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British diplomat lobbied on behalf of big tobacco

High commissioner helped British American Tobacco to fight Bangladesh’s demand for £170m unpaid VAT



Big tobacco is seeking to expand in countries such as Bangladesh, where control measures have not been introduced. Photograph: Belal Hossain

The Foreign Office is immersed in a major lobbying row after it emerged that a senior official sought to help a British tobacco company to avoid paying tax owed to one of the world’s poorest countries.

Alison Blake, the British high commissioner to Bangladesh, has been accused of lobbying on behalf of British American Tobacco (BAT) after it sought her help in a long-running battle with the country’s revenue authorities.

The extraordinary intervention has provoked anger among health organisations and transparency campaigners, both in the UK and in Bangladesh, who say that it breaches strict World Health Organisation rules on lobbying.


AT is disputing a £170m claim for unpaid VAT brought by the government of Bangladesh against its subsidiary BATB. The claim has been recognised in the country’s courts but BAT, in a letter to Blake seeking her support, boasted of its “proud history of more than 105 years of investment and revenue contribution in Bangladesh”.

The company described the demand as “baseless” and signalled that it may take the matter to the international court of arbitration.

Shortly after she received the letter, Blake wrote on 6 August to the Bangladeshi government repeating the arguments made by BAT. She said: “I am writing regarding the long pending VAT case of British American Tobacco Bangladesh which we have discussed a number of times before and on those occasions I felt assured that your honourable office was determined to resolve the matter.”

Blake highlighted the fact that BAT paid more to the exchequer than any other company last year. She also noted that the high commission was aware of government legal opinions stating that there was “no scope to hold the manufacturer liable to pay VAT on a retrospective basis”.

She noted that the Bangladeshi finance minister had in the past discussed meeting the law minister and attorney general to consider an out-of-court settlement “but somehow these meetings have not been held”.
This is not the first time the Foreign Office has found its relationship with BAT under scrutiny.

In 2015 the British high commissioner in Pakistan attended a lobbying meeting between BAT and the country’s finance ministry at which the company protested about proposed tobacco control measures.

The Bangladeshi organisation Progga says that tobacco kills around 100,000 people a year Photograph: MUNIR UZ ZAMAN/AFP/Getty Images

In 2013 the Foreign Office was forced to issue new guidelines to its staff about its relationship with the tobacco industry following a previous scandal when the British ambassador to Panama intervened on BAT’s behalf in 2012.
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The guidelines stated that officials must not “engage with foreign governments on behalf of the tobacco industry, except in cases where local policies could be considered protectionist or discriminatory”.

The guidelines also forbade officials from seeking to “encourage investment in the tobacco industry, or provide any assistance in helping tobacco companies influence non-discriminatory local business policies to their advantage”.
The UK is also a signatory to WHO guidelines prohibiting officials from acting in the interests of big tobacco.

Progga, a Bangladeshi nonprofit organisation that promotes transparency, said it was dismayed by the Foreign Office’s intervention. A spokesman said: “We appreciate the development initiatives of British government in Bangladesh but the attempts to settle the BATB tax issue out of court by the British high commissioner, Ms Alison Blake, is entirely undesirable. Tobacco kills around 100,000 people annually and cripples around 382,000 in Bangladesh, and BATB owns the largest share [of the market] here.”

As smoking declines in the west, big tobacco is seeking to expand into countries such as Bangladesh that have not implemented tobacco control measures. But BAT’s actions have provoked controversy.

Allegations that it was involved in bribery and corruption in Africa are being investigated by the Serious Fraud Office. However, a spokeswoman for BAT defended its relationship with the high commissioner.

“We have done nothing wrong here,” she said. “It’s incorrect to say that WHO guidelines prohibit all engagement between governments and the tobacco industry; in fact, they caution governments to ensure that all operations and activities of the tobacco industry are transparent.”

Deborah Arnott, chief executive of the health charity Ash, said: “The Foreign Office has instructed all its diplomats not to act as tobacco company lobbyists. Indeed they are supposed to assist tobacco companies in complying with foreign government laws or regulations, not try and overturn them. This case is particularly egregious as BAT has enlisted the British high commissioner to pressurise the Bangladesh government to overturn a legal decision handed down by the courts.

“This is a company currently under investigation by the UK’s Serious Fraud Office over allegations of bribery in east Africa, so what on earth is a senior diplomat doing acting as its lobbyist?”

A Foreign Office spokesman defended the commissioner. “It is entirely appropriate that the UK government supports British businesses overseas. Our actions were in line with guidelines and the letter in question highlighted the original legal opinion that there was no legal basis for retrospective VAT.”


Source: UK news-The Observer

Link: https://www.theguardian.com/uk-news/2017/sep/09/british-diplomat-lobbied-big-tobacco-bat-bangladesh-unpaid-vat

 




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