Is Walmart Reselling Clothes From Bangladesh Factories On Its Own Banned List?

Walmart  (NYSE:WMT) last month released a list of more than 200 factories it said it had barred from producing its merchandise because of serious or repeated safety problems, labor violations or unauthorized subcontracting. But at least two of the factories on the list have continued to send massive shipments of sports bras and girls' dresses to Walmart stores in recent months, according to a report Wednesday (June 12) in Pro Publica.

"In June 2011, Walmart said, it banned the Bangladeshi garment factory Mars Apparels from producing goods for the retail giant. But over the last year, Mars has repeatedly shipped tons of sports bras to Walmart, according to U.S. customs records and Mars owners. The most recent shipment was in late May, almost two years after Walmart claims it stopped doing business with the Bangladeshi firm," the story said. "A second Bangladeshi clothing maker, Simco Dresses, was blacklisted in January but continued shipping to Walmart Canada into March."

Walmart defended the actions, saying one happened because of "confusion over whether Walmart's standards applied" in one case. In another case, Walmart said that "orders that Walmart had already placed were accepted to lessen the impact on workers."

This does highlight questions about whether such blacklists are practical. It takes a long time to make supply chain changes in any operation as global and massive as Walmart. It should have stressed when the list was unveiled that it could take many months before any products from any of these suppliers are completely gone from Walmart shelves, with a good chance that a few would linger longer.

The Pro Publica story also raised another question these kinds of blacklists, saying that interviews with Bangladeshi factory owners revealed complaints that the list could unfairly taint family business with minor violations. The best way to combat that would be to be much more detailed as to each suppliers' violations.

For more:

- See Pro Publica story

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