By  on April 6, 2006

WASHINGTON — The AFL-CIO, in a report it submitted to Congress on Wednesday, accused Wal-Mart Stores Inc. and a retail industry organization of investing millions of dollars to block legislative measures on port security.

In the report, the AFL-CIO charged: “Wal-Mart, America's largest importer, is using its clout to block new port security measures. Together with its Washington lobbyists and allies, it has pitted its bottom line against port and supply chain security.”

Bill Wertz, director of international corporate affairs at Wal-Mart, countered that “we have spent millions of dollars and required our suppliers to spend millions of dollars on various proposals to increase port security.”

The report, titled “Unchecked: How Wal-Mart Uses Its Might to Block Port Security,” said that Wal-Mart, through its trade and lobbying association, the Retail Industry Leaders Association, has lobbied against the introduction of antiterrorist “smart containers” and electronic seals for cargo containers, independent and regular inspections of its supply chain practices, tougher notification requirements for importers and new container-handling fees to fund improved port security.

Some of these programs have been initiated, some of the measures have been defeated and others are pending.

Jonathan Gold, vice president of global supply chain policy for RILA, said, “The report is false and misleading and completely misrepresents our industry.”

In addition to Wal-Mart, RILA primarily represents discounters and mass merchants, such as Target Stores, Gap Inc., Sears Holdings and Limited Brands.

Gold said RILA and its members do not oppose introducing “smart containers” and electronic seals, but believe testing on reliability of such measures is not yet foolproof.

“We encourage further testing of these devices to ensure overall reliability,” said Gold.

Gold said RILA is against third parties being involved in validation of the C-TPAT program — a public-private initiative through which foreign cargo is prescreened before entering the U.S. so that shipments can be expedited — for business confidentiality reasons. The validation process is handled by Customs and supply chain security specialists. The four-year-old program involves about 5,800 companies, including most major U.S. retailers and vendors.

Wertz said Wal-Mart was one of the first members of C-TPAT and is in favor of expanding Customs' Container Security Initiative to more ports around the world.“This seems to be clearly another example of how the union is singling out Wal-Mart as part of a reputation attack against us,” Wertz said. “I think it is pretty clear that labor's agenda is to seek in any way, legitimate or otherwise, to tarnish Wal-Mart's reputation.”

As for user fees, Gold said: “The trade as a whole spends billions of dollars on maritime transportation security through Customs duties and other user fees. Before we put new fees in the system, we need to first decide what the fee will go toward and whether fees currently collected for other purposes can be reallocated.”

Gold said RILA strongly opposes increasing physical inspections of 100 percent of all cargo, but supports Customs' focus on high-risk cargo and would be against any requirements for companies to publish steps they have taken on supply chain security.

The AFL-CIO, which represents port, transportation and emergency and safety workers, said Wal-Mart and RILA have donated millions of dollars, notably to Republican lawmakers, sitting on key committees with jurisdiction over port security to influence legislation.

Wertz said, “We may have reservations about certain specific proposals... But reasonable people understand that we and others seek to choose the most effective of the various proposals that are advanced.”

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