Wal-Mart's Ethical Sourcing Report Finds Fewer Violations at Overseas Factories

BENTONVILLE, Ark. -- Wal-Mart Stores, Inc. said yesterday that its 2006 Ethical Sourcing report, which provides information on the company's ethical standards program, shows that high-risk violations at its factories decreased 23.5 percent in 2006, mainly due to educational outreach.

Wal-Mart said that in 2006, it conducted more factory audits than any other company in the world, at 8,873 factories producing goods for Wal-Mart, 15 percent more than in 2005. Unannounced audits made up 26 percent of the audits undertaken, a six percent increase over 2005.

Program enhancements detailed in the 2006 report include the expansion of environmental elements into supplier factory audits to include waste identification, waste handling and disposal, wastewater treatment and discharge, and air emissions. Auditors now discuss environmental findings with factory management as part of the audit closing meetings to educate them on the new criteria and on environmental sustainability. In addition, Wal-Mart now includes environmental training in group training sessions for new and existing suppliers.

"Factories that are disapproved may close, and the impact on the factory workers can be devastating," said Rajan Kamalanathan, v.p. of ethical standards for Wal-Mart Stores. "To prevent this, we identify at-risk factories and invite factory management, along with the suppliers they do business with, to meet with members of the Wal-Mart Ethical Standards Team. We facilitate dialogue on issues of concern and serve as a resource to factory management in a collaborative way. For example, in the Europe Middle East, and Africa region, meetings were held with eight targeted suppliers and factory management, and at the end of 2006, all eight showed substantial improvement, with six achieving our highest audit rating."

Established in 1992, Wal-Mart's Standards for Suppliers code details the company's expectations for labor practices in the production of merchandise for sale by Wal-Mart.
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