[Intl-tobacco] BAT Targeted Over Burma Factory]

[Robert Weissman]

 MEDIA RELEASESTRICTLY EMBARGOED until 00.01 Tuesday 12th November
2002 CAMPAIGNERS TARGET BAT OVER BURMA FACTORY

BAT DEPUTY CHAIRMAN KEN CLARKE MP CRITICISES COMPANIES COLLABORATING
WITH BURMA'S MILITARY REGIME

The Burma Campaign UK today launched a global campaign against British
American Tobacco (BAT). BAT have a factory in Burma which is a joint
venture with the military regime. The campaign is backed by amongst
others; the Federation of Trade Unions - Burma, UNISON, Glenys Kinnock
MEP, actress Juliet Stevenson, Maureen Lipman, Mark Thomas, and Lord
Steel of Aikwood.A major embarrassment for BAT is the fact that its own
Deputy Chairman, Ken Clarke MP, has criticised companies collaborating
with the regime. In a recent letter to a constituent he stated: "I must
admit I sometimes feel uncomfortable about investment in that country."
He went on to say that: "The problem in Burma arises when companies
start collaborating with an extremely unpleasant regime which is totally
contrary to our notions of civil liberties and democracy."
BAT's Burmese subsidiary is Rothmans of Pall Mall Myanmar - a 60/40
joint venture with the Union of Myanmar Economic Holdings (UMEH).  UMEH
is owned and controlled by Burma's military regime. In 1996 the
industrial zone where the BAT factory is sited was upgraded by the
military authorities using child labour.BAT pays factory workers just
23p a day. The UN defines anyone living on less than 60p a day as living
in extreme poverty. The Burma Campaign UK estimates that the joint
venture earns the regime $400,000 a year. Aung San Suu Kyi, leader of
Burma's democracy movement, has called on companies to stay out of the
country, saying  foreign investment funds the regime and helps to keep
it in power.
"Ken Clarke is absolutely right", says John Jackson, Director of Burma
Campaign UK. "BAT's collaboration with the regime is helping to keep
this brutal dictatorship in power. He should get them to pull out
immediately."

Campaigners are being asked to deluge BAT with emails and postcards
calling on them to close their factory in Burma. Major investors will
also be asked to use their influence. Over the next year the campaign
will be rolled out in nearly twenty countries, including the USA,
Australia, Germany, France, Netherlands, Italy, Ireland, Brazil and
Thailand.

Dozens of companies have been forced to pull out of Burma following
similar campaigns, including Pepsico, Heineken, Texaco and Triumph
International. Earlier this year Premier Oil, the largest UK investor in
Burma, was forced to pull out following a five-year campaign."BAT face
the biggest global campaign yet organised by Burma democracy
campaigners", says John Jackson.  "There is no way a company can operate
in Burma without supporting the regime. It is impossible for them to
defend their investment. They would do well to pull out now before their
corporate reputation is damaged even further."A FULL CAMPAIGN BRIEFING
FOLLOWS. THE BRIEFING IS ALSO AVAILABLE AS A WORD DOCUMENT. For a copy
of the campaign briefing or to arrange an interview contact John
Jackson, Director, on 020 7281 7377, mobile  07961 357 391,  or Mark
Farmaner, Media Officer, on 020 7281 7377, mobile 07941 239 640, EMAIL
mark.farmaner@burmacampaign.org.uk. JPEGS of campaign posters are also
available for reprint.  BRITISH AMERICAN TOBACCO -IN BUSINESS WITH
BURMA'S GENERALSEXECUTIVE SUMMARY

BAT is one of the most important UK investors in Burma.  Its Burmese
subsidiary - Rothmans of Pall Mall Myanmar - is a joint venture with
Burma's military regime; a regime described by the US State Department
as brutal, repressive, and routinely using torture.
The facts in brief:

=D6 BAT's factory in Burma is a joint venture with the military regime.
=D6 The industrial zone where BAT has its factory was upgraded by the
military authorities using child labour.
=D6 BAT pays its factory workers around 23p a day.

=D6 Ken Clarke QC MP, Deputy Chairman of BAT, has said he is
"uncomfortable' with companies investing in Burma.

=D6 Aung San Suu Kyi, Burma's democracy leader, has asked companies not to
invest in Burma.

=D6 It would take 85 years (three generations) for one of BAT's factory
workers in Burma to earn what BAT Chairman Martin Broughton earns in a
single day.

=D6 By investing in Burma BAT is collaborating with a regime that
routinely uses rape and torture to suppress its own people.

=D6 The regime in Burma spends just 44p per person per year on health and
education combined.

=D6 BAT makes a profit of =A35,136 a minute. It would take just 6 minutes
worth of BAT's annual profits to give its workers in Burma a years
salary as severance pay.

In a letter to a constituent, BAT Deputy Chairman Ken Clarke stated "I
must admit that I do sometimes feel uncomfortable about investment in
that country (Burma)". He went on to say "The problem of Burma arises
when companies start collaborating with an extremely unpleasant regime
which is totally contrary to our notions of civil liberties and
democracy".  This is exactly what BAT are doing.  Ironically Ken Clarke
is also Chair of BAT's Ethics Committee, and has said that "(BAT's)
approach to corporate social responsibility was important in my decision
to join (the company)."

Background - The Dictatorship in Burma

Burma's military dictatorship

Burma is a country ruled by one of the longest running and most brutal
military dictatorships in the world; a dictatorship charged by the
United Nations with a "crime against humanity" for its systematic abuses
of human rights, and condemned internationally for refusing to transfer
power to the legally elected Government of the country - the party led
by Nobel Peace Laureate Aung San Suu Kyi.

Democracy denied

Burma's people have had one single and dramatic opportunity to reject
the dictatorship that has ruled them for four decades. In 1990 free
elections were held. To the amazement of Burma's Generals who had done
all they could to fragment the vote (through the creation of hundreds of
political parties), Aung San Suu Kyi's National League for Democracy
(NLD) won a landslide victory, taking 82% of the seats. However, the
aspirations of Burma's people were ignored and further repression of the
democratic movement took place. Political power has never been
transferred from the military to the elected assembly. Indeed, since the
election around half of all NLD MPs have been detained - many have
suffered torture, and some have died in custody.  Today the regime
clings to power through fear and oppression while the Burmese people
suffer from ever increasing poverty.

Burma's military regime is responsible for:

=D6 Millions of men, women and children in forced labour often imposed
with the threat of physical abuse, torture, rape and murder.
=D6 The detention of at least 1,400 political prisoners, many of whom are
routinely tortured.
=D6 Spending just 44p per person per year on health and education
combined. Even Sierra Leone, ranked by the UN as the poorest country in
the world, spends almost three times as much on health alone.
=D6 More child soldiers than any other country in the world.
=D6 The refusal to transfer power to Aung San Suu Kyi's party, the
National League for Democracy, elected to Government in 1990.
=D6 Thousands of refugees who have fled to Thailand, China, India and
Bangladesh.
=D6 One of the largest armies in Asia despite having no external enemies.
=D6 Reducing what was once one of the richest countries in Asia to one of
the world's poorest. Over 60% of Burmese people live in extreme poverty.
(Less than 60p a day)


THE DISINVESTMENT CAMPAIGN

"I don't think we have found evidence that sanctions have harmed the
Burmese people, because they have been clearly limited and many of those
who have suffered under sanctions have belonged to the business
community. Naturally some ordinary employees have been exposed, but we
have not yet found proof that large numbers of Burmese have suffered as
a result of sanctions. Sanctions have a role to play because they are a
strong political message. But also because they are an economic message.
"Aung San Suu Kyi speaking two days after her release from house arrest
in May 2002

In response to calls from Burma's democracy movement, the Burma Campaign
UK and other campaign groups around the world have been pressuring
companies to sever business ties with Burma.

The European Parliament, the British government, Burma's democrats, the
US government and many other bodies and institutions recognise the role
investment plays in strengthening Burma's regime. The British government
actively discourages trade and investment in Burma  - Robin Cook, when
Secretary of State for Foreign Affairs, made an unprecedented call to
Premier Oil and other British companies to pull out of Burma.

Concern about the role foreign investment plays in perpetuating the
brutal regime is also widespread in the private sector. In December 2001
European investment funds managing over =A3400bn in assets issued an
groundbreaking statement of concern about companies investing in Burma.

Over the last five years a large number of foreign companies have
withdrawn from the country. The reasons cited for doing so include:
difficulties in working with the regime, consumer boycotts, damage to
company reputation and incompatibility with corporate values. These
companies now include amongst others: Texaco, Adidas, Levi Strauss,
Pepsico, Ericcson, Heineken, Carlsberg, British Home Stores, Burton,
River Island, Apple, Reebok and Compaq.

In January 2002 the Burma Campaign UK won a major victory over the Swiss
company Triumph International, who had been producing garments in Burma.
After a short and aggressive high profile campaign against Triumph the
company agreed to withdraw from Burma by May 2002. It stated
"International pressure from different NGOs, in the case of Nike, Adidas
and others, has taught us that it is very difficult to escape.
Management accepted that the money from their lease went to the
government, and that had been the deciding factor."

This success was followed in September 2002 by the withdrawal of Premier
Oil from Burma following a decade long campaign.

BAT, as one of the highest profile investors in Burma, faces the largest
global campaign organised so far by democracy campaigners.

Background on BAT's investment in Burma

BAT's Burmese subsidiary is Rothmans of Pall Mall Myanmar - a joint
venture (60%-40%) with the Union of Myanmar Economic Holdings (UMEH).
UMEH is owned and controlled by Burma's military regime.

Rothmans of Pall Mall Myanmar began operations in Burma on 10 August
1995. Initiated by Rothman's Singapore subsidiary, it became part of BAT
when they merged with Rothmans in 1999. BAT decided to continue with the
investment. In its first social audit report in 2002 BAT admitted that
UK stakeholders had said that the company should withdraw from Burma,
but stated:

"In line with our position, Rothmans of Pall Mall (Myanmar) intends to
continue conducting its business in Myanmar in the belief that this is
the best way for a commercial organisation to fulfil its role and to
contribute to economic, environmental and social development goals and
to the spread of best practice."

BAT is not in Burma to contribute to its development. As its own Deputy
Chairman has admitted, BAT's collaboration with the regime actually
harms Burma. Quite simply Burma provides cheap labour for BAT. The
annual salary of a BAT factory worker is approximately =A368.52 a year.

BAT's factory is located in the military owned Pyinmapin Industrial Zone
located in Mingaladon township, Rangoon division. This industrial zone
was upgraded in 1996 by construction crews made up of child labourers.
UMEH contributed the land and the factory building to the venture.

The factory employs approximately 410 people and produces the 'London
Cigarettes' brand and 555 brands, mainly for domestic consumption.
Factory workers are paid around 23p a day.  The United Nations defines
people living on less than 60p a day as living in extreme poverty.

The cigarettes are distributed by the Myawaddy Trading Co. This is also
a subsidiary of UMEH and is based in Rangoon.

In 2000-2001 profits from the factory were US$1.06 million.  If split
60-40 then the factory earns the regime and its cronies $400,000 a
year.   This is enough to buy 20,000 AK47 assault rifles.  Around 20% of
the cigarettes are for export to neighbouring countries. The regime
earns a further 10% export tax on these cigarette exports.
BAT's subsidiary sponsors the largest golfing event in Burma, The London
Gold Tour, named after its London Cigarette brand.

BAT makes a profit of =A35,136 a minute. It would take just 6 minutes
worth of BAT's annual profits to give its workers in Burma a years
salary as severance pay.

Union of Myanmar Economic Holdings (UMEH)

UMEH is a key vehicle used by the regime to attract foreign investment.
Created by SLORC order No 7/90 on 19 February 1990, the regime injected
an initial US$1.4bn into the company.  Forty percent of the shares in
the company are designated class A shares and are owned by the Ministry
of Defence. The remaining 60% of the shares are designated class B and
are allocated to military personnel and organisations.  Many of the
shares belong to friends, relatives and cronies of those in the ruling
regime.


About BAT

"Our goals are to continue creating long term sustainable shareholder
value, and to lead the tobacco industry in demonstrating corporate
social responsibility and wider accountability."
    Martin Broughton, Chairman BAT

"We must strive to ensure an impeccable reputation in every sphereS"
  Ken Clarke QC MP, Deputy Chairman of BAT

BAT is ranked as the 18th largest company in the UK in an FT Global
survey in May 2002.  It was also ranked as 204th largest company in the
world with a market capitalisation of $21bn.  Profits before
exceptionals in 2001 were =A32.7bn.

Its brands include Dunhill, Rothmans, Lucky Strike, Pall Mall, Benson &
Hedges (in Asia), and Kent.  They sell 900bn cigarettes a year and
employ 100,000 people in 180 countries.

BAT are the second largest international tobacco company and have 15 per
cent of the global cigarette market.

BAT is a British company, with its HQ in London.  Through subsidiaries
it also operates under the names Brown and Williamson in the US, Souza
Cruz in Brazil and P.J. Carroll & Co in Ireland.


This report was compiled by Burma Campaign UK and Federation of Trade
Unions - Burma, with the support of UNISON, Britains biggest trade
union.

Burma Campaign UK
25/27 Bickerton Rd
London
N19 5JT
Tel 020 7281 7377
Fax 020 7272 3559
info@burmacampaign.org.uk
www.burmacampaign.org.uk

Federation of Trade Unions - Burma
www.tradeunions-burma.org

UNISON
www.unison.org.uk

November 2002 --
Mark Farmaner
Media and Campaigns Officer
Burma Campaign UK

Bickerton House
25/27 Bickerton Road
London
N19 5JT

Mobile: 0794 123 9640
Tel: 00 44 (0)207 281 7377
Fax: 00 44 (0)207 272 3559
E-mail mark.farmaner@burmacampaign.org.uk
www.burmacampaign.org.uk

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