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Wal-Mart Faces Scrutiny Over Suppliers’ Chinese Labor Violations

Wal-Mart Stores (WMT) is the target of a new, unflattering report about the Chinese labor practices of some of its suppliers.

New York-based China Labor Watch (CLW), has released a report on its investigation of Wal-Mart Stores, Inc. [[WMT]] Chinese supply chain’s labor practices.

The report notes that due to consumer scrutiny, Wal-Mart established corporate responsibility standards for its Chinese supply chain that are enforced through factory audits. However, CLW reports that factories exploit and cheat on their commitments.

CLW investigations from April to June 2009 of Walmart suppliers Huasheng Packaging Factory and Hantai Shoe Factory found alleged violations including:

  • Some workers make only $0.51/hour, 60% of the minimum wage.
  • Poor working conditions: workers inhale large amounts of paper particles and other debris.
  • Twelve workers live together in cramped dorms.
  • Workers not paid overtime wages.
  • During busy season, workday is 11 hours or 77 hours per week, and overtime is mandatory.

Clearly these violations raise ethics concerns among many, but even callously setting aside such concerns (or arguing, as some do, that even if these allegations are true, the workers are still better-off than they otherwise would be) Wal-Mart should be concerned about continued attention to its labor practices given its history of mixed public relations management.

The company has made great strides recently overcoming villinization by union groups. It would be a serious business mistake to ignore the treatment of workers overseas and allow it to become a new cause that competitors, such as Target Corporation [[TGT]] – with its more friendly corporate facade, could exploit.

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