Ethical Standards and Working Conditions in Wal-Mart's Supply Chain

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SECTION 1: BY THE NUMBERSAs do many major corporations, Wal-Mart produces an annual report outlining its corporatesocial responsibility practices, including efforts to improve working conditions within supplierfacilities. Table One, below, summarizes the findings of audits (both internal and external) offactories supplying for Wal-Mart over the past four years.Table One: Wal-Mart Supplier Factory Audits 2003-2006Question 2003 2004 2005 2006How manyfactories aresupplying forWal-Mart?7,700 7,600 (stoppeddoing businesswith 1,500 due tocapability issues)7,200 8,873Number of totalauditsconductedHow manywereunannounced?How manywere ratedGreen forhaving no orlow riskviolations?How manywere ratedYellow forhaving mediumrisk violations?How manywere ratedOrange forhaving high riskviolations?How manywere ratedDisapproved?How manywere Failed andbanned fromfuture orders?What violationsled to failures?14,750inspections (40per day; nearly300 per week)12,500 (30 perday)13,600 16,7001% 8% 20% 26%21% 21% 10% 6%43% 43% 37% 52%36% 36% 53% 41%0% 9% 1% 2%1% (103factories)Failures due tochild labor,forced labor,attempted1% (108factories)Most failures dueto child laborissues, one due toforced labor1% (141factories)Primarilyunderage laborviolations1%Primarily forcedlabor andunderage labor6
Number ofEthicalStandards StaffHow many newfactories?How manydisapprovedfactories laterreapproved?Contractorsused for auditsNumber ofFactoriesaudited by 3 rdparty auditorsDirect Factoriesvs. supplierfactoriesNumber ofPeople TrainedMost CommonViolationsbribery, andunsafe workingconditions104 associates 202 associates 200 assoc.approx.N/A 1,100 Approx. 2,000 N/AN/A 260 of 1,211 23 N/AGlobal SocialCompliance andInterfaithServicesGlobal SocialCompliance andIntertek TestingServicesAccordia, BureauVeritas, CalSafetyComplianceCorporation,Global SocialCompliance,Intertek TestingServices, andSociete Generalede Surveillance35% 15% N/A 24%Over 200Only knowncontractor isVerité5,700 vs. 2,000 5,300 vs. 2,300 6,120 vs. 1,080 6,757 vs. 2,116Representativesof 2,846 suppliersand 1,798factoriesN/A7,900 suppliersand factorymanagersLegally requiredbenefits not paid,working off theclock, doublebooks, andincompletedocumentation11,000 suppliersand factorymanagersLegally requiredbenefits not paid,working hoursviolations,overtimecompensation,coaching workers5,000 suppliersand factorymanagers*sessionpostponed from2006 to 2007*Legally requiredbenefits monetaryor non-monetaryvalue not paid,failure to payminimum wage,overtime, safetyissues.(Data obtained from 2003 Factory Certification Report, 2004 Report on Standards for Suppliers,2005 Report on Standards for Suppliers, and 2006 Report on Ethical Sourcing, all published byWal-Mart, Inc.)7
Page 1 and 2: Ethical Standards and Working Condi
Page 3 and 4: TABLE OF CONTENTSEXECUTIVE SUMMARY
Page 5: INTRODUCTIONWal-Mart is currently t
Page 9 and 10: available to the public. Informatio
Page 11 and 12: SECTION 2: “VIOLATIONS WILL OCCUR
Page 13 and 14: meeting those goals. By avoiding de
Page 15 and 16: SECTION 3: “WAL-MART IS A RETAILE
Page 17 and 18: When it comes to product quality co
Page 19 and 20: (3) Wal-Mart needs to develop a rol
Page 21 and 22: and physical violence as the Philip
Page 23 and 24: CONCLUSIONWal-Mart has a commitment
Page 25 and 26: • Provide Restitution to Wal-Mart
Page 27 and 28: Who owns it: Hanesbrand Inc.What th
Page 29 and 30: Chong Won Fashion, Inc.Who owns it:
Page 31 and 32: workers voted to unionize) through
Page 33 and 34: • Minimum Wages:Standard minimum
Page 35: Guy D. Bradford, Vice PresidentCorp

Ethical Standards and Working Conditions in Wal-Mart's Supply Chain

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