While RAI's operating subsidiaries do not employ farm workers or grow tobacco, we engage with growers, leaf suppliers and other stakeholders to address social and environmental sustainability risks and opportunities in the tobacco supply chain. We put significant effort into ensuring that our contracted growers have the training and resources they need to do the right thing for the people who play an important role in our operating companies’ supply chain.
Through contracts with growers, we require compliance with laws protecting workers and the environment; and compliance with Good Agricultural Practices (GAP) standards for environmental, agronomical and labor practices and standards. R.J. Reynolds purchases tobacco leaf and provides services relating to tobacco leaf procurement through services agreements for American Snuff Company (ASC) and Santa Fe Natural Tobacco Company (SFNTC).
Imported tobacco is sourced through a network of leaf suppliers who participate in the AB Sustain Sustainable Tobacco Production (STP) program. AB Sustain, an international auditing organization, conducts third-party audits of all tobacco leaf suppliers that sell tobacco to R.J. Reynolds, ASC and SFNTC. This program provides a platform for periodic review of our international leaf supply chain and covers key sustainability areas, such as:
Through the STP program, we monitor leaf suppliers’ performance against criteria pertaining to sustainability, and create an environment of knowledge transfer, capacity building and continuous improvement within our leaf supplier base.
Risks inherent in agricultural work, together with the special issues that arise when a significant number of farm workers are migrant workers, make compliance with the laws that protect farm workers on contracted farms a priority for R.J. Reynolds and its affiliates that purchase tobacco, and for many of our stakeholders. The GAP standards, against which we also review contract growers, address the following social issues:
In 2015, we completed a third-party environmental materiality assessment to determine where our largest environmental impacts occur. Not surprisingly, we found that the significant majority of our environmental impacts occur in our supply chain and in particular, the farming of tobacco leaf. The GAP standards against which we review contract growers address the following environmental management issues:
Multi-party engagement is critical to driving improved sustainability in the supply chain. Many growers sell to multiple purchasers, creating the need and the opportunity for the industry, growers’ associations, government, labor unions, and other stakeholders to work together in appropriate ways to address general issues in the supply chain. The two most significant multi-lateral stakeholder groups in the United States are the Farm Labor Practices Group and GAP Connections.
The Farm Labor Practices Group, a multilateral dialogue group that includes manufacturers, growers’ associations, a labor union, and the U.S. Department of Labor, works to address the complex issues associated with migrant and seasonal farm labor. The FLPG has made significant progress. Most recently, it has authorized and issued a Request for Proposals for the design and administration of a pilot voluntary grievance mechanism.
GAP Connections is a non-profit agricultural organization founded to simplify and streamline the processes that connect growers to purchasers and to assist each in meeting regulatory requirements and ensuring sustainable and socially responsible production. GAP Connections provides training and education programs and resources to growers, and has, since 2014, contracted with independent supply chain assessment firms to conduct environmental, agronomic, and labor rights due diligence on behalf of many of its member companies, including R.J. Reynolds.
Goals & Leadership
R.J. Reynolds’ 2017 goal was to audit or assess 33% of its contracted grower base. 340 contracts were audited by independent assessors at 293 sites (two growers may be associated with a single site) and 377 assessments were conducted by R.J. Reynolds personnel, accounting for 36% of growers contracted to sell to R.J. Reynolds or its affiliates.
The executive vice president of operations for R.J. Reynolds Tobacco Company is ultimately responsible for RAI’s operating companies’ tobacco supply chain management and goals. Through services agreements, R.J. Reynolds provides services relating to tobacco leaf procurement to other RAI tobacco operating companies that purchase tobacco leaf, enabling an integrated, comprehensive approach to managing the leaf supply chain. Executives from the leaf department and corporate sustainability and commercial equity collaborate to develop, coordinate and execute programs to achieve company-wide goals and targets.
Programs & Priorities
R.J. Reynolds adopts a three-part, STP-based approach to management of leaf supply chain social and environmental issues.