October 1, 2008
Walmart Says ‘No’ to Uzbek Cotton Over Child Labor
Walmart is the latest retailer to announce it will not buy cotton sourced from Uzbekistan over that country’s lack of action in ending forced child labor.
Other retailers including Tesco and Debenhams have previously said they would not do business with suppliers who bought cotton from the Central Asian nation. Uzbekistan, according to Reuters, is one of the top exporters of cotton in the world.
Walmart’s vice president of ethical standards, Rajan Kamalanathan, said the retailer was working with trade associations, government agencies and others to exert pressure on Uzbekistan.
“We have formed an unprecedented coalition, representing 90 percent of the U.S. purchases of cotton and cotton-based merchandise, to bring these appalling child labor conditions to an end. There is no tolerance for forced child labor in the Wal-Mart supply chain,” said Mr. Kamalanathan in a statement.
The American Association of Footwear and Apparel, Retail Industry Leaders Association, National Retail Federation, and the United States Association of Importers of Textiles and Apparel sent a letter to the Uzbekistan Embassy in August asking the government to step in and end forced child labor in the harvesting of cotton.
The Uzbek government responded in September with a list of steps it would take as part of a National Action Plan.
Walmart has said it will reconsider its decision once it is able to verify that Uzbekistan has adequately addressed the problem.
Discussion Questions: Do you see new precedents being set in this action in
the kind of pressure a retailer coalition is able to apply to sourcing markets?
Do you see dangers in businesses and trade associations taking sides against
foreign governments?
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It seems that even Walmart executives like Rajan Kamalanathan haven’t gotten the memo that the spelling of their employer’s name has changed. So sad. If they approve the misspelling of their employer’s name in a press release, how can you trust the veracity of any of the other details appearing there?
There are additional questions: Does Walmart’s willingness to purchase content offshore (which can be found here in the U.S.) encourage offsource suppliers to abuse their workers to provide lower costs? Is there a systemic Walmart pattern that connects the purchase of UZ cotton to the purchase of tainted products from China?
Due diligence. When did we abandon that concept?
Such collaboration and cohesiveness for the common good is needed to reduce government legislation and benefit all. When the issue is quality, safety and security, or humanitarian, this kind of collaboration will carry much weight.
The new theme and trend in the industry arising as the “next big thing” is among vendors and retailers…forget the imaginary competitive barriers and come together to reduce cost, and increase safety and quality. Collaborate on big issues! Reach across party lines…oops, that’s politics!!!
Considering Walmart’s current image problems, I would say this is a necessary move for them. Who in their right mind wants to be associated with child labor in this day and age? The only real way to force these countries to stop this practice is through economic coercion. While singling out Uzbek cotton is a good start, I suspect they are only scratching the surface. Most of the stuff in Walmart is made in China and as we know, controls over there are loose at best.
Retailers need to really consider where they are getting inventory from and how it is made. I don’t care how bad margins are or how the economy is doing. Child labor is an unacceptable practice and must be stopped at the source. Punishing manufacturers who employ children is the most direct way to deter this problem and it starts with retailers stepping up to the plate and saying NO!
We’ve heard this before and I’m not sure if anything really comes of it. We certainly hope that working conditions for children improve, if need be. Still Walmart’s priority is to purchase items as cheaply as possible. Do any of Walmart’s consumers really care where and how the cotton was produced?
I’m not really sure what forced child labor means. Have any of you grown up on a farm? I knew lots of kids forced by their parents to work in their agriculture enterprise. These stories can sometimes be spinned a certain way to promote someone’s agenda. Regardless, this is a power play against the Uzbek government. In the end, it will be all about the cotton and not about the children.
I don’t know enough about Uzbekistan’s economy to know whether or not this will have much of an impact. If cotton is a huge piece of their economy, it’ll have a big impact; if not, it won’t. Or, they might just move cotton workers to a different industry.
Having said that, I think Walmart is doing the right thing, absolutely. Any pressure we can bring to bear against this sort of thing is good. A Walmart exec said, memorably, some time ago, that often the best way to bring about change is not via government intervention, but via the order blank. Amen to that.
Finally, actions such as this by businesses could always bring about retaliation by overseas governments or businesses, but given all the circumstances I’m aware of in this case at least, I wouldn’t lose sleep over it.
Walmart and several other major retailers have been requiring and/or conducting social compliance audits at overseas manufacturing facilities for a number of years now. While this process is rife with corruption and unrealistic expectations, one very positive result has been the painfully slow adoption of Western ethics in some developing ares. This is a very complicated situation, one which might be served well by such a strong message.
Suppliers who are now scrambling for alternative sources simply did not do their homework. In this truly global economy, wise suppliers–and direct importing retailers–must be prepared to go to alternative sources for several reasons, not the least of which is to comply with customer requirements for ethical compliance.
What a refreshing concept of private enterprise putting pressure on a government to do the right thing instead of the other way around. We have found out that the U.S. government wasn’t regulating our financial system, maybe we need the Walmarts of the world to do it?
Well done by Walmart! Responsible action toward all stakeholders, including suppliers and our community is a core tenet of the firm. Perhaps Mr. Livingston, who seems to feel that seeking profit is the only goal of the firm, and that all means to such an end are justified outside the social contract, has missed the last 30 years of development in business theory and practice. Ethical action by firms furthers not only society, but also the firm.
What George wrote, “Other retailers including Tesco and Debenhams have previously said they would not do business with suppliers who bought cotton from the Central Asian nation” is a big point.
Walmart supposedly has inspectors, but other retailers spoke out 1st.
Let’s pretend — I mean think hypothetically: Walmart has inspectors who are passionate about doing the right things in the right ways. Do they interview workers in off site settings so the supervisors won’t intimidate the workers? Do they do surprise inspections or do they set appointments? Are there gated fences around the factories? How long does it take to get permission to enter? How long does it take to get from the gates to the factories?
Supervisors may be able to cover up abuses while inspectors wait to enter the facilities.
They inspect factories, but from whom do they get the addresses of and directions to those factories? I’m sure they get those directly or indirectly from the factories’ owners. There probably aren’t visitors’ bureaus or Chambers Of Commerce offices offering maps in 3rd world countries. How do they know if all of the products are made in the factories they inspect?
Those factories may be showcases where very little of the work is done. The majority of products could be produced in locations inspectors from a foreign country would never find. Even if inspectors know where sweatshops are, they may not dare go near them.
Among reasons for having products made in foreign countries, away from US legal authorities, are few–if any–restrictions on pollution, bribery and abuses that likely would be stopped here. Why do you think the Chinese government stopped factory production in and near Beijing before the Olympics? Preventing pollution increases costs and decreases profits.
I don’t think it matters what their motive really is, whether it be genuine concern over child labor issues, or more a concern over social responsibility in the public eye. I think it’s vital that big companies with lots of leverage make these steps to change the way suppliers operate.
I do see new precedents being set recently. Large retailers like Nike (with ambitious goals to cut waste and increase sustainability across all product lines), ABC carpet and home (to slowly phase out vendors with no sustainable factors or to help them become so), and Walmart (saying no to child labor) all have vastly different reasons to change their business practices. Nike’s head of corporate responsibility has no problem in admitting theirs has little to do with environmental concerns, and more to do with bottom line. ABC carpet and home is much the opposite, and Walmart? I am curious to see how they further evolve on this issue and what authenticity is behind it, if any….
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It seems that even Walmart executives like Rajan Kamalanathan haven’t gotten the memo that the spelling of their employer’s name has changed. So sad. If they approve the misspelling of their employer’s name in a press release, how can you trust the veracity of any of the other details appearing there?
There are additional questions: Does Walmart’s willingness to purchase content offshore (which can be found here in the U.S.) encourage offsource suppliers to abuse their workers to provide lower costs? Is there a systemic Walmart pattern that connects the purchase of UZ cotton to the purchase of tainted products from China?
Due diligence. When did we abandon that concept?
Such collaboration and cohesiveness for the common good is needed to reduce government legislation and benefit all. When the issue is quality, safety and security, or humanitarian, this kind of collaboration will carry much weight.
The new theme and trend in the industry arising as the “next big thing” is among vendors and retailers…forget the imaginary competitive barriers and come together to reduce cost, and increase safety and quality. Collaborate on big issues! Reach across party lines…oops, that’s politics!!!
Considering Walmart’s current image problems, I would say this is a necessary move for them. Who in their right mind wants to be associated with child labor in this day and age? The only real way to force these countries to stop this practice is through economic coercion. While singling out Uzbek cotton is a good start, I suspect they are only scratching the surface. Most of the stuff in Walmart is made in China and as we know, controls over there are loose at best.
Retailers need to really consider where they are getting inventory from and how it is made. I don’t care how bad margins are or how the economy is doing. Child labor is an unacceptable practice and must be stopped at the source. Punishing manufacturers who employ children is the most direct way to deter this problem and it starts with retailers stepping up to the plate and saying NO!
We’ve heard this before and I’m not sure if anything really comes of it. We certainly hope that working conditions for children improve, if need be. Still Walmart’s priority is to purchase items as cheaply as possible. Do any of Walmart’s consumers really care where and how the cotton was produced?
I’m not really sure what forced child labor means. Have any of you grown up on a farm? I knew lots of kids forced by their parents to work in their agriculture enterprise. These stories can sometimes be spinned a certain way to promote someone’s agenda. Regardless, this is a power play against the Uzbek government. In the end, it will be all about the cotton and not about the children.
I don’t know enough about Uzbekistan’s economy to know whether or not this will have much of an impact. If cotton is a huge piece of their economy, it’ll have a big impact; if not, it won’t. Or, they might just move cotton workers to a different industry.
Having said that, I think Walmart is doing the right thing, absolutely. Any pressure we can bring to bear against this sort of thing is good. A Walmart exec said, memorably, some time ago, that often the best way to bring about change is not via government intervention, but via the order blank. Amen to that.
Finally, actions such as this by businesses could always bring about retaliation by overseas governments or businesses, but given all the circumstances I’m aware of in this case at least, I wouldn’t lose sleep over it.
Walmart and several other major retailers have been requiring and/or conducting social compliance audits at overseas manufacturing facilities for a number of years now. While this process is rife with corruption and unrealistic expectations, one very positive result has been the painfully slow adoption of Western ethics in some developing ares. This is a very complicated situation, one which might be served well by such a strong message.
Suppliers who are now scrambling for alternative sources simply did not do their homework. In this truly global economy, wise suppliers–and direct importing retailers–must be prepared to go to alternative sources for several reasons, not the least of which is to comply with customer requirements for ethical compliance.
What a refreshing concept of private enterprise putting pressure on a government to do the right thing instead of the other way around. We have found out that the U.S. government wasn’t regulating our financial system, maybe we need the Walmarts of the world to do it?
Well done by Walmart! Responsible action toward all stakeholders, including suppliers and our community is a core tenet of the firm. Perhaps Mr. Livingston, who seems to feel that seeking profit is the only goal of the firm, and that all means to such an end are justified outside the social contract, has missed the last 30 years of development in business theory and practice. Ethical action by firms furthers not only society, but also the firm.
What George wrote, “Other retailers including Tesco and Debenhams have previously said they would not do business with suppliers who bought cotton from the Central Asian nation” is a big point.
Walmart supposedly has inspectors, but other retailers spoke out 1st.
Let’s pretend — I mean think hypothetically: Walmart has inspectors who are passionate about doing the right things in the right ways. Do they interview workers in off site settings so the supervisors won’t intimidate the workers? Do they do surprise inspections or do they set appointments? Are there gated fences around the factories? How long does it take to get permission to enter? How long does it take to get from the gates to the factories?
Supervisors may be able to cover up abuses while inspectors wait to enter the facilities.
They inspect factories, but from whom do they get the addresses of and directions to those factories? I’m sure they get those directly or indirectly from the factories’ owners. There probably aren’t visitors’ bureaus or Chambers Of Commerce offices offering maps in 3rd world countries. How do they know if all of the products are made in the factories they inspect?
Those factories may be showcases where very little of the work is done. The majority of products could be produced in locations inspectors from a foreign country would never find. Even if inspectors know where sweatshops are, they may not dare go near them.
Among reasons for having products made in foreign countries, away from US legal authorities, are few–if any–restrictions on pollution, bribery and abuses that likely would be stopped here. Why do you think the Chinese government stopped factory production in and near Beijing before the Olympics? Preventing pollution increases costs and decreases profits.
I don’t think it matters what their motive really is, whether it be genuine concern over child labor issues, or more a concern over social responsibility in the public eye. I think it’s vital that big companies with lots of leverage make these steps to change the way suppliers operate.
I do see new precedents being set recently. Large retailers like Nike (with ambitious goals to cut waste and increase sustainability across all product lines), ABC carpet and home (to slowly phase out vendors with no sustainable factors or to help them become so), and Walmart (saying no to child labor) all have vastly different reasons to change their business practices. Nike’s head of corporate responsibility has no problem in admitting theirs has little to do with environmental concerns, and more to do with bottom line. ABC carpet and home is much the opposite, and Walmart? I am curious to see how they further evolve on this issue and what authenticity is behind it, if any….