BRITISH AMERICAN TOBACCO BANGLADESH

VISION-“TO extend our leadership through world class performance.”

SLOGAN-“Success and responsibility go together.”

About the company-British American Tobacco Bangladesh is the member of British

American Tobacco plc which is the 2nd largest company in the tobacco industry in the
world based in UK. British American Tobacco Bangladesh has two factories in
Bangladesh. The cigarette manufacturing factory (Dhaka factory) is located on the same
premises as the head office in Mohakhali, Dhaka. The Green Leaf Threshing Plant
(GLTP) is situated in Kushtia.

CORPORATE SOCIAL RESPONSIBILITY

The company has established a Corporate Social Responsibility (CSR) Steering Group
chaired by the Managing Director and consisting of the Deputy Managing Director and
all function heads. It is responsible for the review of Stakeholder feedback, the
development of responses, the integration of CSR principles into its business activities
and overseeing the preparation of the Social Report.

Identification of stakeholders-

• Government-Finance, Environment & Forest, Commerce, Industries, Health, Law,

Agriculture, Police/BDR/Coast Guard, Local Administration, Others etc.

• Academicians-Teachers, Researchers.

• Legal Community

• Medical Community

• NGOs

• Think Tanks

• Anti Tobacco Groups

• Media-Print, Electronic

• Political Group

• Business Group

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 • BATB’s business partners-Distributors/Retailers/Cash & Carry, Suppliers,
Tobacco growers

• International Organizations

• Students(Adults)

• Human Rights Organization

• Neighbor/DOHS

As their slogan is “Success and Responsibility go together” they are the first company to
prepare a social report that complies with the rigorous global benchmarks of the AA 1000
standards and the United Nations Foundation sponsored global reporting initiative
guidelines. They have formulated the expectations (approximately 122) of stakeholders
under ten main headings through a discussion with the stakeholders.

These are as followed along with their solutions-

• Consumer information (12%):

Stakeholders expressed that current warning clause printed on cigarette packets and all
tobacco advertisements were inadequate.

BATB position and response-In response to stakeholders’ expectations they have

decided to provide additional information on smoking and health risks. They will help by
providing additional relevant information to the government to assist them in this area if
they are asked to do so.

BATB Commitment-will support reasonable and enforceable laws by the government, in

respect of improved health warnings on packets and brand communications and also will
provide additional information on smoking and health through distribution of the
‘smoking and health risks-our views’ booklets amongst stakeholders also distribute
consumer leaflets.

• Public Smoking (7%):

Stakeholders expressed their view that laws should be enacted to restrict public smoking.
Opinions were also expressed regarding protection of smokers’ rights.

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BATB position and response-They want to support initiatives of the government to
restrict smoking in public places and will work the government to have clear definitions
of public places with the objective of protecting nonsmokers’ and smokers’ rights.

BATB Commitment-will support initiatives of the government to restrict smoking in

public places.

• Lower Risk Products(2%):

Stakeholders expressed that they would like to see BATB undertake long term research
programme for developing products which would be less harmful to consumers.

BATB position and response-British American Tobacco’s central research and

development (R&D) based in London, UK are coordinating their efforts in this respect.
But they have suggested that the only way to avoid the risks of smoking is not to smoke,
and the best way for smokers to reduce the risks is to give up smoking.

• Youth smoking prevention(13%):

Stakeholders expressed that cigarette advertisements which attract the youth should be
stopped. They urge to make advertisements showing harmful effects of cigarettes on
children. They want to restrict availability of cigarettes to underage.

BATB position and response-They will support any government initiative which
suggests practical solutions to underage smoking and to enforce the law on juvenile
smoking which prohibits sale and purchase of tobacco products by the underage. They
have clear company policy which they communicate to their distributors, not to engage or
sell cigarettes to underage vendors. They have stopped all the brand advertisements on
TV.

BATB Commitment-will continue to work with other third parties, including the
government, in order to make improvements to our Youth Smoking Prevention (YSP)
campaign.

• Responsible marketing(10%):
Stakeholders expressed that tobacco advertisements are too aggressive, often taking
almost the entire attraction of a viewer. They have said that indirect advertisements
through sports sponsorships like cricket should be avoided just like direct advertisements.

BATB position and response-They have voluntarily stopped advertising in the electronic
media and print media. They have also recommended to the print and electronic media

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that they introduce their own code of conduct to restrict aggressive and unethical tobacco
advertisements.

BATB Commitment-will follow all the guidelines provided by the regulatory agencies in
case of promoting their products.

• Tobacco regulation(4%):
Stakeholders were concerned about the poor enforcement of laws relevant to the industry
which they felt was contributing to the rapid increase in the numbers of smokers in the
country. They want support enforcement of laws to restrict tobacco related products.

BATB position and response-BATB advocates and supports practical and enforceable
tobacco regulation. They will support the government on regulations providing realistic
solutions to relevant tobacco issues.

BATB Commitment-will record proactive engagements with the government on a

quarterly basis.

• Tobacco Taxation and Cigarette pricing(2%):

Stakeholders expressed that tax on tobacco products should be increased to a prohibitive
level to discourage consumers from purchasing the product.

BATB position and response-Cigarettes are already heavily taxed with as much as 70%
of the retail selling price going to the government.They have already engaged with the
government and National Board of Revenue(NBR) to ensure reasonable, sustainable
growth in government revenues.

BATB Commitment-will keep relevant evidence of dialogue with the NBR and BCMA
for reasonable excise rates that supports revenue generation without encouraging
counterfeits and smuggling.

• Issues relating to environmental management, corporate citizenship and

corporate governance

Environmental management(16%):
Stakeholders expressed their concern regarding the impact that tobacco cultivation has on
the environment.They also expressed their concern regarding soil fertility issue due to
tobacco cultivation.Stakeholders mentioned that BATB should make more meaningful

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contributions to environmental management.During this session five main themes
emerged-

1. Afforestation

2. Alternatives to wood fuel

3. Fertilisers

4. Soil conservation

5. Product waste and factory emmisions

BATB position and response-BATB is in a position to influence directly some of the

environmental impacts occuring the product life cycle. Their aim is to eliminate or
minimize these impacts to reduce the burden on the environment. In line with this
approach BATB is already focusing reducing wastes, promoting recycling, reducing
water comsumption,using raw materials efficiently, improving soil’s nutrient
composition, introducing alternatives to agricultural chemicals and wood fuels in tobacco
growing, reducing depending on fossil fuels and atmospheric emmisions.They manage
the country’s largest private afforestation programme and distribute more than 3.5million
saplings annually. In the last two decades, they have distributed and planted more than
42.5 million saplings. They have received the first prize of Prime Minster’s tree
plantation award in 1999.They meet 70% of their wood fuel requirements through
alternatives like paddy straw, jute stick, dhoncha stick etc.They use potassium sulphate
which is recommended by Bangldesh Agriculture Research Council(BARC) .They also
recommended balanced use of fertilisers on the cultivation process. They buy the best
valuable non-adulterated fertilisers from the government in bulk and supply at cost price
to the farmers. Soil fertility actually improved by tobacco cultivation but they still
conduct soil quality test in tobacco growing areas from time to time to determine the
fertility status. Their farmers have already taken up soil fertility programme.Every year
they obtain a clearance certificate from the department of environment(DOE) which
testifies that they are abiding by all environmental laws and regulations relevant to their
operations. Any smoke residue from th e wood-fuel burning is emitted high in the air at
about 12-14 feet. The residual ashes are used as fertilisers.

BATB Commitment-will conduct the ongoing biodiversity assessment of their

operating areas based on which specific improvements in their afforestation programmes
will be designed and implemented.

Corporate citizenship(31%):
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Stakeholders suggested that BATB should take up such economic activities which would
help the company to diversify and create more employment opportunities.Stakehlders
listed a number of expectations regarding the role of BATB in CSR:

Six main themes emerged in this list-

1. Role as a development partner

2. Corporate sponsorship and poverty alleviance

3. Support to tobacco farmers

4. Support to health programmes

5. Support to education programmes

6. Eliminating child labor

BATB position and response-BATB has always conducted business in Bagladesh

responsibly. Their corporate citizenship has a much wider reach. They are involved in
various projects and initiatives, in improving the environment, supporting philanthropic
organizations, promoting art and culture and assisting with disaster relief. They play a
significant role in human resources development in the country. They run management
development programmes which are attended by managers of other business houses.
They offer internship programme for graduates and they also provise marketing skills
development programme for BRAC.They promote indigenous culture by including
Rabindra sangeet and Baul sangeet in their Star search programme.They also sponsor
annual Lalon festival in Kushtia.They employ many women managers in order to con
duct their business butr they do not have any women worker directly employed in their
facory.Tobacco cultivation has a direct and indirect impact on the local economy and
poverty alleviation. It also genrates employment for 100,000 people over the four month
growing season. They run many programmes such as advising in the area of poultry
rearing, vegetable and fruit cultivation to make life easier for farmers. They also try to
facilitate bank loans to support farmers. They have initiated medical check up
programmes for farmers but they do not compensate smokers affected by smoking. They
are also involved with eye donation and blood donation programme and they also provide
support health programmes such as Center for Rehabilitation for paralysed (CRP).They
have a basic IT education center in Kushtia.They will promote higher education to
farmers’ children as well as adult literacy programmes for farmers. They do not
encourage child labour in their business area.

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BATB Commitment-will keep contributing in the tobacco export business of the country
and also keep continuing current various types of programmes related to culture.

Corporate Governance(3%):
Stakeholders stated that BATB is a good company and they would want to see the
company continue with its operations. Company’s vision statement should include social
responsibility and the company should not take all the profit out of the country. They
should actively participate with the customs intelligence to control smuggling.

BATB position and response-In 2002 they have introduced a new corporate slogan
“success and responsibility go together” which supports their vision and emphasizes their
commitment to be a responsible company.BATB is a public limited company in this
country and there are some shareholders of this company. They get dividend from the
company against their share. They provide any relevant appropriate in formations for
supporting to control smuggling, counterfeiting and will continue to do so.

SOCIAL AND ECONOMIC CONTRIBUTION

 One of the largest revenue generator in private sector.

 Has planted and distributed 42.5 million trees with a sapling survival rate
exceeding 90%.

 Has successful biodiversity program specifically emphasizing on water, air and

energy.

 Has partnership with the Students’ Anti Smoking Committee(SASC).

 Has been providing Basic IT Education and Basic English at free of cost in rural
areas.

 Has signed an agreement with Agro-based Industries & Technology Development

project to produce quality vegetables for export.

 Established a call center which provides business consultancy and technical IT

supports to different BAT companies in Sri Lanka and Middle East.

 Installed a bio-filter at a cost of 6 crores for environmental health and safety

practices.

 Provides support to programmes like Shandhani’s Posthumous eye donation, the

government’s Polio vaccination programme and blood donation programme etc.
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  Gives support to the people of that regions which are affected by natural disasters.

ACHIEVEMENTS

 Has won the Food and Agricultural organization award for pioneering the
development of vegetable seed industry in Bangladesh

 1st prize of Prime Minister’s National Award on Tree Plantation in 1999 and 2002.

 The Prime Minister’s Afforestation Award in 1993.

 The President’s Award in Agriculture in 1976.

 The FAO Award in 1999

 The National Export Trophy Award in 2000.

Measurement of CSR to Stakeholders:

As BATB has identified stakeholders, it has some responsibilities for its stakeholders.
From the discussion held between BATB and its stakeholders, we have got some ideas
where the stakeholders have some expectations from BATB. They expect some non-
profitable activities from BATB in order to control tobacco business in the country. A
total of 122 expectations have come up through the discussion and all of them fall in ten
main categories.

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 Figure: Percentage of expectations

Most of them have strong logical base to conduct and BATB is trying to meet these
expectations for many years. Majority of these are being conducted successfully
throughout the country under supervision of BATB. Few of these expectations are
coming to consideration of BATB and they have already started working on these. BATB
has some strong responses and positions over each and every expectation and they also
have commitments regarding the demands from stakeholders. BATB has achieved many
awards from many organizations including government for contributing a lot in the social
and economic context of Bangladesh. It implies that BATB is doing well and putting best
effort in conducting social responsibility in their chosen areas.

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‘YOUR VOICE SURVEY’ result-

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From the survey stated above it is clearly seen that BATB is performing extremely in
order to satisfy their stakeholders. In comparison to global high performance, BATB is
clearly serving well in terms of culture, freedom through responsibility, open minded,
pay & benefits, enterprising spirit, leadership, CSR etc.As the stakeholders have been
selected by BATB itself, we think the stakeholders are being reasonably served by
BATB.

In the context of conducting corporate social responsibility they are doing comparably
well than others. Their stakeholders getting proper feedbacks against their expectations.

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