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ASH Daily News

4 November 2002

HEADLINES

>From fags to oil: can you trust the companies?
A growing fire around Big Tobacco

FULL TEXT

Heather Tomlinson writes on the new trend for companies with serious image
problems to produce and promote some sort of Social Corporate
Responsibilities (CSR) report. Journalists'desks, she says, are piling up
with glossy brochures filled with smiling African children in schools or
endangered elephant species - all helped by the generosity of the company.

But some pressure groups question whether CSR reports are more talk and not
enough action.

For example BP and Shell, the two UK oil and gas giants have taken great
efforts to improve their ethical image. Both produce CSR reports and shout
loudly about their environmental credentials. But environmental charities
are incensed by BP's proposed project to build a pipeline through
Azerbaijan, Georgia and Turkey to pump oil from sites in the Caspian Sea to
the Mediterranean.

Campaigners also dispute the information provided by some companies. Take
BAT, maker of the Benson & Hedges and Lucky Strike cigarette brands, which
is vilified by anti-smoking groups and shunned by many ethical investors. So
it produced a hefty report detailing its views on controversial topics, such
as its opposition to under-age smoking and its reassurance that tobacco
advertising is only about the promotion of brands.

That didn't wash with its arch-enemy, Action on Smoking and Health (ASH).
"On all the issues that really matter, the social report is either cosmetic,
evasive or deceitful," says ASH director Clive Bates. "What is shocking is
the gullibility of some parts of the ethical investment and corporate social
responsibility community. They have blindly lapped up the glossy report and
soothing PR without bothering to test if they are in any way related to
BAT's real-world operations."

BAT responds by pointing out that this was its first report, and intended to
show its serious commitment to CSR.

But hard facts are hard to find on the social and environmental impact of
any company's operations. Some blame this on the lack of standardisation of
CSR reporting. There is no requirement for what the company has to reveal
and how it should do it.


Full article: http://www.independent.co.uk/story.jsp?story=348260
ASH critique of BAT CSR report:
http://www.ash.org.uk/html/conduct/html/socialreport.html

Source: The Independent on Sunday, 3 November 2002



A growing fire around Big Tobacco


When Michael Piuze suggested to a Los Angeles jury last monththat it should
order Philip Morris, the world's biggest tobacco company, to pay $20bn
(£13bn) damages - or at leasta symbolic $6.66bn - to his client, a woman
with lung cancer, even he could not have predicted the amount it would come
back with: $28bn.

The figure stunned the courtroom. It was nine times the previous record
punitive damages in a case brought by an individual smoker - $3bn in the
so-called Boeken case, where Mr Piuze was also the plaintiff's lawyer.
Philip Morris shares sagged.

The chances of Philip Morris ever having to pay this sum are, of course,
tiny. California law says punitive damages - meant to punish companies for
wrongdoing - must bear a "reasonable" relationship to the compensatory
damages, which compensate for the injury caused. In this case, the punitive
damages were a mammoth 33,000 times the $850,000 compensation the jury
awarded to the plaintiff, Betty Bullock, aged 64.

Yet the Bullock case, the latest in a string of initial trial losses, mostly
on the US west coast, still indicates a renewed - and somewhat unexpected -
litigation threat to Big Tobacco.

The industry had started to believe the worst of the litigation threat was
behind it. The so-called Master Settlement Agreement of November 1998 dealt
with one of the biggest challenges - from US states claiming reimbursement
of billions of dollars spent treating sick smokers.

The recent losses have shattered that illusion. Juries, particularly in
politically aware and fiercely anti-tobacco California, have been
increasingly ready to award huge punitive damages. Jurors' anger has been
fuelled by damning internal documents showing the lengths to which tobacco
companies went to conceal the dangers of smoking. Many of these, ironically,
were made public as part of the 1998 settlement between the industry and US
states.

Full article: http://search.ft.com/search/article.html?id=021104000971
Source: Financial Times, 4 November 2002


Cigarette manufacturers are facing a flood of litigation claims which could
result in a multimillion pound legal bill.

Leading companies including BAT have been hit with a string of individual
and group lawsuits. Tobacco analyst for JP Morgan, Michael Smith, said: "The
legal caseload outside the US against the tobacco industry is increasing."

Among the cases are 204 claimants involved in class action litigation in
Ireland against BAT, Imperial and Gallaher. Imperial, which boasts a
flawless litigation track record, is also facing a £500,000 individual claim
in Scotland where Mrs. McTear has launched an action on behalf of her late
husband Alf.

Source: The Express on Sunday, 3 November 2002



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Naj Dehlavi
Action on Smoking and Health
102 Clifton Street
London EC2A 4HW
http://www.ash.org.uk