Audit Stance Generates Controversy

Safe working conditions. Reasonable hours. No child labor.

These are among the rules that Wal-Mart Stores Inc. and other retailers imposed on their foreign contractors after a series of scandals in the 1990s. Yet just how well Wal-Mart’s contractors abide by its standards is something of a mystery — and a source of controversy.

Unlike other retailers, Wal-Mart refuses to open its suppliers’ factories to independent inspections.

That prompted Domini Investments, which runs a “socially responsible� mutual fund, to dump its 1.3 million Wal-Mart shares in 2001. “At the very least you want some transparency,� said Domini’s Kyle Johnson.

Wal-Mart insists that it rigorously enforces its code of conduct, sending inspectors on unannounced visits to about 300 plants a week. The company says it won’t open the factories to independent audits for competitive reasons.

Few expect the giant to budge. “They want to set their own agenda and do it the Wal-Mart way,� said Vidette Bullock Mixon, director of corporate relations and social concerns for the $11-billion United Methodist Church Pension Fund.