January 22, 2013 / 4:32 AM / 5 years ago

Wal-Mart tightens supplier policy after factory fire: WSJ

(Reuters) - Wal-Mart Stores Inc (WMT.N) plans to cut ties immediately with suppliers who subcontract work to factories without the retailer’s knowledge, changing its policy after a fire killed more than 100 garment workers in Bangladesh, the Wall Street Journal reported.

Wal-Mart is warning suppliers that it is adopting a “zero tolerance policy” for violations of its global sourcing standards and the company’s new plan would begin taking effect from March 1, the Journal said.

The tougher code replaces Wal-Mart's prior "three strikes" approach to policing suppliers, which gave the suppliers three chances to address problems before being terminated. (link.reuters.com/wyh45t)

    “Obviously our three-strike policy wasn’t working as well as it could have,” Rajan Kamalanathan, Wal-Mart’s vice president of ethical sourcing, told the Journal in an interview. “Our message of zero tolerance is meant to get people’s attention.”

    Wal-Mart could not be reached for comment by Reuters outside of regular U.S. business hours.

    More than 100 workers were killed in a November 24 fire at the Tazreen garment factory in Bangladesh. Wal-Mart has said repeatedly that its Faded Glory clothing should not have been in production at the factory, a facility Bangladeshi authorities said was not safe for use.

    Reporting by Sakthi Prasad in Bangalore; Editing by Richard Pullin

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