Walmart's challenges with its Chinese suppliers

Filed in archive News on November 30, 2009

Workers in Walmart's supply chain producing goods including shoes, Christmas lights, tools, curtains and paper boxes for sale in the US are laboring in "illegal and degrading conditions", a new report claims.

According to Procurement Leaders, China Labor Watch's latest investigation of five Wal-Mart supplier factories claims that "not a single factory has implemented Wal-Mart's basic standards, and a total of 10,000 workers included in the report suffer serious rights abuses".

In the report, CLW attributes this failure to ineffective auditing and a pricing structure that forces factories to sell goods at unsustainable prices. As the world's largest retailer, Wal-Mart leverages its massive product orders to purchase goods at low prices, and workers suffer the financial burden, according to CLW.

"This is not about a single factory, but about Wal-Mart's inability to implement its standards," said CLW Executive Director, Li Qiang.

The report states that workers at all five factories work at least 3 hours of overtime/day, for 100-140 total hours of overtime/month, and one factory routinely schedules overtime through the night. Two of the factories illegally underpay overtime wages at rates as low as $0.44/hour, and two withhold wages from workers who fail to meet production quotas.

"Worker abuse extends beyond paychecks. Workers at two factories are denied gloves on the grounds that it will slow production. Dormitory conditions are so poor that at one factory, there is no running water in the bathrooms," CLW stated.

According to CLW Wal-Mart has already pledged to "remediate" these five factories.