On June 21, 2006, Sprawl-Busters reported that the Norwegian Government Petroleum Fund had voted to drop Wal-Mart stock from its portfolio because the company runs its business in an “ethically unacceptable manner.” Today, two and a half months later, a second Scandinavian pension fund has divested itself of Wal-Mart stock because of the retailer’s policies towards its own employers. The Swedish Second National Pension Fund, known as AP 2, announced that it has sold its shares in Wal-Mart and Wal-Mart Mexico, worth about $41 million. Wal-Mart of course had no comment to make when an investor drops them cold, but a company spokesman said: “we strive to adhere to the highest standards in the treatment of each and every one of our own associates. These matters are among our highest priorities as a company.” AP 2 told the media that “since 2003 (it had) written letters, voted at shareholder meetings and taken part in an investor group to influence the company (Wal-Mart), but there has been no change in the company’s view of labor rights.” The divestiture by AP 2 represents its entire holdings in Wal-Mart and Wal-Mart De Mexico. One spokesman for AP 2 told the Dow Jones Newswires that the decision was based on alleged abuses of workers’ rights at Wal-Mart’s various businesses. “Since there are so many accusations from so many parties, in so many countries, it’s impossible to say that there have been no systemic abuses,” the fund spokesman told Dow Jones. A Wal-Mart spokesman did tell Dow Jones that the charges against Wal-Mart were “inaccurate and unfounded”, saying the company offers competitive salaries and supports unionization. “They (AP2) are accepting just one side of the story,” a Wal-Mart spokesman said.
It’s not clear who Dow Jones spoke to at Wal-Mart, but the idea that Wal-Mart “supports unionization” is going to be the last comment that spokesman ever makes while wearing a Wal-Mart vest. It is true that Wal-Mart had to accept a national union in China — but the company remains obsessive/compulsive on the subject of organized labor, and spends a great deal of time and money to keep its workers from organizing. Sprawl-Busters recently testified before the TIAA-CREF board of directors in New York City that CREF should follow the lead of the Norwegian Pension Fund, and either hold Wal-Mart to higher standards, or drop the retailer’s stock from its portfolio. As countries like Norway and Sweden lead the way, and Wal-Mart continues to receive international scorn for its worker rights violations, the world’s largest retailer could well become the next South Africa in terms of stock divestment. Shareholders will wish they had heeded the warning signs coming out of Scandinavia.