WASHINGTON — Labor leaders and workers are turning up the pressure on Wal-Mart Stores Inc. over working conditions in the U.S. and abroad.
This story first appeared in the June 6, 2013 issue of WWD. Subscribe Today.
In the run-up to the retailer’s annual meeting on Friday, the groups accused the world’s largest retailer of failing to provide funding and safe workplaces in its domestic warehouses and global supply chain, particularly in Bangladesh, and criticized the company for refusing to sign a binding, international fire and building safety accord.
Wal-Mart has come under fire in recent weeks because it has refused to sign a legally binding Bangladesh fire and safety accord that 43 mainly European retailers and brands have signed. Four North American companies have also signed the accord.
The latest company to sign the legally binding accord led by IndustriALL Global Union was British retailer Debenhams, according to Scott Nova, executive director of the Worker Rights Consortium, who was on a conference call Wednesday. In addition, a Wal-Mart employee who works at one of the retailer’s stores in Placerville, Calif., and is currently on strike accused the firm of not giving her enough hours to work to qualify for health care benefits. A second worker, a Southern California warehouse worker, said he was fired after speaking out about poor working conditions.
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Kalpona Akter, executive director of the Bangladeshi Center for Worker Solidarity, traveled to Bentonville, Ark., for Wal-Mart’s annual meeting after hundreds of supporters raised $9,000 for her expenses. Akter, who was on the call from Bentonville, said working conditions in Bangladesh’s apparel industry are dismal. She said workers are still forced to work 11- to 14-hour shifts, six days a week, and take home $37 a month, per the minimum wage.
“It is so difficult for those women who have kids in their family,” she said. “The workers do not have a union voice there. Whenever workers try to organize, they are threatened, beaten or fired.”
Akter said she will have the opportunity to address some of the issues in Bangladesh to Wal-Mart’s founding Walton family and all of the shareholders and attendees at the annual meeting on Friday. She plans to present proxy proposal number five by shareholder Jim McRitchie, which seeks to “enhance Wal-Mart accountability to shareholders.”
“It would allow Wal-Mart shareholders who own 10 percent of shares to call for a special meeting of shareholders on key issues of corporate governance,” said McRitchie.
Akter said, “This is happening because of the pattern of denial of brands and retailers like Wal-Mart.…They don’t want to take any responsibility. They just want to have their so-called code of conduct and CSR….They have announced their own policy, which is not legally binding.”
Wal-Mart is leading an alliance of North American retailers and apparel brands with Gap Inc. to formulate their own fire and building safety plan. Wal-Mart has already instituted its own stepped-up plan for conducting detailed safety inspections at the 279 factories it uses in Bangladesh. The company has also said it will post a list on its Web site of “failed factories” in Bangladesh and will contribute $600,000 toward Labor Voices, a project that empowers workers.
“Wal-Mart is the second-largest company sourcing from Bangladesh,” Akter said. “They really have a responsibility for cleaning up the factories where they source from.”
She contended that Wal-Mart refuses to sign the binding accord because the company does not want to work with unions.
“If they start working with unions, they know workers will have access to ask them not only about improving working conditions [but also about raising wages],” Akter said.
In addition to its own plan, Wal-Mart has said it is committed to working with industry trade groups and other retailers and brands to develop a safety plan to address the issues in Bangladesh.
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The new alliance led by Wal-Mart and Gap includes retailers and brands that are members of the American Apparel & Footwear Association, National Retail Federation, Retail Industry Leaders Association and Retail Council of Canada. The alliance is working with the Bipartisan Policy Center to help facilitate the discussions and develop a program it hopes to be released in July. Wal-Mart and Gap are both members of RILA and NRF. RILA members include major retailers such as J.C. Penney Co. Inc., Target Corp. and Sears Holdings Corp., while Macy’s Inc., Saks Inc. and Neiman Marcus Inc. are NRF members.
Nova of the Worker Rights Consortium said of the North American industry group’s efforts to develop its own plan, “We believe there is not a serious alternate effort to develop a safety program but rather a serious public relations dodge that Wal-Mart and others have undertaken in order to deflect attention from the fundamental fact, which is that they are unwilling to make enforceable commitments that include paying for the building repairs and renovations that are necessary to make in these factories. Notwithstanding their effort to claim this is about some undefined legal liability, their real concern is clearly a defined obligation to the agreement, which, yes, includes paying for the repairs and renovation necessary to stop these disasters.”
Several industry executives who are suppliers for Wal-Mart and are familiar with the inner workings of factories in Bangladesh told WWD they were “skeptical” of Wal-Mart’s recent announcement that the retailer would begin conducting detailed safety inspections at all the factories it uses in Bangladesh.
Asked if he thought it would be best for the Bangladesh government to be more proactive in factory safety issues, one executive, who requested anonymity, replied, “Yes. That’s the way it should be.”
He added, “That’s not the Wal-Mart way….We have to follow all of the rules in the Wal-Mart vendor manual, which says manufacturers are responsible for taking care of factory and worker safety issues, and any other problems along the supply chain. We’re the fall guys.”
Another executive, who did not want to be named, agreed. “What Wal-Mart is saying publicly is one thing, it’s good p.r., it’s good to look like you’re concerned with safety inspections and a list of bad factories….But they’re really not getting involved. The [Wal-Mart vendor] manual is specific.…Wal-Mart is putting the onus on our backs to ensure the safety of factory workers.”
As for the competing agreements and apparent lack of unity among retailers and brands to an approach to solving the problems, Nova said, “If they are serious about working with us, if they are serious about addressing the safety crisis in Bangladesh, why would they not sign a binding, enforceable agreement that will make them keep their promise that has been signed by numerous brands and retailers who are giants players in the industry?”
In response to the labor groups’ charges and questions, Wal-Mart issued the same statement it gave last week when the new alliance was unveiled. Wal-Mart said it has taken a number of actions that “meet or exceed” other factory proposals, including strengthening safety standards for factories, a zero-tolerance policy for unauthorized subcontracting and requiring in-depth safety audits and remediations at all of its factories in Bangladesh.