Wal-Mart Stores has released a “Factory Certification Report” for the period March, 2003 to February, 2004. In this report, Wal-Mart admits that nearly 80% of its outsourcing factories have serious labor rights problems, which they color code as “yellow” or “red” ratings. The report also notes that effective January 1, 2005, Wal-Mart is implementing new supplier standards for its Third World factories that some activists would argue it has not implemented in its own American stores: “the right to freedom of association – including the right to form or join labor unions – in accordance with all local laws and regulations” and “compliance with immigration laws and regulations to reduce abuses of migrant workers, who are sometimes exploited by unscrupulous employers and employment agencies.” Wal-Mart just settled an $11 million case involving is own use of illegal workers in the United States. Wal-Mart also says it plans to “modify our approach in situations where we encounter isolated cases of child labor. Our existing practice has been to immediately and permanently prohibit a factory from doing business with Wal-Mart if our inspectors identified any child labor issues.. we plan to modify our guidelines and provide factories with the opportunity to correct violations quickly. This change in approach should provide continued employment for workers of legal age in that facility.” The company says that “we are committed to utilizing our Factory Certification Program to make a difference in the quality of life for workers, their families and their communities. We also know our customers and stakeholders expect our merchandise to be made in factories where workers are treated fairly and have superior working conditions, and which show respect for the environment. To these ends, we are also committed to increasing our volume of business with factories and suppliers who demonstrate best practices.” Wal-Mart admits in this report that 43% of its factory inspections turned up “yellow ratings” that involved “three major categories of violations”, including health and safety concerns such as Excessive working hours (61 to 72 hours a week), and seventh day of rest violation.” There were also 36% of inspections which received a “red rating… mainly resulted from infringements concerning compensation such as: legally required benefits not paid; failure to pay legally required overtime premium; failure to pay minimum wage; wages unverifiable or wage systems unclear. There were also 103 inspections (0.7%) of “failed ratings”, due to “child labor, forced labor, and attempted bribery.” In response to these low inspection ratings, Wal-Mart is making several changes: 1. “Our standards will address the right to freedom of association -including the right to join or form labor unions – in accordance with local laws and regulations. This is consistent with our commitment to adhere to these laws in all countries where we operate. 2. “We will provide factories with the opportunity to correct (child labor) violations quickly..We continue to treat child labor violations as a serious infraction, but we will now provide these factories with the opportunity to promptly remedy any violations found during the inspection. In instances where factories do not correct their labor practices, we will cease doing business with them.” But many of the checklist of violations found in Third World sweatshops are problems that Wal-Mart has had in the U.S. including: Wages unverifiable, or wage system unclear; Failure to pay legally required overtime premium; No pay slips for workers; Manipulation of payroll. Wal-Mart says its factories now must provide “a day of rest every week. They must have an acceptable system to track hours worked, and they must prohibit working off the clock. Work weeks exceeding 60 hours are unacceptable and considered a violation. Wal-Mart’s maximum tolerance is a 72-hour work week over six days, or no more than 14 hours per calendar day. Factories should be working toward a maximum of 60 hours per work week.” Wal-Mart says it will not allow children under 14 to make its products, but if you are 14, Wal-Mart will allow its factories to work you for 72 hours a week, for 14 hour shifts.
Wal-Mart refuses to make public a list of its factories, because it says,”Like other retailers, Wal-Mart does not provide a list because it would disclose competitive information.” As a result, none of these factory inspections can be independently verified. Many of the warning ratings given to overseas factories would apply to Wal-Mart stores in America.
