Ethical sourcing around the world: Improving the supply chain
Cotton supply chain
Persistent and documented reports of the use of child labour in cotton harvesting in Uzbekistan led us to instruct our supply base to cease sourcing cotton and cotton materials from Uzbekistan in 2008. We also began working with international governmental organizations to pressure Uzbekistan to stop using child labour. To help communicate our position with our suppliers and their factories and to gain additional information on challenges related to the use of Uzbekistan cotton, we partnered with other brands and retailers as part of the Strategic Mills and Spinners Initiative organized by the Responsible Sourcing Network in 2010. As part of our work to address global concerns around cotton production, including harvesting and ginning processes, we are partnering with the America Apparel and Footwear Association and others to determine the most effective ways to work collaboratively as retailers and brands to address issues in the cotton supply chain. We have found that the nature of the industry makes it difficult to determine where cotton has been grown. One way we have worked to address this challenge is to support the Better Cotton Initiative (BCI), a nonprofit organization that works with farmers to develop supplies of cotton with less environmental and social impact than conventional cotton – “better cotton.” ASDA/George has been a BCI member for two years. We expanded our BCI membership to include Walmart U.S. in January 2012.
Dormitory standards
One important way we are working to improve the conditions of workers in our supply chain is through our efforts around dormitory standards. We are already seeing success in this program in Mexico. For example, following suggestions made by Walmart’s Ethical Sourcing team, Daniel Cardenas Cevallos, a supplier of fresh produce based in Mexico, undertook several programs to improve the living conditions on his farm, including renovating six living spaces, two bathrooms and a childcare facility for workers’ children. Daniel now reports that because of the improved living conditions, the workers, who are largely seasonal, have asked if they can return and work for him again next season.
Fire safety
Fire safety continues to be a key focus for brands and retailers sourcing from Bangladesh. Consultation with industry experts on fire, electrical and structural safety helped equip us to establish criteria for factories at high risk for incidents of fire. We visited our supplier factories to understand which ones met the criteria, and then worked with our suppliers in Bangladesh to phase their production out of buildings identified as high risk for fire safety hazards. In 2011, we ceased working with 49 factories in Bangladesh due to fire safety issues. In February 2011, we organized a supply chain meeting, in collaboration with other brands and retailers focused on fire safety, which was attended by 160 suppliers. Through our participation in the Bangladesh Buyers Forum, we worked with other retailers and brands to create fire safety training films and training materials. These materials are being distributed to all Bangladeshi exporting garment factories, and training facilitated by the involved exporter associations has begun.
Subcontracting
Undisclosed subcontracting is defined as factories in our supply chain that produce merchandise or component items for Walmart in a facility that is improperly disclosed and/or unknown to Walmart. There are signs that this practice may be on the rise in countries including, but not limited to, Indonesia, China and Pakistan. The potential impact of undisclosed subcontracting is that illegal and unethical practices can be more easily hidden. To more effectively monitor undisclosed subcontracting, we have taken steps to enhance our Standards for Suppliers, audit reporting and training processes.