An exception in the ban on CSR activities allows tobacco companies in Vietnam to engage in poverty projects and disaster relief. This has enabled the industry to exaggerate and overstate its small handouts to poor people. Imperial boasts it built 10 new houses and have helped fund the opening of a new road in rural Vietnam.
Why do tobacco companies conduct CSR among the poor and the most vulnerable of society? How much does it cost to build 10 small houses in Dong Nai Province? This is chicken feed when compared with Imperial tobacco’s net profit which rose to $1.30 billion in the six months to March 31, 2015. Its full year pre-tax profits is expected to be $2.4 billion? In fact Imperial is so sure of its profits that its boss described it as, “boringly consistent”.
Imperial Tobacco got what they wanted for these miserly handouts in these fake CSR activities – a photograph of local authority representative shaking hands (endorsement!) with Imperial’s local General Manager. Now that photo appears as an advertisement on Imperial Tobacco’s website. It is to avoid such exploitation that the FCTC Articles 5.3 and 13 Guidelines recommend a ban on CSR activities by the tobacco industry.
How much money does the tobacco industry make?
The value of the global tobacco market (excluding China) was about $800 billion in 2014, up from $780 billion in 2013. The operating profit of the industry is about $50 billion. Industry commentators refer to tobacco as a “remarkably lucrative business”. No wonder the industry fights so aggressively to protect its profits despite the overwhelming evidence on disease and deaths.