Winnipeg Free Press - PRINT EDITION

Walmart has a strict warning for its suppliers

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BENTONVILLE, Ark. -- Walmart Stores Inc. has alerted its global suppliers that it will immediately drop them if they subcontract their work to factories that haven't been authorized by the discounter.

Walmart's stricter contracting rule, along with other changes to its policy, comes amid increasing calls for better safety oversight after a deadly fire at a Bangladesh factory that supplied clothing to Walmart and other retailers. The fire in late November killed 112 workers at a factory owned by Tazreen Fashions Ltd. Walmart has said the factory wasn't authorized to make its clothes.

In a letter sent Tuesday to suppliers of its Walmart stores as well as Sam's Clubs in the U.S., Canada and the United Kingdom, the company says it will adopt a "zero tolerance" policy on subcontracting without the company's knowledge, effective March. 1. Previously, suppliers had three chances to rectify mistakes.

Walmart also said it plans to publish on its corporate website a list of factories that haven't been authorized to manufacture goods for Walmart.

Also, starting June 1, suppliers must have an employee stationed in countries where they subcontract to ensure compliance, rather than relying on third-party agents.

"We want the right accountability and ownership to be in the hands of the suppliers," said Rajan Kamalanathan, Walmart's vice-president of ethical sourcing. "We are placing our orders in good faith."

Walmart will hold a meeting for clothing suppliers from the U.S. and Canada on Thursday to explain the new policy changes.

Critics quickly dismissed Walmart's moves as inadequate and said the retailer needs to do more.

"It shows that Walmart is feeling a great deal of pressure in the wake of public scrutiny," said Scott Nova, executive director at Workers' Rights Consortium, a labour-backed advocacy group.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition January 23, 2013 B4

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