ILRF Critiques Wal-Mart's Sourcing Practices

“To effectively address these flaws, Wal-Mart must reorganize its
auditing program to enable auditors to fully investigate factories and
gain a realistic depiction of operations.  Further, Wal-Mart needs to
communicate and engage with all levels of the supply chain directly,
from workers to suppliers, and take responsibility for its powerful
role in the production process,” as stated in the report.

On October 24, 2005, Lee Scott highlighted four examples in which
Wal-Mart was looking to change including “reorganizing our global
sourcing organization to separate the factory certification function
from our buying organization so that these two organizations can focus
completely on their respective missions.”  According to the reports
conclusion, continuing to separate buying policies from the impact of
factory workers producing Wal-Mart goods will only increase labor
rights violations.

ILRF found a series of failures and inefficiencies in Wal-Mart’s
auditing systems as well as a lack of consequences for violations of
standards.  The Wal-Mart’s 2004 Factory Certification Report states
that “[Wal-Mart] desires to be a leader in factory compliance, be
responsive to the sensitivities of the global community and meet the
expectations of our customers and shareholder.”  Unfortunately the
findings of ILRF’s report show otherwise. 

Wal-Mart must recognize that their purchasing policies are the source
of the problem.  These high demands encourage wage, hour and safety
violations that many times their auditing system fails to point out or
address.  Wal-Mart’s auditing program is significantly flawed and is in
need of a modification that will eventually lead to taking actions
against these problems rather than just identifying them. 

The report states that the auditing system should include involvement
at all levels of the supply chain, ranging from the factory workers to
NGOs, and stakeholders.  Together they can facilitate and offer a
dispute resolution system that can finally offer the workers with
solutions.  Wal-Mart must stick by these partners and make sure that
solutions go through rather than removing themselves from the issue and
placing the responsibility on others. 

Wal-Mart has a commitment to its workers, shareholders, consumers and
stakeholders to faithfully monitor and resolve issues surrounding their
supplier factories.  As the world’s largest retailer Wal-Mart has an
enormous responsibility not to only set an example of an efficient
Ethical Standards Program, but to be a pioneer in the promotion of fair
working conditions.  ILRF’s 34 page report conveys that corporate
responsibility is more than just identifying a problem; it is about
taking effective action towards a solution. 

The report is available at: