Wal-Mart Fights Criticism With Action

Last year, Wal-Mart's PR Chief Leslie Dach commented that every crisis is an opportunity, and that the public responds to what a company actually does -- not what a press release suggests will occur. When it comes to labor conditions in foreign factories, Wal-Mart put its money where its mouth is.The company's Ethical Standards Department, which monitors foreign factories, releases an annual report on ethical sourcing that details exactly what the company's done throughout the year to ensure compliance with its Standards for Suppliers code.

Wal-Mart's 2006 report indicated fewer safety, labor, and environmental violations than the year prior, perhaps a result of educating factory managers (or tipping them off before auditing, depending on your level of cynicism). While the improvements are actually minimal, it demonstrates Wal-Mart's commitment to responding with action instead of fighting critics. In another smart PR move, this past year the retailer initiated its International Giving program which awards scholarships to factory workers and their families.

Here's a brief rundown of what the ES Department does:

• Over 200 Wal-Mart Ethical Standards associates are located in five regions around the globe: Southeast Asia; the Indian subcontinent; the Far East; the Americas; and the Middle East, Africa and Europe. The team monitors factories, engages with stakeholders, manages risk, and works to educate factories and suppliers to help prevent violations of Wal-Mart's Standards for Suppliers code.

• Every supplier signs a statement agreeing that they, their contractors, and their subcontractors will abide by Wal-Mart's Standard's for Suppliers code. This agreement, which includes a local helpline number, must be visibly posted within the factory.

• In 2006, the program expanded to include environmental elements in the audit process, including waste identification, waste handling and disposal, wastewater treatment and discharge, and air emissions.

• Wal-Mart now includes environmental training in group training sessions for new and existing suppliers.