British American Tobacco has defended its decision not to disclose in
its annual accounts that it has operated a factory in Pyongyang, the
North Korean capital, for four years. Only ‘principal subsidiaries’ are
listed, it said, and it was not obliged to inform investors of an
investment of that size – it produces about two billion cigarettes a
year.
BAT’s spokeswoman denied the factory was ‘secret’ and said: ‘If we are
asked about our investment there, we respond appropriately. The
investor community knows of it.’ The UK newspaper The Guardian had
reported that many shareholders were unaware of BAT’s links with North
Korea.
When asked about North Korea’s human rights record, she said: ‘It is
not for us to interfere with the way governments run countries.’ She
said, however, that BAT could lead by example and help the country’s
development by meeting internationally accepted CSR and business
practice standards. BAT, she claimed, had worked to improve its
employees’ working conditions, paid its workers well and gave them free
meals.
BAT is said to have started the business in September 2001 after
forming a joint venture company with a state-owned enterprise, the
Korea Sogyong Trading Corporation. It made an initial $7.1million (£4m)
investment, taking a 60 per cent stake in the new company, Taesong-BAT,
but it has since increased its share.
