Statements from Gap and Walmart for the Made in Bangladesh Episode

Fault Lines repeatedly asked for on-camera interviews with representatives of Walmart and Gap, but by our deadline, both companies had denied our requests. Instead, they issued written comments in response to the reporting in our investigative film, "Made in Bangladesh," which examines some of the practices of U.S. retailers in Bangladesh's garment industry. Walmart's comments come in the form of a Q&A we did with a company spokesperson, while Gap issued a statement in response to our findings in Bangladesh that we outlined to them. Both statements are posted in full below.

Statement from Gap: 

"Gap Inc. does not do business with Samie's Finishing House.  An immediate inspection of the facility found no Gap Inc. products and no evidence that Gap products had been produced there. If the facility at one time had products with a Gap Inc. brand label, those products were either counterfeit or improperly acquired by the facility.

Gap Inc. strictly prohibits any vendor from employing underage workers, reselling Gap Inc. branded products to third parties or producing counterfeit goods. We will continue to closely monitor all of our factories in the region and take necessary actions against those factories who are found in violation of Gap Inc.'s policies.

Gap Inc. has a long history of seeking to ensure that the people who work in our supply chain are treated with fairness, dignity and respect. One of the most complex challenges we currently face - as a company and as an industry - is in Bangladesh. While Gap Inc. brands did not have a business relationship with either Tazreen or Rana Plaza, where recent tragedies occurred, we are committed to supporting improvements across the Bangladesh garment industry. In October 2012, Gap Inc. launched a robust Building and Fire Safety Plan for the factories that we work with, and in July 2013 Gap Inc. became a founding member of the Alliance for Bangladesh Worker Safety. The Alliance brings together retailers, brands and industry associations to play a substantial role in improving working conditions for the people in Bangladesh's garment industry."

Responses from a Walmart spokesman to questions we posed:

Q: Have you provided compensation to any of the victims (families of the dead and injured workers) of the Tazreen factory fire? If yes, how much did you pay, whom did you pay, and when was the payment made? 

Walmart: At Walmart, our goal is to positively impact global supply chain practices both by raising our own standards and by partnering with other stakeholders to improve the standards for workers across the industry. This is why we are focused on investing our resources in proactive programs that will address worker safety in the garment and textile industry in Bangladesh and prevent tragedies before they happen.

For example, we’re very pleased to report the creation of the newly-formed Alliance for Bangladesh Worker Safety and the release of its action plan, the Bangladesh Worker Safety Initiative, which was developed through a process facilitated by former Senators George J. Mitchell and Olympia Snowe, through the Bipartisan Policy Center (BPC) with major brands, retailers and industry associations. You can find more information on the Alliance here: http://www.bangladeshworkersafety.org/

Q: Do you know the production capacity of the factories you work with? Does Wal-Mart have a policy of tracking a factory’s production capacity and monitoring orders filled by its suppliers? Would it be unusual for the same factory to get large orders from two different Wal-Mart suppliers at the same time? What is the procedure if the combined orders are larger than the factory's production capacity? 

Walmart:  For a factory to produce good for Walmart, the factory must go through an audit called the Factory Capacity and Capability Audit.  This audit is used to determine the installed capacity of a particular factory  and must be completed prior to initially placing production in a factory. Walmart relies on its suppliers to ensure the factories with which they place orders have sufficient capacity and understand the obligations of producing merchandise that will ultimately be sold in a Walmart retail location. We have also implemented a zero-tolerance policy for unauthorized subcontracting. This includes any undisclosed subcontracting conducted with or without the supplier’s knowledge.  Suppliers are responsible to communicate our Ethical Sourcing requirements to their supply chain. Any factory subcontracting sourcing of Walmart merchandise to an undisclosed facility will be permanently barred from sourcing merchandise to Walmart for all retail markets.

Q: We understand that the Wal-Mart program Retail Link requires suppliers to enter the name of the factory in which an order is being filled. Did Success Apparel enter this information regarding the Faded Glory shorts order that ended up in Tazreen? If so, which factory was listed for the order?

Walmart:  We do not discuss our relationships with specific suppliers.  The Tazreen factory was no longer authorized to produce merchandise for Walmart. Without any notice to Walmart, a supplier subcontracted work to this factory without authorization and in direct violation of our policies. We have since terminated the relationship with that supplier.

Q: Does Wal-Mart take any measures against a supplier if it fails to enter a factory into Retail Link? If so, what are the measures? 

Walmart:  Suppliers are prohibited from producing goods for sale to Walmart in factories that are not disclosed consistent with our procedures.  To better ensure visibility in our supply chain, we have implemented a zero-tolerance policy for unauthorized subcontracting. This includes any undisclosed subcontracting conducted with or without the supplier’s knowledge.  Suppliers are responsible to communicate our Ethical Sourcing requirements to their supply chain. Any factory subcontracting sourcing of Walmart merchandise to an undisclosed facility will be permanently barred from sourcing merchandise to Walmart for all retail markets.

Q: Simco claims it did not receive payment of $1.2 million for the girls Faded Glory shorts order even though some of the order had already been shipped. Did you pay Simco for any part of this order, and if so, how much and when?  

Walmart:  Walmart’s relationship was not with Simco, because Simco is a factory, not a supplier, and we do not disclose supplier payment information.

Q: Have you cut off ties with Success Apparel? 

Walmart:  We do not publically discuss our relationships with specific suppliers.   We have implemented a zero-tolerance policy for unauthorized subcontracting. This includes any undisclosed subcontracting conducted with or without the supplier’s knowledge.  Suppliers are responsible to communicate our Ethical Sourcing requirements to their supply chain. Suppliers who violate our policy are disciplined consistent with our internal policies.

Q: Do you do business with Americo Group? 

Walmart: We do not discuss supplier relationships.

Q: Do you work directly with any factories in Bangladesh? Why or why not? If you use agents, how many agents are typically between you and the factories producing your clothes? 

Walmart: Walmart works with our supplier partners to source merchandise for sale at Walmart. We require all of our suppliers to accept our rigorous Standards for Suppliers as part of their contractual agreement with Walmart. For more information on our Standards for Suppliers and our auditing procedures, please visit www.walmartstores.com\ethicalstandards.

Q: How does Wal-Mart ensure that it has full control over its supply chain and knows exactly in which factories its products end up? How well would you say you know your supply chain? 

Walmart: Our suppliers have an obligation to disclose to us all factories producing Walmart merchandise to us for audit per their supplier agreement and according to our Ethical Sourcing policies.  Furthermore, in January we announced several enhancements to our ethical sourcing program aimed at addressing unauthorized subcontracting in our supply chain, including:

• A zero tolerance policy for unauthorized subcontracting.

•  Requiring a company representative, and not just an agent, responsible for ensuring compliance with our Ethical Sourcing requirements stationed in all countries in which the supplier is actively sourcing Walmart product.

• Posting a list of factories in Bangladesh that are unauthorized for Walmart production publicly on our corporate website to drive greater transparency in our supply chain.

Q: We visited a small factory in Bangladesh that says it had finished garments for Wal-Mart, although it’s not an authorized subcontractor for Wal-Mart. The manager told us it is common practice for factories to receive subcontracted orders, despite having no authorization from Wal-Mart, as long as they have a relationship with the main factory doing the subcontracting. What is your reaction to this claim? 

Walmart:  Thank you for providing us more information on this question. Atelier Finishing Center is not authorized for Walmart production. We take allegations like this very seriously and are currently investigating to see if unauthorized subcontracting has taken place at Atelier Finishing Center. As you know we have implemented a zero-tolerance policy for unauthorized subcontracting. This includes any undisclosed subcontracting conducted with or without the supplier’s knowledge.  Any factory subcontracting sourcing of Walmart merchandise to an undisclosed facility will be permanently barred from sourcing merchandise to Walmart for all retail markets.

Q: In the factory mentioned in the previous question, we found child workers as young as 14, finishing garments in dangerous conditions. What does Wal-Mart do to ensure that it does not use factories that use child workers?    

Walmart: Walmart does not tolerate child labor or human trafficking in our supply chain. During the factory audits conducted under our ethical sourcing program, personal documentation is checked to ensure work is voluntary, wages are accurately paid and workers are of legal working age.  For more information on our standards for suppliers, please visit:http://corporate.walmart.com/global-responsibility/ethical-sourcing/ethical-standards-resources

Q: In May, Wal-Mart named more than 240 factories that it would no longer work with, saying it had a ‘zero-tolerance’ policy for unauthorized subcontracting. Can you give us a list of the factories you do work with - in other words, which factories are authorized to work with Wal-Mart in Bangladesh? Would you consider making this list public? Why or why not?  

Walmart: We should clarify that not all of the factories that were listed on our unauthorized factory list were for unauthorized subcontracting, some were unauthorized for other issues.  As part of the Alliance for Bangladesh Worker Safety we will work closely with the Fair Factories Clearinghouse (“FFC”). Our goal is for critical information to be shared expeditiously, including with Worker Participation Committees within factories, so urgent problems can be known and understood widely and addressed rapidly.