The San Francisco Chronicle reports that:
“Workers in foreign factories that supply Wal-Mart can't blame the company for their alleged sweatshop conditions, despite the retail giant's code of conduct that's supposed to hold its contractors to decent labor standards, a federal appeals court ruled Friday.
The Ninth U.S. Circuit of Appeals in San Francisco refused to reinstate a suit filed in 2005 by factory workers in China, Bangladesh, Indonesia, Swaziland and Nicaragua. They accused Wal-Mart of failing to enforce its code and winking at violations, while touting its standards to potential shoppers”.
More information about Walmart’s code of conduct is available here, including their special rules for suppliers in China.
The activists in this case claimed that Walmart was “was lax in monitoring factories, often gave its contractors advance notice of inspections, coached workers on how to respond and pressured inspectors into covering up violations.” CLB has previously reported how employees in Chinese factories are coached and rewarded by lying to labour inspectors.
However, regardless of whether the allegations are true or not, the court upheld “an April 2007 ruling by a federal judge in Santa Ana" saying that "the company had no legal duty to monitor its suppliers or protect their workers”.
The court’s ruling simply underscores one simple fact: only the relationship between employer and employee has legal status in China, and although buyers may have a moral duty in pressuring suppliers to improve their factory’s conditions, under both American and Chinese law, they have no legal obligation to do so, and in fact, in many cases, their economic incentive is to do just the opposite. Although encouraging companies to implement and enforce a good code of conduct and increasing legal defense for workers are not mutually exclusive strategies, clearly, this latest ruling shows the limits of the code of conduct route.
What do you think?