Initial results of inspections at Bangladeshi factories supplying garments to retail giant Walmart stores found that more than 30 posed a safety risk – but most have since made improvements.
More than 15% of the factories in Walmart Stores Inc. in initial round of safety inspections in Bangladesh failed their audits and had to make improvements to keep doing business with the giant retailer. Walmart said most of the three dozen factories were able to correct the problems or are in the process of doing so. One seven-storey factory, for example, had to knock down an illegally built eighth floor.
The company stopped doing business with two factories that failed the safety audits and couldn’t sufficiently fix the problems discovered. One factory had to be closed completely.
Walmart will release the results of 75 inspections on its website and add others as they are completed, a step no other major Western retailer has taken. The company currently does business with more than 200 factories in Bangladesh, and has pledged to inspect all of them. It previously said it would begin posting results of the inspections by last June.
During an October safety audit at Epic Garments Manufacturing Co, engineers hired by Walmart checked on new red fire doors and outside staircases that had been installed to make evacuation easier in case of a fire and to prevent flames from spreading from stock rooms to factory floors.
According to Ranjan Mahtani, CMD of the Group, who has already spent US $ 300,000 on safety improvements to meet standards set by Walmart and other western retailers, fireproof doors and related materials weren’t even available in Bangladesh. “We had to fly them in from abroad and teach local manufacturers how to make them,” he stated.
Walmart would put up US $ 50 million in low-interest loans to help factories make building improvements however no factories have tapped the financing offer so far. Jan Saumweber, Walmart’s Head, Ethical sourcing, said she plans to increase her staff by 40% this year and add a team of 10 engineers to the company’s Bangladesh sourcing office to regularly inspect factories.
“We’ve spent US $ 4 million on these audits, and we’re not done yet; there’s a lot of progress left to be made,” said Jay Jorgensen, Walmart’s Global Chief Compliance Officer.
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