The audit program
Standards for Suppliers
Walmart's Standards for Suppliers provides the framework for our audits, while outlining our expectations for employee relations and environmental management. A detailed manual has been developed for suppliers explaining our expectations and the audit process.
Suppliers are required to display the Standards for Suppliers poster in the local languages in their factories in view of all workers. Suppliers must adhere to these standards in order to do business with Walmart. The Standards for Suppliers are updated regularly and include, but are not limited to, the following provisions:
- No forced or child labor
- No discrimination
- Wages and benefits must meet country law
- Freedom of association and collective bargaining
- Health and safety of workers
- Environmental compliance
In 2011, 9,737 audits on 8,713 factories were conducted to verify our suppliers were adhering to our Standards for Suppliers. Of these, 855 were conducted through the ILO/IFC Better Work Program or the International Council of Toy Industries CARE Process. Walmart chooses to participate in these programs in an effort to reduce audit duplication and because of the programs' remediation components. During 2011, we required our suppliers to cease production for Walmart in 155 factories due to serious violations.
Walmart audits factories supplying private-label and nonbranded goods or when Walmart is the importer of record. All audits are conducted by accredited and internationally recognized auditing firms. Audits are conducted every six to 24 months, depending on the findings from the previous audit. Initial factory audits are announced, with all subsequent audits being unannounced. Our Ethical Sourcing team conducts a percentage of validation audits to assess if audit firms are following the audit protocol and reporting findings accurately.
In addition to the audit process, violations of Walmart's Standards for Suppliers can be reported confidentially, in the local language of workers in the factory. On the Standards for Suppliers poster that all factories are required to display, there is a local toll-free telephone number, email address and website that workers can use to anonymously report violations and other concerns. Violations of our Standards for Suppliers are confidentially reported to a third party with the capability of processing concerns in more than 140 languages. All reports are directed to Walmart's Global Ethics office, where they are referred for investigation and corrective action if needed.
Retail market compliance
Our Ethical Sourcing program has expanded to all of our retail markets around the world. As part of this global program, the Walmart Standards for Suppliers is now enforced in all our markets.
Factory color rating system
As part of the audit process, we rate our factories based on the type and severity of violations found.
Green: Low to minor to no violations; the factory will be audited within two years.
Yellow: Medium-risk violations; the factory will be re-audited within one year.
Orange: Higher-risk violations; the factory will be re-audited within six months; if a factory receives three orange ratings in a two-year period, the factory is disapproved, and the factory is restricted from doing business with Walmart for at least one year.
Red: Most serious violations that prohibit future business with Walmart.