INDO BIZZ

Wal-Mart inspectors find more violations at foreign factories
The Jakarta Post

BENTONVILLE, Arkansas (AP): Wal-Mart Stores Inc. found a higher rate of severe violations at foreign factories last year as it stepped up inspections for labor and environmental standards in more than 60 countries where it buys clothes, toys, shoes andother products, it said in a report.

Only 23 factories were cut off from Wal-Mart's business for repeated violations, a sharp decline from 1,200 in 2004. But the retailer said that was in part because of a change in its auditing rules. It expects the number to increase again this year.

Wal-Mart posted its "2005 Report on Ethical Sourcing" on a section of its Web site last week but did not make any public announcement, spokeswoman Beth Keck said.

"In 2005, we audited more factories than any other company in the world, performing more than 13,600 initial and follow-up audits of 7,200 supplier factories," the report said.

The company is also the target of a U.S. lawsuit seeking class-action status for factory workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland.

In 2005, Wal-Mart's inspectors reported what it calls "high-risk" violations at 52 percent of those factories, compared with 36 percent in 2004.

Medium-risk violations were reported at 37 percent of plants, down from 43 percent the year before. Only 10 percent of factories were found to have no violations or only minor ones, compared with 21 percent in 2004.

Last year, as Wal-Mart came under mounting criticism led by union-backed campaign groups, Chief Executive Lee Scott said Wal-Mart would step up enforcement of workplace and environmentalstandards. It does not own factories but instead buys from others who do. (**)