California Transparency in Supply Chains Act

Corporate Disclosure in Compliance with SB 657 California Transparency in Supply Chains Act (Human Trafficking and Anti-Slavery)

Walmart strives to conduct business in a manner that respects its three core beliefs – respect for the individual, service to customers and striving for excellence. Holding the same expectations of our suppliers in contracting, subcontracting and other business relationships is one way we believe we can be a more responsible company and a better advocate for the men and women in our suppliers’ factories who manufacture the products we sell.

On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) went into effect, requiring retailers and manufacturers above a certain size that are doing business in California to disclose measures used to track possible slavery and human trafficking in their supply chains. The disclosure is aimed at providing information to consumers, allowing them to make better, more informed choices about the products they buy and the companies they support.

As part of our commitment to be a responsible company, the Responsible Sourcing program was established in 1992. A key part of that program is our Standards for Suppliers, which are Walmart’s fundamental expectations of its suppliers on social and environmental practices. The Standards cover topics including: compliance with laws, voluntary labor, labor hours, hiring and employment practices, compensation, freedom of association and collective bargaining, dormitories and canteens, and the environment. Walmart requires every supplier to sign an agreement that they, their contractors and subcontractors will abide by these Standards. Factory audits are used to verify suppliers’ compliance with the Standards in those facilities producing merchandise for Walmart 

While auditing had been the primary focus of Walmart’s Responsible Sourcing program, it was soon realized that responsible sourcing goes far beyond monitoring and should also confront the complexities that are at the root of noncompliance, and drive improvements in working conditions globally. To help address these concerns, Walmart is working to increase collaboration with other stakeholders and find ways to transform the sourcing process across the industry to identify and address barriers that may contribute to noncompliance.

Verification

Walmart’s Standards for Suppliers require suppliers to refrain from the direct or indirect use of forced labor or any forms of human trafficking and to verify/certify that their supply chains address these issues. Walmart further requires suppliers to certify implementation of procedures to manage the materials, including all labor-related process incorporated into their products, to ensure they comply with laws on slavery and human trafficking.

Dialogue and partnership can be an effective way to drive positive change and to address root cause issues that are persistent within the supply chain. Walmart continues to participate in collaborative efforts with external stakeholders that advance the goal of building a more transparent supply chain. Additionally, Walmart participates in industry working groups that serve as a vehicle to share experiences and gain new information that can help improve operations and the supply chain.

Auditing

Walmart requires suppliers for all Walmart retail markets to disclose all facilities producing direct import, private label or nonbranded merchandise. Facilities are required to demonstrate adherence to Walmart’s Standards through social and environmental audits. As of April 2009, all of our standard audits are conducted by approved third-party audit firms. All factory audits, except for the initial audit, are unannounced and typically conducted every 6 to 24 months depending on previous audit findings.

Upon completion of all audits, the identified issues and recommendations to rectify violations observed are discussed and documented with the audited facility. Factory management is expected to address all identified issues as noted. The corrections of the identified issues are validated during the follow-up audit.

For more information regarding Walmart’s audit requirements please read our Standards for Suppliers

Certification

Through signing Walmart’s Supplier Agreement, suppliers agree to comply with the obligations stated in the Standards for Suppliers, which have been amended to require suppliers to certify that materials incorporated into their products comply with laws on slavery and human trafficking.

Internal Accountability

We require all Walmart associates to comply with our Statement of Ethics. Suppliers, contractors and service providers are expected to act ethically and are required to comply with Walmart’s Standards for Suppliers and our Responsible Sourcing Program Standards. As with all alleged violations of policy, we investigate issues and take the appropriate action up to and including termination of associates and termination of agreements for suppliers and contractors.

Training

How Walmart manages its purchase orders has a significant impact on suppliers and factories. Responsible Sourcing is training Walmart supply chain decision-makers (merchandisers, buyers and sourcing managers) on how their decisions can potentially impact factory working conditions, and equipping them with the necessary knowledge to reinforce to suppliers the importance of positive factory labor practices. At Walmart, we believe that associate education is fundamental to fully integrating labor compliance and social responsibility into all purchasing decisions and to building a socially and environmentally responsible supply chain.