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Walmart Slammed for “Pathetic” Contribution to Rana Plaza Victims’ Fund: $2.2 Million

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Mega-retailer Walmart has come under fire for the amount it pledged to a fund for the victims of the Rana Plaza factory collapse: $2.2 million.

The international union IndustriALL lambasted Walmart of what it considers unacceptable stinginess. Jyrki Raina, general secretary of the union, said, “The paltry amount of compensation money paid by the clothing giants can only be a start. Between them, Gap and Walmart, together with The Children’s Place and Walmart’s UK division Asda, will contribute £1,330,000. That equals around £300 per family. This is pathetic.”

She continued, “These dead and injured workers contributed to huge profits of the companies, created in dangerous conditions that finally proved fatal for these young women and men.”

Sam Maher, a spokesperson from the workers’ rights group Labour Behind the Label, said, “This is the first time that Walmart has contributed to compensation for the survivors and the families of those killed in a garment industry accident. As such we welcome the decision of both The Children’s Place and Walmart to finally pay contributions for compensation into the Rana Plaza Trust Fund. However their contributions are grossly inadequate. As one of the largest retailers in the world Walmart can and should be contributing a significant amount to the Fund.”

Walmart has sustained continued criticism for its response to the Rana Plaza tragedy but has recently tried to improve its strategic approach to factory safety. Just months ago, Walmart released 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.”

Walmart says this is the first step toward 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, Walmart has been hammered for its proposed financial commitments to Bangladesh, especially in light of its plans for capital spending on business expansion. Walmart remains committed to opening as many as 300 additional stores in the U.S., including 115 new supercenters. The retailer increased it capital spending plan for the year by a staggering $600 million. Total spending for the year is projected to be between $12.4 billion and $13.4 billion. Their eye-popping goal for 2016: $500 billion in sales.

Of the twenty-eight retailers who have pledged contributions to a fund set up to compensate the families of Rana Plaza victims, only sixteen have made good on their promises so far. The International Labour Organisation (ILO), which supervises the fund, originally intended to raise $40 million, but so far the fund only contains $7 million.

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