Wal-Mart tightens rules for suppliers
BENTONVILLE, Ark. (AP) -- Wal-Mart 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.
Wal-Mart'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 Wal-Mart and other retailers. The fire in late November killed 112 workers at a factory owned by Tazreen Fashions Ltd. Wal-Mart has said the factory wasn't authorized to make its clothes.
In a letter sent Tuesday to suppliers of its Wal-Mart 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.
Wal-Mart also said it plans to publish on its corporate website a list of factories that haven't been authorized to manufacture goods for Wal-Mart.
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, Wal-Mart's vice president of ethical sourcing. "We are placing our orders in good faith."
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