Wk 4 Walmart Audit (Work Program Phase)
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The Washington Post
June 8, 2011 Wednesday Correction Appended
Suburban Edition
For Wal-Mart, global pressures
BYLINE: Ylan Q. Mui
SECTION: A-SECTION; Pg. A16
LENGTH: 766 words
Retailing giant Wal-Mart faced an unusual request when it sought government approval recently to buy a chain of stores in South Africa.
Labor groups there first asked for traditional protections, such as job security and a commitment from the new managers to buy merchandise from local suppliers. Then they called on Wal-Mart to end its long-running battle with unions thousands of miles away in the United States.
"You can't say you violate the right to freedom of association because the culture in that country supports it," said Mduduzi Mbongwe, who represents the South Africa Commercial, Catering and Allied Workers Union. "We don't accept such an argument."
The exchange highlights the complex relationship Wal-Mart has with its employees as unions become as globalized as the retailing giant's footprint.
Its employees are not unionized in the United States, where the retailer has become infamous for its staunch opposition to labor groups. Even in Canada, it closed a store after workers there organized. But in the United Kingdom, Wal-Mart touts a growing roster of union employees, and it has negotiated contracts with entrenched labor groups in Brazil and Argentina for decades.
"We recognize those rights," said John Peter "J.P." Suarez, senior vice president of international business development at Wal-Mart. "In that market, that's what the associates want, and that's the prevailing practice."
Union organizers are pushing for a unified approach to the retailer's 2 million workers around the world. Labor leaders from disparate groups in Central America have begun talks, and unions in the United States, Argentina and Chile bolstered South African organizations during their negotiations. Last week, the international trade union coalition UNI sent a letter to Wal-Mart executives to discuss the possibility of a global agreement similar to those signed by
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competitors such as France's Carrefour and retailers Ikea and H&M.
"Our message to Wal-Mart is that they should realize that this is the new reality of dealing with unions in a global economy, that we are so connected," UNI General Secretary Philip Jennings said.
Wal-Mart has stores in 14 countries, and its expansion overseas is all the more important since it relies on international operations to fuel growth. While sales at home stagnated, its foreign stores raked in $100 billion in sales last year - a quarter of the company's total revenue. That has forced the retailer to learn to play by a new set of rules.
In some countries, such as China, recognition of unions is required by law. In other cases, the political and social climate of a country makes union membership more palatable.
Chris Tilly, director of the Institute for Research on Labor and Employment at the University of California, said workers in the emerging markets that Wal-Mart is targeting in its international expansion often have a "split consciousness": They are wary of large foreign enterprises, but the jobs they bring can be a boon to the community.
Tilly compared Mexican workers' contracts with Wal-Mart with those at other supermarket chains in 2007 and found that Wal-Mart's pay was comparable or slightly higher. He cited other studies that have shown Wal-Mart paying higher-than-average wages in China and as much as 40 percent more than major competitors in unionized Argentina.
"Certainly they prefer to do without unions, but there are other things that are more core to the model," Tilly said, such as the retailer's famously efficient logistics.
In South Africa, government officials approved Wal-Mart's acquisition of retail conglomerate Massmart on the condition that it honor existing union contracts for three years and vow not to eliminate any jobs for two years. It also required the company to give preference to 500 workers who were recently fired from Massmart and establish a fund to buy from local suppliers.
But the government's decision made no mention of Wal-Mart's tensions with U.S. unions.
"We have a local philosophy," Wal-Mart International chief executive Doug McMillon recently told reporters. "It's our intention to demonstrate that we are a great corporate citizen."
Still, labor organizations pointed to a strike in Chile this spring by 300 Wal-Mart employees to showcase the need for an international alliance.
"We ain't going anywhere," said Michael Bride, deputy organizing director for global strategies at the United Food and Commercial Workers International Union, which has been a vocal Wal-Mart critic. "That's something that the company's going to have to grapple with again and again."
muiy@washpost.com
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CORRECTION: A June 8 Economy & Business article about Wal-Mart's international unions incorrectly described
Page 2 For Wal-Mart, global pressures The Washington Post June 8, 2011 Wednesday Correction Appended
one of the conditions on which South Africa's government approved the company's acquisition of a retail conglomerate in that country. Wal-Mart was required to establish a fund for supplier development, not a fund to buy from local suppliers.
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Page 3 For Wal-Mart, global pressures The Washington Post June 8, 2011 Wednesday Correction Appended
6 of 997 DOCUMENTS
The International Herald Tribune
June 1, 2011 Wednesday
Rattling Wal-Mart's supply chain; Retailer resists drive for disclosure on how workers are treated
BYLINE: BY STEPHANIE CLIFFORD
SECTION: FINANCE; Pg. 17
LENGTH: 1011 words
DATELINE: NEW YORK
ABSTRACT
Complaining that the retailer puts too much pressure on suppliers to cut costs, New York City pension fund representatives plan to ask the company to require vendors to publish workplace reports.
FULL TEXT
Wal-Mart is facing new pressure to monitor and disclose how its international suppliers treat their workers.
At Wal-Mart's annual shareholder meeting on Friday, the New York City pension funds, which own a small percentage of shares in Wal-Mart, plan to ask the company to require vendors to publish annual reports detailing working conditions in their factories.
Michael Garland, who oversees shareholder activism efforts as executive director for corporate governance at the city comptroller's office, said the proposal was meant to improve workplace safety and workers' rights at companies making goods for Wal-Mart, the world's largest retailer.
''No matter how much Wal-Mart and other companies are doing, or claim they are doing, to monitor their suppliers, they just don't have the capacity to do it in a comprehensive way,'' Mr. Garland said. ''They put tremendous pressure on their suppliers to cut money out of the system,'' which can lead to long hours, low pay or other problems.
Wal-Mart opposes the request, citing the difficulty of persuading suppliers to issue reports. The company contends that even if it could enforce such a plan, to do so might threaten the availability of certain products from those who did not comply.
While Mr. Garland acknowledged that the proposal was unlikely to succeed, he said casting a spotlight on the problem could prompt Wal-Mart to begin considering how to address its association with suppliers who did not treat workers fairly.
Kalpona Akter, a Bangladeshi labor organizer who is expected to present the proposal at the meeting in Fayetteville, Arkansas, complained that many of the factories in Bangladesh that produced goods for Wal-Mart mistreated their workers. At Wal-Mart suppliers, she said, ''very often, first of all, the factory does not enforce the law'' regarding
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minimum wages.
''Though the minimum salary has been cleared by the government, and many factories implemented that,'' she added, ''we haven't seen any Wal-Mart suppliers giving a living wage to workers.''
Though Wal-Mart sometimes sends auditors to check on working conditions, ''when the auditor goes to the factory, the worker is coached by the management to tell lies in front of the auditors - that they are being paid living wages, that they are not being harassed,'' she said.
The proposal states that there is a ''significant gap between general policies against labor and human rights abuse and more detailed standards and enforcement mechanisms required to carry them out.''
It asks vendors to publish yearly reports that ''include the supplier's objective assessments and measurements of performance on workplace safety, and human and worker rights, using internationally recognized standards, indicators and measurement protocols.''
''These problems, particularly with regard to labor and human rights practices, are in the supply chain,'' Mr. Garland said. ''So even at companies that produce sustainability reports, like Wal-Mart, there's an inability to get to the practices within the supply chain.''
A Wal-Mart spokesman, David Tovar, wrote in an e-mail that for years Wal-Mart had maintained standards ''that address the treatment of workers by suppliers and supplier workplace safety.''
''We expect our suppliers to meet or exceed these standards,'' Mr. Tovar said. ''Our supplier standards are not merely goals that we encourage our suppliers to meet; rather, a supplier's failure to adhere to these standards may jeopardize that supplier's continued business relationship with Wal-Mart.''
The New York City pension funds, which represent civil servants including police, teachers and fire department employees, own about 5.7 million shares of Wal-Mart stock, worth about $312 million. That gives them an ownership stake of less than 0.2 percent in Wal-Mart.
Wal-Mart has been fighting the proposal since January, when it notified the U.S. Securities and Exchange Commission that it planned to strike the proposal from its proxy statement, and asked the S.E.C. not to penalize it for doing so.
Wal-Mart wrote the S.E.C. saying it did not have the contractual authority to require suppliers to publish the sustainability reports. In addition, using only those suppliers that issued these reports would require it to renegotiate thousands of agreements.
In the environmental field, Wal-Mart has successfully created metrics for reducing packaging and asked suppliers to change their practices in response, suggesting that creating new standards across the supply chain is feasible.
In late March, the S.E.C. declined Wal-Mart's request to strike the proposal.
''Wal-Mart's practices and policies do not compare favorably with the guidelines of the proposal,'' wrote Rose A. Zukin, a lawyer for the S.E.C., and ''it appears that the proposal may focus on the significant policy issues of sustainability and human rights.''
South Africa has approved a $2.4 billion bid by Wal-Mart for Massmart, a local retailer, without imposing conditions that could have jeopardized the deal. The decision opens the door for the U.S. company to expand into the fast-growing African market, Reuters reported from Johannesburg.
The South African Competition Tribunal approved the deal on Tuesday with the stipulation that Wal-Mart must not cut jobs for two years and must work to develop local suppliers.
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Herald Tribune June 1, 2011 Wednesday
The decision is likely to be seen as a major advance for Wal-Mart, the world's largest retailer, which had said that it could walk away from the deal if targets were put on local procurement.
The decision still could trigger industrial action. South African unions had threatened the ''mother of all boycotts'' if the deal were approved.
The deal has been seen as a test case for major foreign investment in South Africa. Home to the continent's deepest capital markets, South Africa is also a country where unions hold enormous political influence.
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Page 6 Rattling Wal-Mart's supply chain; Retailer resists drive for disclosure on how workers are treated The International
Herald Tribune June 1, 2011 Wednesday
19 of 997 DOCUMENTS
The Globe and Mail (Canada)
January 21, 2011 Friday
Attention shoppers: Wal-Mart plans to offer healthier foods in U.S.
BYLINE: PAUL WALDIE and CARLY WEEKS
SECTION: INTERNATIONAL NEWS; RETAILING; Pg. A19
LENGTH: 915 words
Wal-Mart has changed the way people shop, now it wants to change the way they eat.
The world's largest retailer announced a five-year plan on Thursday to cut prices on healthy food and press its suppliers to cut back on sodium, sugar and trans fats in their packaged products.
The announcement won the backing of Michelle Obama, who has been leading a White House initiative to combat child obesity. Wal-Mart's move had "the potential to transform the marketplace and help Americans put healthier foods on their tables every single day," Ms. Obama said during a news conference in Washington with Wal-Mart executives.
There has been a trend toward healthier eating for years, but some experts say Wal-Mart's decision to take up the cause marks a kind of tipping point that could transform the way healthy food is sold and make it more affordable for huge portions of the population.
"The implications are very deep and wide," said Mari Gallagher, a Chicago consultant whose public health research in 2006 led to the concept of "food deserts," communities that don't have a grocery store but rely on fast food outlets and convenience stores.
"This will not only mean better food in Wal-Mart but it would mean better food at some of these fringe places ... Wal-Mart is very powerful because it's so ubiquitous. It's in rural areas and suburban areas across the country. It's reaching a lot of different kinds of consumers. And many consumers are concerned about healthy food but also the price of food."
Ms. Gallagher and others say Wal-Mart is one of the few companies that has the power to alter eating habits. Over the past 20 years, the Arkansas-based retailer has moved away from its roots as a general merchant and has become a food behemoth. Sales of groceries accounted for more than half of Wal-Mart's roughly $260-billion revenue in the United States last year and the company sells almost twice as much food as the biggest U.S. supermarket chain. In Canada, Wal-Mart doesn't have the same dominance in the grocery business but its market share is growing as it adds more food products. Wal-Mart Canada said Thursday it is not planning to follow its parent company's lead for now, but will focus instead on increasing its emphasis on locally-sourced produce.
Experts say if Wal-Mart is serious about selling healthy food, its impact will go beyond the grocery store aisles. Wal-Mart's buying power means it can force food companies such as Kraft, Campbell Soup and General Mills to produce healthier products at a lower cost. The ability of Wal-Mart to institute across-the-board changes to the nutrition of food products rivals that of the U.S. Food and Drug Administration, said Michael Jacobson, executive
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director of the Center for Science in the Public Interest, a Washington-based consumer advocacy group.
"Wal-Mart's pressure on food manufacturers will absolutely have a ripple effect," Mr. Jacobson said. "When they snap their fingers, their suppliers jump because everybody wants Wal-Mart's business."
Any move by Wal-Mart will also likely be matched by other retailers, many of whom have been reeling under pricing pressure from Wal-Mart. "I think this puts the onus on those stores to look at what they're serving and see if they need to make improvements," said Yoni Freedhoff, medical director of Ottawa's Bariatric Medical Institute and an outspoken advocate on nutrition issues.
But there are skeptics, including those who say Wal-Mart's announcement was more about public relations than healthy eating.
"I see this as, essentially Wal-Mart looking to get media and consumers attention by doing something that they have to do anyway," said Martin Gooch, director of the Value Chain Management Centre, a Guelph, Ont.-based food retail expert. Mr. Gooch added that changing consumer demands and government regulation have already forced food companies to move toward healthier offerings. Wal-Mart, he said, is simply catching up.
He said Wal-Mart is also trying to expand its customer base. The company has been facing growing competition from up-market rivals such as Target, which also sells groceries and is planning to expand into Canada. "Wal-Mart is still very much [focused] on the price issue, which does appeal to a certain segment of the market. But I think there's way more than price that appeals to the majority of the market," Mr. Gooch said.
Appealing to health issues has also helped Wal-Mart overcome opposition to its expansion plans in some communities. In Chicago for example city officials blocked Wal-Mart's expansion plans for years over concerns about low pay for its employees. But when Wal-Mart officials pointed out that new stores would bring groceries to "food deserts," opposition quickly faded and the company won approval for several locations.
Wisconsin-based supermarket research analyst David Livingston said he's skeptical Wal-Mart's announcement will have an impact on the health of consumers because the company is not going to sacrifice sales by producing bland, unpalatable food. Wal-Mart may lower the amount of certain unhealthy ingredients in salty salad dressings, sugary fruit drinks or preservative-filled frozen dinners, but in the end, those products still can't be considered healthy.
"The whole point is to sell food, not to make people healthy," Mr. Livingston said. "We're not going to become a continent of super healthy people just because Wal-Mart says they're going to change a few things around."
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Page 8 Attention shoppers: Wal-Mart plans to offer healthier foods in U.S. The Globe and Mail (Canada) January 21, 2011
Friday
25 of 997 DOCUMENTS
The International Herald Tribune
October 16, 2010 Saturday
A global retailing giant embraces locally grown produce; Wal-Mart will also gauge how efficiently the food it sells reaches its stores
BYLINE: BY STEPHANIE CLIFFORD
SECTION: FINANCE; Pg. 11
LENGTH: 1076 words
DATELINE: NEW YORK
ABSTRACT
The world's largest retailer announced a program Thursday that focuses on sustainable agriculture among its suppliers as it tries to reduce its overall environmental effects.
FULL TEXT
The local-and-sustainable food movement has spread to the world's largest retailer.
Wal-Mart announced a program Thursday that focuses on sustainable agriculture among its suppliers as it tries to reduce its overall environmental effects.
The program is intended to put more locally grown food in Wal-Mart stores in the United States, invest in training and infrastructure for operators of small and medium-size farms, particularly in emerging markets, and begin to measure how efficiently large suppliers grow and get their produce into stores.
Advocates of environmentally sustainable farming said the announcement was significant because of Wal-Mart's size and because it would give small farmers a chance at Wal-Mart's business, but they questioned how ''local'' a $405 billion company with two million employees could be.
Given that Wal-Mart, based in Arkansas, is the world's largest grocer, with one of the biggest food supply chains, any change it made would have wide implications.
Wal-Mart's decision five years ago to set sustainability goals that, among other things, increased its reliance on renewable energy and reduced packaging waste among its suppliers sent broad ripples through product manufacturers.
Large companies like Procter & Gamble redesigned packages that are now carried by other retailers, while Wal-Mart's measurements of the environmental efficiency of its suppliers helped define how they needed to change.
''No other retailer has the ability to make more of a difference than Wal-Mart,'' the retailer's president and chief executive, Michael T. Duke, said in remarks prepared for a meeting Thursday. ''Grocery is more than half of Wal-Mart's business. Yet only 4 of our 39 public sustainability goals address food.''
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Wal-Mart said it expected to meet the goals by the end of 2015.
In the United States, Wal-Mart plans to double the percentage of locally grown produce it sells to 9 percent. Wal-Mart defines local produce as that grown and sold in the same state.
Still, the program is far less ambitious than in some other countries - in Canada, for instance, Wal-Mart expects to buy 30 percent of its produce locally by the end of 2013, and, when local produce is available, increase that to 100 percent.
''Our food business in Canada is brand new, so there's a lot they can do,'' said Andrea Thomas, senior vice president of sustainability. She said the program allowed each country to set its own specific goals.
In emerging markets, Wal-Mart has pledged to sell $1 billion of food from small and medium-size farmers (which it defines as farmers with fewer than 20 hectares, or about 50 acres). It will also provide training for farmers and their laborers on how to choose crops that are in demand and on proper application of water and pesticides.
Both in the United States and globally, Wal-Mart will invest more than $1 billion to improve its supply chain for perishable food. For example, if trucks, trains and distribution centers could help farmers in Minnesota get crops to Wal-Mart more quickly, the result would be less spoiled food, a longer shelf life and presumably more profit for the farmers and for Wal-Mart.
Wal-Mart said it planned to reduce food waste in emerging-market stores by 15 percent and in other stores by 10 percent.
Michelle Mauthe Harvey of the Environmental Defense Fund, who worked with Wal-Mart on the goals, said that was significant.
''As we've moved to reliance on key locations like California and Florida,'' she said, ''we've made it very difficult for local farmers to actually get their food to market.''
As Wal-Mart is doing with consumer products, it will begin asking agricultural producers questions about water, fertilizer and chemical use. The eventual goal is to include that information in a sustainability index.
Customers would see sustainability ratings, so they could decide whether to choose one avocado over another based on how efficiently it had been grown and shipped. Wal-Mart could use index information when it decided from whom to buy.
Finally, the company announced specific guidelines for the sources of its products, including a requirement that palm oil from sustainable sources be used in all its private-label products (the Wal-Mart house brands) and that any beef it sold not have contributed to the deforestation of the Amazon region because of cattle ranch expansion.
While the overall goals include Sam's Club, the warehouse store wing of Wal-Mart, that division also has other specific goals, including a 15 percent increase in fair trade or Rainforest Alliance-certified flowers and produce.
Some local-food supporters said that while the environmental goals were positive, Wal-Mart could not provide some benefits that other buy-local movements did.
For instance, said Linda Berlin, director of the Center for Sustainable Agriculture at the University of Vermont, farmers markets help return money to the local economy.
''The local-food movement has been, certainly, about taste and quality of food, about providing good incomes for farmers and also about other things that have to do with building smaller economies so we as a society aren't dominated by the more industrial complexes,'' she said. ''This initiative doesn't necessarily address that.''
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reaches its stores The International Herald Tribune October 16, 2010 Saturday
Other environmental and agricultural specialists said it would have a big effect.
''It's very impressive,'' said Margaret Mellon, director of the food and environment program at the Union of Concerned Scientists. ''It's encouraging that Wal-Mart understands that the path forward in agriculture isn't through making the big bigger, it's really through encouraging the small and medium-sized farms,'' she said.
Still, she said she was disappointed that goals around organic food had not been included, and surprised that Wal-Mart had not addressed genetically modified seeds and produce.
The agricultural sustainability index was particularly noteworthy, said Marty Matlock, a professor of ecological engineering at the University of Arkansas.
''The index represents a real number that will mean improvement on the ground: improving ecosystem health, soil health and food quality,'' said Mr. Matlock, who worked with Wal-Mart on the sustainability goals. And those factors, he said, ''will move agricultural producers en masse.''
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Page 11 A global retailing giant embraces locally grown produce; Wal-Mart will also gauge how efficiently the food it sells
reaches its stores The International Herald Tribune October 16, 2010 Saturday