SUPPLEMENTARY MEMORANDUM BY DUNCAN CAMPBELL
(TB 51A)
SMUGGLING IN AFRICA BY BRITISH AMERICAN TOBACCO
PLC
OBSTRUCTION OF ACCESS TO EVIDENCE
Wednesday 15 January 2000
1. In previous written evidence to the Committee,
I expressed my view that BAT had deliberately obstructed investigations
into its involvement in tax evasion and smuggling, by means of
a policy of unreasonably restricting access to its Depository
and to copies of the documents contained therein.
2. I regret to say that these practices
are being continued, despite the concerns which Members of the
Committee have already expressed to the company. BAT have refused
to make important and relevant material available for the Committee
today.
3. I visited the Guildford Depository yesterday.
I inspected previously unseen company files which gave extensive
details of BAT smuggling operations in Africa. Because of the
difficulties to which I have referred, it had not been possible
previously to make inquiries to this area. I wished to be able
to provide the Committee with evidence about this further aspect
of BAT's conduct.
4. I inspected files concerning the departments
within the British American Tobacco Company Ltd, which were responsible
during the 1990s for organising smuggling into west Africa and
parts of Francophone Africa. Another document described BAT's
strategic company plan to increase smuggling into India and Nigeria.
5. I asked for copies of these important
documents to be made. I also asked for the one file concerned
with smuggling in Africa to be copied in full, so that it might
be put before the Committee at its hearing today. This request
was refused, on the ground that this would be "jumping the
queue" in respect of earlier copying requests.
6. BAT's stated (and written) policy is
to supply copies of all documents requested within 10 days. In
our experience, documents have never been supplied in less than
two months, while other requesters have had to wait four months.
If this type of conduct is permitted to continue, effective investigations
of the company's will be frustrated.
16 February 2000
BAT SMUGGLING IN AFRICA
This note is taken entirely from BAT file numbers
FJ3201 and BB0123. File JF3201 is one of six files concerning
the planning, organisation and management of BAT smuggling into
Africa, particularly to Nigeria, Cameroons, and other countries
in Francophone Africa. The files show that the departments of
BAT responsible for organising this activity were know as "Unit
1" and "Unit 2". These Units were based at the
then BATCo headquarters at Staines, Middlesex. The files show
that cigarettes to be smuggled to these countries were manufactured
in Southampton and then shipped to Antwerp or Marseille. A Liechtenstein
based BAT agent called Soropex then passed the containers on to
a network of smugglers, using a variety of routes including Benin.
The names of many of the smugglers and the routes they used are
listed in the files.
Among the documents in BAT file FJ3201 are a
memorandum concerning a visit to Yaounde, Cameroons on 18 October
1991 by the then BAT Industries chairman Sir Patrick Sheehy. BAT
policy in Cameroons was described on the second page of this document:
"Unit 2 Fixed assumptions . . .
3. GT movements to this market will remain
a priority throughout the period."
"GT" stands for "General Trade",
and is a company euphemism for smuggling.
The next page of the same document confirms
that GT sales were unlawful, observing that:
"the import of BHSF legally is not an available
option"
"BHSF" stands for Benson and Hedges
Special Filter [cigarettes].
The note explained that because BAT cigarettes
could not be legally imported, they could not be advertised within
the country. Sir Patrick was therefore advised that BAT conducted
advertising into Cameroons from nearby Gabon, where the company
was spending about £100,000 advertising on the "African
No 1" radio station. The note continued:
"even if legal imports were allowed . .
. GT shipments will remain the mainstay of our activity (and)
the Malabo distribution channel will have to be maintained"
If imports were to become legal, the company
would
"maintain a minimum cover level of BHSF
via legal imports ca 1 20' TC every 10 weeks".
In other words, even if imports to the Cameroons
became legal, these would only be used to facilitate more sales
of smuggled cigarettes. The suggestion quoted above meant that
about one 20 foot container of cigarettes would be sent legally
to the Cameroons every 10 weeks as "cover" for smuggling.
Sir Patrick Sheehy was told that the BAT subsidiary
company BAT (UK and Export) Ltd ("BATUKE") wanted to
develop legal "cover" for their cigarettes in Cameroons.
The minute records:
"4. When the issue of Unit II was discussed
where BATUKE wish to appoint a domestic importer enabling us to
provide cover for advertising and GT business, Sir Patrick felt
that it was perfectly acceptable for BAT's Cameroon to appoint
a domestic importer."
In the same file, BATCo company summary of the
Cameroons market says:
"The Unit II market produces a valuable
contribution and it is intended to continue investment in order
to protect it from further erosion. As there are no legal imports—which
have been rejected in the past due to legal clausing on the packs—no
local media is used. However a major campaign on the Africa No
1 radio programmes transmitted from Gabon is funded from Unit
2 resources ( . . . ).
Pricing varies throughout the country and is
largely related to the risks to which supply routes are subjected.
There have been no controls on imports at retail level but road
controls and customs activity inhibit the free movement of wholesale
stocks".
The file also contains a copy of a letter written
on 23 April 1991 by Tony Pereira, whose official post was a senior
export manager at BAT's Staines HQ. He wrote to Unit 1 about detailed
smuggling routes into Cameroons. Mr Pereira was in fact employed
by BAT as its worldwide smuggling co-ordinator. He was then directly
answerable to Mr Paul Adams, who remains a member of BAT Plc's
Management Board to this day. Mr Pereira wrote:
"Neither of these customers of Gerconal
has the facility to redeploy any of his activity in Benin should
the routes change and therefore it is in our interests to assist
them and motivate them in order to keep the northern routes open."
(Gerconal was an intermediate smuggling distributor
used by BAT.)
BAT has refused to make this file available
to the Health Committee today.
(The emphasis in the quotations above are mine.)
February 2000
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