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December 19th, 2015:

Bullets, prostitutes and ‘mass corruption’: How a tobacco giant’s Mr Fix-It turned whistleblower

Exclusive: Paul Hopkins, the man who used to do British American Tobacco’s dirty work, is now soiling the firm’s reputation

Paul Hopkins working as an Irish Army Ranger in Somalia in 1993 John Daly

Paul Hopkins working as an Irish Army Ranger in Somalia in 1993 John Daly

The British American Tobacco (BAT) email was for internal consumption only and never meant for outside eyes. Paul Hopkins is “not your normal run-of-the-mill employee,” a senior company manager wrote, “but then he doesn’t do run-of-the-mill jobs for BAT.”

Run of the mill for Paul Hopkins during his 13-year tenure at BAT involved being shot at, saving the lives of board directors, providing security to VIPs and evacuating employees from war-torn countries.

It also involved fixing “various delicate issues” related to BAT and the tobacco industry. These ranged from unusual “reputational” issues, including retrieving container-loads of cigarettes sold to Iraq in breach of UN sanctions – and obscuring the fact that a BAT finance director, who died in a Nairobi hotel room, had passed away after a drug-fuelled orgy with two prostitutes.

Hopkins took such things in his stride. As a veteran of the Irish Army, including nine in its special forces unit, the Army Ranger Wing, he saw service with UN peacekeepers in Lebanon and Somalia.

What his military career had not prepared him for was the bribery and corruption in the corporate world. When he questioned BAT’s order to “facilitate” payments to law enforcement agents and government officials, he was told it was the “cost of doing business in Africa”.

Such was BAT’s appetite for the fruits of corruption, he became good at it. Documents seen by The Independent show he facilitated payments on BAT’s account to cripple anti-smoking laws in several East African countries, “incentivised” law enforcement to arrest tobacco smugglers, as well as running a sophisticated corporate spying operation involving “black ops” to put rival cigarette-makers out of business.

At BAT’s behest, he cultivated a network of informants in the police and government throughout East and Central Africa, where he headed the AIT (anti-illicit trade) team. Their job was to take out smugglers who were undercutting BAT brands such as Pall Mall, Dunhill and Lucky Strike and 555. Removing smuggled or counterfeit products from the market meant BAT could sell more of its own brands.

At a time when global cigarette sales are forecast to decline, Africa is seen as a place of expansion which tobacco firms are using controversial tactics such as selling single sticks and targeting young people.

He helped secure the arrest of Rwanda’s richest businessman Tribert Rujugiro Ayabatwa in London. Ayabatwa, who heads the cigarette-maker Mastermind, one of Africa’s biggest manufacturers and a major BAT rival, was wanted by the South African tax authorities as well as Interpol. BAT told its teams to close down his operations.

Through his network Hopkins learnt Ayabatwa, wanted for fraud and tax evasion in South Africa, was about to board a UK-bound flight. After a tip-off to Scotland Yard Ayabatwa was arrested. He was later released after agreeing to pay a $7.1m (£4.6m) fine.

As Hopkins’s skills became more widely appreciated he was asked to do more than just combat smuggling. When a senior British-born BAT finance director was found dead in one of Nairobi’s finest hotels after a company conference, Hopkins was asked to deal with the potential “reputational” problems.

These surrounded the fact the executive who was married with two children, had returned to his hotel with drugs and two prostitutes after an evening of clubbing. He ensured the Kenyan police did not charge the sex workers as well as arranging the autopsy report made no mention of the drugs found in the dead executive’s body.

Payments were made in cash through third parties and invoiced back from BAT via two sets of accounts, one for internal use setting out the real details, while a second, sanitised, set referred to fictitious operational spending.

However, a BAT spokesperson said: “All companies in the BAT group are required to operate in line with the group’s standards of business conduct and are obliged to ensure that all 57,000 employees around the world understand them and abide by them.

“Whenever we learn that there is the possibility there may have been a lapse in these standards, our policy is to take all appropriate action. This includes, where relevant, co-operating fully with the authorities. We do not tolerate corruption in our business anywhere in the world.”

The company’s appetite for such methods did not lessen even after the UK’s Bribery Act came into force in 2011. BAT updated its guidelines of the Act’s tough new provisions and sent a summary to employees to sign and return confirming they were aware of the new standards and legal obligations.

Nevertheless, senior managers continued to order him to facilitate payments to achieve BAT’s ends. In recorded conversations with his director Gary Fagan, Hopkins openly reports back on these payments to senior Kenyan Revenue Authority (KRA) officials in return for confidential tax details belonging to a rival cigarette-making firm.

Hopkins would then send the information to Fagan from a bogus email via Fagan’s wife’s email. Fagan, who was BAT’s East and Central Africa’s area director, continues to work for BAT in Africa.

In telephone conversations and emails, Naushad Ramoly, BAT’s regional legal counsel for the region who authorised the payments, never questions Hopkins when he talks about “paying off” people and even takes an active part in one meeting to discuss obtaining a confidential KRA contract. It was when BAT used Hopkins’s carefully built network to enable another department to make bribes that a row resulted and he left the company.

Hopkins was ordered to let the Corporate and Regulatory Affairs (Cora) department use his covert system to make £30,000 payments to “consultants” in Uganda, Rwanda, Burundi and the Comoros Islands. The payments were made but his contractors were alarmed to discover they were directly paying “sitting government ministers or employees in their respective countries”.

“I feel it is crucial that you are aware of the fact that, contrary to Cora’s stating they are purely consultants, they are not,” one warned Hopkins in writing.

In fact they were illegal payments to two members and one former member of the World Health Organisation’s Framework Convention on Tobacco Control (FCTC), a UN initiative aimed at reducing the toll of tobacco-related deaths. BAT paid the insiders to subvert the FCTC proposals before they became law in those countries.

However, when Hopkins raised his concerns internally BAT’s management became silent. He escalated his concerns to London who sent a “whistleblowing” team down to interview him. Despite promises of confidentiality, news of what he had done quickly spread.

The Cora official, who made the payments authorised by her manager, left the company but shortly afterwards Hopkins, after 13 years of service, found himself the subject of a campaign of “harassment”.

His expenses were slow to be paid, his electricity at home cut off after BAT overlooked paying the bill and crucially his work permit was mysteriously delayed and his immigration file vanished.

Colleagues who supported him also suffered. One discovered a promotion he had previously been congratulated on suddenly evaporated. The colleague was later suddenly let go.

Hopkins himself was told he was also under threat of redundancy despite routinely exceeding all his targets. He was placed on gardening leave as rumours circulated he had been sacked.

When Hopkins tried suing BAT for unfair dismissal a London tribunal ruled his contracts, said to be governed by the laws of England and Wales, did not permit him to sue in the UK.

Details of BAT’s bribery first emerged during those hearings. Now Serious Fraud Office officials are examining the allegations it seems likely the secrecy BAT sought to cloak its African operations in may yet be lifted in court.

Hong Kong Customs detects suspected illicit cigarettes smuggling case in Lok Ma Chau Control Point

Hong Kong (HKSAR) – Hong Kong Customs stepped up enforcement actions against illicit cigarettes before Christmas. A suspected case of using cross-boundary truck to smuggle about 2.7 million sticks of illicit cigarettes was detected today (December 19).

Early this morning, Customs officers intercepted an incoming cross-boundary truck. After X-ray examination and thorough inspection by Customs officers, about 2.7 million sticks of suspected illicit cigarettes were found in 212 carton boxes mix-loaded with other goods.

The total market value of the cigarettes was about $7.6 million with a duty potential of about $5.3 million. A 42-year-old male driver was arrested and the truck involved was detained. Investigation is ongoing.

Customs will continue to undertake stringent enforcement against illicit cigarette activities to protect government revenue.

Under the Import and Export Ordinance, smuggling is a serious offence.

The maximum penalty is a fine of $2 million and imprisonment for seven years.

Members of the public are urged to report any suspected illicit cigarette activities by calling the Customs’ 24-hour hotline 2545 6182.

Govt urged to act on plain packaging

The government is being urged to speed up plain packaging laws for cigarettes following the Australian government’s win against one of the world’s biggest tobacco companies.

Australia introduced plain packaging for all tobacco products in 2012, which resulted in a four-year legal challenge by Philip Morris.

The company tried to challenge the laws at a tribunal in Singapore, using an investment agreement that Australia signed with Hong Kong in 1993.

But the Arbitration Tribunal ruled that it had no jurisdiction to decide whether plain packaging is legal in Australia.

Nurses Organisation spokesperson Kerri Nuku said New Zealand’s government has been very clear about wanting to wait to see what would happen in Australia.

Now that it’s happened, plain packaging should be introduced immediately, she said.

The organisation planned to put more pressure on the government to act as part of its goal for a smokefree country by 2025.

Action on Smoking and Health NZ (ASH) director Stephanie Erick said the legislation urgently needed to be finalised in order for the country to be smokefree by 2025.

“This decision can give New Zealand greater confidence to pass Standardised (Plain) Packaging for immediate implementation.”

Research showed large graphic health warnings helped people who wanted to stop smoking, but standardised packaging and dissuasive cigarette sticks can also deter people from ever starting or relapsing, ASH said.

Australia has been monitoring its implementation of plain packaging and research was showing it works, Australia’s Public Health Association chief executive Michael Moore said.

“Smoking in Australia is falling in adults, in children and by tobacco volume sales.”

Australia’s law is still facing challenges in other forums, such as the World Trade Organisation.

But Maori Party co-leader Marama Fox said yesterday’s court decision was still a victory.

“This is a strong signal to the government that we should be expecting a favourable outcome from WTO, but despite that the government should be making stronger moves to advance the tobacco control legislation.”

The Public Health Association of Australia (PHAA) has described the decision as a massive win.

“The tobacco industry’s desperate legal efforts have failed yet again,” said PHAA tobacco spokesperson Professor Mike Daube.

“They are the big losers, but the thousands who will not die from smoking are the winners.”

Tobacco companies were “desperate to prevent plain packaging here and internationally because they know it works”.

Philip Morris said it was reviewing the tribunal’s decision in detail.

Plain cigarette packaging likely to snowball globally

One of Australia’s leading anti-smoking campaigners says a “snowball” effect is likely to result in plain packaging for cigarettes being introduced in a number of new countries over the next decade, after tobacco company Philip Morris lost a court case challenging Australia’s strict packaging laws.

The Singapore-based Permanent Court of Arbitration declined on jurisdictional grounds to allow the company’s case to proceed against the Australian government’s plain packaging laws, which were passed in 2011 to curb smoking rates.

Under the Australian laws, the first of their kind, no branding is allowed on cigarette packages and retailers must store tobacco products behind blank screens or cabinets. In addition, cigarette packages in Australia also show large graphic warnings of the possible health effects of smoking.

Public Health Association of Australia spokesman Mike Daube, who chaired the government committee which recommended plain packaging, said the Singapore court’s decision was a major blow to “Big Tobacco”.

“People who work in tobacco talk about the scream test – the louder the tobacco industry screams the more you know you are on the right track,” he said.

“The tobacco industry’s campaign against plain packaging in Australia is more ferocious than anything I’ve seen in the 40 years I’ve been working in this area.

“They have fought it in the media, they have fought it in parliament, they have fought it in the courts – and they have lost all of the way through.”

Daube said that he expected to see the success of Australia’s policy – which researchers say has led to a reduction in smoking rates and the volume of tobacco sold – cause a “snowball effect”, encouraging other nations to implement similar laws.

Plain tobacco packaging is currently being introduced in the UK and Ireland, while a number of other countries are also considering legislative changes.

“Australia is showing that you can beat Big Tobacco,” Daube said.

“What we’re now seeing, and this often happens in public health, is that once one country successfully implements change, other countries follow. There is a leapfrog effect. “It’s going to be tough, because the industry is desperate for new markets, but I think we will see plain packaging in many more countries over the next decade.”

Tobacco companies say plain packaging laws breach international regulations for trademarks and, along with the case in Singapore, the Australian government is also still facing challenges within the World Trade Organisation.

Philip Morris’ International senior vice president and general counsel Marc Firestone said in a statement on Friday that it was “regrettable that the [Singapore court] outcome hinged entirely on a procedural issue”.

“There’s nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else,” he said, adding that the company was considering further legal options.

But Australia’s Rural Health Minister Fiona Nash, who is in charge of the government’s smoking policies, said in a statement on Friday that “plain packaging…is consistent with Australia’s international legal obligations”.

“We welcome the unanimous decision by the tribunal agreeing with Australia’s position that it has no jurisdiction to hear Philip Morris’ claim,” she said.

“Smoking does untold harm to Australians, causing deaths from cancer, lung and heart disease, and hurting families.” – Al Jazeera

Push for plain-pack tobacco in NZ grows

ASH and the New Zealand Nurses Organisation are urging the government to push ahead with its proposed plain-packaging tobacco laws.

The NZ government is being urged to get on with introducing plain-packaging laws for tobacco products after tobacco company Philip Morris failed in its bid to challenge such laws across the Tasman.

The Permanent Court of Arbitration, based in The Hague, on Friday rejected a case brought by the global tobacco giant, unanimously agreeing with Australia’s argument it had no jurisdiction to hear the claim.

Philip Morris believes plain-packaging laws breach foreign investment protections the Australian government guaranteed in its trade agreement with Hong Kong, which contains an investor state dispute settlement mechanism.

The New Zealand government has been waiting for the outcome of the Australian case before pushing forward with plans to introduce plain packaging.

Action on Smoking and Health NZ (ASH) director Stephanie Erick says the outcome of the protracted legal battle in Australia should give New Zealand greater confidence to introduce plain-packaging laws.

Meanwhile, the New Zealand Nurses Organisation says there’s no further reason to delay introducing such laws.

“I’m calling on the government to announce plain-packaging laws here immediately. Those lured to smoke by tobacco companies marketing are predominantly young, Maori and female,” NZNO spokeswoman Kerri Nuku said.

“Any further delays will be responsible for more grieving whanau missing out on years with their daughters, sisters and mums. The best Christmas present the government could give whanau is announcing plain packaging today.”

Plain-packaging laws require all branding to be removed from packaging, which reduces promotion of the product.

The government brought a plain-packaging bill to parliament in February last year, and it passed its first reading. The health select committee backed adopting the bill with just a couple of minor amendments, but it hasn’t proceeded any further.

Australia was the first country in the world to introduce plain packaging.

Reilly welcomes ruling on Australian tobacco packaging

Minister says Ireland just as committed to standing up to big tobacco as Australia

Minister for Children James Reilly: “I admire Australia’s courage in standing up to the tobacco industry again and again in legal challenges. Today is a great day for the future health of Australian children.” Photograph: Gareth Chaney/Collins

Minister for Children James Reilly: “I admire Australia’s courage in standing up to the tobacco industry again and again in legal challenges. Today is a great day for the future health of Australian children.” Photograph: Gareth Chaney/Collins

Minister for Children James Reilly has welcomed the decision of an international court to throw out a challenge by the tobacco industry to Australia’s plain-packaging legislation for tobacco products. Dr Reilly said the Government, which plans to introduce plain packaging next May but is facing a similar legal challenge, was equally committed to standing up to the tobacco industry.

“I applaud the leadership shown by the Australian government in being the first country in the world to introduce plain packaging,” he said. “I admire their courage in standing up to the tobacco industry again and again in legal challenges. Today is a great day for the future health of Australian children.”

Dr Reilly’s officials are awaiting a key opinion from the advocate general of the European Court of Justice, due next Wednesday, on the competence of European Union member states to introduce plain packaging.

In the latest round of the international legal battle on the issue, a Singapore-based court refused a challenge by Philip Morris to Australia’s landmark 2011 plain-packaging law. The tobacco giant brought the case under a bilateral trade treaty with Hong Kong.

The permanent court of arbitration declined on jurisdictional grounds to allow the case to proceed, ending the challenge through this venue, which was based on claims that Australia was violating intellectual property laws.

The decision by the court not to hear the case is likely to be seen as a major victory for Australia, which is facing challenges in other forums such as the World Trade Organisation, and for other countries considering similar laws, including Ireland and Britain.

Australia was the first country to force manufacturers to strip all branding from cigarette packets, most of which are now sold over the counter from blank-fronted cabinets.

A boost to global drive for stricter anti-tobacco laws

In a significant boost to stricter tobacco control laws, the Australian government on Friday won an international legal battle against tobacco giant Phillip Morris, which had challenged “plain packaging” laws.

Globally, the public health community has been demanding implementation of “plain tobacco packaging” — which means standardised packaging of tobacco products without any exclusive branding (colours, imagery, corporate logos and trademarks). The laws will only allow the manufacturers to print the brand name in a mandated size and font. Australia, the first country to implement these laws, had passed the plain packaging legislation in November 2011.

The Australian tribunal in the arbitration, based in Singapore, unanimously agreed with Australia’s position and gave a verdict against Phillip Morris. The verdict was awaited by many countries wanting to implement stricter tobacco control legislation. “The judgment in favour of Australia is a vindication of policy taken in public interest. It is important that judiciary everywhere in the world recognises the irrefutable evidence on the incalculable harm done by tobacco to the health of millions across the world. Law must prioritise societal interest over narrow corporate interests, while adjudicating on matters of public policy,” said K. Srinath Reddy, the president of the Public Health Foundation of India (PHFI) and one of the leading voices of India’s anti-tobacco campaign.

According to the Global Adult Tobacco Survey (GATS) India report, smoking kills over one million people in India annually and is the fourth leading cause of non-communicable diseases (NCD) such as cancer and heart diseases, which account for 53 per cent of all deaths in India. According to the Health Ministry, economic burden of tobacco consumption is around Rs.1,04,500 crore per annum.

Biju Janata Dal MP Jay Panda had introduced a private member’s Bill on plain packaging, demanding that pictorial warnings occupy at least 60 per cent of the front panel of the pack. He welcomed the verdict given by the Australian tribunal.

“This is an issue that is close to my heart. I have been fervently advocating this reform as a measure to control tobacco consumption in our country; especially since India is the second largest consumer of tobacco. Given the scale of the issue facing us, today’s verdict would offer us greater confidence to follow Australia’s lead towards a stronger public health policy. In this light, I urge all stakeholders to stick to the important April 1, 2016 notification for increased pictorial health warnings.”

In July 2014, the Allahabad High Court allowed a writ petition asking for implementation of plain packaging and directed the government to implement the scheme at the earliest.

The laws are to be implemented in India by April 2016.

Nurses call for urgent tobacco plain packaging laws in NZ after Australia wins legal battle

Nurses are calling on the Government to immediately introduce plain packaging for tobacco, following a landmark court decision in Australia.

Tobacco giant Philip Morris Asia had attempted to challenge the packaging laws introduced in 2011, saying they breached a trade agreement.

On Friday the tribunal in the arbitration agreed unanimously with Australia’s position that it had no jurisdiction to hear the company’s claim.

New Zealand Nurses Organisation spokeswoman Kerri Nuku said the New Zealand Government had been taking a “wait and see” approach, depending on the outcome.

“Today the court proved the tobacco giant had no leg to stand on, and there is no further reason to delay introducing plain packaging in New Zealand,” she said.

Nuku called on the Government to announce plain packaging laws immediately.

“Time lost is lives lost.”

Smokers hooked in by tobacco marketing were predominantly young, Maori and female, she said.

“Any further delays will be responsible for more grieving whanau missing out on years with their daughters, sisters and mums.”

Australia was the first country in the world to mandate plain cigarette packs with no brand logo or colours permitted.

Philip Morris has slammed the decision, saying it does not validate plain packaging in Australia or anywhere else.

It also said it would review the court’s decision, suggesting the battle may not be over yet.

The company brought the case against Australia using a legal mechanism called Investor-State Dispute Settlement (ISDS).

ISDS clauses are included in many trade agreements, including the one signed between Australia and Hong Kong, where Philip Morris Asia is based.

The tobacco giant’s case is the first investor-state dispute to be brought against Australia.

New Zealand was the first foreign country to secure a free trade agreement with Hong Kong, through the Closer Economic Partnership (CEP).

Trade Minister Todd McClay, who is currently overseas, has been approached for comment.