Why do we allow multinationals to treat us with disdain and trample over us with impunity?
This week two reports were released that make gigantic claims about the behaviour of Big Tobacco. In this case British American Tobacco (BAT). The reports are based on analyses of whistle-blower documents and court records by the Tobacco Control Research Group at the University of Bath and published by STOP, a global tobacco industry watchdog, and allege that BAT, a Fortune 500 company, ran a mass surveillance operation and informant network in South Africa and made questionable payments to the tune of $600,000 to dozens of indi- viduals in 10 African countries.
This seems explosive to me. But there has not been much reaction from BAT’s head office – Globe House in London – beyond a generic statement saying that the company “emphatically rejects the mischaracterisation of its anti-illicit trade activities”. In other words, just another day, just another annoying report. Perhaps BAT assumes that if it just waits long enough it will all go away. After all, that is what has happened in the past. In January, the UK’s Serious Fraud Office announced that after an extensive investigation and comprehensive review of the available evidence, it did not have a case worthy of prosecution. It launched a probe into BAT’s activities in August 2017, after a 2015 BBC programme described cases of its employees bribing officials in East African countries, including Rwanda and Burundi, in an effort to undermine anti-smoking laws.
BAT cooperated with the Office during its investigation and ultimately the investigation ran out of steam. The problem is that new claims keep surfacing. These are no ordinary claims. They relate to the systematic corruption of African governments via clandestine operations with militaristic names like “Deep Jungle”. In South Africa the reports talk about the penetration of our intelligence and law enforcement environments.
You would imagine that with our history, law enforcement, investors, and society in general would be screaming for answers. Yet it seems we have all become too jaded to care. How is it possible that the evidence of whistle-blowers is never enough? The fact is that two of the 200-odd BAT secret agents are pretty well known in SA. And their actions have had significant consequences on our society. The one is, of course, Belinda Walter, who was handled and paid straight out of Globe House, London. The other was Mike Peega. What these two also had in common, other than being paid BAT secret agents, is the fact that they were the primary protagonists that started the whole “SARS Rogue Unit” propaganda. They started it in early 2014, they were key to the sham Inspector-General of Intelligence report of 2014, and they were also both handled by rogue agents in the State Security Agency. What they also have in common is their relations with the now defunct Multi-agency Tobacco Task Team, which was littered with rogue intelligence agents.
This week’s report, titled British American Tobacco in South Africa: Any Means Necessary, cited two whistle-blowers who worked for FFS, the security company that was retained by BAT until 2015. They spoke of activities that were “outside the law” and included sophisticated surveillance, breaking into premises, stealing mail, tapping of phones. Does this ring a bell? This is exactly what the six individuals within the so-called
SARS Rogue Unit were falsely accused of. And they were persecuted by the likes of the EFF, Public Protector Advocate Busisiwe Mkhwebane, former SARS commissioner Tom Moyane and the Radical Economic Transformation faction within the ANC – all of whose interests collided to form one unholy union. The lives of those in the socalled Rogue Unit, like too many other whistle-blowers in this country, were ruined. In the meantime, the real culprits escape unscathed. In its drive to sell more and more cigarettes, BAT is treating Africa and her people with disdain and disregard – buying them off when they get in the way.
What we should remember is that when law enforcement and tax agencies are compromised it affects development; it restricts the ability of the country to react, whether to a public health challenge or any other challenge. We allow companies like these to pursue their own agendas with impunity, and the cost is our own democracy. Our regulators show no inclination to act, and SARS is apparently still refining its strategy to deal with illicit cigarettes (and in this regard the evidence suggests that BAT is no angel, regardless of what it says). At the same time portfolio managers, for all their talk about investing according to environmental, social and governance principles, hold BAT in more than 300 actively managed unit trusts.
I realise this is one of the most attractive investment opportunities for funds that are forced to invest in SA-listed stocks, but investing in an unethical company that views Africa as the Last Outpost must ultimately come at a price. Investors need to ask themselves whether the dividends are worth it.