Today marks one year since the collapse of the Rana Plaza garment factory building, which killed more than 1,100 Bangladeshi garment workers. As we have noted before, Walmart, the second-biggest purchaser of apparel made in Bangladesh, was listed as a customer for a factory located in the building, and orders for Walmart goods were found in the rubble. Sadly, Walmart’s response to the tragedy has been woefully inadequate.
Politico broke the news earlier this week that Walmart hired lobbyists to fight a provision of the National Defense Authorization Act (NDAA) that would have cost the company business. Walmart has refused to sign the binding Bangladesh Accord on Fire and Building Safety, in favor of a voluntary alliance it formed with Gap and other retailers. From Politico:
KC’s View: Cheesewright is going to have a full plate, especially if the bribery scandal comes back to bite the company on its posterior.
Does this sound familiar?
After the Rana Plaza tragedy in Bangladesh, Walmart issued a series of bold proclamations. Well, we here at WMTS decided that it might be worth checking in to see if Walmart has lived up to its promises.
Whether Walmart lobbied Indian officials to open the Indian retail market to foreign direct investment (FDI) is a long disputed question. In India, lobbying is illegal and akin to bribery. Concerns that Walmart lobbied in India led the government to appoint a former Justice to investigate Walmart’s activities.
It got overshadowed in the press coverage of the company’s disappointing same-store sales figures, weak traffic, and downward revision of guidance for the rest of the year, but Walmart reported yesterday that it spent about $82 million in the second quarter on FCPA and compliance matters—12 percent more than it spent in the first quarter and well above its projection of $65-70 million. Add that to the $230 million the company spent in Fiscal Year 2013 and the first quarter of Fiscal Year 2014, and the total reported spending to date on FCPA-related matters is $312 million.
Most of you don’t know who he is, so here’s a hint: George Clooney.
Walmart has publicly touted the opportunity the Indian retail market presents for almost 10 years. In 2005, then-International CEO John Menzer (remember him?) described India as “a huge organic growth opportunity.” And of course, Mike Duke has gone so far as to say that “India is very important to Walmart and that we keep coming back and why we pay a great deal of attention to India.” Most thought that the Government of India’s decision to open multi-brand retail to foreign direct investment in September 2012 meant that Walmart would soon realize its Indian dream.