Driving safe, healthy and respectful workplaces

Standards for Suppliers

The safety and well-being of workers across our supply chain is the Responsible Sourcing group’s top priority, which is why Walmart suppliers are contractually required to sign our Standards for Suppliers before they’re approved to produce merchandise for sale at Walmart. These Standards for Suppliers make clear our fundamental expectations for suppliers and factories regarding the treatment of workers and impact on the environment. Suppliers are also required to display our Standards for Suppliers in the local language in all factories where products are made for us, so workers know our expectations of suppliers and factory management. View our Standards for Suppliers manual.

As part of our commitment to worker safety and well-being in the supply chain, Walmart updates the Standards for Suppliers regularly. In 2013, we made several important updates, including:

• Combating unauthorized subcontracting: Unauthorized subcontracting continues to be an issue across the global supply chain. Because of this, we implemented policies in 2013 to address unauthorized subcontracting by Walmart suppliers. This includes any undisclosed subcontracting, with or without the supplier’s knowledge.
• Enhanced fire safety standards: In addition to the enhanced fire safety standards we implemented for Bangladesh, we released our enhanced global fire safety standards in December 2013. These reflect an increased focus on achievable actions that drive meaningful and continuous improvements in fire safety. They were developed by Walmart’s fire safety experts and include the input of more than 100 merchants and suppliers who submitted more than 500 comments during the drafting process.

Audit process

To help verify that the requirements in our Standards for Suppliers are met, we’ve invested in comprehensive social audits across our global supply chain. Our audits review a factory’s practices to verify that:

• They meet or exceed our requirements
• All labor is voluntary
• Children aren’t used in the production of merchandise for Walmart
• Workers are properly paid for all hours worked
• Hours aren’t excessive and are consistent with local laws or regulations
• Factories provide safe and healthy working conditions

Walmart’s responsible sourcing audits are conducted in facilities that produce direct import merchandise, Walmart-owned, proprietary or exclusive brands, Walmart-branded merchandise and merchandise that is nonbranded. Walmart also reserves the right to inspect the facilities of any supplier outside this scope at any time.

All of our facility social audits are conducted by independent accredited and internationally recognized auditing firms. Facilities are then reaudited every six to 24 months, depending on the findings of the previous audits. To make our auditing program more effective, we focus our efforts on unannounced audits.

The social audit results are assigned a color rating by the Responsible Sourcing team, based on type and severity of issues found. Walmart uses these ratings to help make decisions about suppliers and factories – whether to develop them, make them a preferred supplier or to stop doing business with them.

• Green: minor to no violations; the factory will be audited within two years.
• Yellow: medium-risk violations; the factory will be reaudited within one year.
• Orange: higher-risk violations; the factory will be reaudited within six months; if factories receive three orange ratings in a two-year period, the factory may be disapproved and prohibited from doing business with Walmart for at least one year, after which they must pass a reactivation audit and receive a green or yellow rating.
• Red: most serious violations may warrant no future business with Walmart.

In 2013, 20,322 assessments were conducted across 15,027 active factories. Of these, 1,016 were conducted through the ILO/Better Works Program or the International Council of Toy Industries CARE process. If a factory fails to meet our Standards for Suppliers, it must take corrective action to improve its performance or the factory may not be permitted to produce Walmart merchandise.