Respecting and recognising fundamental freedoms
We are fully committed to respecting the rights of our employees, the people we work with and the communities in which we operate, across both our supply chain and our own operations.
We have had a long-standing commitment to respect fundamental human rights, as affirmed by the Universal Declaration of Human Rights.
Agricultural supply chains and global business operations by their nature can present significant rights risks. We operate in challenging and diverse environments around the world, which makes human rights management a key issue.
That’s why we welcome the UN Guiding Principles on Business and Human Rights (UNGPs), and legislation such as the UK Modern Slavery Act , as they clearly articulate the expectations placed on businesses today, as well as providing a roadmap for them to follow and be held account to.
We recognise that, like all businesses, we run the risk of being exposed to modern slavery either within our own operations or those of our extended supply chain. This encompasses slavery, servitude, forced and compulsory labour and human trafficking, which affects some of the world’s most vulnerable individuals and groups, often through exploitation by criminal gangs.
We publish our Modern Slavery Statement each year, in accordance with the UK Modern Slavery Act, detailing the steps taken by BAT plc and subsidiary Group companies to prevent modern slavery and human trafficking in our business and supply chains.
We have an integrated approach to human rights management that covers our own operations and our supply chain, which we continue to strengthen to further align with the UNGPs. This began in 2012, with a review of our existing policies and approach to human rights management, informed by an independently facilitated stakeholder dialogue
As a result, in 2014, we incorporated our Human Rights Policy into our Standards of Business Conduct (SoBC)– the core policy document that Group employees must confirm compliance with. In early 2016, we complemented this with the introduction of our our Supplier Code of Conduct which defines the minimum standards expected of all our suppliers worldwide, including the respect of human rights. The Code was updated in 2018 to include additional human rights provisions for responsible sourcing of conflict minerals, and minimum standards for wages, benefits and working hours.
Our due diligence processes enable us to monitor the effectiveness of, and compliance with, our policy commitments, as well as to identify, prevent and mitigate human rights risks, impacts and abuses.
Because of the nature of agricultural supply chains, the area of greatest risk for human rights abuses is, arguably, in our tobacco leaf supply chain. We have extensive due diligence in place for all our tobacco leaf operations and third-party suppliers, including the industry-wide Sustainable Tobacco Programme and systematic farm monitoring of our directly contacted farmers.
See Human rights and child labour in tobacco growing for more details.
In addition to tobacco leaf, we buy other direct materials for our products, such as paper and filters, and also engage a large amount of indirect goods or services suppliers, such as for logistics, marketing materials, professional services and facilities management. These are all subject to our supply chain due diligence (SCDD) programme, overseen by a cross-functional governance committee.
Before a new supplier of product materials can be appointed, they must undergo an independent on-site audit, in which they must achieve a minimum score of 70%. Conducted by Intertek, the audit is aligned to ILO conventions and covers forced labour, child labour, wages and hours, health and safety, environment and management systems.
We maintain a rigorous focus on human rights with existing suppliers by conducting an annual risk assessment on 100% of our supplier base. This uses independent indices developed by Verisk Maplecroft and assesses inherent risk exposure based on the type of supplier and country where it operates. Suppliers identified as high-risk in the assessment are prioritised for Intertek audits.
If any issues are identified in the audits, we work collaboratively with suppliers to implement corrective actions. These are tracked centrally, and Intertek verifies they have been completed either through a desktop review for moderate issues, or a follow-up audit for more serious issues within 3-6 months. In 2019, a total of 94 supplier audits in 31 countries were conducted by Intertek. By the end of the year, 71% of corrective actions had been fully completed and verified by Intertek, in desktop reviews for the moderate issues and 11 on-site, follow-up audits for the major ones.
We continue to take a risk-based approach to further expand our audit programme beyond tier 1 direct suppliers. By the end of 2019, the Intertek audits had been successfully expanded to include suppliers of our suppliers (tier 2) in high-risk, business-critical areas, such as for packaging materials and electronic products; and to strategic indirect goods and services suppliers in the higher-risk categories of production machinery, marketing materials and facilities management.
It is a specific requirement in our key audit controls for human rights risk assessments and risk mitigation action plans to be in place in high-risk countries where we operate, and for processes to be in place to demonstrate that human rights are managed effectively in the workplace and supply chain. All BAT operations are required to report compliance against the controls annually.
We recognise that circumstances in some countries present a higher risk for human rights issues, such as where regulation or enforcement is weak, or there are high levels of corruption, criminality or unrest. So, in addition to Group-wide procedures and controls, we have a defined process in place to identify and carefully monitor BAT operations in high-risk countries.
Firstly, we carry out an annual risk assessment of all countries worldwide, using Verisk Maplecroft’s human rights indices to identify BAT operations in countries with higher risks for human rights issues. Our Board Audit Committee reviews the high-risk countries identified and can add further countries in the event of new developments in human rights or business circumstances.
Following this Board review, our Legal and External Affairs teams in each high-risk country conduct an in-depth assessment against key human rights issues. For each human rights topic, they confirm compliance with Group policies, standards and controls, and provide details of any additional local measures in place to enhance human rights management.
The final stage of the annual cycle is a review of results by our Board Audit Committee. This includes a dashboard of the compliance status for each country and details of action plans, with defined timescales, for any areas for improvement identified.
In 2019, our subsidiary operations in 25 countries were identified as high risk and underwent the human rights assessment and Board reviews.
We encourage anyone working for, or with, the Group to raise concerns or grievances through our Speak Up channels which are independently managed and available 24 hours a day online, by text or telephone. The channels can be used in confidence and anonymously and are available in multiple local languages, and their details are promoted through staff training and communications, the SoBC app and the Supplier Code of Conduct.
Our Speak Up Policy makes it clear no one will suffer any direct or indirect reprisal for speaking up about actual or suspected wrongdoing, even if they are mistaken. We do not tolerate the harassment or victimisation of anyone raising concerns or anyone who assists them. Such conduct is itself a breach of the SoBC and a serious disciplinary matter. We thoroughly investigate all reported issues and allegations and strong action is taken where required. Information on compliance and reported incidents is gathered at a global level and reported through the year to the RACCs, and quarterly to the Board Audit Committee.
In our 2019 global ‘Your Voice’ survey, completed by 90% of Group employees, we asked for the first time if employees felt they “can report concerns about actual or suspected wrongdoing at work without fear of reprisal” – 79% strongly agreed, 8% higher than the FMCG comparator norm.
By early 2018, all 1,000+ Procurement and Legal and External Affairs managers completed comprehensive human rights e-learning, covering areas such as child labour and modern slavery. The training is now mandatory for new joiners to both functions.
In 2019, over 25,000 employees completed our annual SoBC sign-off and e-learning through the online SoBC portal. Other employees (over 30,000) who do not have easy online access completed the SoBC sign-off in face-to-face sessions that included training. The 2019 SoBC training focused on raising awareness of the requirements of the SoBC and the responsibilities of all employees to act with integrity and speak up when they think something isn’t right. The e-learning through the SoBC online portal resulted in over 10,800 training hours. For the first time, employees were also asked to make an ‘integrity pledge’ – a positive personal commitment for the year ahead.
In 2019, we also launched a new SoBC app, available in 12 languages, which provides easy access to our SoBC, Speak up channels, procedures and related guidance for anyone, any time and anywhere. We have ambassadors for the app across the Group who work to promote it in their business areas and to help shape how it evolves.
In our tobacco leaf supply chain, our leaf operations and third-party suppliers run formal training and awareness sessions on human rights issues for farmers and community members through the year. In 2019, they reported via our Thrive assessments running over 5,000 training sessions with more than 350,000 attendances, including farmers who attend several sessions in the year.