ABC Radio Australia: Walmart's China suppliers accused of employee abuses

China Labour Bulletin appears in the following article. Copyright remains with the original publisher and broadcaster.

Updated November 27, 2009 13:08:36

The American retail giant Wal Mart has run into trouble in China again, after some of its suppliers were accused of serious abuses against their workers.

An investigation by China Labour Watch has found several factories failing to implement Wal-Mart's basic work standards. The investigation unearthed claims that employees often faced wage freezes, low pay, and were allegedly forced to lie to auditors about working conditions. Wal Mart has been accused in the past of seeking to import its well-known opposition to labour unions in the United States, to China. The company says it is taking the allegations seriously, and has launched its own investigation.

Presenter: Girish Sawlani
Speakers: Li Qiang, executive director, China Labour Watch; Christina Lee, spokeswoman, Wal Mart China; Geoffrey Crothall, China Labour Bulletin

SAWLANI: Wal-Mart the world's largest retailer operates 250 stories in China and employs thousands of people both directly and indirectly through its suppliers. Its opposition to organised labour unions in China was reversed in 2004 after direct pressure on the company from Beijing. Now the New York based labour advocate, China Labour Watch, says several factories supplying Wal-Mart's Chinese outlets have subjected their workers to illegal and degrading conditions. The report found pay was withheld to workers who did not meet production targets, and that some employees received poor quality food and accommodation. Li Qiang is executive director of China Labour Watch:

LI: Firstly many suppliers don't obey Chinese labour laws, in fact some factories extend their overtime work to 13 hours a day. They don't buy medical insurance for the workers, some factories don't even pay overtime salary. Normally workers will be required to work overtime of between 120 to 140 hours per month, many factories withhold parts of worker's pay in the name of providing accommodation, but workers usually live in appalling conditions. It's also the same with the quality of the food they receive.

SAWLANI: While the factories are not owned by Wal-Mart, Li Qiang says the retail giant has pledged itself to operate ethically, and should take some responsibility for insuring workers rights are protected.

LI: Wal-Mart should be held accountable for these abuses. During the process of placing orders Wal-Mart would gather its suppliers and see who can give the lowest price. They will then use factories which quote the lowest prices. In order to get the orders, factories will try to keep their prices as low as possible. Naturally they will ignore safety and welfare issues for workers, as well as other issues like protecting the environment. So I reckon Wal-Mart's purchasing policy is the main reason for workers being abused.

SAWLANI: In response Wal-Mart China spokeswoman Christina Lee says the company has launched its own investigation into the alleged abuses.

LEE: As soon as we learned of these allegations we immediately launched an investigation of five factories referenced in the report. And that's consistent with how we respond to any reports of labour violations by suppliers and their factories actually. If anything we found it is illegal we will take immediate action. We will try to take some remedial action if the investigation is confirmed.

SAWLANI: Lee says Wal-Mart is committed to implementing ethical work standards.

LEE: We have a program called Ethical Standards Program, we only work with suppliers and their factories which meet Wal-Mart standards, and we also continuously improve audit their process and systems, and also we utilise factories that have good and fine working conditions for their workers.

SAWLANI: But these don't seem to be working?

LEE: Actually we need to continuously improve our efforts, but this is really Wal-Mart's Ethical Standards Program to improve the whole industry, the whole supply chain to meet these ethical standards, and also this is really a global effort for Wal-Mart.

SAWLANI: When it comes to worker abuse Wal-Mart is not the only foreign firm under fire from labour rights groups. Geoffrey Crothall if from the Hong Kong based China Labour Bulletin.

CROTHALL: Apple is one company that comes to mind. The vast majority of their products as far as I know are now produced in China, often by Taiwanese controlled companies and the labour standards of those companies are highly problematic. I think that Apple does have a responsibility to look into that problem.

SAWLANI: Part of the problem he says is the failure by Chinese authorities to implement the country's own labour laws.

CROTHALL: From time to time there will be government crackdowns on violations of labour rights, but generally speaking the enforcement of law in China is very lax. It boils down to the fact that very often employers have carte blanche to treat the workers in whatever way they feel will generate as much profit for themselves.

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