Walmart's Human Trafficking

Problem

Time Context

December 2013

Background of the Company

Walmart is an American multinational
retail corporation that operates a chain of
discount
department
stores
and
warehouse stores. Headquartered in
Bentonville, Arkansas, the company was
founded by Sam Walton in 1962 and
incorporated on October 31, 1969. It has
over 11,000 stores in 27 countries, under
a total 71 different brands

Background of the Company

The company operates under the Walmart name
in the US and Puerto Rico. It operates in Mexico
as Walmart de Mxico y Centroamrica, in the
United Kingdom as Asda, in Japan as Seiyu,
and in India as Best Price. It has wholly owned
operations in Argentina, Brazil, and Canada.

Point of View
First Statement
As soon as we received reports of potential
violation of our ethical sourcing policy at
Phatthana Seafood, we launched an
investigation. We take reports like this very
seriously, and we will take appropriate actions
based on our findings.
The response continued: Walmart does not
tolerate human trafficking.

Point of View
Walmart on June 21 sent to Human Rights
Watch the same flat message of denial sent to
Cambodian journalists, claiming that Walmart
had never sourced from Phatthana, an
argument on its own terms incongruous with the
companys initial claim that it was launching an
investigation of the potential violation of our
ethical sourcing policy at Phatthana Seafood.

Statement of the Problem

In April, a strike broke out at a seafood
processing factory in Thailands southern
province of Songkhla, where thousands of
Burmese and Cambodian workers, living
in small barracks and working in a nearby
factory, process shrimp for export by a
Bangkok-based company called
Phatthana Seafood Co., Ltd.

Statement of the Problem

The proximate cause of the strike
appears to have been the company
eliminating a daily 20 baht food
allowance (about 65 cents) after the
Thai government raised the legal
minimum wage by over two dollars,
to $8.48 a day.

Statement of the Problem

Among other complaints, some
workers said they were provided
inadequate toilet facilities and given
insufficient bathroom breaks, obliging
them at times to relieve themselves in
corners of the factory. Far worse, labor
organizers say, many of the migrant
workers at the Songkhla facility found
themselves in conditions amounting to
debt bondage.

Statement of the Problem

Despite the legal requirement that
workers be enrolled in Thailands
social security system to receive
health care, the company failed to
sign the workers up, meaning
workers had to pay out of pocket for
any medical treatment for injuries or
sickness.

Statement of the Problem

Workers who wanted to leave found
it difficult, organizers say, because
their official documents, including
work permits, health cards, ID cards,
and passports, were reportedly
confiscated and held by factory
management to prevent workers from
running away.

SWOT ANALYSIS
STRENGHTS
Scale of operations
Competence in information systems
Wide range of products
Cost leadership strategy
International operations

SWOT ANALYSIS
WEAKNESS
Labor related lawsuits
High employee turnover
Little differentiation
Negative publicity

SWOT ANALYSIS
OPPURTUNITIES
Retail market growth in emerging markets
Rising acceptance of own label products
Trend toward healthy eating
Online shopping growth

SWOT ANALYSIS
THREATS
Increasing competition from brick and mortar
and online competitors
Increasing resistance from local communities
Rising commodity prices

Alternative Courses of Action

Human Rights Watch wrote to
Walmart on April 16 to ask about the
Phatthana situation and what steps
Walmart had taken to investigate the
alleged labor abuses there.

Conclusion
A company like Walmart can play an outsize
role in setting standards in labor markets
overseas. Walmart already has systems in place
to do so. It can vigorously enforce its Standards
for Suppliers. It can follow the Best Aquaculture
Practices, to which it has signed up, created by
an industry group called the Global Aquaculture
Alliance to address environmental and social
responsibility. If these standards were effectively
enforced, situations like the strike at the
Phatthana facility could be avoided.

Reccomendations
Recommending greater U.S. involvement
in fighting trafficking and labor rights abuses is
not simply an appeal to altruism or a call for a
more moral U.S. foreign policy.