Wal-Mart Goes Its Own Way In Bangladesh Safety Issue

Wal-Mart said it will not sign an accord with European retailers over factory safety in Bangladesh, but has opted to conduct its own inspections at 100% of the factories in that country where goods for the retail giant are made.

The company will complete all reviews within six months and will publicly release the names and inspection information on all 279 factories, Wal-Mart noted in a company release.

“Transparency is vital to make progress in improving factory conditions, and by disclosing this information, government, workers, non-governmental agencies, and companies can benefit from this work,” said Rajan Kamalanathan, vice president of Ethical Sourcing for Walmart.

Wal-Mart said workers in these facilities can be assured of safer working conditions, and the entire market will be lifted to a new standard as a result of this commitment.

The retailer began more rigorous inspections under the enhanced safety program earlier this year, and will begin posting results of these inspections on June 1.

Adding to this new level of supply chain transparency, starting today, the company posted on its website the list of failed factories in Bangladesh that are no longer allowed to produce for Walmart. A list of all failed factories will follow in the coming weeks.

The company is also increasing the pace and frequency of follow-up inspections in all Bangladesh factories, with visits taking place every two months to ensure both compliance and progress.

The safety inspections are designed to provide detailed reports that allow the company to continue to make responsible sourcing decisions. Wal-Mart retained engineers and other trained professionals to perform these inspections at its own cost.

The company will immediately order its production stopped at facilities where urgent safety issues are identified, notify the factory owner and government authorities of the need to take action, and require remediation.

The retailer expects that the costs of appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased.

“If we identify issues that cause us to believe that people’s lives are in danger, we will take swift action,” said Kamalanathan. “Preventing the kinds of tragedies that have recently taken place in Bangladesh will only happen if all stakeholders across the board set clear parameters and take action to drive real safety and compliance improvements.”

Also today (May 15), Wal-Mart said the company will contract with Bureau Veritas to provide fire safety training to every worker in every factory that produces goods for the company in Bangladesh.

In addition, the company is contributing $600,000 toward a project that empowers workers to have a voice in the solution. By partnering with Labor Voices, a company that communicates directly with workers to identify and share concerns inside of factories, Wal-Mart will gain new insights for ensuring the safety of and empowering factory workers.

This proactive outreach to workers will be introduced at all 279 factories in the company’s supply chain in Bangladesh, and provides another important venue for safety issues to be raised.

“Walmart is committed to a global supply chain that first and foremost provides safe conditions for workers,” said Kamalanathan. “In announcing these changes, Walmart is focusing directly on the most urgent issue, and that’s worker safety. We invite others to join us in this effort.”