Tobacco Documents Online

~1995 KEY AREA PAPER : CORPORATE AFFAIRS I. Corporate Image 2. External Relations 3. Media 4. Marketing Restrictions 5. Packaging 6. Pressure Groups 7. Cornmunication and Co-operation 8. Trai~ing and Development of Corporate Affairs Staff 9 National Manufacturers A.ssociations I0. In~ema] Communications co BATCo document for Province of British Columbia 23 April 1999 BATCO 00116067

[KEY" AREA PAPER CORPORA TE AFFA/RS J CORPORATE IMAGE BA CKGRO U.N'D A comp,.,n.v's co,orate image is a valuable asset. From a commercial perspective, the benefits oia good image and reputation within ]ocaJ and national commurdties are becoming increasingly apparent. The products of a company with a good corporate image are off, en more attractive to consumers. Access can be easier to decision makers and opinion formers, the company can become more attractive in terms of recruitment and it is more di~..cult I~or legislators to enact harsh regulations affecting compares wi-Jch have :he support of local and national communities. With the changing political climate, there are increasing opportunities for internatJonaJ businesses in many new markets around the world. A strong corporate image can assist with :he ex:o,"t of~roduc:s and setting up joint ventures in new countries. Inte.~.,adona! :cm.:~ies and industries are often criticised for their activities and behaviour in many parts of the world. Much ot':he criticism is politically motivated, pa~ic:~laF[v by t~.cse opposed to the fi'.ee enterprise ~'stem. Critics argue that the and cbjec::ves of inte,'-national business are incompatible with the interests and well-oeing ofna;:c~2i communit'.es While t,hJs is not ::'~'e, these views receive wide coverage and have a considerable numcer of subsc.-ibers They are certainly used by the anti-smoking lobby to arrack both :he ~obacca industry and companies in the BAT group. A good co,orate image and reputation is judged on many factors including financial per'formanc.~, corT..crate behav~our and ethical practices, community involvement and cont~3,utior, and e.'R'.ironmental awarecess and sensitivity It is :hereEo,'e im.~enant that operating companies implement prograrm-nes to develop and promote a good ccrporate image for themselves and the group and that all steps are ~aken to ensure that the company enjoys a good corporate reputation POLIC-~" Com.~ani~s shouL'- have a co-ordinated programme to establish and maintain their cc~crate im..~ge 2=.'-' reputation. .-ks part, of :~.eir co,orate image programmes, companies should associate themselves with British-.-kme~can Tobacco Company on stationeD', includlng the BATCo logo, in accordance with tF.e corporate identity guidelines. General communications should refer ~o being pa~ or'the BAT group, e.g., total group volume should be quoted rather than BATC,~'s and group operations should refer to North Aune,,ica, all of Europe and Latin .-Lmeric:k although reference should not be made to BAT Industries as s~ch. The gene~c term BAT ~,,iil be the communication reference. 1".2 BATCo document for Province of British Columbia 23 April 1999 BATCO 00116068

IKEY AREA PAPER CORPORA TE AFFAIRS Corporate image/reputation should be assessed re~alarly and programmes adjusted to take account of changing opinions and attitudes. OBJE C'['IVES The overall obiective of corporate image/reputation progra.mmes should be to achieve the highest reputation within the industry sector among key target audiences to ensure community suppor~ For the company's business objectives and activities and to assist in gaining competitive advantage. BAT should be positioned as the pacesetter in the following areas: • Financial management and profit performance • Ethical standards • Marketing standards and practices • Product quality • Customer relations • Environmental practices • Employment practices • Community contribution • Corporate identification Programmes and action should address: Financial standing - to ensure :hat: the company is able to ma.ximise the benefits and the commercial advantage of financial credibility ttu'ough favourabie banldng terms, preferred terms with suppliers, etc; government recognises the economic contribution and views of the company when determining policy; the company enjoys a fair share price Ethical standards - to ensure that: the group's strict standaa-ds regarding obseP,'ance of local laws and customs, payments of ta.xes and chm'ges are observed; that proper and fair relationships are observed with distributors, suppliers, farmers, etc and in the conduct of rdations with elected and government o~cials .Harkcting standards and practices - to ensure that the compan)~s code of marketing practice is observed and that the company operates within local laws and voluntao' a~zreements. Product quality. - to ensure that the company is able to gaan competitive advantage through the marketing of'superior quality produc~s and that all communications material is of the highest quality standards. Customer relations - to ensure that customer enquiries are handled efficiently and quickly and :hat the company demonstrates care and concern to achieve customer satisfaczion. o:~plamtdr.lp~klpc=") 011/03/9~ Ox P~ ~o BATCo document for Province of British Columbia 23 April 1999 BATCO 00116069

KEY AREA PAPER CORPORA TE AFFAIRS Environmental Practic~ - to ensure that strict standards are obse~,ed in relation to disposal of waste, re~. cllng, utilisation of local r~ourc~ ~d oth~ isles, set out sepa~ety in BA~s ~ronmental policy ~d that due recog~tion is sought on approp~a~e occ~ions Employment practices - co ensure strict observance and due recognition of employment policies and con,'.'kions and safety standards and that management quality and employee oppo~:nhies axe communicated and understood Community contribution - to e~s~re that community programmcs respond to the needs and aspirations of'.ocal and nationa~ corm~unkies and ale re[evazat to local development needs. P:c~a.mmes should be selected from one of'the following four areas so that BAT is r~ognised as a cons{stent supporter of specific initiatives: - health - environment - culture - business deveiopme~: Corporate identification - :~ ensure that all visual identification such as logo, letterhead and stationery., sig:age, vehicles comply with BAT's corporate identity rules to achieve consistent corporate identification. Where appropriate, companies sho::~ seek :o associate the company with the brands. c~ r~ r-~ BATCo document for Province of British Columbia 23 April 1999 BATCO 00116070

KEY AREA PAPER CORPORA TE AFFAIRS EXTEI~.NAL RELATIONS BACKGROUND The fi'ee enterprise ~stem is now a world wide phenomenon, however that fi'endom is qualified and under great pressure. Increasingly, communities are demanding that international corporations justify, their franchise to do business. Companies such as BATCo must not only be good world citizens, they, m,,,~st demonstrate and corm'nurdcate that this is so POLICY It is BATCo policy that s~stematic pro-active progra,':',.mes of regular contact with government officials, politicians and ministers on ma~,~rs of mutual interest be pursued. Contact programmes should also be carried out with appropriate international bodies, such as the World Bank and World Trade Organlsaticn. Audiences should be made aware of the company's positive contribution to the national economy. Assistance will not be forthcoming if a company approaches a potentiaJ heiper only when problems arise. Systernattc contact should also be maintained with other key, audiences whose goodwill and co-operation can help companies achieve their business objectives. These groups can include, for example, employees, supplier~, customers/smokers, the trade, local community leaders, leaders of the financial se=er, competition, politicians, the public, tobacco growers, advertising agencies and business leaders. Steps should be taken to ensure that non-executive directors are #ven the opportun2ty to play a full and appropriate role in relationships with government and other appropriate audiences. This policy should be read in conjunction with the Key Area Paper on Smoking ~d Health - Communication. OBJECTIVE The objective of e.'c~ernal relations' activity is to ensure :hat the ~i1 support of key audiences is enlisted. In this way a company will hele itself to sharpen its competitive edge and maintain the freedom to conduct its busines~ !n a responsible manner. BATCo's business contributions and practices shoutd ":e recognised to be of a high standard and not open to criticism. BATCo document for Province of British Columbia 23 April 1999 BATCO 00116071

KEY AREA PAPER CORPORA TE AFFAIRS BACKGROUND Aa major employers and contributors to the economy, 8ATCo companies ~d operations are the subject of legitimate interest by the media. Dealing with :he media can have a significant impact on the company's business. Relations with press, radio and :ele,Asion are an important means of developing corporate refutation and mishandled c2m have a significant negative impac~ on the company. POLICY It is BATCo's policy to be open and honest in all its dealings with the media and to conduct ~.stematic, pro-active media relations programmes to promote :~,e company a.s ! a responsible business. Media relations' plans should be developed and re:~.sed a.nnually, to ir, c~ude key journalists to contact, subjects and messages to co,'v.mu~c::,- and pro_~-",-mmes for regular contact. Companies should nominate a media spokesman who should receive re_~_'!z.- issues and media trairung and is the ordy person in the company, apart ~'om :he No 1. who is authorised to talk to the media. When company spokesmen are dealing with commercial issues a.ffecting the local business, i~'ormation made available should be cleared with the No I. When providing commerc/al and financial information, close attention should be ;a.id to Ice± laws, ~ock exchange rules, etc. Oppo,n-unities for general comraent on all smoking issues should be care.-hil.v reviewed and .~ursued if it is considered that the company's views can be adequately re;resented. This ;hould be with the agreement of the No I. When discussing a~y sme~'~g and health issues, spokesmen should be aware ofproduc~ liability, irr, Flicatio~s ~,,d scientific accuracy and should fully understand the company's stance. Corporate .-Lff'airs Department, ~fillbank, should be kept informed of sigrfificant media comact and coverage which may have international or damaging local im.cac': and should be c~nsulted if there is any doubt about handling any specific ccntac:s. OBJ-ECTIVES Media relations prograrnmes should contribute to the achievement of co.orate objectives by ensuring that the company is well known and h2ghiy regarde5 by its key audiences. A more detailed paper - Guidelines for Dealing with the Media - has been c~'culated by Corp. orate Affairs Department, Millbank. 0:' plara',k ap,k apmeem I Z'0.1~95 r~,,: c~ BATCo document for Province of British Columbia 23 April 1999 BATCO 00116072

AREA PAPER CORPORA TE AFFAIRS MARKETING RESTRICTIONS BACKGROUND In response to recommendations from WHO and a number of international pressure groups, governments aze introducing a wide range of restrictions on marketing ~'tivities relating to tobacco. These include restrictions or ba~s on advertising in some or a/l media, on brand sponsorship, particularly of sports, and on trademark diversification activities. It is often gated that such restrictions ~r¢ aimed at the 'protection' of young people from the influence or'tobacco advertising and sponsorship. However, major studies and experience~ in various markets clearly demonstrate that advertising or sponsorship is not si~ificant in influencing young people to begin smoking, or that advertising or sponsorship bans have any demonstrable effect on the overall consumption of tobacco. POLIC'~' it is BATCo ?olicy to protect marketing freedoms in all instances Whe.-ever possible, negotiatec[ volunta~" codes are to be preferred to legislation, ~d companies should consider adopting such codes throughout the industry in their country, where they do .'.or already exist, in the hope of pre-empting legislation. O BJ'KCTIV'KS To preserve :he ,fight of companies to advertise and market their produc~s within so,ally acceptable standards and practices. To preserve :heir ability to inform their consumers of product developments md inno~ations. To ensure ;hat companies are able to compete and increase their market share. BATCo document for Province of British Columbia 23 April 1999 BATCO 00116073

LKEYAREA PAPER CORPORA TE AFFAIRS j PACKAGING BACKGROUND For many years, health warnings have appeared on cigarette packets in some markets and in others they have not. In pa,~icular, health warnings have been required by governments in most OECD nations and it is the perception of the company that, in these countries at least, there is a community expectation that all cigarette packets should contain a warmng of'some kind, As a responsible manut'act~rer, BATCo believes it should respond to those exp~:ations and apply a health warning to all products it makes. Moves have also been made in seine markets :o force manufacturers to se!l cigarettes in plain or gene.'-ic packs. In many countries health warnings are also included in advertising either as a result legislation or industry, agreement. ?OLIC~' I: is BATCo policy to comply ,,~i:~. any nationai requirement to place health w~t~ags on cigarette packaging and in adve,":ising. In most cas,s warnings are required by government and should therefore contain a~ attribution Io the government. [n cases where there is no requirement or agreement, health warnings should be included on packaging but not in advertising (g~idelines for the application of health wa.mings where no gove.,-nmem requirement e.,dsts are circulated separately). Pic:oriai warnings, and those occ'.:p~ing a major pack face or faces (fi'ont and back) or a disproportionately large area o£ad',ertising space, should be resisted, as should moves to plain cr generic packs. Ever?." e.=,o~ should be made to protect the integrity of~he company's packs and trade marks 0 BJ-~CTIVES To minimise the damage to the Group's most valuable assets, trade marks, pack desi_~ns, To neutralise the controversy over ~ack wamin~ labels, Zo minimise the dis~ption to ad~enisin~ communications. BATCo document for Province of British Columbia 23 April 1999 BATCO 00116074

KEY AREA PAPER CORPORA TE AFFAIRS PRESSURE GROUPS BACKGROUND International issues including tobacco, have become politicised such that pressure groups are sometimes regarded ~ political groupings. Ma~y are well ¢stablithed, employing ~11 time sta~. A bureaucracy has arisen with an international career structure and world wide irfformation networks. It is most important that the professional nature of pressure groups and their motivations be tinily understood. Because of its business, size and international character, BAT is a special target. The key strategy of anti-tobacco pressure groups is to persuade governments to introduce legislation to ban advertising, reduce tar/nicotine levels, increase taxation, to ban smoldng in public and to force crop substitution. By the~e means pressure groups hope to achieve their objective of eliminating tobacco smoking. Most anti-tobacco pressure groups are linked with the WHO and ai~liated agencies. They include :ke Internationai Union Against Cancer (UICC), the International Organisation o~'Consumer Unions (IOCL0, Action on Smoking and Health (ASH) and many others, who are either regional or national. Compames should be aware that pressure group campaigns will often include: public meetings anti-tobacco media activity defacement or- advertisements 'sme~s' against individual tobacco company executives action at company AGMs at:erupts to influence company shareholders lobbying politicians POLICY BATCo policy is to pre-empt the attacks of adversaries through a review of plans and allegations oi pressure groups and ~o engage them when it is in the interests of'the operating company to do so. Where an attack is directed specifically at BATCo, the operating company should co-ordinate and ~ead the defence of the company. Otherwise pressure groups should be dealt with via the national manufacturers' ~sociation, but it" necessa~, the operating company can take a leading role. O BJ'E c-rivE To ~unher business objectives by the continued defence and protection of the company's interests and reputation To ensure balance and fairness to the debate. BATCo document for Province of British Columbia 23 April 1999 BATCO 00116075

KEY AREA PAPER CORPORATE AFFAIRS CO~Ud-UNICATION AND CO-OPERATION BACKGROUND The issues affecting the interaational tobacco business are now gtobalised. The globaJ an~J-tobacco poficies o~d~e WHO and its executive an¢ill~rie~ are hein~ implemented on a regional basis. The WHO activity is administered from regional centres in New Delhi, Ma~ila~ BrazzaviJle, Wasb.ingxon DC, Copenhagen and Alexandria. Over the next t'ew yea~s, the regional stout'mr= of~h¢ ~ust~s opponents ~s expected to be strengthened. RegionaJ trading b[oc~ exist ~ some parts of the world ~nd necessi~te a re~on~ approach to public issues management. In the BATCo grou~ companies have considerable experience in dealing with WHO's smoldng and health strate~es, ~nd aJso with criticism of international businesses. POLICY A regional as well as an international view should be taken of the issues affecting a company's business. The strate~es of WHO and pressure groups should be monitored. Strategies on smoking issues adopted by BATCo companies should be mindful of other re~onal activities. Knowledge and experience should be efficiently communicated among BATCo com~ames witl~in the re_mon and to Millbank so that all can benefit. Regional issues and communications should be managed through the Public Affairs managers tn the Corporate ,4flairs department. ~[illbanlc OBJECTIVE To ma.ximise commurtication and cooperation on public issues amongst companies and business units in re~ons covered by R.BUs. O:'plam~ap,Xapm~m BATCo document for Province of British Columbia 23 April 1999 BATCO 00116076