Walmart will finally release the results of a much anticipated audit of its Bangladesh factories for safety, the first time a major Western retailer has provided such a transparent portal into its inspections process.
Currently, Walmart contracts with more than 200 factories in Bangladesh and has, thus far, managed to inspect seventy-five of them. Approximately 15 percent of these failed the initial round of inspections. One of these was in such egregious violation of code it had to be shuttered. The company’s plan is to have completed an inspection of all of its factories and begin publishing the results in the next few months.
Historically, Walmart has played its cards close to the chest, refraining from openly discussing its factories, their safety and structural conditions and even specific locations. But now they aim to become an industry leader in supply chain transparency. Jay Jorgensen, Walmart’s global chief compliance officer, said, “We’ve spent $4 million on these audits, and we’re not done yet. There’s a lot of progress left to be made.”
In lieu of specific details regarding the inspections result specific to each factory, Walmart will be disclosing the grade it assigns to each factory. Basic risk assessments will be assigned letter grades, ranging from A through D. Walmart plans to discontinue contracting with any business that earns a D, though there are opportunities for them to improve and them resubmit to inspection.
Walmart says this is the first step towards a much more aggressive approach to vigilantly supervising the totality of its supply chain, particularly the weaker links. In addition to the inspections, it plans to train its buyers in basic compliance and incentivize its merchants to take labor conditions and factory safety into account. It also intends to offer $50 million in low-interest loans to factories willing to make considerable infrastructural improvements. And Walmart’s head of ethical sourcing, Jan Saumweber, will hire a team of ten engineers for their sourcing office in Bangladesh and increase her staff by 40 percent. “These are big changes and the company takes this very seriously,” she said.
Still, many critics complain that Walmart’s efforts are insufficient, failing to provide enough information to be truly useful to any firm looking to contract with a factory, or to incentivize a factory to take reform seriously.
Scott Nova, executive director of the Worker Rights Consortium, said, “I am struck by how little real information they are providing. They offer no specifics whatsoever as to the dangers workers face in these factories, all we get is a scoring system that is largely opaque.”
In the face of criticism, Wal-Mart remained optimistic about its current strategies. Speaking to WWD, Saumweber said, “This is the first time any retailer has published this breadth of information about their factory base. We were so encouraged to see [the rate of improvement] in such a short window of time. On average they had 60 days from the initial assessment to follow through.”
Walmart has already conducted a second audit of the first round of factories, with thirty-four improving a first score of a D or C to an A or B.