British American Tobacco: Lobbying

Lobbying

The ways in which companies influence governments is allegedly part of legitimate political process. The village of East Budleigh in Devon has been given funding from British American Tobacco (BAT) to erect a monument to Sir Walter Raleigh, who was born there. The funding from BAT for the statue has been secured by East Devon Tory MP Hugo Swire. Although this looks harmless enough, it could be argued that this deal leaves Mr. Swire politically indebted to the big tobacco firm and hence more open to being influenced further by them, perhaps in less innocuous ways. ^[1]

Early evidence of Blair sleaze

Allegations of sleaze and corruption become less easy to dismiss when evidence emerges that the lobbying process is corrupt and based on who has the greater ability to pay the greater sum. The Tony Blair government took power with a promise of getting tough on sleaze, making it all the more notable that only months into the Blair era the first evidence of cash being exchanged for a sympathetic ear emerged.

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 Labour Party had already accepted £1 million from Mr. Ecclestone to help with their successful election campaign, and were promised more in the future. Blair, after a meeting requested by the Formula One owner Ecclestone, wrote a letter to the Health Secretary the next day suggesting they look at a compromise for F1 Racing. 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." ^[2]

BAT and Burma

British American Tobacco were in breach of OECD (Organisation for Economic Co-operation and Development) guidelines for multi-national social corporate responsibility as a result of their joint venture with the ruthless military government in Burma. The International Union of Foodworkers (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." ^[3] 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.

John Jackson, director of the Burma Campaign UK, stated that "BAT are collaborating with a military dictatorship." ^[4] Workers are allegedly being paid "pennies" whilst helping to line the pockets of both the military dictatorship and BAT shareholders. After Burmese campaigners demanded that the company shut down the factory which BAT jointly owns with the Burmese government, a BAT spokeswoman responded: "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." ^[5]

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. ^[6]

Black markets and BAT

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 and end up on alternative markets in South and North America and across Asia.

From 1997 there have been several court cases and investigations in various parts of the world which have 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. A former BAT executive was found guilty by the Hong Kong High Court for his involvement in operations that smuggled cigarettes into China. ^[7]

BAT face DTI investigation ^[8]

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, UK trade and industry secretary, who threatened to use his powers under the Companies Act to instruct Department of Trade and Industry (DTI) inspectors to investigate allegations that BAT colluded in cigarette smuggling on an unprecedented scale. Also 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." But Clive Bates, director of Action on Smoking and Health, said that BAT directors needed to be questioned under oath, stating that, "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.

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 [9]

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. [[10]]