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UK: Former Tobacco Executive Faces Embarrassment over Burma Link

by Alison Maitland and Jean EagleshamFinancial Times
November 12th, 2002

Kenneth Clarke, former chancellor and deputy chairman of British American Tobacco, faces severe embarrassment today over revelations that he criticised companies investing in Burma -- where BAT has a joint venture with the military junta.

Mr Clarke, who chairs the BAT board's corporate social responsibility committee, said in a letter to a constituent: "I must admit that I do sometimes feel uncomfortable about investment in that country . . . Theproblem in Burma arises when companies start collaborating with an extremely unpleasant regime which is totally contrary to our notions of civil liberties and democracy."

Last night, however, Mr Clarke issued a statement rejecting calls for BAT to withdraw from the venture.

The letter was obtained by the Burma Campaign UK, a leading human rights pressure group, which today launches a worldwide campaign to force BAT to withdraw. John Jackson, director of the pressure group, said: "Ken Clarke is absolutely right. He should get them to pull out immediately."

Mr Clarke's letter appears to be in contradiction with BAT's policy, made clear in its first "social report" in July, to press on with the 60-40 per cent joint venture between its Rothmans subsidiary and Union of Myanmar Economic Holdings, an organisation owned by the Burmese military regime.

BAT said Mr Clarke had not forgotten about the Burma investment when writing the letter. It issued a statement from Mr Clarke recalling that the Burma business was inherited in the merger with Rothmans International in 1999.

Mr Clarke said: "An international company cannot reform the politics of the government of any country in which it does business. We employ more than 400 people in Burma and I see no benefit to them in us simply pulling out."

The Burma Campaign, supported by the Federation of Trade Unions of Burma, Unison, Glenys Kinnock and Lord (formerly Sir David) Steel, said it would take just six minutes' worth of BAT's annual profits to give its workers in Burma a year's salary as severance pay.

It points out the opposition of Aung San Suu Kyi, Burma's democracy leader, to any investment until there is political change. It says the industrial zone where the cigarette factory is located was upgraded by the military authorities in 1996 using child labour.

The campaign will ask leading investment funds, including Hermes, Insight Investment, Morley and Jupiter, to use their influence to persuade BAT to pull out.

Vincent Cable, Liberal Democrat trade and industry spokesman, claimed Mr Clarke was "risking his reputation for being forthright and honest" by advocating withdrawal of investment from Burma while representing a company doing the opposite.

However, Mr Clarke said on BBC's Newsnight last night : "I don't think companies can have a rule about not doing business with dictatorships." He added that "probably about a third of the world" was governed by dictatorships.





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