The New York Times (May 31, 2011) reports today that Wal-Mart will be facing pressure, at the company’s annual meeting in 3 days, to monitor and disclose how its global suppliers treat their workers. The New York City pension fund, which owns shares in the company, plans to ask Wal-Mart to require vendors to document working conditions in their factories. “They put tremendous pressure on their suppliers to cut money out of the system”, says a fund exec, instead of improving workplace safety and worker rights.
A Bangladeshi labor organizer complained that many of the factories in her country that make goods for Wal-Mart mistreat their workers. “Very often, first of all, the factory does not enforce the law regarding minimum wages. We haven’t seen any Wal-Mart suppliers give a living wage to workers”, she said. The pension fund proposal asks for yearly reports that include measurements of performance on workplace safety and human rights, using international standards.
Wal-Mart opposes the request, saying it is too hard to get suppliers to issue reports. This might threaten the availability of products from companies that do not comply. Wal-Mart’s spokesman adds, “We expect our suppliers to meet or exceed these (workplace) standards. A supplier’s failure… may jeopardize that supplier’s continued business relationship with Wal-Mart”.
Ironically, in the environmental field, Wal-Mart has successfully become a world leader in creating metrics for reducing packaging and for sustainability across the whole 100,000 member supply chain (see our blog last week on the topic). But the topic of human rights is a separate issue.
Discussion questions:
1. Why does Wal-Mart oppose reporting on human rights issues such as this?
2. How does this compare with the company’s drive towards sustainability?