wfn.org | Coalition calls on Wal-Mart to use independent monitors

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Jan. 26, 2001  News media contact: Tim Tanton·(615)742-5470·Nashville, Tenn.
10-21-30-71B{031}

By United Methodist News Service

A United Methodist agency is the lead filer of a shareholder resolution
calling on retail giant Wal-Mart to use independent monitors to help ensure
fair labor conditions in factories that make its products.

The United Methodist Board of Pension and Health Benefits, the largest
denominational pension fund in the United States, is one of 38
religious-affiliated investors that have signed the resolution. The New
York-based Interfaith Center on Corporate Responsibility (ICCR) is
coordinating the resolution, which will be voted on by Wal-Mart shareholders
at their annual meeting in June.

The move follows the company's rejection last fall of a proposal to
establish an independent monitoring pilot project at a vendor's plant in
Central America. ICCR had been negotiating with key company executives to
set up the project.

"We feel that as a large leading global retailer, Wal-Mart is in a position
to take a leadership role in establishing higher standards of accountability
for its respective vendors," said Vidette Bullock Mixon, director of
corporate relations and social concerns for the Board of Pension and Health
Benefits in Evanston, Ill.

The resolution cites a recent Business Week magazine report on abuses at a
vendor's handbag factory in China. "After a three-month investigation,
Business Week reported that workers were forced to work long hours at
poverty wages and were subject to beatings and exorbitant fines for small
infractions, such as taking too long in the bathroom," the resolution
stated. While auditors hired by Wal-Mart found some problems at the plant,
Business Week reported that they missed the more serious abuses, such as the
beatings and confiscation of identity papers, according to the resolution.

The company has its own code of conduct, but an outside check adds
credibility and value to its monitoring programs, said the Rev. David
Schilling, a United Methodist clergyman and the director of ICCR's Global
Corporate Accountability Program.

"We have negotiated in good faith over the last several years with the ICCR
and have serious reservations about third-party involvement in the
monitoring process," said Tom Williams, Wal-Mart spokesman at the company's
headquarters in Bentonville, Ark. He wouldn't elaborate on those
reservations.

"What we are seeking and will continue to seek is consistent improvement on
a worldwide basis rather than focus on one single factory," Williams told
United Methodist News Service. "We state emphatically that Wal-Mart has no
desire to do business with any factory that is run illegally or unethically.

"There are no easy answers to this complex issue," he said. "However, we do
understand and we do accept our responsibility in the fight against child
labor and human rights abuses. This is an issue to which we at Wal-Mart are
committing extensive resources and will continue in our efforts to make
Wal-Mart's system one of the best. 

"We are working very diligently to improve systems and we believe we have
made some progress," he said.
 
Besides the Board of Pension, other sponsors of the resolution include
religious organizations, other pension funds, university and social
responsible investment funds. The Catholic, Presbyterian and Christian
Church (Disciples of Christ) are among the faith groups represented along
with the United Methodist Church. 

The 38 investors hold more than 3 million shares of Wal-Mart stock. The
company has a significant place in the investment portfolio of the Board of
Pension and Health Benefits, Mixon said told United Methodist News Service.

The resolution requests that the company's board of directors prepare a
report "describing Wal-Mart's actions to ensure it does not purchase from
suppliers who manufacture items using forced labor, convict labor or child
labor, or who fail to comply with fundamental workplace rights protecting
their employees' wages, benefits, working conditions, freedom of
association, collective bargaining and other rights." 

Among other things, the report should include a description of current
monitoring practices and "plans for independent monitoring programs
involving local respected religious, labor rights and human rights groups,"
according to the resolution. It sets a deadline of November for the report. 

The ICCR and Wal-Mart have been in dialogue off and on since 1995, according
to Schilling. "We have felt over the last several years that there has not
been much movement on the part of the company," he said. One modest sign of
progress was the company's decision to institute an 800 number for workers
to call if they had issues that they didn't feel comfortable talking to
their supervisor or factory management about, he said.

Even though Wal-Mart rejected the independent monitoring project, ICCR's
presence and ideas have helped the company pay more attention to the
monitoring process, he added. 

The Board of Pension has raised the subject of independent monitoring with a
number of global companies, Mixon said. Some are taking the idea under
advisement while others are approaching it using nongovernmental
organizations, she said. "So we feel that efforts are being made to embrace
... the concept of independent monitoring."

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United Methodist News Service
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