Corporate Social Responsibility

British American Tobacco Cambodia plays a significant role in poverty alleviation through corporate social responsibility

Corporate Social Responsibility (CSR) is defined as operating a business in a manner that, if not exceeds, meets legal and societal expectations, fostering both business benefits and positive development impact. CSR covers a wide range of business activity, but everything centres on business voluntary efforts to improve social and environmental standards.
In the early 1990s, production outsourcing from developed countries increased at the same time that communication technologies were becoming increasingly global. A number of well publicised sweatshop scandals increased concerns about the conditions under which internationally outsourced goods and services were being produced. Many multinational corporations responded by designing voluntary codes of conduct that specified the social and environmental standards they wanted to see applied right through their supply chain, no matter where production was taking place. In almost all cases, the standards within these codes were higher than those that were being enforced at that time in developing country factories.
According to The Kenan Institute Asia, over recent years there has been increasing pressure for corporations to become better corporate citizens: “This pressure has come from customers, buyers, investors, employees, governments, the news media, NGOs, and local communities.
“The corporate scandals of Enron, WorldCom, etc. have drawn attention to corporate failures and led to greater government scrutiny. In response, forward-looking companies are strengthening their corporate governance, improving labour conditions, exceeding environmental standards, and positively engaging their communities in order to build trust with their stakeholders. Many business managers have concluded it is no longer sufficient for companies to have simply philanthropic mechanisms; they must become active partners in helping prevent and solve social problems.”
In Cambodia British American Tobacco Cambodia (BATC) is leading the way in CSR. According to Kun Lim, Head of Corporate and Regulatory Affairs for BATC, British American Tobacco takes CSR very seriously indeed.
“Around the world CSR has increasingly become a core part of the language and strategy of our business. In every country where British American Tobacco operates, it embeds CSR into its day-to-day business activities. This is no exception to Cambodia. Since our inception in 1996 we have actively undertaken and embedded CSR objectives into every stage of our vertically integrated operation from crop to consumer,” he explained.
He says that BATC is proud of what it has accomplished already in this area and that its CSR activities together with their positive outcomes had been appreciated and highly valued by the Royal Government, NGO’s and the community in which it operates.
BATC’s Leaf Extension Programme and its CSR programmes include an introduction to its contracted farmers of agronomic best practices, integrated pest management, irrigation systems; child labour, environmental health and safety policies; and, importantly, its reforestation programme.

Leaf Extension Programme
BATC has contracted around 800 families with 2,250 hectares this year to grow tobacco in Kampong Cham province. It works with the farmers in adopting agronomic best practices and techniques and provides them with new seed varieties, training, quality control and advice on how to improve the quality of production. As a result, their yield has increased to 2 tons per hectare from just 730 kg in 1996 and their income has increased some 550 per cent to 4.4 million Cambodian Riels per hectare. The quality of tobacco produced has also improved significantly. This has enabled BATC not only to increase the use of local tobacco leaf for local brands from 40 per cent in 1997 to 90 per cent over the years but also to help export Cambodian tobacco leaf. By this year 5,500 tons of local leaf will have been exported by BATC. BATC contracted farmers also do not have to worry about fluctuating market prices. No matter what happens BATC purchases the tobacco leaves from the farmers for the pre-agreed price.
Neang Naleak, a BATC contracted farmer says, “I feel very loyal to BATC because they have always been loyal to me. If we have negotiated a price for my tobacco they will pay this price, even if the market price has fallen. It is more than reasonable.”

Partnership for a greener Cambodia
BATC provides as many tree saplings as possible to local communities free of charge in order to address the ecological imbalance caused by deforestation in Cambodia. As a result, hundreds of thousands of trees have been planted in tobacco fields and along lanes in Tbong Khmum, Kroch Chmar and Kos Tasuy. Tree saplings have also been provided to the Tertiary Road Improvement Programme (TRIP) to plant along rural roads in a number of provinces including Kampong Cham, Kratie, Kampong Thom and Preyveng. And more recently trees have been planted along National Road No. 7 (from Thnol Toteung of Tbong Khmum District to Memot District and from Krek District to the Cambodia-Vietnam border) and along National Road No. 2 from Kandal Province all the way through to the Cambodia-Vietnam border.
Dr. Vuthy Chuon, BATC’s Operations Director says, “To date we have planted and distributed over 10 million trees nationwide along some 2,000 kilometres of roadsides. We plan to grow more trees along other National Roads in the coming years in order to play our part in assisting the Royal Government’s Reforestation Programme and to ensure a greener Cambodia.
“Since 1998, we have established 4 large scale tree nurseries to produce trees saplings for distribution free of charge. (Varieties include Eucalyptus, Ipil Ipil, Acacia, Flamboyant and Neem.) They are Hun Neng’s Forestation Nursery at Phnom Pros in Kampong Cham, Srang Thom Tree Nursery Station on National Road No. 5 in Pursat, Samdech Hun Sen’s Forestation Nursery on National Road No.1 in Svay Rieng and Samdech Hun Sen’s Forestation Nursery at Phnom Tamao in Takeo.”
BATC takes pride in the development of the community in which it operates and fully supports the Royal Government’s policy of reforestation.