Corporate Social Responsibility In The Tobacco Industry

Corporate Social Responsibility In The Tobacco Industry




The performance of contemporary corporations is highly reliant on the business activities, and the efforts they make to sustain long term goodwill and reputation, which in other words is referred to as Corporate Social Responsibility (CSR). CSR refers to the subset of the overall corporate governance practices of firms pertaining to ethical and legal practices, as well as business procedures focusing on the protection of the investors’ rights and the firm’s social stakeholders. In the last number of years, there has been growing public awareness on firms’ role as far as corporate social responsibility is concerned. Quite a large number of firms that contribute immensely to economic growth have been accused of creating social problems in the host societies. In most cases, the issues that are brought up include employee safety and health, waste management, environmental proactiveness and resource depletion, as well as product quality. Corporations, therefore, are induced to show accountability to the public and not the shareholders only. As much as the manager has a social responsibility of maximizing the profitability of the company to the shareholders, there is the wider corporate governance role where the maximization of the shareholders’ wealth has to be done alongside sustainable returns for all societal stakeholders. Corporate Social Responsibility came from the realization of the need to be accountable for, as well as redress the adverse impact that transnational corporations have on society. These impacts specifically relate to labor practices, the environment and human rights. As numerous companies take on this trend, tobacco companies have not been left behind. Key tobacco corporations have come up with programs aimed at enhancing small business development, prevent crime, as well as alleviate poverty. In essence, the tobacco industry has used CSR tactics to enhance its corporate image with the press, regulators and the public who have for a long time viewed it as the merchant of death (Dorgan, 1995). However, there exists an obstinate problem that these tactics may cover up but not resolve. It is noteworthy that the products of the tobacco industry are deadly even when the products are utilized in line with the directions. In essence, no amount of effort pertaining to corporate social responsibility would reconcile the fundamental contradiction with the principles of ethical, corporate citizenship. This study aims at gaining an enhanced understanding of the CSR efforts made by the tobacco industry, as well as assess there is any significant modification in the manner in which it conducts business.

Thesis: The tobacco industry has not made any considerable modifications in the way it does business even after adopting CSR tactics. In essence, the CSR practices have only been a public relations exercise.

Youth smoking prevention

One area that quite a large number of the tobacco industry players have invested intensively in an effort to enhance their corporate image is the establishment, as well as the promotion of programs aimed at preventing youths from smoking. These programs have been created established so as to appear as if they are dissuading youths from smoking by incorporating stickers to portray smoking as an activity for adults. In addition, they incorporate stickers saying that cigarette smoking can harm one’s health. However, research shows that these programs, while aligned to the Principle of Protection of Public health and aimed at addressing the concerns of the public, have only produced contrary results (Harned 1994). The programs enhance the appeal that cigarettes have on adolescents once they depict them as a precinct of adults only. These programs have also proposed that young people be required to prove that they are above a certain age in order to purchase tobacco products at the counter (Farell, 2007). Unfortunately, these restrictions are ineffective since young people have their own way of circumventing them. In essence, it appears that these programs only serve the purpose of bringing about the appearance that the tobacco companies are providing solutions for the problems that they have created (Muller 1976). However, it is noteworthy that they, in reality, distract attention from effective and proven solutions that would be more effective than the programs. In addition, it is noteworthy that key transnational tobacco companies, as well as their trade organizations were, in 1999, found guilty of a number of offenses including “intentionally marketing their tobacco products to underage smokers while viewing them as replacement smokers” (Friedman, 2009). This, therefore, puts a question mark on the sincerity of these companies to lower underage smoking. After all, their profits are dependent on the number of people who smoke, in which case they may not have the incentive to discourage young smokers from smoking, (Fredrick, 2006).

In line with the dignity principle which encompasses health and safety, the tobacco industry has seemingly played a key role in enhancing environmental cleanliness. In 2000, BAT Malaysia’s annual report indicated that it would tackle global warming issues in line with the efforts of the government (Barraclough & Morrow, 2008). The company, supposedly, aimed at becoming a carbon-neutral business operation and was involved in negotiation for a collaborative partnership in afforestation. In essence, the company engaged in intensive projects that involved planting trees in Sabah and Pahang. However, as much as the company’s operations were said to have gone beyond carbon neutrality, the company has been skimpy about the issue of discarded packets and cigarette butts citing insufficient data on the impact. In addition, the company has never addressed the issue of passive smoking and environmental tobacco smoke, which pose a higher and more immediate risk on the health of public and the smokers (Plan 2009).

In line with the citizenship principle, the tobacco industry has been playing a key or significant role in development of communities and other philanthropic activities. When PM was changing its name to Altria, its CEO stated that it aimed at focusing its attention away from tobacco to responsibility, compliance, environment and philanthropy, among other things that it wanted the company to be associated with at the time (Hirschhorn, 2004). However, as much as it made statements founded on CSR concepts, the company soon realized that philanthropy and public relation statements were not enough to sway the investigations, and litigations, as well as internal documents that were coming to light about its underhand dealings (Hirschhorn, 2004). It is also noteworthy that while the company seeks to comply with CSR principles, it claims that the adult smoker is one of its principal stakeholders, in which case his right to make an informed choice has to be maintained. However, there is no way that the company can claim to be committed to CSR principles while half of its products’ users die of the effects, not to mention non-users who are exposed to secondhand smoke.

In Kenya, the tobacco industry has taken up community development projects. For example, the Kerio Trade Winds Project is a partnership between the community in Kenya and BAT that has the sole aim of enhancing tobacco growing activities (Harned 1994). These are seen as options of alleviating poverty thereby conforming to the poverty alleviation strategy of the Kenyan government. In addition, the Tobacco Association of Malawi joined in ILO efforts aiming at discouraging and preventing child labor practices that are deemed as abusive in Malawi’s tobacco farms (Plan 2009). However, it is noteworthy that these efforts came at almost the same time when a report by the Christian Aid that had investigated Souza Cruz, a BAT subsidiary, had exposed a wide range of abusive labor practices (Monbiot, 2006). These practices included suspected price control abuses, failure to give their workers protection against hazardous chemicals that they work with, as well as the failure to enhance the conditions where children were forced to work in the tobacco field in an effort to alleviate their family (Fredrick, 2006).

In conclusion, it is evident that the tobacco industry efforts that aim at contributing to the social welfare have not been genuine. It is, obviously, a tall order for tobacco companies to reconcile their key goal, which is to maximize profits through productions and sale of a lethal product, with the CSR goals that are based on respect for employees, communities, and even the environment (Barry, 1991). It would be foolhardy for them to call for open dialogue among the key stakeholders whereas legal testimonies and public enquiries in numerous countries around the globe attest to their strategies and actions to conceal the lethal nature of their products, destroy incriminating evidence and ruin efforts aimed at protecting public health (Hastings & Angus, 2008). As much as tobacco products are perfectly legal, they are also deadly. In essence, this fact in itself renders all efforts that tobacco companies may make at social responsibility useless (Monbiot, 2006).


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