Wal-Mart Finds More Problems at Foreign Sites

Wal-Mart Stores Inc. found a higher rate of severe violations at foreign factories last year as it stepped up inspections for labor and environmental standards in more than 60 countries where it buys clothes, toys, shoes and other products, it said in a report.

Twenty-three factories were cut off from Wal-Mart’s business for repeated violations, a sharp decline from 1,200 in 2004. But the retailer said that was in part because of a change in its auditing rules. It expects the number to increase again this year.

Union-backed critics on Wednesday said the results showed Wal-Mart’s pledges to use inspections to improve conditions at foreign factories in Asia, Central America and elsewhere were hollow.

“Wal-Mart is ignoring the crux of the problem, which is that they are paying their suppliers too little to meet even minimal standards,” said Nu Wexler of Wal-Mart Watch, a union-backed group.

Inspectors found moderate to severe violations at 89% of factories, up from 79% in 2004. Wexler said that was an indictment of Wal-Mart’s ethics program; 80% of inspections were announced in advance, the company report said.

Wal-Mart, based in Bentonville, Ark., said the worsened showing was because of more vigorous inspections.