Wal-Mart tightens supplier policy after factory fire: Wall Street Journal

Jan 22 2013, 10:30 IST
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WalMart Stores Inc plans to cut ties immediately with suppliers who subcontract work to factories. (Reuters) WalMart Stores Inc plans to cut ties immediately with suppliers who subcontract work to factories. (Reuters)
SummaryWalMart Stores Inc plans to cut ties immediately with suppliers who subcontract work to factories.

Wal-Mart Stores Inc plans to cut ties immediately with suppliers who subcontract work to factories without the retailer's knowledge, changing its policy after a fire killed more than 100 garment workers in Bangladesh, the Wall Street Journal reported.

Wal-Mart is warning suppliers that it is adopting a "zero tolerance policy" for violations of its global sourcing standards and the company's new plan would begin taking effect from March 1, the Journal said.

The tougher code replaces Wal-Mart's prior "three strikes" approach to policing suppliers, which gave the suppliers three chances to address problems before being terminated.

"Obviously our three-strike policy wasn't working as well as it could have," Rajan Kamalanathan, Wal-Mart's vice president of ethical sourcing, told the Journal in an interview. "Our message of zero tolerance is meant to get people's attention."

Wal-Mart could not be reached for comment by Reuters outside of regular U.S. business hours.

More than 100 workers were killed in a Nov. 24 fire at the Tazreen garment factory in Bangladesh. Wal-Mart has said repeatedly that its Faded Glory clothing should not have been in production at the factory, a facility Bangladeshi authorities said was not safe for use.

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