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BRITISH AMERICAN TOBACCO BANGLADESH
SOCIAL REPORT 2002-2003
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Contact Details:
Corporate and Regulatory Affairs
British American Tobacco Bangladesh
P.O. Box 6069
New DOHS Road, MohakhaliDhaka 1206, Bangladesh
Telephone: +880 2 8822791-5
Fax: +880 2 8828718
OUR VISION
"TO EXTEND OUR LEADERSHIPTHROUGH WORLD CLASS PERFORMANCE"
SNAPSHOT - ON WHAT TOOK PLACE
British American Tobacco Bangladesh began its Social Reporting process in
April 2002 through for mal dialogue with it s external stakeholders to
understand t heir views and concerns on issues surrounding the tobacco
industry in general, and the Company in particular.
8 facilitated d ialogue sessions were held in t wo stages:
First stage of dialogue sessions in 2002:
21st and 28th July (Dhaka), 5th August (Kushtia) and 7th August(Chittagong)
Second stage of dialogue sessions in 2003:
8th March (Kushtia), 11th and 12th March (Dhaka) and 15th March(Chittagong)
23 stakeholder groups took part:
23 stakeholder groups attended the dialogue sessions with 79 participantsin Dialogue 1 and 58 in Dialogue 2
Issues raised by stakeholders were grouped in to 10 m ain categories:
Consumer Information
Public Smoking
Lower Risk Products
Youth Smoking Prevention
Responsible Marketing
Tobacco Regulation
Tobacco Taxation and Cigarette Pricing
Environmental Management
Corporate Citizenship
Corporate Governance
British American Tobacco Bangladesh issues its first Social Report in
September 2003
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A Message from the Managing Director
About t he Comp any
THE SOCIAL REPORTING PROCESS1.1 British American Tobacco Bangladesh's approach to
Social Reporting
1.2 Social reporting through stakeholder dialogue
1.3 Global Reporting Initiatives (GRI) Guidelines
1.4 Independent verification
1.5 Reporting exclusions and limitations
1.6 Learnings in the first cycle
STAKEHOLDER DIALOGUEIssues and responses
2.1 Issues relat ing to tobacco
2.1.a Consumer information
2.1.b Public smoking
2.1.c Lower risk products
2.1.d Youth smoking prevention
2.1.e Responsible marketing
2.1.f Tobacco regulation
2.1.g Tobacco taxation and cigarette pricing
2.2 Issues relating to environmental management,
corporate ci t izensh ip and corporate governance
2.2.a Environmental management
2.2.b Corporate citizenship
2.2.c Corporate governance
2.3 Stakeholder agreed action plans and indicators
2.4 Annexures
2.4.a Identification of stakeholders
2.4.b Invitation and attendance of stakeholders in the
dialogue sessions
GRI INDICATORSTrends and performance
3.1 Work place performance indicators
3.2 Social, environmental and economic performance
indicators
LOOKING AHEAD AND VERIFICATION4.1 Looking ahead
4.2 Bureau Veritas verification statement
APPENDICES5.1 International Tobacco Products Marketing Standards
(ITPMS)
5.2 Glossary of terms
5.3 Useful information and feedback
SECTION 1
SECTION 2
SECTION 3
SECTION 4
SECTION 5
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82
CONTENTS
The symbols above indicatewhere specific informationand facts have been verifiedby Bureau Veritas. Moredetails on the verificationprocess can be found in theverification statement onpage 71 to 75
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A MESSAGE FROM THEMANAGING DIRECTOR
It gives me great pleasure to introduce ourfirst Social Report.This report describesthe Social Reporting process that we havecarried out over the past year. The reportincludes a detailed analysis of ourstakeholder expectations that wereidentified during the process togetherwith our response to those expectations.
For many years now we have listened toand engaged with our stakeholders to
understand their expectations. This newSocial Reporting process provides aframework for stakeholder engagement
that is both transparent and accountable.
British American Tobacco Bangladesh isjust one of many companies within theBritish American Tobacco Group to engagein the Social Reporting process. We arefully committed to the process, as itprovides us with an opportunity to meetour objective of being a good corporatecitizen and a responsible company byengaging with all our stakeholders, from
government and non-governmentorganisations to business partners, in anopen, honest and constructive dialogue.
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"The Social Report ing process is about agreeing commonareas of int erest and ident ifying posit ive act ions where wecan address societal expectations."
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A Messagefrom theManagingDirector
We believe that organisations likeourselves are most successful when theyhave this congruence between corporategoals and expectations of thecommunities we operate in. This is alsoreflected in our Corporate Slogan that'Success and Responsibility Go Together'.
We are the first company in Bangladesh
to prepare a Social Report that complieswith the rigorous global benchmarks ofthe AA 1000 standards and the UnitedNations Foundation sponsored GlobalReporting Initiative (GRI) guidelines. Wehave opted to work with both, and moreimportantly, have sought an independentverification on the integrity of our SocialReporting process from Bureau VeritasQuality International (BVQI). We havealso established a formal CorporateSocial Responsibility Committee within
the company.I am particularly grateful to ourmoderator, Dr. Debapriya Bhattacharya forguiding us through the dialogue sessionswith great professionalism and integrity.For me, it was a stimulating and rewardingexperience. I believe that many of ourstakeholders similarly share this view and Iam extremely grateful for their meaningfuland positive contribution to our SocialReporting process.
The Social Reporting discussionscovered many of the areas that we havebeen addressing for some time and thatare often the centre of attention for ourindustry. We acknowledge that ourproducts pose risks to health and ourindustry is often seen as controversial.We are conscious of the implications ofmanufacturing and marketing acontroversial product. We believe thatit is all the more important to manageour business responsibly and to seeknew ways of demonstrating corporatesocial responsibility.
The dialogue sessions with ourstakeholders were wide ranging and
covered much ground. In order tosummarise the stakeholder issues wehave grouped the discussions into tenmain headings:
G Consumer information
G Public smoking
G Lower risk products
G Youth smoking prevention
G Responsible marketing
G Tobacco regulation
G Tobacco taxation and cigarette pricing
G Environmental management
G Corporate citizenship
G Corporate governance
As a result of this first Social Reportingprocess we have made a number ofcommitments to our stakeholders. I ampleased to confirm that some of these
commitments have already been deliveredwhile many are in progress.
This process is about agreeing commonareas of interest and identifying positiveactions where we can address societalexpectations. However, we acknowledgethat with the nature of our business we willnot always be able to satisfy all people.
I am confident that it is only throughongoing engagement with ourstakeholders that we can hope tounderstand our role both in addressing
societal issues and stakeholderexpectations. It will be exciting to see howthis new initiative develops within ourbusiness and it will not be easy to deliverimmediately on all the commitments thatwe made to our stakeholders. I can say,however, that we are fully committed tothe Social Reporting process and believethat it is imperative to the future successof our business.
Stephen DaintithManaging Director
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ABOUT THE COMPANY
OUR VISION
The Vision that mot ivates our people and dr ives our businessis "to extend our leadership through World Class performance"
OUR SLOGAN
"SUCCESS AND RESPONSIBILITY GO TOGETHER".
Our Four Guiding Principles:
NStrength from Diversity reflects our
working environment where employees'individual differences are respected andhonoured. It also allows for a workingenvironment where we harness diversityof people, cultures, viewpoints, brands,markets and ideas to create opportunitiesand strengthen performance.
NOpen Minded reflects openness toopportunities and new ideas, includingways to address regulatory issues andadopting to changes in expectations ofsociety. We seek to be active listeners,
genuinely considering others' point ofview and not prejudging.
NFreedom through Responsibility reflects
our belief that decisions should not all bemade at the highest level but across thecompany at all levels. Along with thisfreedom comes ownership ofresponsibility for the way our decisionsaffect our stakeholders.
NEnterprising Spirit is a characteristic ofour business. As a result we seek out newopportunities for success, strive forinnovation and accept risk-taking as away of life. This is reflected in growing
our business in diverse cultures andmarkets and assist in living our values.
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About t heCompany
OUR HISTORY
British American Tobacco Bangladesh is amember of British American Tobacco plcthat is based in UK and is one of theleading players in the global tobaccobusiness. British American Tobacco plc is a
market leader in more than 50 countrieswith 85,000 employees selling more than300 brands in more than 180 marketsworldwide. British American TobaccoBangladesh, a market leader in the country,is a subsidiary of British American Tobaccoplc and is one of the 66 countries in whichBritish American Tobacco plc hasmanufacturing plants. The Company hasoperated in Bangladesh since pre-independence and has its headquarters inDhaka with a tobacco leaf processingoperation in Kushtia. It is one of the oldest,largest and most respected multinationalcompanies operating in Bangladesh.
British American Tobacco Bangladeshcurrently employs more than 1,300 peopleand provides indirect employment to afurther 24,500 farmers, distributors andsuppliers. The company started its journeyas Imperial Tobacco Company Limited in1910 in the then undivided India. After thepartition of India, Pakistan TobaccoCompany (PTC) was established in 1949 to
reflect the new country and to meet thedemand for cigarettes in the region.
The first factory in Bangladesh (then EastPakistan) was set up in Fauzdarhat area ofChittagong in 1954. The second factorywas set up in 1965 in Dhaka. After theindependence of the country, BangladeshTobacco Company Limited (BTC) wasincorporated on 2 February 1972 as aprivate limited company. Since then it hasbeen the market leader in the country. In
1990 the Chittagong Factory was closedand in 1995 a Green Leaf Threshing Plant(GLTP) was set up in Kushtia.
Currently, British American TobaccoBangladesh has two factories in Bangladesh.The Cigarette Manufacturing Factory(Dhaka Factory) is located on the samepremises as the Head Office in Mohakhali,Dhaka. The Green Leaf Threshing Plant(GLTP) is situated in Kushtia.
In line with the global identity change ofBritish American Tobacco plc, BTC wasrenamed as British American TobaccoBangladesh Company Limited (BATB) in1998. The Company is listed on both theDhaka and Chittagong stock exchanges inthe country.
OUR BRANDS
British American Tobacco Bangladesh hasa wide range of cigarettes for differentconsumer segments. These includeinternational brands such as Benson &Hedges, State Express 555, and JohnPlayer Gold Leaf. National brands such asStar, Scissors and Capstan are also part ofthe portfolio.
OUR SOCIAL AND ECONOM IC
CONTRIBUTION
British American Tobacco Bangladesh hasalways taken seriously its wider role as acorporate citizen. The company iscommitted to building constructivepartnerships for change, listening to ourstakeholders to try and understand theirexpectations, and defining anddemonstrating responsible behaviour.
We are the single largest revenuegenerator in the private sector, generatingsome Tk. 1,700 crores in the 2002/03 fiscal
year in supplementary duty and VAT forthe government. Through variousinitiatives and projects, we are also
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ABOUT THE COMPANYOUR SOCIAL AND ECONOMIC CONTRIBUTION CONTINUED
involved in improving the environment,supporting community developmentprogrammes, promoting arts and culture,and assisting with primary health careand disaster relief. Here's a glimpse ofsome of our key activities:
NThe company's afforestation efforts,initiated in 1980, go beyond its tobaccogrowing areas across the country. To datethe company has planted and distributedmore than 42.5 million trees with a saplingsurvival rate exceeding 90%. Initially inconsultation with the Forest Department,the thrust of our afforestation
programme was on Ipil Ipil (an exoticspecies) because of its fast growingnature. With the aim to achieve a balancebetween native and exotic species, 3.5million saplings were distributed in 2003with new 15% native species. We aim toimprove this coverage of native speciesfurther over time. A new dimension hasbeen added to our afforestationprogramme by introducing commercialafforestation in the Chittagong Hill Tractsfrom the year 2001.
NCompanies are often unaware abouttheir impact on biodiversity, as these arecomplex and difficult to measure and acompany's Environmental ManagementSystems relate specifically to products andprocesses which minimise the company'simpact from emissions, mostly on water,air and energy.
NWe have drafted our BiodiversityConservation Strategy, first of its kind in
the country, with the objectives to raiseawareness; ensure efficient land resourcemanagement within the company;
promote biodiversity and sustainable useprinciples within the supply chain; andinfluence others to participate inbiodiversity conservation.
NWe promote the use of briquettes andpaddy husks for tobacco curing asalternatives to wood fuel. This, along withour afforestation initiatives, has kept thecost of wood fuel in the Kushtia leafgrowing region unchanged over the last 10years while supporting governmentinitiatives in forestry.
NBritish American Tobacco Bangladesh is
firmly committed to the principle thatsmoking is an adult choice and that thoseunderage (below 18 years) should notsmoke. Throughout the world, underagesmoking is an issue for society. The causeof youth smoking is based on variouscomplex factors. Independent researchhas shown that peer pressure, influenceof family members and defiance are thebiggest causes of youth smoking. Our"BE SMART" campaign discourages theunderage from smoking. We have taken
the Youth Smoking Prevention (YSP)campaign to schools as well, inpartnership with the Students' AntiSmoking Committee (SASC).
NIn support of the government's emphasison IT and in response to stakeholders'expectation, we provide basic ITEducation in some rural communities freeof cost. We have opened 2 centres todate, one at Chechua and one atMoulvibazar. The two month courseteaches Basic English as well as
introduction to operating systems andnetwork environment, MS Word, Excel,Power Point, Database and project work in
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About t heCompany
a Windows 2000 network environmentwith each student having a dedicated PC.This enables many under-privileged youthto realise their dream of making a livingwith IT knowledge. To date, 72 studentscompleted the course; more than 15
students are self employed; most of themare going for higher studies and one ofthem is teaching at Dishari.
NWe have recently signed an agreementwith Agro-based Industries & TechnologyDevelopment Project-II (ATDP-II) toexplore assisting the farmers of Bangladeshin producing quality vegetables for export.There is an increasing demand forvegetables in the foreign market and theGovernment has also declared this to be a
thrust sector for the country.
NWe are involved in vegetable seedmultiplication programme and receivedthe Food and Agricultural Organization(FAO) award for pioneering thedevelopment of vegetable seed industry inBangladesh.
NA call centre established by BritishAmerican Tobacco Bangladesh is currentlyproviding business consultancy andtechnical IT supports to different BritishAmerican Tobacco operating companies inSri Lanka and Middle East. This showcasesBangladesh as an exporter of leading edgeservices and also helps to earn muchneeded foreign exchange for the country.
NOur tobacco buying process has resultedin fair prices to farmers by reducingreliance on other third parties in thebuying process. This has allowed thefarmers to get direct payment to their
bank accounts and has assisted them togenerate savings.
NWe have demonstrated environmentalhealth and safety practices of the highestquality international standards. This isevidenced by the installation of a bio-filterat a cost of Tk. 6 crores and minimal lost-time due to accidents in recent years. We
have received international recognition inthese areas.
NWe provide support to programmes likeShandhani's posthumous eye donation, thegovernment's polio vaccinationprogramme, blood donation programme aswell as to the Center for Rehabilitation ofthe Paralyzed (CRP).
NWe provide advice and assistance tofarmers in crop rotation and optimumutilisation of land.
NIn national disasters the company hasbeen prompt in lending their support topeople of the affected regions.
British American Tobacco Bangladesh haswon many awards during the last 30 years.Among the awards won are the 1st Prize ofPrime Minister's National Award on TreePlantation in 1999 and 2002, the PrimeMinister's Afforestation Award in 1993, thePresident's Award in Agriculture in 1976,
the FAO Award in 1999 and the NationalExport Trophy award in 2000.
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THE SOCIAL REPORTINGPROCESS
"Social Report ing aims to st rike a balance between meet ingstakeholders' reasonable expectat ions and running a
successful business."
8
1.1 BRITISH AMERICAN TOBACCO
BANGLADESH'S APPROACH TO
SOCIAL REPORTING
British American Tobacco Bangladesh iscommitted to continuous improvement.Its approach to Social Reporting recognisesthat running a business is not just aboutprofits. Social Reporting aims to strike a
balance between meeting stakeholders'reasonable expectations and running asuccessful business.
Corporate Social Responsibi lit y Steering Group
The company has established a CorporateSocial Responsibility (CSR) Steering Groupchaired by the Managing Director andconsisting of the Deputy Managing Directorand all function heads. It is responsible forthe review of stakeholder feedback, thedevelopment of responses, the integration
of CSR principles into its business activities,and overseeing the preparation of theSocial Report.
British American Tobacco Bangladeshfollows the accepted standard for SocialReporting (AA1000), developed andregulated by the Institute of Social andEthical AccountAbility (also known asAccountAbility). This standard allows usersto embed the social accounting, auditingand reporting procedures into currentmanagement systems. The essence of this
standard includes:NPutting stakeholder dialogue at the centreof our approach;
NEmbedding the approach, while engagingin dialogue and producing regular reports;
NFollowing both the AA1000 and the GlobalReporting Initiative (GRI) framework;
NBeing measured against the AA1000Standard through a highly rigorous externalverification.
This Social Report focuses mainly on issuesraised in the stakeholder dialogue sessions.It also provides overviews on a number ofother key and relevant topics.
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1The SocialReportingProcess
9
Social Reporting Process OverviewBrit ish American Tobacco Bangladesh
Stakeholder Mapping
Internal Scoping & Preparation
Identify Stakeholders for Dialogue
Dialogue 1(Understand Expectations)
Identify Gaps & Make Commitments
Dialogue 2(Discuss Commitments &
Indicators)
Implement &Measure against Indicators
Report & Communicate
Social Repor t
LISTEN
DECIDE
ENTER
DELIVER
VERIFY
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THE SOCIAL REPORTING PROCESS1.2 SOCIAL REPORTING THROUGH
STAKEHOLDER DIALOGUE
The Dialog ue Process
The dialogue with stakeholders is central
to the approach and the Social Report is
structured around the key topics raised indialogue by stakeholders.
It recognises that stakeholder dialogue is
about listening and absorbing and, ifpossible, seeking areas of common ground
and solutions. In this first reporting cycle,
the emphasis has largely been on listening
and building greater understanding.The initial dialogue objectives have been:
NTo enable opportunities for the company
and its stakeholders to learn more about
each others' views, beliefs, activities androles in society;
NTo identify key issues;
NTo enable the company to respond tothose issues and to establish areas of focus
for dialogue going forward;
NTo agree on action plans that thecompany will undertake, wherever
appropriate, in addressing the concerns
raised by the stakeholders.
Comments and suggestions were sought
in all dialogue sessions on the approach
itself.The future Social Reports will report
on progress against the action plansshown in Section 2.3 and will also include
any new issues identified in future
stakeholder dialogues.
The dialogue processes were designed to
enable the company to respond to the
economic and political environment,
regulatory regimes and differingstakeholder attitudes towards the tobacco
industry. The sessions were held in Bangla
and in English, where stakeholders had the
option to talk in their language of choiceand ask for any clarification. Responses to
the issues raised in dialogue were
discussed and agreement of stakeholderson actions and indicators to measure
delivery of these plans was reached.
Dialogue Structure
The company engaged in dialogue with a
broad range of stakeholders. Theattendance and invitation of stakeholder
groups are mapped in Annex 2.4.b under
Section 2. A stakeholder is defined as anyperson or organisation on whom the
business impacts or whose actions impact
on the business. Broadly this means
governments, regulators, politicians,
consumers, investors, employees,commercial and trade partners, the
scientific and medical community, localcommunities, welfare, education, NGOs
and campaigner/pressure groups.
BATB conducted two researches, the
Stakeholder Mapping and Classificationand Internal Scoping Study, to identify key
stakeholder groups. The advice of the
independent Moderator, Dr. DebapriyaBhattacharya, a renowned economist, was
also sought in inviting stakeholders.Though a wide group of stakeholders wereinvited, for the sake of inclusivity even
more stakeholder groups will be added
going forward into the future cycles of
Social Reporting. Some stakeholders wereapprehensive or uncertain of the motives
and felt unable to participate. The
company respects their position and willseek to build on the dialogue to be
increasingly inclusive going forward.
Stakeholders were approached in twomain dialogue stages to understand theirconcerns and expectations. In Dialogue 1,
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1The SocialReportingProcess
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the emphasis was largely on activelistening by various members of themanagement of British American TobaccoBangladesh. In Dialogue 2, the Company'sresponses to the stakeholder expectationswere presented by the senior managementand various directors of British American
Tobacco Bangladesh. The stakeholdersthen had the opportunity to offer views onthe extent to which they felt that theresponses aligned with their initialexpectations and to explore opportunitiesfor further involvement.
All the dialogue sessions were facilitatedby Dr. Debapriya Bhattacharya, whoretained independence throughout. Heselected and contacted stakeholders fromthe initial stakeholder mapping exercise,with a view to obtain a broad and balancedrepresentation in dialogue. The Moderatorstructured the dialogue sessions andreported on stakeholder inputs. All thesedialogue reports have been verified by theindependent verifier, BVQI.
To capture any regional differences, thedialogue sessions were held in Dhaka,Chittagong and Kushtia, the three majorareas where the company operates. Intotal, 160 individual stakeholders orrepresentatives of stakeholderorganisations were invited by Dr.Bhattacharya to join one of the fourDialogue 1 sessions and 79 attended. InDialogue 2, 91 stakeholders were invited ofwhich 58 attended. Views of absentstakeholders expressed through lettershave also been included in the list ofstakeholder views in consultation with theModerator. The Moderator emphasisedthat the identity and affiliation of theparticipants should not be revealed in thereports. Therefore stakeholder commentsare not identified to any particular
stakeholder. The independent verifier hashowever verified the record of thoseinvited and attending.
Independent Standards
The AA1000 Standard, a rigorous
reporting standard established by the
Institute for Social and Ethical
AccountAbility, also known as
AccountAbility, was followed as thestandard for this process. This is the
eminent international professional body
supporting organisational accountability
and sustainable performance. Current
membership includes over 300 major
businesses, NGOs, service providers,
professional bodies, academics and
research establishments.
AA1000 was first published in November
1999 and was designed to improve
accountability and performance with aprocess of learning through stakeholder
engagement. It is a process standard
covering the way that social performance
reporting is carried out, and embodies a
set of key principles which aim to
encourage a high standard of transparency
and impartiality.
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THE SOCIAL REPORTING PROCESS
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SOCIAL REPORTING THROUGH
STAKEHOLDER DIALOGUE CONTINUED
AA1000 requires Social Reporting to meetthe principles of:
Inclusivity: consideration of the views and
needs of stakeholders;
Completeness: unbiased inclusion of allappropriate areas of social and ethicalactivity;
Materiality: alignment of reporting withstakeholders' interests, expectations andneeds;
Regularit y and t imeliness: regularreporting;
Qualit y assurance: verification of the
process by an independent and competentthird party;
Accessibility: appropriate and effective
communication to stakeholders of social
performance and reporting;
Information quality: relevance of
information and its ability to enable
comparisons with past performance or the
performance of other organisations;
Embeddedness: embedding of reporting
processes and principles into policies,
decision-making and management
systems, ensuring that the agreed action
plans are incorporated in the relevant
processes and social and ethical
performance is measured and reported
under the Global Reporting Initiatives (GRI)
Indicators;
Cont inuous improvement: recognised
and audited steps to improve social
performance in response to stakeholder
inputs.
1.3 GLOBAL REPORTING INITIATIVES
(GRI) GUIDELINES
The GRI was convened in 1997 by CERES,the Coalition for EnvironmentallyResponsible Economies, a US-based NGO,in partnership with UNEP, the United
Nations Environment Programme, toproduce guidelines applicable globally forvoluntary use by organisations reportingon the economic, environmental and socialdimensions of their activities.
The GRI Guidelines were first published inJune 2000, after consultation in 51countries, and revised in 2002. These areexpected to evolve over time. They offera reporting framework that promotescomparability between organisations,
while recognising the practicalconsiderations of collecting andpresenting information across diverseorganisations. The GRI recommendstopics on which companies may report,with indicators of performance thatthey may use.
While this report is substantially shaped bythe issues raised by stakeholders in thedialogue sessions, it also reported againstsome of the Social and EnvironmentalGRI indicators.
GRI Indicators
NThis reporting uses the 2002 GlobalReporting Initiative (GRI) Indicators and isbased on information available at this time.
NThe report includes performance againstsome Social and Environmental GRIIndicators currently measured in BritishAmerican Tobacco Bangladesh and infuture, aim to refine and develop to
improve alignment with the GRI.
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1.4 INDEPENDENT VERIFICATION
Bureau Veritas Quality International (BVQI)
was appointed as independent verifier to
verify the Social Reporting process against
the AA1000 Standard. This standard has
been applied for all participating British
American Tobacco Group companies. BVQIis a professional services company that
specialises in Quality, Health and Safety,
Social and Environmental management,
with a presence in over 120 countries.
As Verifier, the role of Bureau Veritas
Quality International is to:
NMonitor the company's performance
throughout the process against the
AA1000 Standard and to report publicly on
the degree of attainment;
NAudit and verify the accuracy of dialogue
summaries compiled by independent
moderator;
NAudit and verify the accuracy of the
stakeholder commentary, responses and
social performance data in this report.
BVQI assessed the Social Reporting process
against AA1000 using VeriSEAAR, a unique
proprietary verification tool that it has
developed as a result of the company'sbrief to measure rigorously against the
AA1000 requirements. VeriSE+AAR is
owned by BVQI and has been welcomed by
the Institute of Social and Ethical
AccountAbility, which established the
AA1000 Standard. It enables assessment of
the extent the company has met each
individual AA1000 requirement. To date,
this form of rigorous verification has not
been carried out for any other organisation.
1.5 REPORTING EXCLUSIONS AND
LIMITATIONS
Employee views, perceptions about
stakeholders and their expectations were
captured in the Internal Scoping Study. No
specific employee dialogue took place in
the first cycle, as it was felt thatappropriate structures are already in place
to capture employee views, including
holding open forum discussions with staff
on smoking and health issues. Discussions
with employees also take place regularly at
informal meetings that cover all hierarchies
of employees. In addition, a global
employee survey, Your Voice, was carried
out in Bangladesh in 2002. The summary of
the results of this global employee survey
is also included in Section 3.1.
The first Social Reporting cycle
concentrated on engaging with external
stakeholders. However, some of the
business stakeholders such as suppliers,
distributors, tobacco growers and retailers
were included. To allow the stakeholders
to talk freely about their concerns about
the industry, members of competition
were not included.
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THE SOCIAL REPORTING PROCESS1.6 LEARNINGS IN THE FIRST CYCLE
British American Tobacco Bangladesh has
learned much from the first cycle of
dialogue and reporting but recognises that
there is some way to go. Though a wide
group of stakeholders attended the
dialogue sessions, there were somestakeholder groups who were unable to
attend. By being able to bring more
stakeholder groups in the future dialogues
the company shall be able to identify more
clearly how they see the issues around the
tobacco business. This is a key area of
focus going forward. This first Social
Report identifies many of the key issues
that face the company and represents the
start of a continuing journey.
The key learnings from the first SocialReporting cycle are summarised below:
NThe company has learned the
importance of achieving a shared
agreement on the boundaries of company
responsibility; what a commercial
organisation can and cannot do and the
contributions it can make, how much
further it can extend corporate
responsibility, and its legal, political,
commercial and moral boundaries. It
expects to continue to explore thisimportant area in future dialogue sessions.
NWhile both dialogue on controversial
issues and developing appropriate
company responses is a challenging
process, it has learned that progress is
possible. Stakeholders have devoted
significant time to dialogue, for which the
company is extremely grateful.
NIt learned how a genuinely independent
moderator can add significant value to
the process.
NIt has learned that independent
verification is of considerable value in
assuring stakeholders that the process is
objective and in helping to ensure
consistency and quality of reporting.
NThe dialogue sessions have reinforced
that the very nature of the product and
the way it is marketed remains a core issue
for stakeholders.
NThe dialogue with stakeholders providedopportunities to bridge 'knowledge gaps'
for both the company and stakeholders, in
turn creating a valuable basis for
developing a better understanding.
Looking forward, it also aims to include
more internal dialogue within the
company.
NThe company learned that not all
stakeholders share the same views.
Indeed, some stakeholder expectations
can contrast.
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STAKEHOLDER DIALOGUE
ISSUES AND RESPONSES
16
Stakeholder Expectat ions
Corporatecitizenship
31%
Environmentalmanagement
16%
Youth smoking prevention
13%
Lower risk products
2%
Public smoking
7%
Consumerinformation
12%
Corporategovernance
3%
Tobacco taxation andcigarette pricing
Tobacco regulation
4%
Responsible marketing
10%
A total of 122 expectat ions were ident ified during t he dialoguesessions, which are grouped into 10 broad categories.
2%
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more meaningful
information should
be provided on
hazards of smoking
2.1 ISSUES RELATING TO TOBACCO
2.1.a CONSUMER INFORMATION
www.bat.com
STAKEHOLDER VIEWS
Stakeholders expressed that the current
warning clause printed on cigarette
packets and all tobacco advertisements
was inadequate. They expressed that more
meaningful information should be
provided on hazards of smoking by theindustry.
STAKEHOLDER EXPECTATIONS
NIntroduce cautionary warnings for all
sorts of tobacco products
NProvide rotational health warnings, with
specific messages on diseases caused by
smoking - if not on packs then on ads
NProvide information on cigarette packs
which is easily understandable with
specific messages
NProvide health information to the
consumers through advertisements
NDisseminate negative impact of
smoking while giving any advertisement in
any media
NImprove accessibility to information
related to hazards of smoking
NPrint hazards of smoking on each
cigarette stick and packet
NLabels to contain information oningredients
NGive counselling on how to give up
smoking
NIntroduce an authority for quality
control of cigarettes and publish quality
information of all cigarettes
NMedia should play active role in educating
people about hazards of smoking
NIntroduce programmes to identify people
affected by smoking related disease
NHighlight financial burden of smoking on
family through anti-tobacco messages
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NCommission a study on the socio-economic consequences of tobacco
NEconomists should provide informationon treatment and social costs of smoking
for comparing with the excise generatedby BATB/the industry
OUR POSITION
Given that there are real risks of seriousdiseases associated with tobacco use, webelieve that smoking should be aninformed adult choice. We support therights of adults who choose to smoke andbelieve that they should have access toinformation on the health risks associatedwith smoking either from the Governmentor related organisations includingourselves. Our group of companiesproduce fine quality products that providepleasure to many millions of adult smokersaround the world. We want to ensure thatour stakeholders are aware of our views onsmoking and health issues.
We also recognise that for many people,smoking is difficult to quit, despiteknowing that it poses risks to health. Butwe also believe that smokers can quit,given the necessary motivation and self-
belief. This is evidenced by the largenumber of people who have given upsmoking.
We will always ensure that information wedo provide is based on sound science andevidence. However, we believe thatconsumers should look to - and listen to -public health agencies as the prime sourceof information about the health risks ofusing tobacco.
We also believe that legislation shouldprescribe the minimum level of consumerinformation and we will support anyenforceable law by the government in thisrespect.
OUR RESPONSE
NHealth warnings on packets arelegislated and regulated by thegovernment, and we are not able tochange the content of the warnings at ourown discretion. We will supportreasonable and enforceable law by thegovernment which makes it mandatory forall tobacco products to give visible andmore specific health warnings on packetsand all brand communications.
NAs required by law we print healthwarning clauses in all our brandcommunications. However, to match thespirit of the law we have on our ownincreased the size of health warnings to
make it visible and legible. As a resulthealth warnings on our packets comprise10% of both the front and back panel. Inaddition, British American TobaccoBangladesh has been proactively givingvoice-over health warnings in all its brandadvertisements in TV before stopping allbrand advertisements in TV from 1stJanuary 2003.
NWe believe that for smoking and healthmessages to be credible, the governmentand public health community should play a
central role in providing information onhealth risks and the impact of smoking onpublic health. We will help by providingadditional relevant information to thegovernment to assist them in this rolewhenever we are requested to do so.
NHowever, we do acknowledge theconcerns about improving accessibility toinformation and in response tostakeholders' expectations we havedecided to provide additional informationon smoking and health risks.
N
It is impractical to print health warningson sticks. Health warnings are clearly andvisibly given on all our packets and brandcommunications.
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www.bat.com
NWe will be happy to work with relevantgovernment bodies through BangladeshCigarette Manufacturers' Association(BCMA), to make it mandatory for tobaccocompanies to disclose tar and nicotinelevels on packets. We would, however,emphasise on the need for an independent
body to ensure compliance.
NWe believe that smoking does not takeaway anyone's free will, and we believe itis important that smokers realise that theycan give up smoking, given the necessarymotivation and self-belief. This isevidenced by the fact that a large numberof people have today given up smoking.While we believe that we are not theappropriate body to give counselling ongiving up smoking, we are willing tosupport initiatives by appropriate external
organisations by providing relevantinformation.
NWe follow a rigorous standard for qualitycontrol of all our products and constantlymonitor quality of our products through asophisticated quality assurance process.Quality measurement, however, is acomplex area. Therefore we believe thatfor any standardised quality controlsystem for the industry the governmentshould play a role in introducing anauthority, through discussion with industry
members, to independently andobjectively monitor quality control ofcigarettes.
NWhile media does play a role in providinginformation to the public on the healthimpact of tobacco, we will alwaysparticipate in any Smoking and Healthdebate in the print and electronic media.
NWe believe that there are other bodieswho are better equipped to take upstudies on the impact of tobacco on health
and society and to provide relevantinformation. We will play our part byadding to the body of information for
consumers by communicating our views onSmoking and Health risks.
NWe will assist any independenteconomist that may wish to conduct astudy on relevant socio-economic issuesrelating to tobacco by providing
appropriate information. Apart fromgenerating significant governmentrevenues, we provide direct employmentto more than 1,300 people. 24,500 farmers,distributors, retailers and suppliers areactively engaged in our business.
WHAT WE WILL DO
NWe will support reasonable andenforceable law by the government, inrespect of improved health warnings on
packets and brand communications.NWe will provide additional informationon smoking and health through distributionof the "Smoking and Health Risks - OurViews" booklet amongst stakeholders andalso through consumer leaflets.
NWe will initiate dialogue with relevantgovernment departments, through BCMA,to make it mandatory for all tobaccocompanies to disclose tar and nicotinelevel on their packets. We would however,emphasise on the need for an independentbody to ensure compliance.
NWe will support initiatives byappropriate external organisations oncounselling to give up smoking byproviding them with relevant information.
NWe will assist any credible andindependent body that may wish toconduct any relevant socio-economicstudies relating to tobacco by providingappropriate information.
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2.1.b PUBLIC SMOKING
laws should be
enacted to restrict
public smoking and
also protect the
smokers' rights
STAKEHOLDER VIEWS
Stakeholders expressed their view thatlaws should be enacted to restrict publicsmoking. Opinions were also expressedregarding protection of smokers' rights.
STAKEHOLDER EXPECTATIONS
NProhibit smoking in public places.Smoking in open public gathering andpublic transports like bus, train, launch andsteamer should be banned.
NIn defining public place, hotels andrestaurants should be clearly defined so asto distinguish between eating andsleeping places.
NThe rights of non-smokers and smokersshould be ensured. While ensuring non-smokers' rights, smokers should not besubjected to uncomfortable confinements.
NTake initiative to stop smoking in thetransport sector.
NBe proactive in preventing secondarysmoking and enforcement of existing laws.
NAll open space should be declared smokefree zone.
NSupport enforcement of laws relating tosmoking in public place.
NSmoking should be prohibited in primary
schools, mosques and temples.
OUR POSITION
We acknowledge that EnvironmentalTobacco Smoke (ETS) can be a realannoyance and may be of concern to somepeople. Based on our assessment of theavailable science, we think that many ofthe claims against ETS have beenoverstated. In our view, there is noconvincing evidence that ETS is a cause of
chronic disease such as lung cancer,cardiovascular disease or chronicobstructive pulmonary disease.
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www.bat.com
But we cannot say that it is proven to be
harmless to everyone. There is evidence,
for example, that exposure to ETS is
related to acute illnesses, like respiratory
and ear infections in children and may also
cause discomfort to people, specially
those who suffer from respiratory
problems such as asthma. We believe that
one should not smoke around young
children and infants and also around people
who suffer from respiratory problems.
We support initiatives that aim to reduce
exposure to ETS for non-smokers, while
balancing the rights of smokers. We will
continue to support the rights of adult
smokers who wish to smoke. Any
restriction on smoking in public places
needs to take these rights intoconsideration.
OUR RESPONSE
We will welcome any government
initiative in enacting enforceable and
practical laws to restrict smoking in public
places including public transports
balancing the need of both non-smokers
and smokers. The term public place can
mean different things for different people.
We believe that public places should be
properly defined and incorporated in any
legislation seeking to restrict smoking in
public places. The government is currently
working on a new legislation which seeks
to address these concerns.
WHAT WE WILL DO
We will support initiatives of the
government to restrict smoking in public
places and will work with the government
to have clear definition of public places
with the objective of protecting both non-
smokers' and smokers' rights.
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2.1.c LOWER RISK PRODUCTS
undertake long
term research
programme for
developing products
which would be less
harmful to
consumers
STAKEHOLDER VIEWS
Stakeholders expressed that they wouldlike to see British American TobaccoBangladesh undertake long term researchprogramme for developing products whichwould be less harmful to consumers.
STAKEHOLDER EXPECTATIONS
NMinimise the harmful effects of tobacco
NInvest in Research & Development toreduce the hazardous effect of cigarette
OUR POSITION AND RESPONSE
Along with the pleasures of smoking come
real risks of serious diseases. We believe
that there is no such thing as a safecigarette. However, a realistic view is that
a large number of people will still choose to
smoke even though it is risky. We therefore
think it is important to continue working
towards products which might offer
reduced risks, and which consumers would
also find acceptable. We see the
development of such products as a priority,
and British American Tobacco's central
Research & Development (R&D) team
based in London, U.K. are coordinating ourglobal efforts in this respect.
To date, the development of lower tar
products is the only product modification
that has been encouraged by some
governments and medical bodies as having
the potential to make smoking less risky.
There is, however, disagreement as to
whether current low tar products are less
risky than current full flavour products. We
do not make health claims for lower tar
products as it cannot be conclusivelydemonstrated that for any particular
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www.bat.com
individual, lower tar is less risky than higher
tar. 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.
Globally, the British American Tobaccogroup of companies aspires to be the first
to launch new generation tobacco
products with critical mass appeal that
will, over time, be recognised by scientific
and regulatory authorities as posing
substantially reduced risks to health. British
American Tobacco will seek endorsement
from independent regulatory or scientific
bodies before making any claims about a
lower risk product to consumers.
In Bangladesh we will launch such aproduct, once it gets endorsement from
independent regulatory or scientific
bodies, as a potentially reduced exposure
product and is acceptable by consumers.
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2.1.d YOUTH SMOKING
PREVENTION
stop cigarette
advertisements in
televisions which
attract the youth
STAKEHOLDER VIEWS
While some stakeholders commended theinvolvement of British American TobaccoBangladesh in Youth Smoking Prevention(YSP) campaign, there were others whowere critical of the campaign.
STAKEHOLDER EXPECTATIONSNYSP campaign by BATB contradicts itsobjectives. By saying that one should notsmoke before 18, it is implied that one cansmoke after crossing that age.
NMake advertisements showing harmfuleffects of cigarettes on children.
NYSP campaign should cover the issue intotality including health hazards.
N
Support enforcement of laws relating tojuvenile smoking.
NRestrict availability of cigarettes tounderage.
NStop selling of cigarettes outsideeducational institutions.
NBar should be imposed on smoking forchildren aged below 16. Selling of cigaretteto underage to be strictly prohibited andtreated as a punishable offence.
NIncrease age limit to 20 years forprohibiting juvenile smoking.
NYSP campaign advertisement should beaired after 10 pm.
NStop cigarette advertisements intelevisions which attract the youth.
NParents, family and school to playprimary role in preventing their childrenfrom smoking.
NIntroduce anti-smoking education inschool curriculum.
NHarmful impact of smoking should beincorporated in school curriculum.
NGenerate information on number ofunderage starting smoking every year.
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www.bat.com
NAnalyse the impact of BATB's YSPcampaign on the youth.
NIntroduce cigarette selling throughdoctor's prescriptions to protect teenage.
OUR POSITION
We believe that tobacco should never bemarketed to the underage and thatsmoking should be for informed adults whounderstand the risks associated with it. Allour brand promotions are targeted at adultconsumers and we are committed toensuring that none of our marketingactivities is directed at, or particularlyappeals to, the underage.
We believe that underage smoking is a
complex societal issue and needs to betackled by society as a whole. We arecommitted to playing our part inaddressing the issue of underage smoking.With this objective we launched acomprehensive Youth Smoking Preventioncampaign in 2001. We are willing to workwith appropriate third parties to makeimprovements to our Youth SmokingPrevention campaign.
OUR RESPONSE
NIt is generally acknowledged that at theage of 18, a child reaches adulthood whensociety deems appropriate for people totake decisions on important issues likedriving, voting, etc. The decision to smokeis a similar important decision to be takenby informed adults who understand therisks associated with smoking. We do notimply anywhere in our Youth SmokingPrevention campaign that smoking after 18is desirable.
NA research study conducted amongparents and teachers showed thattraditional messages on health hazards of
smoking do not have any real impact onchildren. Our YSP campaign is based ondiscouraging the under-age to smoke byshowing them typical children environmentwith the message that it is not right tosmoke. We will support any governmentinitiative which suggests practical
solutions to underage smoking and also toenforce the law on juvenile smoking whichprohibits sale and purchase of tobaccoproducts by the underage.
NThe current law prohibits the sale of alltobacco products to those under the ageof 16. We believe this age definition shouldbe extended and 18 years should be theminimum age at which individuals canlegally purchase tobacco products. Wehave a clear company policy, which we
communicate to our distributors, not toengage or sell cigarettes to underagevendors (those under 18 years of age).
NThe government is currently working ona new law which we believe will raise thelegal age for smoking from 16 years of ageto 18 years. It is a legislation that we willwelcome and support. If the governmentincreases it to 20, we do not have anyissue. What is important however is thatthe law should be enforced with theretailers. We are willing to work with the
government in this respect.
NOur YSP campaign advertisements areaired before 10 p.m. in TV because they aretargeted at the underage. Contrarily up tothe end of 2002, our brand advertisementswere aired only after 10 p.m. when theviewers are primarily adults.
NHowever, we are happy to report that, asof 1st January 2003 we have stopped allsorts of brand advertisements in TV. This isin line with stakeholders' expectations andthe International Tobacco ProductsMarketing Standards (ITPMS) which sets
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26
guidelines for marketing our productsresponsibly. (See Appendix 5.1)
NWe believe the underage smoking issueshould be addressed by society as a wholeincluding parents and teachers. Our YSPcampaign has specific elements whichaddress both parents and teachers inpreventing youth smoking. We arecommitted to playing our part and areprepared to discuss any practical solutionsto address the campaign more effectively.
NThe government has introduced anti-smoking education in the schoolcurriculum. To supplement this we supporta programme for schools by Students'Anti-Smoking Committee (SASC) todiscourage the underage from smoking,and also to create awareness among theteachers about their role in preventingunderage smoking.
NAs a policy we do not conduct anyresearch among the underage. However,we will support a neutral and appropriate3rd party to carry out research to analysethe underage smoking pattern and the
impact that our YSP campaign has on theunderage.
NWe do not think cigarettes are productswhich should be prescribed by doctors.
WHAT WE WILL DO
NWe will continue to work with otherappropriate third parties, including thegovernment in order to makeimprovements to our YSP campaign.
NWe will continue to supportorganisations like Students' Anti SmokingCommittee to take YSP programmes to agreater number of schools.
NWe will support an appropriate 3rdparty to conduct any meaningful researchto analyse the underage smoking patternsand the impact of our YSP campaign onthe underage.
NWe will reinforce our communication toour distributors, advising them not toengage or sell cigarettes to underagevendors (those under 18 years of age).
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2.1.e RESPONSIBLE MARKETING
stop aggressive and
unethical cigarette
advertisements
www.bat.com
STAKEHOLDER VIEWS
Stakeholders expressed that tobacco
advertisements are too aggressive, often
taking almost the entire page of a
newspaper. They also expressed concern
regarding showing of unethical and vulgar
cigarette advertisements in the electronic
media.
STAKEHOLDER EXPECTATIONS
NStop unethical tobacco advertisements
NIntroduce a code of conduct for print
and electronic media regarding cigarette
advertisements
NRestrict cigarette advertisements by
tobacco companies; Form a policy fortobacco product marketing
NStop aggressive advertisement in
newspapers
NTelevision advertisements should be
controlled
NNo tobacco advertisements should be
given during prime time
NInitiate a study by stopping all media
campaigns for five years to see the impact
of such step
NStop indirect advertising through sports
sponsorships and stop sponsoring of sports
like cricket
NAll tobacco advertisements should go
through government censorship
NGet permission from local government
for advertising on bill boards
NProvide information on BATB's
advertisement expenditure
NRedistribute advertisement cost to anti-
smoking motivation programmes
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OUR POSITION
As a responsible market leader in acontroversial industry, we have always
taken care to market our productsresponsibly. We believe we should be ableto communicate responsibly with adultconsumers who have already decided tosmoke and to compete fairly for theirchoice of brands.
All our advertisement and promotionscomply with our own Code of Conduct,introduced in 2000, which addressesvarious aspects of marketing of ourproducts responsibly. Our Code ofConduct sets high standards for our brandcommunications, going beyond thecurrent laws and regulations of thecountry. British American TobaccoBangladesh has further enhanced its Codeof Conduct by implementing the ITPMS inBangladesh from January 2003. (SeeAppendix 5.1 )
The new International Tobacco ProductsMarketing Standards (ITPMS) was launchedin September 2001 by British AmericanTobacco together with two other global
tobacco companies (Philip MorrisInternational and Japan TobaccoInternational) in response to society'schanging expectations on how responsibletobacco companies should market theirproducts. The ITPMS governs all aspects oftobacco marketing, from print, billboardsand electronic media to promotionalevents, packaging and sponsorship.
OUR RESPONSE
NIn compliance with the InternationalTobacco Products Marketing Standards
(ITPMS) to which our company subscribes,we carefully regulate the content of ouradvertisements and the way we advertiseto ensure that they are done responsibly.
(See Appendix 5.1). If any relevant bodywants to restrict tobacco advertisementfurther we are open to discussion.
NWe would recommend to the print andelectronic media to form their own codeof conduct regarding tobaccoadvertisements. From 1st of January 2003we have voluntarily stopped advertising inthe electronic media. We now also havelimited presence in the print media in linewith the requirements of ITPMS
NThe question of whether tobaccoadvertising affects the prevalence ofsmoking has been the subject of muchacademic study. Some studies suggest animpact and some do not. For example inboth Norway and Portugal there was nosignificant change in total smokingconsumption following an advertising ban.Many governments around the world haveinitiated advertising bans on tobaccoproducts. Should the government ofBangladesh follow that route we will
support it. However, we believe we shouldbe able to communicate directly withadult consumers who have chosen tosmoke to encourage them to switch overto our brands.
NWith effect from January 2003, incompliance with ITPMS British AmericanTobacco Bangladesh does not sponsor anysports events. However, it should be notedthat we have not sponsored any large scaleoutdoor sporting event for many years.
NWe follow all laws and regulations of thecountry in conducting our brandpromotion activities. Furthermore, we
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www.bat.com
believe that our compliance with the
ITPMS will satisfy any sensible censor
requirements. However, should the
government want to restrict tobacco
advertisements further we are open to
discussion.
NWe don't believe that the disclosure ofmarketing spend will provide any
meaningful information. It is also not
supplied for competitive reasons.
NWe believe we should be able to
communicate about our brands responsibly
with adult consumers who have already
decided to smoke. Our advertisement
spend is designed to encourage adults who
have chosen to smoke to switch over to
our brands. However, we support any
initiative by public health authorities and
the media to educate people about the
health hazards of smoking. We will
continue to support the government
initiative through appropriate warning
clauses on our packs and all brand
promotions.
WHAT WE WILL DO
NWe will recommend to the print and
electronic media that they introduce their
own code of conduct to restrict
aggressive and unethical tobacco
advertisements.
NWe will fully comply with our own ITPMS
and encourage our fellow members in the
industry to adopt these standards.
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2.1.f TOBACCO REGULATION
support enforcement
of laws to restrict
tobacco relatedproducts
STAKEHOLDER VIEWS
Stakeholders were concerned about the
poor enforcement of laws relevant to the
industry which they felt was contributing
to the rapid increase in the number of
smokers in the country.
STAKEHOLDER EXPECTATIONS
NSupport enforcement of laws to restrict
tobacco related products
NA system of penalty should be
introduced for violating laws which will be
used to create fund for treatment of
addicted people
NStop tobacco growing by enactment of
a new law
NGradual prohibition of smoking should
be made
NBATB should not exist as a cigarette
producer
OUR POSITION
British American Tobacco Bangladesh
advocates and supports practical and
enforceable tobacco regulation. We
believe that the wider public interest is
better served by responsible tobacco
companies, like ourselves, manufacturingand making available tobacco products
that comply fully with the regulatory
requirements of the country.
We believe in engaging constructively
with the government and regulators to
work out practical solutions to tobacco
issues. We will always welcome and
support enforcement of laws relevant to
our business. We have a long track record
and are well respected for complying with
rules and regulations of the country and
for cooperating with the government on
relevant issues of the company and the
cigarette industry.
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www.bat.com
In addition we conduct our marketing
activities under our Marketing Code of
Conduct and the International Tobacco
Products Marketing Standards, which
provide for restrictions that are stricter
than the laws governing the industry. We
will continue with our efforts to engage
constructively with relevant governmentdepartments and regulatory bodies to
discuss further practical solutions to
tobacco issues.
OUR RESPONSE
NWe will welcome any government
initiative to introduce laws which will
provide practical solutions to tobacco
related issues.
NThe government is responsible forframing and enforcement of laws and
managing funds generated from violation
of laws. We have no role to play in this
respect.
NWe cannot support the proposal of
banning tobacco growing. Tobacco is a
legal product globally. A significant
amount of tobacco requires to be grown
each year to meet the demands in
Bangladesh. Banning of tobacco growing in
Bangladesh will lead to the loss of
livelihood for many farmers. It will also lead
to large foreign exchange payments to
import tobacco from overseas to replace
local tobacco. The export of locally growntobacco which is a growing industry in the
country will also be jeopardised.
NWe are engaged in the manufacturing
and marketing of a legal product. No
government or society seeks total
prohibition of tobacco smoking or tobacco
cultivation. We will continue to conduct
our business complying with all legal
requirements of the country. Because our
product is a risk to health, we believe it is
important that we do it responsibly.
WHAT WE WILL DO
We will support the government on
regulations providing realistic solutions to
relevant tobacco issues
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2.1.g TOBACCO TAXATION AND
CIGARETTE PRICING
increase tax on
tobacco products toa prohibitive level
STAKEHOLDER VIEWS
Stakeholders expressed that tax on
tobacco products should be increased to a
prohibitive level to discourage consumers
from purchasing the product.
STAKEHOLDER EXPECTATIONS
NIncrease tax on tobacco products to a
prohibitive level
NIncrease the price of cigarettes to a
prohibitive level
NMake serrated banderole diagonal, along
the hinge, instead of straight
OUR POSITION
Cigarettes are already heavily taxed with
as much as 70% of the retail selling price
going to the government. Cigarettes are
one of the highest, if not the highest,
taxed consumer product in Bangladesh.
British American Tobacco Bangladesh
supports government initiatives to
establish reasonable and practical tax
rates. We believe high taxes on tobacco
products encourage smuggling and
counterfeit trade. When prices are too
high compared to disposable income, the
opportunity and incentive for illegal tradeincrease. Thus, although an overall higher
price could reduce consumption of legal
products, it would encourage illegal
products. Illegitimate operators will
invariably explore alternative ways to
service demand and the actual impact on
consumption may be minimal.
OUR RESPONSE
NIf tobacco taxation on manufactured
cigarettes is further increased, it is likelythat in our country there will be a significant
shift in consumption to handmade
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cigarettes i.e. biris and encourage a growthin smuggled products. A market withsmuggled and counterfeit goods deprivesgovernments of tax revenue.
NWe believe that the industry and thegovernment should work together to
identify appropriate levels of tobaccotaxation. We will continue to work withBangladesh Cigarette Manufacturers'Association (BCMA) and the governmentfor a tobacco taxation regime thatmaximises government revenue andminimises the incidence of smuggling andcounterfeit products.
WHAT WE WILL DO
NWe will engage with the government andNational Board of Revenue (NBR) to ensurereasonable, sustainable growth ingovernment revenues
NWe will communicate the serration
quality issue on tax stamps to BCMA andNBR to find a practical solution to the issue.
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make more
meaningful
contributions to
environmental
management
Five main themes emerged:
NAfforestation
NAlternatives to wood fuel
NFertilisers
NSoil conservation
NProduct waste and factory emissions
2.2 ISSUES RELATING TO ENVIRONMENTAL MANAGEMENT,
CORPORATE CITIZENSHIP AND CORPORATE GOVERNANCE
2.2.a ENVIRONMENTAL MANAGEMENT
STAKEHOLDER VIEWS
Stakeholders expressed their concern
regarding the impact that tobaccocultivation has on the environment. While
afforestation programme by British
American Tobacco Bangladesh was
commended, some stakeholders felt that
the company was also contributing to
deforestation, as wood cut down for
tobacco curing by farmers could become
timber in the future. They also expressed
their concern regarding the soil fertility
issue due to tobacco cultivation.
Stakeholders mentioned that British
American Tobacco Bangladesh shouldmake more meaningful contributions to
environmental management.
OUR POSITION
Each stage in the production, distribution
and consumption of tobacco products has
environmental implications. British
American Tobacco companies are in a
position to influence directly some of the
environmental impacts occurring during
the product life cycle. Our aim is tominimise or eliminate these impacts to
reduce our burden on the environment.
Wherever we cannot directly manage
impacts, we seek actively to encourage
best practices amongst suppliers, clients
and consumers. Since almost all the raw
materials used for the production of
cigarettes are based on goods from the
natural environment, such as tobacco,
paper and board, British American Tobacco
has committed itself to attaining world
class standards of environmentalperformance. In line with this approach,
British American Tobacco Bangladesh is
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already focusing on reducing wastes,promoting recycling, reducing waterconsumption, using raw materialsefficiently, improving soil's nutrientcomposition, introducing alternatives toagricultural chemicals and wood fuels intobacco growing, reducing dependence on
fossil fuels, and limiting atmosphericemissions.
We manage the country's largest privateafforestation programme and distributemore than 3.5 million saplings annually. Inthe last two decades, we have distributedand planted more than 42.5 millionsaplings. Most of these are located in thetobacco growing areas of Kushtia,Rangpur, Manikganj and Chittagongincluding the developing areas of Lama and
Alikadam in the Chittagong Hill Tracts. Wehave been given recognition by thegovernment for our well managedafforestation programme. The recognitioncame through the Prime Minister's awardgiven to us in 1993, 1999 and 2002 for ourcontributions to the country'safforestation programme.
British American Tobacco Bangladesh isone of the four operating companies in theBritish American Tobacco group, chosenunder the global initiative of BATBiodiversity Partnership, to formulate alocal biodiversity strategy and toimplement a portfolio of conservationactivities. The principal aim of this 'globalthinking, local implementation' is todevelop a replicable model for corporatebiodiversity conservation based on 'bestpractice' examples derived from the pilotinitiatives undertaken by these fouroperating companies of British AmericanTobacco.
STAKEHOLDER EXPECTATIONS
NChange plantation plan and plant morefruit and timber producing trees andherbal trees
NPlant more trees than destroyed fortobacco curing
NPlant quick growing species around Lamato take care of curing and environment
NGo further in the deep area of the hillsand take lease of land for plantation. Alsotake tobacco cultivation to the interior
NGovernment to impose through law thatall tobacco manufacturers undertakeafforestation programme. Ministry ofAgriculture can monitor implementation
NExpand the tree plantation programmeof BATB to cover more area
OUR RESPONSE
NWe are conscious of the need for abalance between fast growing trees andfruit, timber and herbal trees. So far ourafforestation programme incorporatingmainly fast growing trees has helped toensure that we have wood fuel reserveexceeding our requirement in the tobacco
growing area of Kushtia, which isevidenced by stable price of fire wood inthe region. However, to build further onour current achievements we havedeveloped a biodiversity conservationstrategy which seeks to achieve a balancebetween fast growing trees and fruit,timber and herbal trees.
NOur afforestation programme in the Lamaand Chokoria region received the First Prizeof Prime Minister's Tree Plantation Award in1999. However, we recognise that wood fuel
is scarce in the Lama and Chokoria regionand as such have accelerated ourafforestation drive in the region.
AFFORESTATION
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NWe are already encouraging tobaccocultivation and tree plantations in theinteriors of Khagrachhori and Bandarban.We are also distributing free saplings to
hill owners and lessees, to encourage largescale commercial afforestation on thebarren hills. We do not take lease of landsdirectly, nor do we have plans to do so asit is not feasible.
NAny initiative to make afforestationmandatory for tobacco manufacturers hasto be initiated by the government. We arealready heavily involved in afforestationand we will communicate this expectationto the government.
NIn addition to our existing tobacco
growing areas, we are encouraging treeplantation in areas outside the tobaccogrowing belt. For the last few years wehave been distributing saplings in Sylhet,Khulna, Dhaka, Pabna and Tangail.
NIn addition to our current environmentalprogrammes we will strive to ensure thatour operational activities abide by the bio-diversity conservation principles. As thelargest corporate body in the country, wealso aim to effectively act as adevelopment partner for biodiversity
conservation.
WHAT WE WILL DO
NWe will conduct a bio-diversityassessment of our operating areas basedon which specific improvements in ourafforestation programmes will be designedand implemented.
NWe will continue an acceleratedafforestation programme in the
Chittagong Hilltracts in Lama and Alikadamregion.
NWe will further explore tobacco growingand commercial afforestation in theinteriors of Bandarban and Khagrachhori.
NWe will raise awareness and
understanding of the biodiversity issueswithin and outside the company.
STAKEHOLDER EXPECTATIONS
NUse alternatives to wood fuel like jutestick and dhoncha stick.
OUR RESPONSE
We meet 70% of our wood fuelrequirements through alternatives likepaddy straw, sugar cane bagasse, jutesticks, dhoncha sticks, mustard stalk, etc.We encourage all our 14,000 registeredtobacco growers to use alternate fuelsources in tobacco curing. We seek toensure efficient and sustainable use ofwood fuel as far as practicable.
WHAT WE WILL DO
We will increase the use of alternatives towood fuel and provide the information inour social report next year.
STAKEHOLDER EXPECTATIONS
NUse urea instead of Ammonium Sulphateand Potassium Sulphate as fertilisers
NReduce the price of fertiliser
NEstablish a large scale modern factory torecycle the garbage from Dhaka andproduce compost fertiliser
ALTERNATIVES TO WOOD FUEL
FERTILISERS
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www.bat.com
OUR RESPONSE
NWe use potassium sulphate which isrecommended by Bangladesh AgricultureResearch Council (BARC). We alsorecommend balanced use of fertilisers inthe cultivation process.
NFertilisers in Bangladesh are producedand imported by the government and priceis fixed by the government. We buy thebest available non-adulterated fertilisersfrom the government in bulk and supply atcost price to our farmers on a no-interestdeferred payment basis. This ensuresavailability of fertilisers locally ataffordable prices.
NIn the growing areas, we provideinstructions on how organic waste of thehomestead can be converted to compost
in pits. Farmers are finding this low costalternative very useful.
NThough we cannot take responsibilityfor the waste management of the entireDhaka city, in response to stakeholderexpectations we will explore theavailable options of waste managementin our operation.
WHAT WE WILL DO
We will explore the available options ofwaste management for incorporation in
our areas of operation.
STAKEHOLDER EXPECTATIONS
NConduct research for overcoming soil
imbalance problem.
NAfter years of tobacco cultivation when
soil loses fertility, organise alternative
employment for affected farmers.
NIdentify crop pattern, which will recover
the soil quality.
NTrain all farmers on soil fertility and
provide logistic support.
NRelocate tobacco cultivation to remote
hilly areas.
NConduct further research for using
tobacco to produce organic herbicide.
OUR RESPONSE
NAs stated previously we do not believetobacco growing causes any imbalance insoil fertility. Tobacco growing itself leadsto crop rotation and residual fertilisers,which actually improves soil fertility. Thisis evidenced by the increased yield overthe years for both tobacco and othercrops. However, we will conduct soil
quality tests in the tobacco growing areasfrom time to time to determine the soilfertility status.
NTobacco growing in the country hasbeen going on for the last 30 years andthere is no indication of loss in soil fertilityin the growing areas. Another evidence ofthis is that farmers do grow other crops intobacco growing areas.
NWe try to ensure that soil fertility issuesare properly addressed within the existing
cropping pattern. Our recommendationfor crop rotation is: tobacco - greenmanuring - paddy/jute - paddy.
NFarmers are regularly trained on the useof balanced fertilisers. Our farmers havealready taken up soil fertility programmei.e. green manuring and compost makingand these will be further developed in thefuture.
NResearch on producing organic herbicideusing tobacco is going on in the developedworld. Once any success is achieved, we
will pilot it to see the impact on our crops.
SOIL CONSERVATION
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WHAT WE WILL DO
NFollowing our biodiversity strategy we
will improve our current usage patterns in
the land use and supply chain mechanismsof the company.
NIn compliance with Bangladesh
Agriculture Research Council (BARC) soil
fertility guidelines, we will continue our
monitoring of soil fertility status in our
growing areas.
STAKEHOLDER EXPECTATIONS
NEstablish a smoke and waste
management system in the curing barns
NChimneys to be made tall so that gas will
be emitted high in the air
NStudy the extent of pollution caused by
tobacco production
NCreate a proper waste product
management system in the factory
OUR RESPONSE
NThe tobacco curing barns are generally 10to 12 feet high with the chimney aboutanother two feet higher. Hence, any smokeresidue from the wood-fuel burning isemitted high in the air at about 12-14 feet.The residual ashes are used as fertilisers.
NEvery year we obtain a clearancecertificate from the Department of
Environment (DOE). This certificationtestifies that we are abiding by allenvironmental laws and regulationsrelevant to our operations. Recently a
study was conducted jointly by DOE,Cantonment Board, DOHS and scientistsfrom Dhaka University. No evidence of anysignificant environmental impact on theimmediate neighbourhood of our cigarettefactory was reported. However,recommendations made on making furtherimprovements are being currentlyimplemented.
NWe have a global policy onEnvironmental Health & Safety (EH&S)practices that aims at achieving a high levelof EH&S standards. The standards includethe issue of waste management in ourGreen Leaf Threshing plant and Dhakafactory. A bio-filter plant was set up in1996 at a cost of Tk 6 crore to reduce theimpact of tobacco smell and residue fromour Dhaka Factory. This is the only one ofits kind in Bangladesh for any industry andis recommended by the DOE as bestpractice in connection with environmentalpollution control.
WHAT WE WILL DO
We will make available information onstudies conducted to analyse pollutionlevel in our factory to stakeholders whoare interested.
PRODUCT WASTE AND FACTORYEMISSIONS
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take up such
economic activities
which would createmore employment
opportunities
2.2.b CORPORATE CITIZENSHIP
Six main themes emerged:
NOur role as a development partner
NCorporate sponsorships and poverty
alleviation
NSupport to tobacco farmers
NSupporting health programmes
NSupport to education programmes
NEliminating child labour
www.bat.com
Stakeholders expressed that they were
aware of the contributions being made by
British American Tobacco Bangladesh
specially its contribution to the
government in excise revenue, which
constitutes a big portion of the total
excise revenue earnings of the government
of Bangladesh. Their suggestion was thatwe take up such economic activities which
would help the company to diversify and
create more employment opportunities.
Stakeholders listed a number of
expectations regarding the role of British
American Tobacco Bangladesh in corporate
social responsibility which are wide and
varied.
OUR POSITION
We take our commitment to be a
development partner of Bangladesh
seriously and believe that good corporate
citizenship is a commitment of business to
contribute to sustainable economic
development. We work with employees,
business partners, the local community and
society at large to improve the quality of
their lives and livelihood.
We have always conducted our business
responsibly in the country. We workclosely with our business partners,
providing them with skills and expertise
which they apply not only to develop their
own businesses, but also to expand their
areas of operation thus leading to
employment generation.
However, our corporate citizenship has a
much wider reach. We are involved, through
various projects and initiatives, in improving
the environment, supporting philanthropic
organisations, promoting art and cultureand assisting with disaster relief.
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We are keen to engage in constructivedialogue with our stakeholders to help usidentify how we can improve ourcorporate social initiatives even further.
STAKEHOLDER EXPECTATIONS
NGradually shift business from tobacco tomore socially acceptable products which isnot harmful for society
NContribute in fruit and vegetablepreservation
NDiversify towards tourism and agro
processing
NInvest in agro based industry like juteproducts, sugar, edible oil, and sunflower
NTake over Sugar Mills Corporation,Adamjee Jute Mills and other loss makinginstitutions including Biman on profit sharebasis
NInvest more in human resourcedevelopment
NProduce cigarettes for export and notfor domestic use. Also produce good
quality tobacco for export
OUR RESPONSE
NOur core business is tobacco and we shallcontinue building the value of our businessin a responsible manner in line with ourstakeholders' concerns. Should a proposalwhich both complements our business andassists in the development of Bangladesharise, we shall explore the opportunity.
N
We have no expertise in running jutemills, sugar mills and airlines operations.We appreciate the confidence shown in
our management but do not expect to getinvolved in these ventures.
NBritish American Tobacco Bangladeshcontinues to play a significant role inhuman resource development of thecountry. We offer world class humanresource development trainings for ouremployees. Last year alone approximately650 of our management and non-management employees attended 30managerial and 156 technical trainingprogrammes on a wide variety ofdisciplines. As a result many of ourmanagers are employed in BAT groupcompanies in different parts of the worldwhile many former managers are holding
top positions in other reputed companiesof Bangladesh. We also provide trainingprogrammes to people outside ourcompany. For example:
- We offer a 12-week internshipprogramme for students of leadingbusiness schools in Bangladesh andBangladesh University of Engineering &Technology. Last year alone 45 studentsattended our internship programme.
- Our Managers offer lectures on variousmanagement topics in different business
schools- We provide marketing skills developmentprogramme for BRAC
- We run management developmentprogrammes which are attended bymanagers of other business houses
NWhile we will explore the opportunityfor exporting cigarettes, we arecommitted to satisfy the demands of ourconsumers in the domestic market. IfBritish American Tobacco Bangladeshwithdrew from the cigarette business the
demand for cigarettes would notdisappear; it would simply be satisfied byother manufacturers.
OUR ROLE AS A DEVELOPMENTPARTNER
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www.bat.com
WHAT WE WILL DO
NWe will extend our support in the area of
human resource development further:
- We will increase the number of
opportunities for managers of