Wal-Mart criticised over conditions at Chinese suppliers' factories

27 July 2009

28 July 2009 | Helen Gilbert

Wal-Mart's supply chain standards in China have been blasted after an investigation claimed staff at two supplier factories were being exploited.

China Labour Watch (CLW), an organisation that supports labour rights in China, claims to have found evidence of "inhumane overtime systems", an "elaborate system to cheat Wal-Mart audits" and pay packets "below the minimum wage".

The campaign group investigated conditions at the Huasheng Packaging Factory and Hantai Shoe Factory, where Wal-Mart products are manufactured, between April and June 2009.

"Disturbing evidence of widespread, systematic and serious violations of worker rights" were found at both factories, according to Li Qiang, executive director of CLW. Among the discoveries at Huasheng was a document to "falsify information for Wal-Mart audits".

"This document instructs management to force workers to lie about wages, benefits and working time, to hide or adjust official documents relating to working schedules, safety procedures and environmental records," Qiang wrote in a letter to Mike Duke, CEO at Wal-Mart Stores.

Overcrowded dorms and safety issues, such as workers inhaling large amounts of paper particles and other debris because they did not wear masks, were also uncovered by the search.

In addition, CLW claimed violations discovered following an investigation of the Hantai Shoe Factory last year had still not been addressed. These included incomplete contracts and safety issues.

The report, Wal-Mart's Road to Sustainability - Paved with False Promises, urged immediate action, and Qiang called on Wal-Mart to publicly disclose the names of the auditing companies that have certified both Hantai and Huasheng and "failed to identify the problems in the report".

"Furthermore, Wal-Mart should conduct a wholesale re-appraisal of its auditing system. Instances of corruption are rarely isolated, and it is highly likely that these issues are representative of wider corruption in the Wal-Mart auditing system," wrote Qiang.

A Wal-Mart spokesman said: "Upon our learning about the report, we have launched an immediate investigation.

"Through our rigorous Ethical Standards program, Wal-Mart aggressively deals with any allegations of improper conditions at our suppliers and factories. We expect our suppliers to meet our Standards for Suppliers, and maintain one of the largest ethical standard operations in the world to ensure compliance, conducting more than 11,500 audits last year and training more than 14,000 supplier and factory managers."

It follows the retailer's efforts to question its 100,000 suppliers worldwide on their sustainability credentials, such as labour standards (news, 17 July 2009).

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