Our Standards of Business Conduct (SoBC) expresses the high standards of integrity we are committed to upholding, and applies these values to our daily business lives. It includes our core policies for areas such as whistleblowing, bribery and corruption, illicit trade, respect in the workplace, human rights, and political and charitable contributions.

We are committed to 100% adherence to our SoBC, and we have a number of controls in place to facilitate this: 

• Key audit controls: All business units complete annual self-assessments to confirm compliance with requirements as set out in SoBC and other policies.
• Annual training and sign-off: All business units complete annual self-assessments to confirm compliance with requirements as set out in SoBC and other policies.
• Speak Up channels: Anyone working for, or with, the Group can raise concerns or grievances in their language, in confidence and without fear of reprisal, either through our Speak Up  hotlines and website, or directly with their line manager, an HR manager or designated officer. We follow up on all reported allegations and strong action is taken where required.

In 2018, over 26,000 employees completed our SoBC e-learning and assessment covering key policy areas. Our remaining employees, who don’t have easy online access, received face-to-face training. In addition, over 2,500 hours of mandatory ABAC training were completed by targeted employees in roles considered to be exposed to ABAC risk, with refresher training scheduled for 2019. We also launched a new e-learning module, focusing on ethical decision making and data security.

For more information, please see www.bat.com/sobc  and Delivery with Integrity section of our 2018 Sustainability Report .

We have a long-standing commitment to respect fundamental human rights, as affirmed by the Universal Declaration of Human Rights. This includes always conducting our operations in ways that respect the human rights of our employees, the people we work with and the communities in which we operate.

Our Human Rights Policy forms part of our Standards of Business Conduct (SoBC) and details our human rights commitments, including no child labour or exploitation of labour, and respect for freedom of association, as well as covering our management of human rights risks. Our Supplier Code of Conduct sets out the minimum standards we expect all our suppliers to adhere to, including specific human rights criteria, and is incorporated into our contractual arrangements with them.

We assess non-agricultural suppliers annually through our supply chain due diligence (SCDD) programme, overseen by a cross-functional governance committee. Each supplier’s risk exposure is considered, and we then prioritise them for third-party on-site audits by Intertek.

In 2018, a total of 88 non-agricultural suppliers in 29 countries underwent Intertek audits. As well as our directly contracted tier 1 suppliers, this also included 17 tier 2 (those from whom our directly contracted suppliers buy) strategic suppliers for vapour products and tobacco heating products and eight strategic indirect suppliers of factory machinery and point-of-sale marketing materials in high-risk countries.

The majority of these audits identified issues categorised by Intertek as ‘moderate’, relating to hours and wages, poor record keeping and health and safety procedures. For 13 suppliers, issues classified as ‘major’ by Intertek were identified, relating to excessive working hours, lack of age verification, monetary penalties as disciplinary measures, the absence of right-to-work checks for migrant workers and, in one case, retention of passports.

We require suppliers to implement corrective action plans to mitigate any issues identified. Intertek then monitors suppliers’ progress and conducts further checks to ensure these have been implemented. Moderate issues are verified through desktop reviews. Major issues are followed up using on-site audits.

By the end of 2018, 75% of supplier corrective actions had been fully completed and verified by Intertek, and the monitoring of remaining corrective actions is ongoing.

Details of our wider human rights management and due diligence processes, as well as our Modern Slavery Act statement, can be found at www.bat.com/humanrights .

Details of due diligence conducted on our agricultural suppliers can be found at www.bat.com/srtp .