When Walmart (NYSE:WMT) customers returned products to local stores, those store associates dumped them into municipal trash bins or "poured it into the local sewer system," according to federal filings. The government said the products included pesticides, while Walmart characterized it more as "mouthwash and hairspray." (You say tomato, I say Molotov cocktail…) Given that the substances were considered hazardous waste (when handled at the retail level), this exposed Walmart to various federal charges. On Tuesday (May 28), Walmart pleaded guilty to some of those charges and agreed to pay almost $82 million in fines.
The U.S. Justice Department said that Walmart sells "thousands of products which are flammable, corrosive, reactive, toxic or otherwise hazardous under federal law. The products that contain hazardous materials include pesticides, solvents, detergents, paints, aerosols and cleaners. Once discarded, these products are considered hazardous waste under federal law."
The incidents happened years ago, Walmart said, and even the government said it found no such instances after January 2006.
Walmart even said that IT played a role in addressing the toxic waste situation. "Walmart completed a multi-year project to enhance IT systems that allows it to analyze waste generation trends for consumer products. This enables the company to better identify and track the disposition of products that for a variety of reasons will not be sold in stores," a Walmart statement said. "Walmart can now provide real time product specific direction to associates regarding properly managing products, significantly reducing the number of products that become hazardous waste."
The chain pleaded guilty to federal charges in Los Angeles, San Francisco and Kansas City, charges that included six counts of violating the Clean Water Act by illegally handling and disposing of hazardous materials at its retail stores across the United States. The Kansas City charges mostly involved violating the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) by failing to properly handle pesticides that had been returned by customers at its stores across the country.
"As one of the largest retailers in the United States, Walmart is responsible not only for the stock on its shelves, but also for the significant amount of hazardous materials that result from damaged products returned by customers," said Melinda Haag, U.S. attorney for the Northern District of California. "The crimes in these cases stem from Walmart's failure to comply with the regulations designed to ensure the proper handling, storage, and disposal of those hazardous materials and waste. With its guilty plea today, Walmart is in a position to be an industry leader by ensuring that not only Walmart, but all retail stores properly handle their waste."
Not so sure about how Walmart is supposed to "ensure" that all of its retail rivals "properly handle their waste," but it sounds good in a news release. What that is presumably referencing is part of the $82 million in fines is $6 million to create a "Retail Compliance Assistant Center" to help all retailers "learn how to properly handle hazardous waste," said a Justice Department statement. That might be helpful—to the extent other chains use it—but that will hardly "ensure" retail-wide compliance.
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