Ethical Performance
inside intelligence for responsible business


BAT defends Burma position

November 2005

British American Tobacco has defended its decision not to disclose in its annual accounts that it has operated a factory in Pyongyang, the North Korean capital, for four years. Only 'principal subsidiaries' are listed, it said, and it was not obliged to inform investors of an investment of that size - it produces about two billion cigarettes a year.

BAT's spokeswoman denied the factory was 'secret' and said: 'If we are asked about our investment there, we respond appropriately. The investor community knows of it.' The UK newspaper The Guardian had reported that many shareholders were unaware of BAT's links with North Korea.
When asked about North Korea's human rights record, she said: 'It is not for us to interfere with the way governments run countries.' She said, however, that BAT could lead by example and help the country's development by meeting internationally accepted CSR and business practice standards. BAT, she claimed, had worked to improve its employees' working conditions, paid its workers well and gave them free meals.

BAT is said to have started the business in September 2001 after forming a joint venture company with a state-owned enterprise, the Korea Sogyong Trading Corporation. It made an initial $7.1million (£4m) investment, taking a 60 per cent stake in the new company, Taesong-BAT, but it has since increased its share.


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