Is BAT also bribing government officials in ASEAN countries?

Bangkok, 4 December 2015: A recent BBC investigation that exposed evidence of bribery at British American Tobacco has relevance for Southeast Asia. According to the investigative report, BAT illegally paid politicians and civil servants in countries in East Africa. The payments were revealed when a whistle blower who worked for BAT in Kenya for 13 years shared hundreds of secret documents.

BBC’s evidence indicates that BAT money has been used to:

  • Corrupt national parliaments;
  • Get information on – and make changes to – tobacco control legislation;
  • Get market information and intelligence to undermine competitors.

In return for the illegal payment to a Burundian senior civil servant, BAT wanted a draft copy of the country’s Tobacco Control Bill. An email from a contractor working for BAT says the official would be able to “accommodate any amendments before the president signs”.

Under the UK Bribery Act, British companies can be prosecuted for bribery anywhere in the world if they fail to take steps to prevent it. BAT could also face prosecution and huge fines in the US. According to UK’s Transparency International bribery expert, Jeremy Carver, this will now set inquires in motion about BAT’s operations globally so that everything they’re doing all over the world is now being scrutinised by prosecutors in the UK, the USA and anywhere they are operating.

BAT sells cigarettes in practically every country in the ASEAN region and has dominant cigarette market share in Malaysia (62%), where it also has a manufacturing facility, and significant market share in Cambodia (40%) and Vietnam (26%).

“In the light of this recent expose, BAT’s activities in countries where it is operating must be investigated by local anti-corruption authorities,” said Ms. Bungon Ritthiphakdee, Executive Director of Southeast Asia Tobacco Control Alliance (SEATCA). “Tobacco companies apply pressure on governments and undermine any effort to strengthen tobacco control.” All ASEAN countries are equipped with anti-corruption laws, which can be applied for any corrupt practices such as bribery of public officials.

 

BAT violated Commonwealth Games sponsorship rules in Malaysia in return for tax freeze

In return for a Commonwealth Games sponsorship deal, the Malaysian government agreed to “a freeze on government imposed excise over a similar period of five years.

BAT’s internal documents[1] reveal how BAT and other tobacco companies sponsored the 1998 Games through the Malaysian National Sports Council (NSC), contrary to the Commonwealth Games constitution that has a tobacco-free policy, and how the payments would be made without evoking public attention and be more of a “silent understanding” as proposed by the Minister of Primary Industries.

In internal BAT communications[2] parent company BAT informed its local subsidiary, Malaysian Tobacco Company, it would sponsor the 1998 Commonwealth Games in Malaysia: “The industry will channel funds through the National Sports Council (an existing organization) and not directly to the Commonwealth Games Foundation. NSC will write to the tobacco companies inviting financial contributions. Effectively, the Industry will be allowed to ‘sponsor’ the aims and work of the NSC and the Industry will seek limited publicity so that contributions can be managed as a brand operating expense, thus avoiding the need for specific disclosure in annual reports. […]The Industry is proposing to contribute RM250 mns [approximately £66 million at current exchange rates] over a five year period, beginning January 1994.”

“In August, the SEATCA released a regional Tobacco Industry Interference Index[3] which shows the industry meddling in public health remains a big problem in ASEAN countries. According to Ms. Ritthiphakdee, “Transparency is important when dealing with the tobacco industry. Many governments do not have a procedure for disclosing their interactions with the industry. This is an important first step to prevent and reduce tobacco industry interference.”

 

For more information, contact: 

Wendell Balderas, SEATCA Communications Manager

Email wendell@seatca.org | Mobile: +63​9998812117

Dr. Mary Assunta, SEATCA Senior Policy Advisor

Email Mary.Assunta@cancer.org.au | Mobile: +61 400119985

[1] https://industrydocuments.library.ucsf.edu/tobacco/docs/#id=jrmk0041

[2] https://industrydocuments.library.ucsf.edu/tobacco/docs/tnjf0196 and https://industrydocuments.library.ucsf.edu/tobacco/docs/#id=fsjf0196

[3] http://seatca.org/dmdocuments/TII Index 2015_F_11Aug.pdf