British American Tobacco in Africa: Continuing Allegations of Misbehaviour

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In British American Tobacco in Africa: A History of Double Standards we set out the evidence for how BAT operated across the continent up to 2015.

Here we look at the some of the research published since then which have added to our understanding of the company.

For more details on the pages published by Tobacco Tactics on British American Tobacco in Africa visit The BAT Files.

Introduction

In 2015, the BBC’s Panorama programme used documents from an industry whistleblower to highlight allegations of alleged bribery by British American Tobacco.

According to the evidence supplied by former BAT employee Paul Hopkins, the firm allegedly arranged bribes totalling US$26,000 for officials in Rwanda, Burundi and Comoros Islands. BAT insisted it conducted its business with honesty, integrity and transparency.

Even though BAT and those featured in the program issued denials about the allegations, in 2015 the Serious Fraud Office (SFO) began investigating, leading to a formal criminal investigation into BAT and associated persons in 2017.

In January 2021 the SFO concluded: “Following extensive investigation and a comprehensive review of the available evidence, the SFO has concluded its investigation into British American Tobacco, its subsidiaries and associated persons. The evidence in this case did not meet the evidential test for prosecution as defined in the Code for Crown Prosecutors.”

The SFO added that it would “continue to offer assistance to the ongoing investigations of other law enforcement partners. We thank our international law enforcement partners, and in particular the Kenyan Ethics and Anti-Corruption Commission (EACC), for their assistance in the SFO’s investigation.”1

Document analysis

In 2021, new research was published adding to the understanding of BAT’s operations in Africa. Panorama followed up on its 2015 programme, which mainly focussed on East and Central Africa, with a new investigation into operations in Southern Africa. 2 Alongside this STOP published its own reports.

The Tobacco Control Research Group at the University of Bath also did a deeper analysis of the Hopkins documents and a second set of documents disclosed from a court case in Uganda involving former BAT employee Solomon Muyita. Both Hopkins and Muyita had invoked BAT’s whistleblower policy.34 5

BAT payments

This analysis looked at 236 payments totalling US$601,502 made between July 2008 and May 2013 to dozens of people including politicians, civil servants, journalists, farmers and staff at competitor companies.

BAT made payments impacting 10 countries Burundi, Comoros, Democratic Republic of Congo (DRC), Kenya, Malawi, Rwanda, Sudan, Tanzania, Uganda and Zambia.

Payments took multiple forms including hand-delivered cash, bank wire transfers, spending money, cars, campaign donations, per diems, and plane tickets.

According to the research, the payments were used for two broad purposes. To obtain information and influence policy and to gather information and undermine competitors. The authors conclude:

“The available evidence suggests BAT’s use of payments in Africa was extensive, systematised, and supported at a high level within parts of the company. Payments were used to buy political and competitive advantage.”6

According to the analysis of the documents sets, the information suggests payments were a routine part of BAT’s business practices in Africa, with senior staff aware of the practice. Third party companies, referred to as “service providers”, were contracted to undertake consultancy services for BAT to make the payments.

BAT’s official policy on corruption as stated on its website is: “Corruption causes distortion in markets and harms economic, social and political development, particularly in developing countries. Our Standards of Business Conduct make clear that it is wholly unacceptable for our companies and employees to be involved or implicated in any way in corrupt practice.”7

Influencing policy

As the original research in 2015 revealed, BAT had been aiming to influence policy changes in several countries. The analysis of these two document sets confirmed and expanded this area of concern.

Attempts were made to frustrate the passing of legislation based on the Framework Convention on Tobacco Control in Burundi, Comoros, Rwanda and Uganda. Civil servants and politicians in particular were targeted through the payments. As a result tobacco control legislation in three of the countries is still not compliant with the FCTC while Uganda had a bitter four-year battle to pass its Tobacco Control Act.

The payments were also used to undermine efforts to control tobacco smuggling. In Kenya, BAT campaigned to have its own system in place for tracking tobacco products rather than an independent one as mandated by the Illicit Trade Protocol.6

Sabotaging competitors

BAT has a very strong market position in Africa and looks to maintain and expand that position. As such payments appear linked to gaining information on competitors – these include Mastermind Tobacco Kenya, Continental Tobacco Uganda and Leaf Tobacco & Commodities Uganda. It also targeted international rival Japan Tobacco International (JTI) which was operating in Zambia, Tanzania, Uganda, Rwanda and the Democratic Republic Congo.

Tactics used included funding a fake trade union to foment labour unrest, pay for sources inside companies and take advantage of complaints to regulators.

Other examples of payments

The evidence that BAT used payments to influence policy and damage competitors between over a number of years is not the first time that a tobacco company has been accused of such activity.

Evidence from Australia suggests that the tobacco industry may have used bribery in the 1970s to help bring down a minority Tasmanian government attempting to impose a tobacco tax, although the police inquiry cleared the politician in question.8 A 2000 court case brought by the European Union and its member states accused tobacco companies of bribing public officials as part of its global scheme to smuggle cigarettes.910 Maithripala Sirisena who later became the President of Sri Lanka in 2015, alleged that, when trying to introduce large pictorial health warnings as Health Minister, BAT tried to bribe him, although this was “categorically denied” by the company.11

The findings also align with widespread evidence from South Africa of payments to monitor and undermine competitors.

Tobacco smuggling in Mali

While the two document sets from the whistleblowers provided evidence of wide-ranging payments across many countries, another investigation in 2021 uncovered further concerns.

The Organized Crime and Corruption Reporting Project (OCCRP) had access to internal BAT documents as well as trade data and interviews with participants to document activities in the country.12. It found that BAT took advantage of the precarious military situation and over-supplied the country with cigarettes. In doing so this keeps BAT brands in circulation; but also generates profits for jihadists and militias.

“This is their playground,” Hana Ross, a University of Cape Town economist who researches tobacco, said of the industry. “They know they can get away with stuff. It’s much easier to bribe. It’s much easier to cheat the system,’’ she said. “Governments here are generally weak. This is where they do things that they don’t dare to do in Europe anymore.”12

A spokesperson for BAT said: “At BAT, we have established anti-illicit trade teams operating at global and local levels. We also have robust policies and procedures in place to fight this issue and fully support regulators, governments and international organizations in seeking to eliminate all forms of illicit trade.”

Further reading

BAT Uncovered

British American Tobacco in South Africa: Any Means Necessary

Buying Influence and Advantage in Africa: An Analysis of British American Tobacco’s Questionable Payments

Tobacco Tactics Resources

The BAT Files

British American Tobacco: Dirty Deeds in Africa

References

  1. Serious Fraud Office, SFO closes British American Tobacco (BAT) Plc investigation, 15 January 2021, accessed September 2021
  2. Dirty Secrets of the Cigarette Business, BBC Panorama, 13 September 2021
  3. Hopkins, P., Witness Statement of Paul Hopkins, London Central Employment Tribunal Case no. 2201480/2014 between Mr. Paul Hopkins (Claimant) and British American Tobacco Tobacco (Holdings) Limited (Respondent). 12 January 2015.
  4. Muyita, S., Plaintiff’s Witness Statement: The High Court of Uganda at Kampala Civil Suit no. 318 of 2013, Solomon Muyita (Plaintiff) Vs. British American Tobacco (U) LTD (Defendant). 14 July 2015.
  5. R.R. Jackson, A. Rowell, A.B. Gilmore, “Unlawful Bribes?”: A documentary analysis showing British American Tobacco’s use of payments to secure policy and competitive advantage in Africa, 13 September 2021, UCSF: Center for Tobacco Control Research and Education
  6. abR. Jackson, A. Rowell, A. Gilmore, “Unlawful Bribes?”: A documentary analysis showing British American Tobacco’s use of payments to secure policy and competitive advantage in Africa, UCSF, September 2021
  7. BAT, Standards of Business Conduct, undated, accessed September 2021
  8. Whitson, R. and J. Dunlevie. Federal Group, Labor, tobacco giant under spotlight as review of 1973 bribe allegations welcomed, 9 May 2017  
  9. Joossens, L., et al., Assessment of the European Union’s illicit trade agreements with the four major Transnational Tobacco Companies. Tobacco Control, 2016. 25(3): p. 254-260.
  10. Action on Smoking and Health. Racketeering legal action (RICO) against tobacco companies for smuggling, 11 April 2002
  11. Perera, M. and Tobacco Control Research Group. British American Tobacco undermines tobacco control in Sri Lanka, April 28 2017
  12. abA. Down, G. Sawadogo and T. Stocks, British American Tobacco Fights Dirty in West Africa, Organized Crime and Reporting Project, 26 February 2021
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