Wal-Mart Stores Inc. told investors on Thursday (Aug. 29) that it could provide up to $50 million in low-interest loans or other types of payments to Bangladesh factory owners for building improvements.
The information was provided by Wal-Mart’s investor staff in a private call, a transcript is expected to be released today (Aug. 30).
Reuters reports the money is part of the more than $100 million in loans and access to capital that a group of North American companies including Wal-Mart and Gap Inc pledged in July. The Bangladesh central bank would need to approve any foreign currency loan. Details about lending rates also need to be finalized.
Bangladesh worker safety issues were raised after more than 1,100 workers perished when a garment factory collapsed in April. Prior to that 112 workers died in a factory fire in November.
Last month, Wal-Mart became part of an Alliance for Bangladesh Worker Safety, after they refused to join a separate European-led initiative known as the Accord on Fire and Building Safety in Bangladesh.
Reuters reports that Wal-Mart is speaking with the central bank of Bangladesh as it tries to figure out the best way to fund factory safety improvements, whether through loans, earlier payments for shipments or other methods.
Wal-Mart was linked to the deadly fire in November as the factory was making the retailer’s Faded Glory clothing without its consent.
In response Wal-Mart stepped up mandatory factory inspections and introduced a no-tolerance policy for unauthorized sourcing.
Wal-Mart has begun the inspections of the roughly 280 Bangladesh factories it gets goods from and those reports are made public on its website.
According to Reuters the inspections are turning up infractions large and small and the factories are give a set time for remediation. The corporate officer told investors the cost of those updates and repairs amounted to tens of thousands of dollars so far.