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.
In 2016, there were three incidents where it has been alleged we failed to protect the human rights of people in our supply chain, two of which were brought to our attention through reports by non-governmental organisations (NGOs).
We take such allegations extremely seriously and openly engaged with the NGOs prior to the reports being published, providing detailed responses to the issues raised and, where possible, also providing supporting evidence, including independent studies, where we felt allegations were unfounded.
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.
The review did highlight some procedural and control issues that can further help us manage human rights risks in-country which we are already working on. 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 reviews for all priority suppliers in Bangladesh, including all direct materials suppliers. All reviews were completed by the end of 2016 and, where any issues where identified, we are supporting those suppliers on their corrective action plans.
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.
These plans include our work with an ECLT -led, multi-stakeholder project to address child labour in Indonesian tobacco growing, as well as further developing our own internal processes to ensure that all aspects of the supply chain are meeting our expected standards. You can read more about this in a case study on page 18 of our Sustainability Report 2016.
Also, in 2016, the International Union of Food (IUF) workers made a complaint to the UK National Contact Point (NCP) of the Organisation for Economic Cooperation and Development (OECD), alleging human rights abuses of migrant farmworkers in our US supply chain.
An initial assessment by the UK NCP found that the complaint that we had directly caused or contributed to abuses could not be substantiated and, as a result, they will not examine this further. However, the complaint that we may not have taken adequate steps to leverage a business relationship in order to prevent abuses will be examined further by the NCP. We vigorously disagree with this secondary complaint and are actively and constructively engaging with the NCP to contest it. We will report on the findings once the NCP’s investigation has concluded.