BRITISH AMERICAN TOBACCO P.L.C. This is our eighth Modern Slavery Statement (the Statement) in accordance with the UK Modern Slavery Act 2015 (the Act) covering British American Tobacco p.l.c. and companies in the British American Tobacco Group.
Approval Process
This Statement has been approved by the Board of British American Tobacco p.l.c. on 23 April 2024. It was signed by the Chief Executive on behalf of the Board on 24 April 2024.
The Statement has been approved by the Board of Directors, and dated and signed-off by a designated director of each BAT Group subsidiary company set out below.
Entities in Scope
The BAT Group subsidiary companies that are subject to the requirements under the Act are set out below.
BATLaw Limited
British American Shared Services (GSD) Limited
British American Tobacco (GLP) Limited
British American Tobacco (Investments) Limited
British American Tobacco Exports Limited
British American Tobacco Services Limited
British American Tobacco Taiwan Logistics Limited
British American Tobacco UK Limited
British-American Tobacco (Holdings) Limited
Carreras Limited
Nicoventures Retail (UK) Limited
Nicoventures Trading Limited
Find out more
Copies of all BAT's key reports and an archive can be found in our reporting centre www.bat.com/reporting
- Find out more online bat.com/reporting
Modern Slavery Statement 2023
Welcome from our Chief Executive
Our long-standing commitment is to respect the human rights of our employees, the people we work with and the communities in which we operate.
Our Modern Slavery Statement
Our statement sets out the steps we have taken to prevent modern slavery during the year ended 31 December 2023.
The latest estimates by the International Labour Organization (ILO)1 state that
50 million people are victims of modern slavery globally. Of these, 27.6 million are estimated to be in forced labour, with
23.6 million being forced to work under threat or coercion in the private economy.
With a truly global footprint, we have the appropriate systems and controls in place for managing modern slavery risks that we may be exposed to within our own operations and those of our extended supply chain.
In 2023, we updated our Double Materiality Assessment (DMA) which confirmed that respecting human rights remains a key focus area. Additionally, Supplier Engagement was identified as a material topic for the first time. Human rights, in particular, is one area in which working with our suppliers and other value chain partners is key.
2023 Highlights:
- Provided human rights training to more than 418,000 farmers and community members;
- Developed the BAT Sustainable Living Income Guidance to help farmers' financial return;
- Joined the Responsible Business Alliance (RBA) as a Supporter Member and the Supplier Ethical Data Exchange (Sedex) to further expand the coverage of supply chain audits globally and build on our work on social due diligence; and
- Developed a tracking and monitoring tool to enable greater visibility of our Social Due Diligence programme for our non- leaf product material suppliers.
In parallel, we continue to aim for our tobacco supply chain to be free of child labour and forced labour by 2025.
As we create A Better Tomorrow™ by Building a Smokeless World, we continue to improve how we manage human rights across our own operations and value chain.
2023 Highlights
Trained
More than 418,000 farmers and community members on human rights;
Developed
The BAT Sustainable Living Income Guidance to help farmers' financial return;
Joined
The Responsible Business Alliance (RBA) as a Supporter Member and the Supplier Ethical Data Exchange (Sedex) to further expand the coverage of audits globally and improve our social due diligence;
Developed
A tracking and monitoring tool, which allows procurement teams to have greater visibility of our Social Due Diligence programme for non-leaf product material suppliers.
As we create A Better Tomorrow™ by Building a Smokeless World, we continue to improve how we manage human rights across our own operations and value chain.
Tadeu Marroco
Chief Executive
Note:
1. Global Estimates of Modern Slavery: Forced Labour and Forced Marriage; International Labour Organization (ILO), Walk Free, and International Organization for Migration (IOM), Geneva, 2022.
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Modern Slavery Statement 2023
Our Business and Supply Chain
As a global consumer focused company our purpose is to create A Better TomorrowTM by Building a Smokeless World.
Commitment to Human Rights
We have a long-standing commitment to respect the human rights of our employees, the people we work with and the communities in which we operate.
We recognise that, like all businesses, there is a risk of modern slavery issues arising either in our own operations or those of our extended supply chain.
In 2023, we continued to build upon, and strengthen, our approach to tackling this global issue within the context of our Group-wide sustainability agenda.
- Find out more about our sustainability agenda in our 2023Combined Annual and Sustainability Report.
Our Business Structure
With Group headquarters located in the UK, we have subsidiary operations around the world, employing more than 46,000 people. Our employees work in a range of roles and environments, including: office- based management; manufacturing and operations; trade marketing and distribution; and research and development.
The Board of British American Tobacco p.l.c. is collectively responsible to our shareholders for the long-term success of the Group and for the Group's strategic direction, purpose, values and governance. It provides the leadership necessary for the Group to meet its business objectives within a robust framework of internal controls. The Board is supported by the Audit Committee, which monitors performance, risks and adherence to
our standards, including for human rights, for all our Group employees worldwide across more than 150 markets.
The Audit Committee is underpinned by the Group's Regional Audit Committees and Corporate Audit Committee with committees for each of the two Group regions, for the US business, and for locally listed Group entities and specific markets, where appropriate. Our Management Board, chaired by our Chief Executive,
is responsible for overseeing the implementation of Group strategy and policies set by the Board, and for creating the framework for Group subsidiaries' day-to-day operations.
46,000+
Group employees worldwide across 150+ markets
Managing Human Rights Impacts
Our 2023 DMA provided greater insights on our material sustainability risks, including topics such as child labour. To better manage our material impacts, we have established topic-specific Centres of Excellence at the middle management level.
Management of material sustainability topics, including human rights, are also discussed in various Committees and forums, such as the:
- Group Sustainability Leadership Team;
- Operations Sustainability Committee;
- Leaf Sustainability Forum; and the
- Supply Chain Due Diligence Committee.
Issues considered in these forums are raised, where appropriate, at Management Board level or with the Audit Committee.
The Chief Strategy & Growth Officer has overall responsibility for the delivery of the Group Sustainability Agenda, supported by the Chief Sustainability Officer, the Group Sustainability Team and the sustainability subject-matter experts across the Group.
Our governance framework provides a channel for the appropriate flow of information, monitoring and oversight of key issues, including those relating to human rights and modern slavery, at all levels of the Group, from our local business units to Board level.
- Find out more about our Group strategy, business model, structure and governance in our 2023Combined Annual and Sustainability Report.
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Modern Slavery Statement 2023
Our Business and Supply Chain
Continued
Our Supply Chain
Our portfolio of products includes both combustible and non-combustible products. These include Vapour products, Heated Products and Modern Oral nicotine pouches, as well as Traditional Oral products, such as snus and moist snuff.
Our supply chain intersects several industries that are exposed to human rights risks and impacts, including agriculture, manufacturing and electronics for our New Categories supply chain.
We assess suppliers' inherent risk exposure against Verisk Maplecroft human rights indices and conduct independent audits on higher-risk suppliers.
- For more information on suppliers audit findings, see pages 11 to 14.
Tobacco supply chain
Our Group's own Leaf Operations source most of our tobacco by contracting directly with over 91,000 farmers.
The rest of our tobacco is sourced from third-party suppliers who contract with approximately 154,000 farmers.
In India, although tobacco is purchased from farmers over an auction floor, our third-party suppliers provide traceability and monitoring of their farmer base, in line with our requirements.
Our sourcing model provides our contracted farmers and those contracted to our third-party suppliers with a reliable and secure relationship, facilitating a more sustainable, efficient and reliable supply chain for the Group.
- For more information, see 'Respecting Human Rights in our Tobacco Supply Chain' on page 11.
Other materials, goods and services
We have a relationship with approximately 1,300 direct and 32,500 indirect product material suppliers.
Our New Categories supply chain is expanding into areas such as consumer electronics and e-liquids.
We have a number of suppliers of indirect goods and services which are not product related, such as IT services and facilities management.
We strive to be a positive influence on how our suppliers manage modern slavery risks. As valued business partners, it is crucial to listen to and engage with our suppliers to build trust and drive progress.
- For more information, see 'Respecting Human Rights in our Product Materials Supply Chain' on page 13.
91,000+
directly contracted farmers supplied
73% of our annual tobacco volume in 2023
Tobacco
Subject to the industry's Sustainable Tobacco Programme (STP), supported by farm-level monitoring and, in selected countries, human rights impact assessments
Total tobacco sourced
73%
BAT Group's own Leaf Operations, by volume, contracting 91,000+ farmers
27%
third parties sourcing, by volume, from approx. 154,000+ farmers
Other materials, goods and services
Subject to human rights risk assessments and independent third-party audits for those with the highest risks
Direct product materials | Indirect goods and services |
1,300+ | 32,500+ |
Tier 1 suppliers | suppliers |
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Modern Slavery Statement 2023
Our Business and Supply Chain
Continued
Our regional structures maximise opportunities for quality growth, while our market-specific business units are accountable for execution and performance.
In-depth marketplace analysis delivers insights on consumer trends and segmentation, facilitating our geographic brand prioritisation across our regions and markets. And with consumer preferences and technology continuously evolving, we strive to stay ahead of the curve with our digital hubs and innovation Centres of Excellence.
Revenue by region | The map below provides a graphic illustration of our supply chain and operations. |
£27,283m
Total revenue
U.S. | £11,994m |
AME | £9,791m |
APMEA | £5,498m |
- For more detail on our Regional Performance, see pages 44-49 of our Combined Annual and Sustainability Report
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Modern Slavery Statement 2023
Our Business and Supply Chain
Continued
BAT-owned manufacturing facilities2
United States | AME | APMEA | Total | |
Fully integrated manufacturing | 1 | 15 | 22 | 38 |
Other processing sites (including leaf threshing and Other Tobacco Products3) | 1 | 9 | 6 | 16 |
Sites manufacturing other products (including Snus, Modern Oral and Liquids) | 3 | 4 | - | 7 |
Research and development facilities | 2 | 2 | 3 | 7 |
Total | 7 | 30 | 31 | 68 |
Note:
- As of 31 December 2023.
- Other Tobacco Products include but are not limited to roll-your-own,make-your-own and cigars.
Note:
As of September 2023, BAT no longer has a presence in Russia and Belarus, and we ceased sourcing of direct product materials from Russia.
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Modern Slavery Statement 2023
Policy Commitments
All our Group companies are expected to adopt and implement policies, principles and standards which are in place to manage human rights and modern slavery issues.
Commitments, Policies,
Standards and Controls
We have a long-standing commitment to respect fundamental human rights as affirmed by the Universal Declaration of Human Rights. This includes respecting the rights of:
- Our employees;
- The people we work with; and
- The communities in which we operate.
Our approach to human rights and policies are aligned with the UN Guiding Principles on Human Rights (UNGPs).
Our policies and principles for human rights and modern slavery issues, including our Standards of Business Conduct (SoBC) and our Supplier Code of Conduct (SCoC) (indicated by * in the table below) are reviewed and endorsed by the Main Board, for adoption and implementation by all Group companies.
Updated in January 2024, both the SoBC and SCoC are reviewed regularly to ensure alignment to best practices.
100%
of our Group employees confirmed compliance with our SoBC
Policies and | Key Stakeholder |
Procedures | Groups |
Standards of | Our People |
Business Conduct | Governments and |
(SoBC)* | wider society |
Available at | |
www.bat.com/principles | |
Supplier Code of | Customers |
Conduct* | Suppliers |
Available at | Governments and |
wider society | |
www.bat.com/principles | |
Group SoBC | Our People |
Assurance | |
Procedure | |
Leaf Supplier | Suppliers |
Manual | Governments and |
wider society |
Standards of Business Conduct (SoBC)
The high standards of integrity we are committed to upholding are enshrined in our SoBC, comprising our global policies and procedures. These include our Workplace and Human Rights policies, which detail our support for the UN Guiding Principles and the International Labour Organization's (ILO) Declaration on Fundamental Principles and Rights at Work.
We aim to ensure our operations are free from slavery, servitude and forced, compulsory, bonded, involuntary, trafficked or exploited migrant labour.
Our SoBC mandates that Group companies and employees, employment agencies, labour brokers or third parties they retain to act on our behalf will not:
- Require workers to pay recruitment fees, take out loans or pay unreasonable service charges or deposits as a condition of employment; and/or
- Withhold or require workers to surrender identity papers, passports or permits as a condition of employment.
Where national law or employment procedures require use of identity papers, they will be used strictly in accordance with the law.
If identity papers are ever retained or stored for reasons of security or safekeeping, this will only be done with the informed and written consent of the worker, which should be genuine, and with unlimited access for the worker to retrieve them, at all times, without any constraints.
- Further information about our SoBC can be found on bat.com/sobc
Our Supplier Code of Conduct (SCoC) complements our SoBC by defining the minimum standards expected of our suppliers, including for human rights. We make it clear through our contractual arrangements that our suppliers are required to comply with the SCoC. Suppliers to any BAT Group company are required to ensure their operations are free from child labour and from forced, bonded, involuntary, trafficked or unlawful migrant labour.
In addition, our suppliers are expected to promote adherence to the requirements of the SCoC and carry out appropriate due diligence within their own supply chain for their new and existing suppliers (including farmers where relevant). Available in multiple languages, the SCoC is shared with all suppliers as part of their onboarding process.
- Further information about our SCoC can be found on bat.com/principles
Standards and controls
To support the effective implementation of our policy commitments, we have a number of standards, procedures and controls to support the effective implementation of our commitments, including:
- Our SoBC Assurance Procedure defines how all reports of alleged SoBC breaches should be investigated and remediated fairly and objectively. This includes a four- step process, involving an initial assessment, in line with data privacy and employment laws, followed by an investigation plan, implementation, reporting of findings, and closure. In 2023, we updated the Procedure detailing further how allegations of wrongdoing or alleged breaches should be followed up.
- Our Leaf Suppliers Manual (LSM) outlines our operational standards on child labour prevention and personal protective equipment (PPE) in tobacco farming. It provides guidance and procedures for applying our commitments on child labour within the SoBC and our requirements for PPE provision, training, and monitoring in our tobacco supply chain.
In 2023, we continued the review of due diligence processes across our value chain in partnership with an independent human rights expert.
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Modern Slavery Statement 2023
Assessing and Managing Risk
Mitigating and tackling the root causes of modern slavery risks.
Understanding the Risks - Tobacco Supply Chain
The agricultural sector (including tobacco) is an area of attention for human rights- related risks. This is associated with the large numbers of temporary workers, use of family labour in small-scale farming and high levels of rural poverty that can be found in agriculture.
The ILO estimates that the agricultural sector accounts for 12.3%3 of all incidents of forced labour and 70% of all child labour globally.4 Debt bondage can also be a particular concern if farmers borrow money to invest in growing a crop, but do not have a guaranteed buyer or price - leaving them vulnerable to getting trapped in a cycle of debt.
Understanding the Risks - Other materials, goods and services
Our product materials suppliers are part of the manufacturing sector, which the ILO estimates accounts for 18.7%3 of forced labour and 10.3% of global child labour, with the majority of cases documented in lower-income countries.4
The key forced labour risks identified in the manufacturing sector relate to excessive working hours and production targets, payment of high recruitment fees, illegal retention of passports and, in some cases, illegal imprisonment and beatings
of workers.4
For our suppliers of indirect goods and services, human rights risks depend on the sector and country of operation.
According to the ILO, 10% of forced labour4 and 15.2% of child labour3 are estimated to be in low-skilled service sectors.
We recognise that particular circumstances in some countries present a higher risk for human rights issues, such as where regulation or enforcement is weak or where levels of corruption, criminality or unrest are high.
Our due diligence procedures involve annual risk assessments based on the type of supplier and country of operation, as described on pages 13-15.
Responding to Human
Rights Allegations
We take allegations relating to human rights extremely seriously and seek to openly engage with the relevant stakeholders; responding appropriately to the issues raised.
If we receive reports of unethical behaviour, we take appropriate steps to investigate, address any issues identified, and report on the progress and outcomes, as appropriate.
- Further details of our response to human rights allegations can be found on bat.com
Notes:
- ILO (2022). Global Estimates of Modern Slavery: Forced Labour and Forced Marriage, ILO, Geneva, 2017.
- International Labour Office and United Nations Children's Fund, Child Labour: Global estimates 2020, trends and the road forward, ILO and UNICEF, New York, 2021. License: CC BY 4.0.
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Modern Slavery Statement 2023
Assessing and Managing Risk
Continued
Enhancing Farmer Livelihoods
We have a vital role in promoting a positive social impact across our supply chain.
We work with our contracted farmers to help improve their economic stability and access to food.
Rural poverty is one of the primary root causes of human rights issues in agriculture. If farmers have sustainable living incomes, farming is more attractive to the next generation. It also reduces the risks of exploitation, as well as child and forced labour, encouraging improved adherence to safety and environmental standards. Enhancing farmer livelihoods is an important part of our sustainability agenda.
Helping Farmers to Thrive
Our Thrive programme, an in-house digital platform, is based on the internationally recognised 'Five Capitals' framework and collects data across aspects of farmers' livelihoods. These are: financial, natural, physical, human and social. Strength in all five areas enables farmers and rural communities to prosper.
THRIVE - Five Capitals of success
We have a set of indicators to measure our progress in relation to each of the Five Capitals. Those in our Thrive Supply Chain5 are required to conduct annual evaluations based on these metrics, providing insights that inform our strategy and guide the development of our action plans.
In 2023, we continued to improve our Thrive digital platform, focusing on increasing data coverage, particularly from third-party suppliers. In 2023, Thrive data represented more than 94% of our total tobacco leaf purchased, up from 84% in 2022.
We continue to build on traceability by reporting on tobacco farmers supplying specifically to the Group, rather than our suppliers' total farmer base.
Our expert field technicians are pivotal in improving human rights management across our directly contracted farmer base. Acting as a conduit between the farmers and BAT, these field technicians build trusted relationships and work with the farmers to develop their skills, as well as promoting enhanced yields and resilience. Our suppliers provide similar support services for their contracted farmers.
Skills, knowledge and human rights, including capacity building, developing the next generation of farmers, health and safety, and eliminating child and forced labour
Resources and safety nets for self-sufficiency and resilience, including networks, grievance mechanisms and women's empowerment
Technology to enhance growing practices and basic infrastructure to live and work, including clean water and sanitation, energy, housing and healthcare
Climate change resilience
and the natural resources upon which farming and landscapes rely, including soil, water, biodiversity and forests
Profitable farms and sustainable living incomes, as well as crop diversification and food security
Giving Farmers a Voice
We recognise the importance of fair and effective grievance mechanism for farmers and farm workers. We track access to grievance mechanisms in our Thrive Supply Chain5 as part of our Thrive assessments, which in 2023 showed:
- 99.9% of farmers and farm labourers, who are part of Thrive, reported having access to at least one type of grievance mechanism;
- 292 grievances were raised by Thrive farmers and/or workers of which 100% were reported as resolved; and
- Regular meetings with farmers/workers or their representatives were reported as the most widely available grievance mechanism. Others used included meetings with unions, local NGO/ government-led mechanisms, and telephone hotlines.
Given how important these grievance mechanisms are for understanding and responding to rights holders, we continue to look at ways to improve accessibility and promote a culture of openness for our contracted farmers and labourers to raise human rights-related issues.
Farmer Living Income Analysis
In 2022, we carried out an independent review of our living income calculation to improve our understanding of the total farm income relative to the cost of a basic standard of living. This was conducted for 13 Group's own Leaf Operations (excluding the U.S.) and is based on the Anker Methodology.6
Following the review, in 2023, we developed the BAT Sustainable Living Income Guidance to help farmer's financial return with a focus on action plans; yield; cost of production; training; and income diversification.
- Find out more about our Farmer Living Income Analysis in our 2023Combined Annual and Sustainability Report.
Notes:
- Our metrics derive data from our annual Thrive assessment, which includes our directly contracted farmers and those of our third-party suppliers, which represented over 94% of the tobacco we purchased by volume in 2023 ('Thrive Supply Chain').
- Source: https://www.living-income.com/measurement-living-income.
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Disclaimer
British American Tobacco plc published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2024 20:22:40 UTC.
