By Michelle Jacome, ILRF intern
Today, on the second year anniversary of the “21st Century Leadership" speech made by Mr. Lee Scott, Wal-Mart CEO, the International Labor Rights Forum is releasing a report on Ethical Standards and Working Conditions in Wal-Mart’s Supply Chain. The report raises awareness about the harsh working conditions that many Wal-Mart workers suffer worldwide.
ILRF questions “Wal-Mart’s role in providing accountability for activities within factories that it purchases from, and its responsibility to find solutions as opposed to merely identifying problems.”
The report concludes that Wal-Mart has not invested the necessary resources or taken the necessary actions to ensure that its Ethical Standards Program is not only on paper but actually enforced.
The report is available at: www.laborrights.org/publications/WMEthicalsourcing102407.pdf
“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: www.laborrights.org/publications/WMEthicalsourcing102407.pdf
Comments