Wal-Mart tightens rules for its suppliers

BENTONVILLE, Ark. — Wal-Mart Stores Inc. has alerted its global suppliers that it will immediately drop them if they subcontract their work to factories that haven't been authorized by the discounter.

Wal-Mart's stricter measure, along with other changes to its policy, comes amid increasing calls for better safety oversight after a deadly fire at a Bangladesh factory that supplied clothing to Wal-Mart and other retailers. The fire in late November killed 112 workers at a factory owned by Tazreen Fashions Ltd. Wal-Mart has said the factory wasn't authorized to make its clothes.

In a letter sent Tuesday to suppliers of its Wal-Mart stores as well as Sam's Clubs in the United States, Canada and the United Kingdom, the company says it will adopt a zero tolerance policy on subcontracting without the company's knowledge, effective March. 1. Previously, suppliers had three chances to rectify mistakes.

Wal-Mart also said it plans to publish on its corporate website a list of factories that haven't been authorized to manufacture goods for Wal-Mart.

Also, starting June 1, suppliers must have an employee stationed in countries where they subcontract to ensure compliance, rather than relying on third-party agents.

We want the right accountability and ownership to be in the hands of the suppliers, said Rajan Kamalanathan, Wal-Mart's vice president of ethical sourcing in an interview with The Associated Press. We are placing our orders in good faith.

Wal-Mart will be holding a meeting for clothing suppliers from the United States and Canada on Thursday to explain the new policy changes.