Unfair Supply Chains: Focus on the Tobacco Industry

Since 2024, the German Act on Corporate Due Diligence in Supply Chains also applies to three cigarette companies with more than 1,000 employees. We have taken a closer look at the raw materials and supply chains that are important for these cigarette companies. We also offer an insight into the fight of tobacco farmers for their rights, in Malawi and in Brazil.

Read the executive summary here.

The German Supply Chain Act and the tobacco industry

The German Act on Corporate Due Diligence in Supply Chains legally obliges companies in Germany to respect human rights and comply with environmental standards in their supply chains. Concerning tobacco and nicotine products, the law applies to (at least) three companies with more than 1,000 employees: Philip Morris GmbH (Philip Morris International), Reemtsma Cigarettenfabriken GmbH (Imperial Brands) and JT International Germany GmbH (Japan Tobacco Inc.).

While the companies covered must take preventive measures to avoid damage, those affected can take action if violations occur and claim their rights. The companies must subsequently ensure that violations are remedied, but the law does not stipulate any compensation. The European Sustainability Due Diligence Directive (EU CSDDD), adopted in 2024, sets higher standards for the compensation of rights violations. By July 2026, the German Act must be harmonzied with this EU directive.

In our German brochure, we show the raw materials needed for cigarettes and their origin as well as the stakeholders of the cigarette business in Germany. We explore human rights risks at the beginning of the tobacco supply chain and discuss challenges and initial successes of the due diligence legislation. We also feature two legal battles of tobacco farmers in Malawi and Brazil.

Malawi: A Case against the exploitation of farmers

In December 2020, a group of more than 7,000 tobacco farmers, including 3,000 children, took legal action against two major tobacco companies: British American Tobacco and Imperial Brands. The case was filed at the High Court in London with the farmers being represented by Leigh Day Partners, a human rights law firm.

The plaintiffs claim to have been impoverished and trapped in a cycle of poverty due to the companies’ actions to maximize their profits. Tobacco growing in Malawi’s tenancy system is associated with child labour, hazardous working conditions on the farms and indebtedness of the farmers unable to repay the loans to the tobacco merchants.

Leigh Day Partners took legal action over the allegation that these companies had been negligent and had unjustly enriched themselves. Currently, the case is pending.

Read here Donald Makoka’s chapter on the Malawian case.

Brazil: A Case against occupational safety failures

In 2015, the tobacco farmer Lídia Maria Bandacheski do Prado filed a lawsuit against Alliance One Brasil (Pyxus Intl.) to get compensation for the devastating health consequences due to pesticide use in tobacco fields. The case was filed at the Labour Court in Irati, Paraná, and the farmer is represented by Vania Moreira, a lawyer with longtime expertise in issues of Brazilian tobacco workers.

Ms do Prado was working for about three decades on tobacco fields continuously being exposed to toxic pesticides. After she collapsed in 2007, she went through several years of health examinations until she was finally diagnosed with chronic pesticide poisoning and resulting polyneuropathy – an incurable degenerative disease.

The Labour Court confirmed her diagnosis, the link between her condition and the tobacco work as well as the employment relationship with the tobacco company. Following the court order, Ms. do Prado currently receives financial support to cover essential treatments. A compensation for moral damages has also been set, but is still pending due to the tobacco company’s expected appeal to the Superior Labour Court.

Read here Raquel Torres Gurgel’s chapter on the Brazilian case.

UPDATE 28.02.2025

Last week, Ms. do Prado’s case was dismissed by the Superior Labour Court claiming not to have jurisdiction to hear the case. The referral to the Common Court might mean another decade of legal fight or even another dismissal because the Court has already declined jurisdiction in an earlier similar case.