Press statement from the Hong Kong based organisation SACOM about a new report on toys produced for Walmart. Also copied in a statement jointly released by the Hong Kong based organisation SACOM, and US-based coalition Walmart-Watch, who released the report on the eve of the publication of Walmart's "2006 Ethical Sourcing report". SACOMs report tells a very different story.

Tai Qiang worker

SACOM PRESS STATEMENT on release of Wal-Mart 2006 Ethical Sourcing
Aug 2007

The Story of Toys Made in China for Wal-Mart
Wal-Mart squeeze pushes Chinese toy factories to lie and cheat Chinese Workers suffer intense labor pains calling on human dignity

New research by Students and Scholars against Corporate Misbehavior (SACOM) shows that Wal-Mart – China’s eighth largest trading partner – consistently fails to catch and stop serious labor violations in its Chinese supplier factories, despite promising real changes in its monitoring system.

Interviews conducted between June 2005 and December 2006 with eighty-two workers at five Wal-Mart toy supplier factories in the cities of Shenzhen and Zhuhai in Guangdong province uncovered widespread illegal and unethical labor practices that previously eluded Wal-Mart auditors.

During off-site interviews, workers at the five Wal-Mart toy factories gave SACOM researchers detailed accounts concerning wage and hour violations, unsafe working conditions, unsanitary worker housing, hash punishments and heavy fines, deprivation of labor contract protection, non-provision of social security, illegal firings and suppression by factory management.

Scripts, Threats and Hidden Workers

Testimony and detailed evidence collected from factory workers sheds new light on why Wal-Mart’s “supplier code of ethics” and top-down monitoring program is built to fail.

At the Tai Hsing toy factory in Shenzhen, managers conducted “training sessions” with workers on how to answer questions from Wal-Mart’s auditors in preparation for pre-announced inspections. At these trainings, managers warned workers, “If you answer auditors’ questions incorrectly, we get to lose orders and you get to lose your job.”

At the Kam Long toy factory in Zhuhai, managers resorted to fraudulent tactics by preparing a set of scripts for frequently asked questions, forced workers to commit a standardized answer key to memory in dealing with an upcoming Wal-Mart audit. On the day of the audit, all the workers without labor contracts, workers without social insurance, and novice workers were required to take a day off to avoid detection.

Failing Standards for Suppliers, Suppression of Union RightsWal-Mart claims to be committed to workers’ rights to “freedom of association” but workers argue the opposite. When Tai Qiang workers petitioned to the Wal-Mart corporate responsibility department in April 2005 to set up a worker-run union in accordance with the Chinese law, they received no reply. Wal-Mart turned a blind eye to their sufferings when the worker leaders were retaliated and laid off by the factory management.

At Kam Long, in one worker’s words, “We all are forced to keep our resentment to ourselves, there is nowhere to register complaints… and we are afraid if we do complain, we will be fired or receive wage deductions.”

The Wal-Mart Squeeze

Widespread accounts of labor violations in Wal-Mart’s supplier factories indicate that Wal-Mart’s attempt to improve working conditions in China and other countries is not a serious one. Wal-Mart’s low-cost sourcing strategy coupled with its porous monitoring system encourages suppliers to violate even the most basic laws and ethical standards.

SACOM AND WAL-MART WATCH JOINT STATEMENT ON RELEASE OF WAL-MART 2006 ETHICAL SOURCING

15 Aug 2007

Wal-Mart Watch executive director David Nassar today released the following statement in response to Wal-Mart's 2006 Ethical Sourcing Report:

"Wal-Mart's Report on Ethical Sourcing is an attempt to avoid responsibility for the problems the company itself has created.”

"In recent years, in factory after factory that supplies goods for Wal-Mart, widespread cases of blatant illegal and unethical labor abuses have been uncovered. Today, we are releasing another report produced by Students and Scholars against Corporate Misbehavior (SACOM) that shows serious labor violations in toy factories in China ranging from wage and hour violations to unsafe working conditions to unsanitary housing to coerced audit responses from workers.”

"In light of recent toy recalls, it is not a stretch to draw a connection between the pressure Wal-Mart puts on its suppliers for low cost merchandise, the problems at these factories and the safety issues of the products. If Wal-Mart and the Walton family were truly committed to improving product safety and worker conditions, the company would spend money to do it, not distract with a report that glosses over the serious problems within its supply chain."