Examination of witnesses (Questions 1355
- 1359)
WEDNESDAY 16 FEBRUARY 2000
MR M BROUGHTON,
MR K CLARKE,
MR C BATES
and MR D CAMPBELL
Chairman
1355. Colleagues, may I welcome you to this
session of the Committee? May I particularly welcome our witnesses
and express the Committee's appreciation for your participation
today. May I ask you each to introduce yourselves briefly to the
Committee, starting with Mr Campbell?
(Mr Campbell) I am Duncan Campbell. I am a freelance
investigative journalist and television producer. These days I
work for people like Channel Four News and The Guardian. My appearance
today is as a result of my participation in the study of tobacco
smuggling conducted by the International Consortium of Investigative
Journalists which is an organisation run from Washington by a
public interest group called the Centre for Public Integrity.
My investigation of tobacco smuggling issues has been under way
for six months as part of an international team run by that Washington
group.
(Mr Bates) My name is Clive Bates. I am the Director
of ASH, Action on Smoking and Health. We have been researching
documents in British American Tobacco's Guildford depository.
We have found a lot of revealing material and posted it on our
website and collated it into a report. I think that is why we
are here.
(Mr Broughton) Martin Broughton. I am chairman of
British American Tobacco.
(Mr Clarke) Kenneth Clarke. I am Member of Parliament
for Rushcliffe but I am here as deputy chairman of British American
Tobacco. I have been deputy chairman since the demerger of BAT
Industries and the formation of British American Tobacco in 1998
and I am the senior non-executive director on the board.
1356. I think that the witnesses appreciate
that this session is in a sense an added session to our inquiry
on the basis of information which came to light particularly arising
from the articles which were in The Guardian a couple of weeks
ago. May I begin by putting a question to Mr Campbell and Mr Bates?
I gained the impression at the time The Guardian produced this
evidence and also at the same time Channel Four News put a feature
on the same issues we are concerned with, the question of BAT
and an alleged involvement in smuggling, that the coverage was
somewhat affected by legal advice, had been somewhat watered down
as a consequence of advice given to both The Guardian and to Channel
Four News. Could you make clear to us that the evidence you have
given to this session is not affected by concerns over possible
legal action in the way that the coverage of The Guardian and
Channel Four News possibly was?
(Mr Campbell) I can give the Committee that assurance.
That is because it is my clear understanding that as a proceeding
of Parliament what I say here in writing or in person to the Committee
has the absolute privilege of Parliament and therefore to the
extent that newspapers in this country properly have to be cautious
in what phrasings they pick, those cautions, but not of course
the duty to be correct, fair and accurate, do not apply here.
(Mr Bates) Yes, we have tried to be as truthful and
open as possible. We have tried not to go beyond the facts, but
we have reported and interpreted the facts in documents as we
see and understand them in as fair a manner as we possibly can,
unencumbered by any threat of legal action in these particular
circumstances.
1357. May I begin by putting a question to Mr
Campbell and quoting briefly from evidence you have given to the
Committee in a document you submitted earlier this week? May I
quote briefly what you said which it is fairly important to put
on the record? You state in this document, "All current executive
directors of BAT PLC and a majority of the current Management
Board have been routinely involved in planning, organising or
managing criminal activity and/or have knowingly consented to
the deliberate smuggling of contraband BAT tobacco products around
the world". You add, "A very substantial part of the
company's revenues derives from this misconduct". You go
on to allege, "... BAT's activities have supported the smuggling
of narcotics (cocaine, crack and heroin)". In marked contrast,
Mr Clarke's article in The Guardian, which was in the same edition
as the allegations which you made, stated, "British American
Tobacco is a good corporate citizen which maintains high ethical
standards". It strikes me we are starting from a somewhat
polarised position, to put it mildly. I wonder, Mr Campbell, whether
you could actually expand on some fairly strong evidence which
you have given to this Committee in respect of what you believe
about BAT involvement.
(Mr Clarke) May I make a comment first? As you quite
rightly say, outside this evidence, the legal advice plainly given
to The Guardian and Channel Four was to be careful in what they
said, although we made no legal representations to them. It is
also the case that under the privilege of this House people do
feel freer to make allegations. On the other hand quite a lot
of members of this House sometimes get worried about the use of
that parliamentary privilege because it does enable people to
make the most extreme allegations against named individuals without
any risk of redress. As I understand it, you are in the process
of putting on the record, so these things can be reported, the
allegations which have been made. I have to say, having seen the
document from Mr Campbell for the first time yesterday, I think
his extreme language is not supported by any evidence and I have
never seen any evidence to support the allegations against individuals.
I hope the Committee is not going to start misusing privilege
simply to make bland allegations against individuals under cover
of our proceedings.
1358. With respect, and you have been a Member
of Parliament longer than I have, we are concerned here to ensure
that the witnesses are able to speak without fear of legal action
being taken against them. This is not the first time in this inquiry
that we have had the threat of legal action held over the heads
of certain witnesses. You may be aware that we had to adjourn
one session a little while ago because we were concerned that
one of the witnesses to this Committee did not feel able to state
openly what he genuinely believed to be the truth in respect of
his evidence. What I would make clear is that the reason we have
asked yourself, Mr Clarke and Mr Broughton here today is that
you are clearly in a position to refute and answer any of the
allegations which are made today. Of course you have the opportunity,
if you are not able to answer those allegations, to write to the
Committee subsequent to our hearings and that is only a fair way
of dealing with the concerns you have just expressed.
(Mr Clarke) But allegations which appear, on the face
of Mr Campbell's document, not to be supported by any evidence,
should be made with care under the cloak of parliamentary privilege.
1359. May I say that the reason I wanted to
put these questions to Mr Campbell is obviously, as you appreciate,
because the allegations he is making in his evidence are extremely
serious? I have read from some of the evidence he has put to the
Committee and my first question, Mr Campbell, is to ask you to
substantiate the very serious allegations which you make in the
written evidence to our Committee, picking up the point which
Mr Clarke has just made.
(Mr Campbell) I think it is right that you put it
in that way and I should be failing in my duty both to myself
professionally and to the Committee if I did not, with some brevity
as befits these proceedings, but being willing to substantiate
to such detail as is required afterwards, each and every allegation
which I have made. They are not made casually. I think I could
disagree with Mr Clarke and that he would agree with me, that
they are not bland either, they are serious. I will perhaps be
a little more lengthy in this answer so that I go into the kinds
of points of detail which can be explored further. I shall be
supported in that both by my willingness to cite to the Committee
or its Clerks any specific page of BAT documents which may be
referred to in a more casual way here. I am also supported by
the detailed analysis of many meanings and points which Mr Bates
from ASH has put before the Committee separately and which I have
read. I would say to Mr Clarke with all respect that I doubt that
he has read the evidence and that is why he has not seen the evidence.
I hope that following this hearing, if he has not already done
so, he will and through his colleagues, take the opportunity to
look at the very extensive display of documents which are from
his own company's files, which are now on a number of websites
around the world, which are compendiously detailed before this
Committee today by Mr Bates from ASH, and take these on board
in forming his considered opinion. I have no doubt he is an honourable
gentleman and I am very puzzled indeed as to why or how, if his
opinion remains that there is no case to answer, he finds that
to be so. I visited the Guildford depository for the first time
in September of 1999 and quite frankly I could not believe my
eyes. By all respects and by my inspection BAT is a well managed
company, some of its staff clearly have the kind of qualities
about them as managers which would earn them places in the Civil
Service. What was most extraordinary to me was to see that deployed
within the careful management, the minute understanding of their
market places, the assiduous pursuit of their business interests,
was a level of detail and understanding and management and control
and planning and organisation of smuggling. Sometimes in these
documents the words were used directly. We see and can cite to
you examples where they refer to their own products as "smuggled";
sometimes the major product on sale in particular countries, Vietnam
being one example. Sometimes they used the word "contraband",
sometimes, very often indeed, they used the word "illegal"
and that word is invariably counterpoised as to the kind of legal
markets we have with duty paid markets. You see immediately from
these documents a series of terms which are company codes, which
when they do not use the explicit term "smuggling" or
"contraband" are codes for smuggling. They have been
exemplified in both papers before the Committee. The key terms
in this area are "duty not paid" or DNP, which really
is self-explanatory, "transit" which means being taken
through but you will see that in BAT usage it is a verb, it is
a verb "being transited into a country", in other words
it ends there, that is the end market and what they mean when
they say it is transit is that it is taken into the country without
duty being paid and it is therefore a smuggled product when it
reaches the end market. The third term prevalent perhaps in Asian
and African usages of company papers is GT, general trade. It
is absolutely clear on examination of these documents that these
terms are each equivalent and each means smuggling and bears no
other meaning. For example, you can see a diagram in page 8 of
my own evidence of a map from the files of Mr Keith Dunt, who
is the current chief financial officer, which is marked "DNP
Distribution", that is duty not paid. On that map you will
see the route taken by BAT brands of cigarettes. They go from
Aruba, which is an island in the Caribbean used for smuggling
distribution, to a district called Maicao in north-east Colombia.
It is legal to take cigarettes, as BAT does, from their factories
in Venezuela to Aruba and legal also to take them into Maicao,
provided they are to be re-exported from Colombia; that is a condition
of special rules of the Colombian Government in relation to Maicao
and its urban district. It is unlawful under Colombian law for
those goods then to be taken into Colombia, but you will see from
the diagram, which is reproduced from BAT's own files, that they
are precisely taken into Colombia. In this particular example
they are taken into the town of Barranquilla on the Atlantic coast.
Other diagrams and numerous other documents—and I mean dozens
when I say numerous—refer to the sale and distribution of
those and other brands of BAT cigarettes to towns such as Bogota,
Medellin and Cali. There is simply no reason for doubt. If there
were any reason for doubt, you can see in the explicit understanding
of marketing by British American Tobacco a reference to "sanandresitos".
It is a Spanish term which means black market trade. These black
markets are well known in Colombia. Any Colombian such as our
colleagues or the Director of Customs in Colombia or her Deputy,
all of whom we have spoken to in the course of our investigations,
take one look at these papers of British American Tobacco PLC
and say they are criminals. This is absolutely clear unequivocal
evidence in our country of crime. If they say they are taking
them into the sanandresitos, then it is black market, it is smuggling
and that is what they intend. BAT has recently entered into negotiations
to bring an end to that smuggling. As far as we can tell, they
have deceived the Colombian Government. Three weeks ago, as part
of a Channel Four News investigation, colleagues of mine went
into Colombia, they went into the smuggling markets, the "sanandresitos"
of Bogota and they were able to buy these cigarettes, the same
sort of cigarettes which are described in the 1990 to 1995 papers
of Mr Dunt and his colleagues.
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