Blog: Leonie BarrieWal-Mart's commercial conscience

Leonie Barrie | 26 October 2005

Wal-Mart, it seems, is finally waking up to the sweatshop issue – and many other areas in which it has been open to criticism, including health care, wages and the environment. Chief executive officer Lee Scott has told workers the company plans to take up a range of initiatives over the next few years, including reducing greenhouse gases at its stores, offering health care coverage, calling on the US government to raise the nation's minimum wage – and making suppliers be more accountable for factory standards.

It could well be that the timing of Wal-Mart's announcement is simply intended to build on the praise and goodwill generated by its relief efforts after Hurricane Katrina. But could it also be a coincidence that suddenly discovering a conscience comes at a time when the retailer is embroiled in a number of wage and environmental lawsuits?

Not least of these is an ongoing lawsuit filed by the International Labor Rights Fund on behalf of apparel workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland that effectively makes Wal-Mart legally responsible for the welfare of workers at its suppliers’ factories.

Wal-Mart is also in the process of trying to broaden its appeal to a wider range of customers – not just those who have remained loyal to the company’s low prices – particularly in the fashion field where it sees opportunities for growth. And these consumers may be wary of shifting their loyalties to a retailer with such a bad track record. The company has admitted that change is vital if it is to build a 21st century business...so perhaps it is at least being honest enough to admit that its motivation is commercial rather than having found a conscience.


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