Last month, the US, UK and Canada announced sanctions targeting individuals and entities understood to be financing Belarussian dictator Alexander Lukashenko. This legislation follows similar action from the EU in June. These sanctions build on reports of police violence against protesters, mass arrests and even torture, with a U.N. official comparing Belarus to a ‘totalitarian’ state. Indeed, Lukashenko’s regime is infamous for its human rights abuses – including heavy-handed repression against pro-democracy protests in 2020 and the recent forcing down of a Ryanair flight to arrest journalist Roman Protasevich. The government’s opposition claims Protasevich is now being held hostage and, like many other prisoners, has been tortured.
Last week, BAT announced that it has stopped placing orders from the Grodno Tobacco Factory Neman (or GTFN)- a state-owned factory in Belarus which had, until the announcement, manufactured BAT brands such as Rothmans and Pall Mall under licence from the company. It is thought that BAT has only taken this step due to the new sanctions forcing its hand.
BAT’s announcement comes several months after sanctions targeting Lukashenko’s regime were introduced by the EU, and months after protests at BAT’s headquarters in London, along with advocacy from a number of NGOs, shed light on BAT’s close ties with the Lukashenko regime. In June of this year, a spokesperson for the pro-democracy group Nadzeya-UK stated: “It is outrageous that a major British company continues to have a close relationship with a Belarusian plant, which is 100 percent owned by a Lukashenko regime that tortures its own people.”
Nevertheless BAT’s operations in Belarus continued unabated for several months. In fact the company’s main response until now was a letter expressing satisfaction with its current operations in the country.
Further, counter to BAT’s public position on cigarette smuggling, the company’s relationship with GTFN continued despite the factory having been repeatedly accused, even in studies commissioned by BAT itself, of overproducing and oversupplying the local market, leading to so-called illicit white cigarettes (including the brands Minsk, Fest, and NZ) being smuggled across Europe and Russia. BAT’s willingness to continue working with the company in spite of these claims is perhaps unsurprising given the company’s efforts to shape and undermine global policy targeted at addressing illicit trade in its favour.
Only now, following the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioning GTFN specifically “for being owned or controlled by, directly or indirectly, the GoB (Government of Belarus)”, has BAT finally taken action. A statement by the Professional Union of Belarusians in Britain (PUBB) provides an apt summary of the situation: “we regret very much that BAT had to be forced to cease by sanctions rather than simply applying its own ethical standards.”
BAT’s reluctance to cease production in Belarus is not the only sign that the company may have little interest in ending its business in countries controlled by regimes with poor human rights records.
For example, BAT withdrew from Myanmar in 2003 due to criticism over the human rights record of the military, with the UK Government formally asking BAT to cease its business there. Following political reforms, BAT re-entered Myanmar in 2013. However, in 2017, the military launched a deadly crackdown on Rohingya Muslims, which the UN described as a “textbook example of ethnic cleansing.” On 1 February 2021, the military staged a violent coup, leading to hundreds of deaths. Since then, multiple companies have been criticized for continuing to work with groups linked to the military. The Japanese drinks company Kirin withdrew from a partnership with a Myanmar brewery partly-owned by generals involved in the coup.
BAT has yet to comment on the future of its business in Myanmar. In 2015, the parent group (Sein Wut Hmon Group) of BAT’s current partner in Myanmar (IMU Enterprise Ltd) was accused of colluding with the military in order to grab land across the country, yet BAT has continued its business in Myanmar, increasing its market share from 7% in 2013 to over 20% in 2019.
While branding itself a responsible stakeholder “behaving ethically in all [it does],” BAT’s business practices challenge this assertion. The company’s cigarettes sales in 2019 alone are projected to cause in excess of 668,000 deaths (based on estimates that one death results from each million cigarettes sold). In September 2021, BAT’s business practices in South Africa came under fire, with the release of evidence that the company used secret agents and co-opted government authorities to disrupt and spy on competitors, along with appearing to have negotiated a bribe for Zimbabwean dictator Robert Mugabe in 2013. Such claims follow growing reports of the company’s alleged role in cigarette smuggling through West Africa, fueling militant and extremist groups in the region. A pending lawsuit claims BAT exploits impoverished tobacco farmers and their children in Malawi.
While BAT has now taken steps to avoid breaching sanctions in Belarus, the company may still be at risk of breaking sanctions elsewhere. Its 2020 annual report notes that the company has “operations in a number of countries that are subject to various sanctions, including Iran and Cuba” and that BAT is cooperating with investigations by the US Department of Justice and OFAC into “suspicions of breach of sanctions.”
It appears incongruous that BAT, a company that claims to be keen on tackling illicit trade, has continued to work with a Belarussian regime which investigative journalists have found to be directly involved in cigarette smuggling.
BAT espouses responsibility and sustainability, yet it continues to sell deadly products, closely partner with authoritarian regimes responsible for human rights abuses (and, in the case of Belarus, only ceases doing so when left with no viable alternative), risks breaching sanctions, and exploit vulnerability in conflict zones around the world in order to sell cigarettes.
This harsh reality belies BAT’s rhetoric of “A Better Tomorrow”.
Allen Gallagher is a Research Associate at the Tobacco Control Research Group at the University of Bath, a partner in STOP, a global tobacco industry watchdog funded by Bloomberg Philanthropies.
Benoît Gomis is an independent consultant on illicit trade, a Research Fellow at Simon Fraser University, and a Sessional Lecturer at the University of Toronto, who has worked as aconsultant researcher for the Tobacco Control Research Group at the University of Bath, a partner in STOP.