Wal-Mart takes own path on factory safety

US retail giant to do in-house plant inspections as it rejects deal favoured by Bangladeshi groups

PUBLISHED : Wednesday, 15 May, 2013, 11:22am
UPDATED : Thursday, 16 May, 2013, 2:45am

Wal-Mart Stores, the American chain that is the world's largest retailer, said it would not accept "at this time" an agreement to improve fire and building safety in Bangladesh that is supported by labour monitoring groups and signed by several other retailers this week.

Instead, in the wake of the deadly Rana Plaza building collapse, the world's largest retailer announced it would make public safety inspections at all of its suppliers' authorised factories in Bangladesh. Labour groups, however, said that falls short of what was necessary to ensure worker safety.

The reviews of the 279 supplier plants will be completed within six months, and the factory names and inspection information will be posted on Wal-Mart's website, the company said. The company said it expects the costs of "appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased."

Wal-Mart and other retailers have been discussing an agreement intended to improve labour conditions in Bangladesh since the collapse of the Rana Plaza factory two weeks ago, the worst industrial incident in the country's history. The accident killed at least 1,127 and came after a series of deadly fires.

Rajan Kamalanathan, Wal-Mart's vice-president of ethical sourcing, said: "Preventing the kinds of tragedies that have recently taken place in Bangladesh will only happen if all stakeholders across the board set clear parameters and take action to drive real safety and compliance improvements."

The company said it would evaluate factories' electrical and fire-safety systems, review their compliance with local building standards and permits, and visually inspect buildings for signs of structural distress. Production will cease immediately at factories where urgent safety issues are identified, Wal-Mart said. Gardner declined to describe what kinds of safety information would be publicly available.

Labour activists such as Scott Nova, executive director of the Worker Rights Consortium, a Washington-based labour-rights monitoring group, are sceptical about how much information the company will release.

"Will they post inspection reports or just aggregated data?" Nova said. "This is vastly different than having a genuinely independent inspection. The bottom line is, there's no accountability. It's still a Wal-Mart run and controlled programme in which Wal-Mart calls every shot."