NEW DELHI — Wal-Mart Stores Inc. is the latest global retailer to come under fire over allegations of persistent abuses and poor working conditions at its supplier factories in Asia.
A report published Tuesday by the Asia Floor Wage Alliance, a consortium of trade unions and labor rights activists, focused on workers at factories that manufacture for Wal-Mart. The prognosis, according to the report, is grim.
Released to coincide with meetings of the International Labour Conference in Geneva regarding supply chain workers, the report cited “persistent abuses, rights violations, forced overtime and a lack of living wages for workers in factories manufacturing for Wal-Mart.”
It added that the retailer used its “tremendous purchasing power to shape the behavior of suppliers — driving down costs and transferring risk to workers.”
The criticism of Wal-Mart by the alliance comes a few days after similar allegations were made against Gap Inc. and H&M.
Responding to the report, a Wal-Mart spokesperson told WWD, “Wal-Mart’s Standards for Suppliers specifically address working hours, breaks, the cultivation of a safe and healthy work environment, and freedom of association. Wal-Mart does not own or operate facilities in Cambodia or Bangladesh, but we expect our suppliers to uphold these standards in the factories from which they manufacture products.”
The report pointed out that all 24 Wal-Mart supplier factories investigated in India employed a nonstandard workforce, including short-term contract workers, daily wage workers and piece-rate workers. “Hiring nonstandard workers benefits suppliers, but workers face periods without pay, loss of seniority that can impact social security benefits and the potential for retaliatory termination,” the report said.
In Cambodia, the report said, forced overtime is a characteristic management practice in all 14 Wal-Mart supplier factories.
Threats of losing their jobs if they did not work excessive hours were part of the work schedules of contingent workers in Bangladesh, Cambodia, India and Indonesia, the report said.
“The workers who produce clothing in Wal-Mart’s supplier factories in Bangladesh, Cambodia, India and Indonesia face a range of coercive practices that make them particularly vulnerable,” said Iwan Kusmawan, chairman of the SPN Union. “Wal-Mart determines the prices, quantities and production schedules that — in the absence of real safeguards and protections — lead to abuses. The company’s limited efforts to monitor and protect workers in its supplier factories have proven wholly inadequate.”
Other points made in the report were the need to pay living wages, defend freedom of association, publicly disclose production units to foster accountability and address the needs of abused or exploited workers.
The Wal-Mart spokesperson observed that the company believed in “collaborative approaches to improving working conditions, which is why we work with the International Labour Organization’s Better Factories Cambodia program in Cambodia and the Alliance for Bangladesh Worker Safety in Bangladesh to monitor compliance with our Standards for Suppliers in our suppliers’ facilities and encourage remediation.”
Anannya Bhattacharjee of the Asia Floor Wage Alliance told WWD that the key way forward was a global regulation. “Multinationals don’t want regulation and want everything kept to their own goodwill and voluntary action but that is not working. We have seen it for the last 25 years.”
Last week, reports on the supply chain of San Francisco-based Gap and Swedish retailer H&M studied the situation of workers in Cambodia and India and were part of a series “Workers’ Voice from Global Supply Chains: A Report to the ILO 2016,” which details supply chain abuses and recommendations to the ILO.
“We are urging the International Labour Organization to move forward with setting enforceable standards for supply chains, including protections for wages, working conditions and protection from overtime,” said Sarita Gupta, executive director of Jobs With Justice.