By Marcus Kabel
Wal-Mart Stores Inc. is increasing surprise inspections at thousands of foreign factories where it buys clothes, toys, shoes and other products as it expands efforts to make sure its suppliers uphold labor and environmental standards.
Wal-Mart expects unannounced inspections to make up 30 percent of all inspections this year, up from 20 percent last year and 8 percent in 2004, said Beth Keck, director of international corporate affairs for the world's largest retailer.
Last year, as Wal-Mart came under mounting criticism led by union-backed campaign groups, Chief Executive Lee Scott said Wal-Mart would step up enforcement of workplace and environmental standards at factories in over 60 countries. The company is also the target of a lawsuit seeking class-action status for factory workers in China, Bangladesh, Indonesia, Swaziland and Nicaragua.
"We find a mixture of announced and unannounced audits (inspections) is the best balance," Keck said. She said the announced visits ensured factory managers and records were available for inspectors.
Wal-Mart critics said the retailer was responding to public pressure but insisted it go further and turn over inspections to outside experts to verify the results.
"Wal-Mart wants America to believe it's responding to the growing calls for change, but real change is measured by positive actions, not empty words," said Chris Kofinis, spokesman for union-funded WakeUpWalMart.com.
Keck said Wal-Mart is in discussions with a San Francisco-based consulting group, Business for Social Responsibility, on the possibility of involving outside groups in its audits.
The retailer has already started working with the International Labor Organization, a United Nations Agency, in Cambodia.
The ILO has its own program of inspections and ethical standards developed with international businesses that buy from Cambodian factories. Keck said Wal-Mart started last year using the ILO to inspect its suppliers there, who mainly make apparel.
Keck said Wal-Mart's Ethical Standards Program, with a global staff of about 200 people, conducted 13,600 factory inspections in 2005 after 12,500 in 2004. Some of those in each year were repeat inspections of factories where violations were found.
In 2004, the last year for which it has published results, Wal-Mart said 36 percent of inspections turned up what it calls "high-risk" violations, 42 percent were medium-risk and 21 percent were low-risk.
One percent, or 108 factories, failed altogether and Wal-Mart stopped doing business with them.