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 reflects
our four basic beliefs – respect for the individual, service to customers,
striving for excellence and acting with integrity. We hold the same
expectations of our suppliers.
The Responsible Sourcing program has its origins in 1992,
when Walmart first established Standards for Suppliers. While our Standards have
evolved over the years, they continue to represent Walmart’s fundamental
expectations of suppliers on social and environmental practices. The Standards currently
cover thirteen topics, including a requirement that all labor be voluntary. We incorporate
these Standards by reference in our supplier agreements.
Walmart recognizes that responsible sourcing requires more
than monitoring facilities for compliance. Initially, auditing of suppliers’
facilities was the primary focus of our Responsible Sourcing program, but we
have evolved our approach over the years. Today, Walmart utilizes a multi-front
approach focused on training, capacity building, promoting remediation and
collaboration to drive responsibility in our world class supply chain and to
lead and inspire others to do the same.
We are continually evaluating risks in our supply chain,
including potential risk of forced labor and human trafficking. Our current formal approach to assessing risk
in our supply chain utilizes Worldwide Governance Indicators from the World
Bank, which incorporate factors like government effectiveness, rule of law,
control of corruption and government stability that can affect the risk of
non-compliance in facilities producing goods in that country. Walmart also monitors risk through the facility
auditing program and investigations.
Because forced labor and human trafficking are complex
issues that can extend beyond the scope of our Responsible Sourcing audit
program, dialogue and collaboration can be an effective way to identify risk.
Walmart continues to participate in collaborative efforts with external
stakeholders to advance the goal of identifying risk and building a more
transparent supply chain. Additionally, we participate in industry groups that
serve as a vehicle to share experiences and gain new information that can help
improve operations and the supply chain.
Suppliers are responsible for disclosing all facilities to
Walmart that fall within Walmart’s disclosure
scope. We use social, safety and environmental compliance audits to
evaluate whether disclosed facilities’ practices meet the requirements set
forth in our Standards for Suppliers.
Any facility disclosed to Walmart may be subject to a
Responsible Sourcing audit at any time; however, our audit program allocates
audit resources based on risk so we can drive the biggest impact to the
countries that need it most in our broad and diverse supply chain. We place
disclosed facilities into one of three risk categories based on the Worldwide
Governance Indicators from the World Bank. The risk category of the country in
which a facility is located determines the requirements of that facility under our
Responsible Sourcing audit program.
Audit requirements for different risk categories are described in more
Responsible Sourcing Audits are assessed and given a color
rating based on the severity of the findings from the audit. The ratings and
violations are provided to all suppliers using the audited facility, and these
suppliers are responsible for working with facilities to remediate the
findings. The audit rating is one tool used to determine whether the facility
can remain active and produce for Walmart and how soon the facility will be
Responsible Sourcing audits normally are unannounced and
conducted at facilities by third-party audit firms. As of September 2015,
Walmart uses the following independent and internationally recognized firms to
conduct audits in facilities around the world: Accordia, Bureau Veritas,
Elevate, Intertek, UL, SGS and TUV. We
also accept the audits of several leading industry programs as a substitute for
audits otherwise conducted by third-party auditors on behalf of Responsible
Sourcing. Read more about those programs
Walmart’s Standards for Suppliers require suppliers to be
able to certify that they have implemented procedures to manage the materials,
including all labor-related processes, incorporated into their products to
ensure they comply with laws on slavery and human trafficking. Suppliers agree
to comply with the obligations stated in the Standards for Suppliers when they
sign a supplier agreement, and Walmart accordingly may request such a
We require all Walmart associates to comply with our Global Statement of Ethics. Suppliers,
contractors and service providers are expected to act ethically, and all
suppliers providing product to Walmart for retail sale are required to comply
with Walmart’s Standards for Suppliers and our Responsible Sourcing program
expectations. We investigate issues and take the appropriate action to address
those issues, up to and including termination of associates and termination of
agreements for suppliers and contractors.
Read more about supplier accountability and consequences here,
and facility consequences here.
The manner in which we manage our purchase orders can have a
significant impact on suppliers and facilities. Responsible Sourcing is
training Walmart supply chain decision-makers (merchandisers, buyers and
sourcing managers) on how their decisions can potentially impact facility working
conditions and equipping them with the necessary knowledge to reinforce to
suppliers the importance of positive facility labor practices. At Walmart, we
believe 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.
Updated May 2016