company was able to reach all age groups in society through their merchandising of a range of Formula 1 related products, which bore the BAT logo. As a result of the continuing regulations and restrictions imposed upon the tobacco industry, BAT, along with two other leading international tobacco companies, Phillip Morris and JT International, joined forces in 2001 in order to tackle what they regarded as a constraint. They worked alongside the International Marketing Standards and together, aimed to meet these standards set and “build on existing principles” (www.bat.com). As previously mentioned, these companies are frequently criticised for targeting specific groups, especially young people, through advertising and other forms of marketing they engage in, but the British American Tobacco Company opposes this idea and argues that through working with the International Marketing Standards, they are trying to combat this belief (www.bat.com). In the light of health groups laying blame for a number of illnesses and diseases on the tobacco industry, BAT has tried to overcome many of the negative beliefs associated with them. In doing so, BAT’s official website demonstrates how they have been actively involved in campaigns in Europe and other areas such as Japan, which promote the idea that young people should not smoke (www.bat.com). In conjunction with Phillip Morris and JT International, BAT has spent $3.6 million on trying to overcome the belief that they target their products at young people. A large proportion of this money spent by the three international corporations was on an advertising campaign showing on MTV in thirty eight European countries between April and July 2001 (http://www.ash.org.uk/html/advspo/html/mtveurope.html). These ideas aimed to perpetuate the idea that in order to be ‘cool’ and popular amongst their peer group, it was not necessary for teenagers to smoke. Campaigns like the one transmitted on MTV, portray the idea that the British American Tobacco Company is a socially responsible company, but in reality, the company uses this idea of corporate social responsibility as a front, and through this, they conceal many of the known dangers from the public by claiming their products are “credible” and that dangers although exist, are in BAT’s view, over-exaggerated (www.bat.com). As can be seen through the various advertising and promotional methods used by the British American Tobacco Company, the awareness of their products, as well as their success, is largely reliant upon this. Due to numerous regulations that have been imposed worldwide restricting the advertising of tobacco products, BAT have had to devise other methods, such as sponsorship and competitions, and it is through these alternative forms of advertising that they maintain their international success.
BAT Lobbying
When we look at companies and how they influence governments we can see that this is allegedly a legitimate political process. The village of East Budleigh Devon has been given funding from BAT to erect a monument to Sir Walter Raleigh who was born there. The funding for the statue has been secured by East Devon Tory MP Hugo Swire from British American Tobacco. Although this looks harmless enough we can clearly see that it will do the MP Hugo Swire no harm in the future.
BBC Devon News 22nd February 2005. http://www.bbc.co.uk/devon/news_features/2005/ralegh_statue.shtml
First evidence of Blair sleaze
When it becomes clear that the lobbying process is corrupt and based on who has the greater ability to pay the greater sum then the allegations of sleaze and corruption are evident. The Tony Blair government took power with a promise of getting tough on sleaze so when one of the first examples of cash for a sympathetic ear to emerge from the Blair era was exposed we all sat up and took note.
The “Bernie Ecclestone affair” as it became known exposed the trail of political interference used by tobacco companies through sponsorship in sport and their links to government. It followed an EU directive that no tobacco advertising should be used in connection with sport. The Blair government had already accepted a million pounds from Mr Ecclestone post- election to help with their successful election campaign and were promised more in the future. Blair, after a meeting requested by the F1 owner Ecclestone wrote a letter to the Health Secretary the next day suggesting they look at a compromise for F1. Subsequently it was announced that Formula One would have an exemption overriding the EU directive. To Iain Duncan Smith, the media and the British public this was unacceptable although Blair stated “there was no appearance of a conflict of interest”.
(BBC, On the Record, Tony Blair Interview, BBC-1 16.11.97) http://www.bbc.co.uk/otr/intext/Blair16.11.97.html
BAT face DTI investigation
British American Tobacco were in breach of OACD guidelines for multi-national social corporate responsibility as a result of their joint venture with the ruthless military Government in Burma. IUF state that by being in a joint venture with the Burmese dictatorship, “BAT is in breach of Article II of the Guidelines, specifically sections stating that enterprises should contribute to economic, social and environmental progress, respect human rights of those affected by their activities, and encourage business partners, including suppliers and sub-contractors, to apply principles of corporate conduct compatible with the Guidelines” in July 2003 the British government called on BAT to pull out of Burma. The BAT response was only that it would consider the request. 01.10.03
http://www.burmacampaign.org.uk/pm/more.php?id=103_0_1_0_M
After Burma’s campaigners demanded that the company shuts down the factory in Burma which it jointly owns with the country's military dictatorship. a BAT spokesman said the firm respected the concerns of protesters but it was not willing to take on a "role of international diplomacy". A Burmese exile in UK stated "BAT is collaborating with a military dictatorship." Workers are allegedly being paid starvation wages helping to fund a military dictatorship and BAT shareholders. Even so a BAT spokeswoman said: "We understand and greatly respect concerns about human rights. While we are willing to discuss these issues open-mindedly with stakeholders, we do not believe businesses should take on the role of international diplomacy and that companies do not and should not have a mandate to step into areas of political authority." http://news.bbc.co.uk/1/hi/england/2889275.stm
Hypocritically BAT are happy to provide funding to promote their ethical reputation. The University of Nottingham has agreed to establish an international centre for corporate social responsibility at its Business School in return for a £3.8 million sponsorship from British American Tobacco. http://www.bbc.co.uk/nottingham/news/2000_12/05/tobacco.shtml
Black markets and BAT
In direct abuse of nation state law around the world BAT black marketing is a growing market for them. As nations try to discourage smoking by increasing tax and restricting imports BAT subvert controls by turning a blind eye to the growing Black Market in cigarettes that are sold to wholesalers that end up on alternative markets in South and North America and across Asia.
From 1987 there have been several court cases and investigations into BAT throughout the world which accused the tobacco industry of illegal supply and the smuggling of cigarettes or at least being aware of the unlawful destination of their tobacco products. For instance a former BAT executive was found guilty by the Hong Kong's High Court for his involvement in operations that smuggled cigarettes into China. http://factsheets.globalink.org/en/smuggling.shtml
BAT supplied huge numbers of cigarettes around the world knowing they would end up in the hands of smugglers. In 2004 BAT came under fire from Stephen Byers, trade and industry secretary, who threatened to use his powers under the companies act by instructing the DTI inspectors to look into the allegations colluding in cigarette smuggling on an unprecedented scale and of corrupt practice. Furthermore in that year The Commons Health Committee called for a DTI inquiry when it published a report expected to be highly critical of BAT. Martin Broughton, BAT's chairman told the annual general meeting of BAT in London: "There is really no need for a DTI investigation". Alternatively Clive Bates, director of Action on Smoking and Health, said “directors needed to be questioned under oath. “A DTI inquiry is needed to get to the truth of what really went on." Mr Broughton refused to allow specific questions about smuggling from the documents to Keith Dunt, BAT's finance director at the enquiry. Tory ex-chancellor and health secretary Kenneth Clarke also defended the company. Although the MP for Rushcliffe has acknowledged the dangers of smoking to health, he is actively involved in BAT's work. Mr Clarke on the BAT website describes the firm as "one of the most advanced and responsible British companies I have come across.". This is what you would expect from an £100,000 a year employees of BAT who has had connections with the company for many years. In March 2004, Trade secretary Steven Byers made it known that he planned to instigate an inquiry under section 432 of the Companies Act, which would allow files to be seized, employees to be questioned on oath and permit Mr. Byers to publish the report. But after strong-hand lobbying the investigation was watered down and a 437 section of the act which does not require public report was advised.
British American Tobacco head, Martin Broughton, was given access to Blair at a private breakfast, with a following private meeting with secretary Byers. It is also understood that former senior Department of Trade and Industry (DTI) officials on BAT's payroll were also used to approach their former departmental colleagues to gain influence. Subsequent to this dubious perhaps fraudulent lobbying, Byers own plan for a rigorous inquiry, diverting the publishing of a possibly highly damaging report. A was dropped, a secret report was promised but under a subsequent new minister it was released under the freedom of information act and was to be deemed insignificant by government. (Guardian, Oct 27 2004.Tobacco firm gained secret access to Blair)
In the Global world of industry we constantly hear of corporate wrong doing but the lengths that the BAT Company goes to can be astonishing. After looking at the evidence we consider a quote from the BAT web pages, “Globalisation has given rise to concerns about power, responsibility, the role of governments and the role of companies. Multinational businesses must demonstrate they are operating responsibly, and work to be more accountable about their roles and responsibilities.”05.04.06 http://www.bat.com/OneWeb/sites/uk__3mnfen.nsf/vwPagesWebLiveText/ In the near future there will be further strong lobbying by the tobacco industry and BAT global governments are pushing for labelling of cigarettes so that they can be tract more easily to combat tax fraud and a solution to smuggling. In the UK the strong labelling is hoped to be accompanied by photograph of deceased organs in graphic colour. All others and more BAT will fight tooth and nail and as demonstrated with disregard for corporate responsibility. http://factsheets.globalink.org/en/smuggling.shtml
BAT
Accessing The Third World and Fair Treatment Within
Introduction
Transnational corporations have a duty to shareholders to occupy as much territory across the world and to maintain as large a market share as possible. Companies desire to gain access to far reaching corners of the globe and to increase their reach and influence.
Multinational cigarette empires are no different to this blueprint. However, in the era of mass communication, the desire for fair trade and the concession that smoking is harmful to ones health, this emotive issue will always attract attention and publicity in aspects of its business, especially in regards to the third world. The opportunities for cigarette companies to enter and to manipulate in the third world are met with increasing opposition.
Charities and individuals both know that indigenous people fight a moribund battle against such a force. The industry’s influence is enough to persuade uneducated locals to start smoking; leading to addiction. And the financial incentives to grow tobacco seem transparent in their benefits when this is not always the case.
Section 1; Smoking Facts
If one examines the levels and predicted levels of smoking comparing the developed and developing world we see an obvious contrast.
Table A. Global and regional estimates of cigarette consumption,
N.B. India is included in the Southeast Asia region. China is included in the Western Pacific region.(www.idrc.ca)
Table B. Estimated number of Deaths caused every year by Tobacco
Developed countries Developing countries Total Decade 1990s
2 million 1 million 3 million Decades 2020s/early 2030s
3 million 7 million 10 million
(www.druglibrary.org)
The numbers of people in the developed world dying of smoking will continue to be large in number but in the America’s and Europe the figure is actually in decline. Compare this to ascending levels of those in the developing world taking up the habit and dying of the associated diseases. Deaths in the developing world are set to shoot to seven million in the foreseeable future.
The 3 million annual deaths of the late nineties translated to six deaths every minute from smoking related disease. The WHO estimates that in 2025 the developing world will reach a mortality figure of 7 million, this translates into one death every 3 seconds. Of the children and teenagers alive in 1994, it is projected that 250 million will die from tobacco use. (www.idrc.ca)
To put it crudely, there seems to be something of a halt in smoking in the developed world. These levels, however, are being buoyed up by sharply increasing numbers of smokers in the developing world.
‘During the last decade, per capita consumption has declined by an average of 1.4% per year in developed countries, but has risen by 1.7% annually in developing countries. (www.druglibrary.org)
Section 2; Entry to the Developing World
There is nothing uncommon in large firms wanting to expand their business into the wider world. The difference between those firms and cigarette manufacturer’s is that the health risks and social implications of smoking are widely accepted and generally deemed undesirable. Why then would a country let such an institution enter its boundaries?
Dr Judith Mackay, Director of the Asian Consultancy on Tobacco Control outlines a four point blueprint of access.
The honeymoon. The initial honeymoon period when the foreign companies enter a country is one of offers of help with technology in farming and manufacturing, free trips overseas and the co-production of glossy magazines. This is the stage of wooing the country and gaining access.
The marriage. Next come the joint ventures, a foot in the door. At this stage advertising and promotion often begin to creep in, usually of a sophistication and funding level not used by the national monopoly.
The marriage turns sour. The relationship then becomes less harmonious, with accusations from the transnational that a monopoly prevents free market access, even with the trade threats . . . . Because of the political strength foreign companies can muster, the national monopoly usually must accede to their demands.
The divorce. Finally the national monopolies weaken or may be disbanded. The foreign tobacco companies come away with what is for them the optimum marriage settlement — domination. (www.idrc.ca)
More devious ways of getting ones brand and image into a country are numerous. The best example is when cigarette companies illegally, under a different guise, enter the market with contraband cigarettes and let the populous gain a taste and a habit for them. Once they have been established the government will want to capitalise to gain tax revenue from the illicit goods and eventually let them enter the country legally.
There are many examples listed of big tobacco firms such as BAT attaining access to developing markets through questionable means, so why then do countries in the third world continue to let them trade?
The percentage of government revenues from tobacco taxes is generally much higher in less-developing countries than industrialised nations, exceeding 10% in many countries; reportedly as high as 18% in Sri Lanka and 26% in Zaire. Why would governments of today, seeking investment and international approval, accept a drastic revenue cut for what will be a problem tomorrow? The big tobacco firms know this and can exploit this. (www.idrc.ca)
They can offer financial incentives to poor farmers and give them an industry letting them become self-sufficient. They in turn generate money for the local economy, the tax economy and while more locals become used to the product and start smoking, BAT makes more money and can reinvest in the process all over again.
Section 3; Youth Smoking and Advertising
BAT claim a desire for youngsters to wait until they can make an informed decision before experiencing smoking. They have become active members in setting up an extensive Youth Smoking Prevention campaign.
‘As a responsible company, we believe that we must take a leadership position in joining with others in society to help prevent youth smoking. The industry currently supports more than 130 youth smoking prevention programmes in over 70 countries, in many instances working closely with national and local governments.’(www.bat.com)
Uneducated children in the developing world have forgone school to work and there can be numerous languages within a tight geographical space. Thus there is an even greater onus on the tobacco giants to promote youth smoking prevention through mediums that all can understand. Simply implementing ‘smoking-prevention-programmes’ in the classroom is not fully effective. BAT claim to be working solidly with third world governments in this area.
‘In Kenya, with Government approval, we have funded a scheme to find ways of communicating the "don't smoke" message through song to children who can't read. We will continue to build on this.’ (www.bat.com)
This claim seems somewhat at odds with an ASH investigation in conjunction with Christian Aid and Friends of the Earth entitled: “The Least Responsible Company In the World”
‘In Nigeria, Uganda, Pakistan, Kenya, Brazil and Russia, BAT advertises itself as a good corporate citizen, while aggressively marketing its cigarettes to the youth and female market, failing to look after its farmers and failing in its environmental stewardship responsibility.’ (www.corporatewatch.org)
There are numerous examples of duplicitous marketing techniques utilised by BAT in the third world. For the company who wish to prevent kids from smoking they are either failing or succeeding depending on how cynical one is.
To sidestep FIFA’s and the World Health Organisation’s ‘Tobacco Free Sport’ initiative, BAT slipped beneath impending legislation to sponsor (not advertise) the national television coverage of the 2002 World Cup in Malaysia. Thus gaining access to the country’s young sports fans and promoting their ‘Dunhill’ brand. (www.ash.org)
‘BAT signed a 10 year contract with the Soccer Federation of Niger (Fédération Nigérienne de Football FENIFOOT). This contract ensures the promotion of BAT Rothman cigarettes in soccer fields throughout Niger. In 1998 BAT built 7 "New Line" pavilions and placed them strategically in Niamey's intersections, even in front of schools. These pavilions are a gathering place where youth congregate, play and have access to cheap cigarettes. It is in those pavilions that BAT will broadcast live matches of the World Cup 2002 on giant screens.’ (www.ash.org)
“The tobacco companies know very well that youth are very much interested and excited about this coming World Cup, and they are making best use of this event to make our youth addicted to tobacco.” (www.ash.org)
The world-cup controversy was quickly followed by BAT’s unauthorised use of English Premiership stars on its 2001/2002 football season calendar. This included a photograph of David Beckham and thus witting entry into the Southern African and Asian markets where Beckham is a superstar and role model to many children.
Cigarette companies have exploited loopholes to reach their audience and seem to overlook that their advertising is strategically placed to influence impressionable youth. They can claim to abhor youth smoking but seemed to also sponsor the World Cup for the third world and no doubt claimed a few more young smokers.
Section 4; Treatment of Farmers and Child Labour
Yet another contentious issue in this field would be the use of exploited third world labour. This includes farmers being indebted to corporations and the use of child labour on tobacco plantations.
A 2002 Christian Aid report called “Hooked on Tobacco” is a document which BAT have gone to great lengths to defend on their website. The report examined Souza Cruz; a subsidiary of BAT in Brazil.
The report explains the evidential link between tobacco farmers and forms of extremely poor physical, sometimes mental health. The farmers are held to ransom by their industry because of constraints to their selling capacity and obligation to their employer.
Farmers under contract to Souza Cruz are obliged to sell to Souza Cruz and not permitted to sell their crop on the open market. Souza Cruz is in control of the classification of the farmers' tobacco crop, which determines the price paid for their tobacco and, therefore, their income. According to federal law, state authorities should monitor the classification process but the system appears to be failing farmers.
Farmers are locked into producing tobacco for Souza Cruz by their contract with the company and by a system of debt which is accrued annually and paid off with the tobacco they grow. As a result, tobacco becomes the currency in which farmers deal. Their annual income is determined by Souza Cruz, which decides the price paid for each farmer's tobacco according to its own rules, and seemingly without thorough independent scrutiny. (www.christian-aid.org.uk)
They are said to be visited infrequently and poorly trained exhibiting BAT’s failure to hold up part of the bargain based on Dr MacKay’s Penetration blueprint.
Owing to being ‘locked in’ to their supplier, the employees of Souza Cruz are obliged to buy specific fertilisers and pesticides. These are deemed by Christian Aid to be like “playing Russian Roulette with their health”. The symptoms of this exposure resemble those of Gulf War veterans and coincide with key moments in the tobacco harvesting year.
The report also stipulates how this unpalatable treatment can also prove a gateway to child labour endangering their health and exhibiting a practice the company deems wholly unacceptable.
If the farmers are locked into contracts and can only pay their way out with their yield, they cannot afford to hire help and must use their children at the most worthwhile times of the year. In actuality this is the harvest and as the evidence demonstrates the cultivators are more likely to get ill at key points of the year coinciding with the harvest.
BAT‘s website claims: “We have helped establish the Eliminating Child Labour in Tobacco Growing (ECLT) Foundation, and aim to be an active and constructive founding member. We are committed to the principles of protecting children from child labour exploitation, believing their development - as well as that of their communities and countries - is best served through education, not child labour. We do not employ children in our operations. (www.bat.com)
The International Labour Organisation (ILO), with which BAT claims to be in partnership with on the issue of child labour stated they were very concerned about the report.
As stated, BAT has gone to some length to refute aspects of this report and on their website have a whole section dedicated to this. On the issue of child labour, they again enforce their involvement with the ECLT programme and
‘…comply with all relevant local and international labour regulations, treaties, conventions and principles relating to the protection, welfare, health and safety of children.’
‘We do not employ children in our industrial operations. However, we do recognise that family labour is an essential part of life on many thousands of small landholdings and we cannot mandate farmers to alter their traditional lifestyles.’ (www.bat.com)
Thus the onus is shifted from BAT and onto the farmers themselves letting British American Tobacco embrace being ranked in the top 50 of Business in the Community's 2005 Corporate Responsibility Index.
This claim is at odds with much of the material available outwith the BAT website and is summed up in strong terms by the authors of “The Least Responsible Company in the World?”
‘While genuine moves by UK companies to improve their social and environmental standards are welcome, the difference between the claims BAT makes in its social reports and its true impacts are stark… The bitter truth is that BAT is one of the least socially responsible companies in the world.’ (www.foe.co.uk)
There seems to be serious contradiction within BAT’s official line and the evidence on the ground from the charities and their reports. BAT appears to promote responsible advertising yet the examples from the 2002 World Cup would beg to differ. In sponsoring sports activities and becoming synonymous with the world cup in that country they become associated with a pleasurable pastime and become subconsciously linked to happy images.
BAT refutes child labour yet her watertight grip on the farmers she exploits forces unpaid labour to take the guise of their offspring thus exposing all parties to the harmful effects of the fertilisers and chemicals they are obliged to buy. Despite the danger reported in Christian Aid’s report, the chemicals are desired to “maintain quality” (www.bat.com) and so are non negotiable.
The statistics in Section 1 suggest that more people in the developing world are smoking more and this is big business for BAT, corporate responsibility programmes are at odds with the tax income of some states who are dependant on the industry so there is a conflict in waiting. The cynics may suggest that given the nature of this conflict, it is a battle BAT are happy to lose.
