OVERVIEW

As an international business we make positive contributions with jobs and employment, revenue to governments, application of international standards and the investments we make. We support livelihoods through our operations, supply chain and community partnerships. We partner, support fundraising and encourage volunteering. In our supply chain we promote responsible labour practices that respect human rights.

 

SHARED WEALTH

We recognise that many direct and indirect livelihoods are impacted by the economic success of our business particularly those stakeholders that have a shared financial interest. These include employees, suppliers, retailers, governments, shareholders and connected communities.

We use select socio-economic impact assessments to better understand our direct and indirect impacts and the contributions that we make to stakeholders. A number of country-specific and regional assessments have been undertaken including a socio-economic impact assessment for West Africa. We have undertaken a social-economic impact assessment twice in Morocco. We share our views on its use here

Our global tax contribution through corporate and tobacco taxation is around some £17 billion annually. It’s our policy to maintain an effective tax rate which enhances value whilst having due regard to financial and reputational risks. Our policy is to ensure compliance with tobacco taxation and product supply legislation and to engage constructively with revenue authorities worldwide to help combat illicit trade. In compliance with legislation, our UK Tax Strategy is made available on our website.

We choose to have a central community investment budget, to support employee engagement and the communities with the greatest need connected to our business footprint.

Our community support is prioritised towards the most disadvantaged around our factories, offices and tobacco-sourcing activities, in line with internal guidelines and our Code of Conduct. We focus on projects aligned to employability, basic needs and the elimination of child labour in tobacco growing communities.

 

REGULATION

Tobacco regulation applies to product development, contents, manufacture, packaging, labelling, testing, data reporting, sale, distribution, display, marketing, advertising, taxation and restrictions on product use.

Regulation is largely driven by three organisations: the World Health Organisation (WHO, through the Framework Convention on Tobacco Control, the FCTC), the USA’s Food and Drug Administration (FDA) and the European Commission (through the European Union Tobacco Products Directive, the EUTPD).

We support reasonable, proportionate and evidence-based regulation that respects adult freedom of choice and recognises that tobacco products are consumed by millions of people worldwide.

We pursue constructive and informed dialogue, to work towards proportionate and pragmatic regulation. We have experienced corporate affairs specialists and consult external experts where necessary. Such employees and any third parties, who undertake engagement on our behalf, are required to do so in line with our Guiding Principles for External Regulatory Engagement.

These guiding principles are consistent with our Code of Conduct, policies and positions and behaviours that promote openness, accuracy, integrity and professionalism. As part of our commitment to transparency we are registered voluntarily on the European Commission’s Register of Interest Representatives.

We seek to engage with governments and regulators across the political spectrum but remain neutral. We engage with governments, opposition parties, select committees, competent authorities and others, directly or through industry associations, on a number of topics in our efforts to raise awareness of key issues and assist informed decision making.

Our membership of a range of industry bodies assists us in understanding the implications of potential regulatory changes.

 

FARMER LIVELIHOODS

We engage our suppliers through our Sustainable Tobacco Programme (STP), which includes the monitoring of farmer standards of living and capacity building. In addition to the economic activity of purchasing tobacco our Leaf Partnership programme enables projects that enhance farmer livelihoods.

Our projects are targeted in tobacco-growing countries, identified as having the most need and focused on enhancing productivity, incomes, reducing labour requirements and improving farming inputs. We see this as important in securing quality tobacco supplies and providing farmers with better incomes, higher standards of living and also mitigating the potential reliance on child labour.

We also help address food security with famers through the application of good agricultural practices and specific interventions to better enable people to afford food, make land more productive and encourage farmers to grow a range of food crops.

 

HUMAN RIGHTS

Human rights are important in relation to our people, external reputation and supply chain sustainability. We refer to the UN Guiding Principles and support the International Labour Organisation’s (ILO) core conventions on human rights and responsible labour practices.

We continue to be informed by following the evolving expectations on business and in 2016 commissioned our Human Rights Impact Assessment. We continue to evolve our address of business and human rights. Please view our Human Rights Progress Report.

We provide an anti-slavery statement in relation to the UK Modern Slavery Act (2015).

We have a responsibility to respect the human rights of our employees, the communities in which we operate and our business partners, globally.

We do this under the governance of specific employment policies, HR systems and processes, our Code of Conduct and supplier standards. The labour practices we work to uphold are: freedom from child labour and forced labour; health and safety; freedom of association; the right to collective bargaining; non-discrimination; disciplinary practices; working hours; and fair remuneration.

Whilst we operate in a number of countries where human rights are of particular concern our global governance is the same. We respect the need and, as appropriate, facilitate individuals in having access to remedies should human rights be potentially breached. Mechanisms include concern reporting, grievance management and public interest disclosure (whistleblowing).

Child labour is not acceptable. Child labour is defined as work that can harm children’s well-being, hinders their education, development and future livelihood. We refer to the main international and legal instruments which are contained in the Conventions of the International Labour Organisation (ILO) and the Convention on the Rights of the Child (UNCRC).

Addressing child labour is a multi-stakeholder issue. We would like to see labour laws globally aligned to ILO conventions 138 (minimum age for admission to employment and work) and 182 (the worst forms of child labour).

We work with our suppliers to improve supply chain standards and farmer livelihoods. We purchase the majority of our leaf tobacco from third-party suppliers who are mainly part of large international leaf supplying companies. Our tobacco is sourced globally from origins including Brazil, China, India, EU member states and in Sub-Saharan Africa. A small amount of our tobacco is purchased directly principally in Madagascar, Morocco and Laos.

We address child labour through three main avenues; (i) our leaf supplier programme known as ‘STP’; (ii) our Leaf Partnership Projects and (iii) our support of the Eliminating Child Labour in Tobacco Growing Foundation (ECLT).

ECLT aims to tackle the root causes of child labour by improving access to education and providing alternatives to childhood working. It also has an advocacy role, raising awareness with governments and communities to galvanise positive action.

To read more about how we address the issue of child labour in our agricultural supply chain please click here.

In addition to our Leaf Supplier Programme (STP), we operate a Supplier Qualification Programme for our key non-tobacco materials suppliers. Materials supplied include paper, board, filters, filter tow, foils, films, printed materials and glues.

Suppliers are asked to complete a periodic compliance check. This includes questions on business conduct, environmental management and labour practices. We also encourage our suppliers to evaluate their suppliers and sub-contractors. The programme involves a phased cycle of audits to check against the supplier’s self-assessment. We prioritise audits on the basis of risk assessment, quality and performance.

 

BUSINESS CONDUCT

How we conduct ourselves and our business can have wider impacts for society. Doing business in the right way, having integrity and not tolerating poor behaviour, fraud or bribery, means we contribute positively.

Our people are required to maintain appropriate standards of behaviour, in line with our Code of Conduct, to foster good relationships and prevent harassment. We provide guidance and training to support employees' understanding of expected behaviour, particularly in respect of their business decisions and the Code of Conduct.

We are committed to treating people with respect and support equal opportunities. We expect any employee grievances to be addressed consistently, fairly and in a timely manner.

Concerns can be raised through a number of contacts internally or if preferred employees can use a confidential global helpline, in accordance with our Public Interest Disclosure (whistleblowing) policy.