Corporate Social Responsibility And Challenges In Creating Smoke Free Environment


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  • These are what I see to be the main concerns, but do we need to add any more ?
  • Workshop participants: any further identification of purposes
  • Rothmans executive got awards from rulers for “community service” but anti-tobacco advocates did not
  • Workshop participants: are there other ethical issues which should be raised ?
  • Workshop participants: are there any further observations on monitoring activities ?
  • Corporate Social Responsibility And Challenges In Creating Smoke Free Environment

    1. 1. Corporate social responsibility and challenges in creating a smoke-free environment Simon Barraclough School of Public Health La Trobe University Australia [email_address]
    2. 2. Aims of the presentation <ul><li>To determine what is meant by corporate social responsibility (CSR) and its functions for the tobacco industry </li></ul><ul><li>To present specific examples of CSR from British American Tobacco Malaysia (BATM) </li></ul><ul><li>To explore the implications for tobacco control in Malaysia and the ultimate rational goal of a smoke-free Malaysia </li></ul><ul><li>To ask what we should do to deal with tobacco corporation CSR </li></ul>
    3. 3. Reality check! <ul><li>The Malaysian government is the major partner in two of Malaysia’s largest tobacco corporations </li></ul><ul><li>The chairman of BATM is also the chair of the Human Rights Commission </li></ul><ul><li>What greater endorsement that tobacco firms are responsible corporate citizens? </li></ul>
    4. 4. Malaysian state controlled shareholdings in the tobacco industry <ul><li>British American Tobacco </li></ul><ul><li>Skim Amanah Saham Bumiputera 24,177,500 shares (8.47%) No 2 shareholder </li></ul><ul><li>Employees Provident Fund 11,498,975 shares (4.03%) No.3 shareholder </li></ul><ul><li>Valuecap Snd Bhd 6,505,200 No.4 shareholder </li></ul><ul><li>Amanah Saham Malaysia 5,991,700 (2.1%) No 5 shareholder </li></ul><ul><li>As of 29 February 2008 Source: BAT Malaysia Berhad, Annual Report 2007, pp. 108-109 </li></ul>
    5. 5. <ul><li>JTI Malaysia </li></ul><ul><li>EPF 319,182,300 shares (7.33%) No 2 shareholder </li></ul><ul><li>Skim Amanah Saham Bumiputera 13,306,200 shares (5.09%) No.3 shareholder </li></ul><ul><li>Valuecap Snd Bhd 47,144,400 shares No.5 shareholder </li></ul><ul><li>Amanah Saham Wawasan 2020 6,756,200 (2.54%) No. 7 shareholder </li></ul><ul><li>Amanah Saham Malaysia 55,939,300 shares (2.27%) No.8 Shareholder </li></ul><ul><li>Kumpulan Wang Persaraan 1.350.000 shares (0.52%) No. 14 shareholder </li></ul><ul><li>Malaysian Industrial Development Finance (MIDF) Berhad 1,261,700 shares (0.48%) No.15 shareholder </li></ul><ul><li>AUTB Progress Fund 367,000shares (0.14%) No. 25 shareholder </li></ul><ul><li>MIDF for EPF 263,400 shares (0.10%) No.28 shareholder </li></ul><ul><li>Amanah Saham Nasional 3 Imbang212,300 (0.08%)No.29 shareholder </li></ul><ul><li>As of 3 March 2008 </li></ul><ul><li>Source: JT International Berhad, Annual Report 2007, p. 77 </li></ul>
    6. 6. Leading citizens and BATM <ul><li>Tan Sri Abu Talib Othman </li></ul><ul><li>Chair of SUHAKAM </li></ul><ul><li>Chairman of the Board of BATM </li></ul><ul><li>Dato’ Ahmad Johari bin Tun Abdul Razak </li></ul><ul><li>Member of the Board of BATM </li></ul>
    7. 7. Corporate Social Responsibility <ul><li>“… the degree of moral obligation that may be ascribed to corporations beyond simple obedience to the laws of the state” </li></ul><ul><li>M. Kilcullen and J. Kooistra, Reference Services Review 27(2) p.158 </li></ul>
    8. 8. BATM and CSR <ul><li>BATM social reporting will “ultimately result in less questioning of our right to exist, thus improving our long-term shareholder value” </li></ul><ul><li>Annual report 2001 p.25 </li></ul>
    9. 9. Good business <ul><li>“… we recognise that by running our business well, we help to drive the engine of economic development, which in turn helps to achieve social and environmental development. Accepting social and environmental responsibilities, in a society that we conduct our business, makes good business sense” </li></ul><ul><li>Annual Report 2003 p.62 </li></ul>
    10. 10. A typology of BATM corporate social responsibility “ working to alleviate hardship, pain and suffering [among] the aged, the disabled, the sick or the less privileged” Annual Report 2005 p.51
    11. 11. The BAT Foundation <ul><li>scholarships to “talented but underprivileged Malaysian students” and grants to community groups </li></ul><ul><li>higher education grants to students from families engaged in tobacco cultivation and curing </li></ul><ul><li>In 2003 a “partnership” with the National Tobacco Board, a federal government agency, permitted the scheme to be all applicants (British American Tobacco 2004, p. 32). </li></ul>
    12. 12. Shelter Home for Abused Women and Children in Negri Sembilan <ul><li>20 cents is received by the home for each greeting card produced by BAT Malaysia. </li></ul><ul><li>According to the shelter’s founder, Mrs Jegathambal, the corporation’s support </li></ul><ul><li>“ . . . goes to show that they do care about the society’s wellbeing” </li></ul><ul><li>(British American Tobacco Malaysia Annual Report 2003, p.67) </li></ul>
    13. 13. Symbolic and substantial support for government policies <ul><li>Portraying BAT’s activities as contributing to domestic economic growth and international trade – regional hub for rechnology and skills </li></ul><ul><li>Scholarships support policy on bumiputra and rural development </li></ul><ul><li>Cooperation with anti-smuggling measures </li></ul><ul><li>Sponsorship of the Dewan Filharmonik Petronas </li></ul><ul><li>Shared in costs of smoking lounge at KL International Airport </li></ul>
    14. 14. Support for government policies <ul><li>Contributions to assist tobacco farmers during the restructuring of the industry in response to AFTA </li></ul><ul><li>Endorsement of Malaysia’s ratification of the Framework Convention on Tobacco Control so long as adults were free to continue to consume a legal product (NST 17 September 2005) </li></ul>
    15. 15. Participation in youth smoking programs <ul><li>Youth Smoking Prevention Programs (through the Confederation of Malaysian Tobacco Manufacturers) </li></ul><ul><li>Retail access prevention to prevent minors from purchasing cigarettes </li></ul><ul><li>Retailer education to inform retailers of the laws governing minors and assist them in refusing under-age purchases </li></ul><ul><li>Mass media advertising advocating that youth do not smoke </li></ul><ul><li>Mass media campaigns to complement the Government’s own “Tak Nak” campaign to deter youth smoking </li></ul>
    16. 16. Environmental action <ul><li>Tree planting project to absorb at least as much carbon dioxide as the company emits into the environment directly, or indirectly </li></ul><ul><li>Re-forestation partnership in Pahang and Sabah </li></ul><ul><li>BAT has a exceeded carbon neutrality ” </li></ul><ul><li>(Annual report 2006, p.49). </li></ul>
    17. 17. Active consultation with government and civil society <ul><li>“ Our Social Reporting initiative enables us to now demonstrate to society how we strike the ultimate balance – playing our role as a corporate citizen to address and manage the key issues impacting our industry, thus meeting society’s expectations of us as a responsible company” </li></ul><ul><li>BAT, Social Report (2001 – 2002) p.12 </li></ul>
    18. 18. The item that remains unanswered <ul><li>PR 1 of the Social Report asks for: </li></ul><ul><li>Description of policy for preserving customer health and safety during use of products </li></ul><ul><li>BAT’s response: “While not reporting on this indicator, information on smoking and health can be found on our website ….” </li></ul>
    19. 19. Passive smoking is not harmful <ul><li>“ statistics do not demonstrate that environmental tobacco smoke is even a risk factor for any long-term health effects and disease” </li></ul><ul><li>BATM Website “Talking about tobacco FAQs” </li></ul><ul><li>Accessed 1.11.07 </li></ul>
    20. 20. Engagement with stakeholders <ul><li>BAT Malaysia engages “stakeholders, from Governments and non-government organisations to employees and business partners, in open, honest and constructive dialogue.” </li></ul><ul><li>BAT, Social Report (2001 – 2002) p.12 </li></ul>
    21. 21. Strategic purposes <ul><li>Create a favourable public relations image for the industry or individual corporation (protecting “reputation capital”) </li></ul><ul><li>Compensate or atone for negative actions (compare with “sin tax” concept in public policy) </li></ul><ul><li>Seek an accommodation with critics (responsible marketing of a dangerous product) and portray those not entering dialogue as unreasonable </li></ul>
    22. 22. Strategic purpose <ul><li>Demonstrate compliance with government policies and even “partnership” with governments </li></ul><ul><li>Stem or restrain the growing tide of regulation </li></ul><ul><li>Coopt elites to create an image of harmonious functions </li></ul><ul><li>Use philanthropy as a persuasive tool </li></ul>
    23. 23. Consequences <ul><li>Public relations furthered </li></ul><ul><li>Favourable mass media coverage </li></ul><ul><li>Symbolic and even actual endorsement by the political and civil elites bestows legitimacy </li></ul><ul><li>Opportunities to influence policy and opinion makers </li></ul><ul><li>Philanthropy separated from the core business of the corporation to blur a tobacco identity </li></ul>
    24. 24. Malaysian leaders endorse BATM CSR <ul><li>Dato’ Seri Najib Tun Abdul Razak (while deputy PM) in 2004 commends BATM for its CSR initiatives, including its Social report </li></ul><ul><li>In 2002 Tan Sri Dato Muhyiddin bin Mohd Yassin observed that the Youth Smoking Program “reiterates the industry’s positiion that its products are meant only for adults” </li></ul>
    25. 25. <ul><li>In 2004 Datuk Seri Syed Hamid Albar challenges describes BATM and JTI as “good and responsible corporate citizens” who are willing to help the Government curb smoking </li></ul><ul><li>In 2006 Datuk Seri Fong Chan Onn emphasised the alignment of BATM’s approach and objectives with the Ninth Malaysia Plan and predicted “returns on investment many times over” </li></ul>
    26. 26. A contrasting view <ul><li>“ They have used every means at their disposal to promote and block effective tobacco reductions measures, including years of systematic lying, obfuscation and denial about addiction and passive smoking” </li></ul><ul><li>A former health minister Dr Chua Soi Lek, NST 20 May 2005) </li></ul>
    27. 27. What is to be done? <ul><li>Monitoring CSR activities </li></ul><ul><li>Countering CSR activities </li></ul>
    28. 28. Monitoring the CSR activities of the tobacco industry <ul><li>We need to: </li></ul><ul><li>Be mindful of ethical considerations </li></ul><ul><li>Identify the nature of tobacco CSR </li></ul><ul><li>Seek to understand the strategic purposes and the consequences of CSR </li></ul><ul><li>Explore opportunities for monitoring </li></ul>
    29. 29. Ethical considerations: should those advocating tobacco control engage with tobacco CSR? <ul><li>“ I am also speaking with executives in multiple industries except for one – the tobacco industry. We are not on speaking terms, and never will be” </li></ul><ul><li>Dr M. Chan, Director-General, WHO, 2007 </li></ul>
    30. 30. Some ethical considerations <ul><li>But what if cooperation reduces the damage of tobacco? </li></ul><ul><li>Can “tobacco money” be regarded differently to taxation and excise revenue or share dividends derived from tobacco (“selective moral outrage”) </li></ul>
    31. 31. How and where can activities be monitored ? <ul><li>Mass media </li></ul><ul><li>Web sites </li></ul><ul><li>Public relations material (press releases) </li></ul><ul><li>Annual company reports (for listed companies) and reports of recipient bodies </li></ul><ul><li>Internal newsletters of tobacco companies </li></ul>
    32. 32. How and where can activities be monitored ? <ul><li>Industry publications (e.g. Tobacco Reporter) </li></ul><ul><li>Tobacco Industry Monitor (WHO/TFI partnership with UICC GLOBALink (available at: http:/ </li></ul><ul><li>Unobtrusive observation </li></ul><ul><li>Personal approaches </li></ul>
    33. 33. Countering CSR <ul><li>Publicize what is monitored </li></ul><ul><li>Inform policy-makers and regulators </li></ul><ul><li>In the language we use: challenge false consensus and employ the narrative of irony (eg paradox of responsible marketing of a lethal product and scholarships for medical students) </li></ul><ul><li>Publicly or privately challenge recipients of tobacco philanthropy to justify their behaviour </li></ul>
    34. 34. Countering CSR <ul><li>Identify and exploit any contradictions with government policy and legislation </li></ul><ul><li>Turn observations and contradictions into policy demands for further control of tobacco industry activities </li></ul>