Announcement from Walmart CEO on Ethical Recruitment Praised by Investors

Nov 4th 2016

In recognition of potential slavery risks, CEO McMillon announces new commitments that will prohibit the paying of recruitment fees by workers.

NEW YORK, NY, FRIDAY, NOVEMBER 4, 2016 – Members of the Interfaith Center on Corporate Responsibility and Walmart shareholders welcomed today’s announcement by CEO Doug McMillon that the company would be implementing ethical recruitment practices including the prohibition of worker-paid recruitment fees known to increase the risk of slavery. The announcement will be made at a plenary during the Net Impact conference in Philadelphia today.  

For ICCR members who have been in dialogue with the company since 2014 urging the adoption of a “No Fees Recruitment” policy, the announcement was especially well-received.

“The charging of recruitment fees to workers, especially vulnerable migrant workers, is a root cause of forced labor and modern slavery in global supply chains,” said David Schilling, senior program director of ICCR. “Today, Walmart is making a public commitment to eliminate this practice over time, beginning with its sourcing from high-risk sectors. ICCR welcomes today’s announcement along with Walmart’s decision to join the Leadership Group for Responsible Recruitment, a collaboration between leading global companies and NGOs advocating for an “employer pays” principle that will drive positive change in the way workers are recruited.”

Walmart’s commitment is especially noteworthy given the scope of the retailer’s global presence, the range of products it sells and its considerable influence with major suppliers. Investors are hopeful in adopting this “No Fees” stance that the business community will acknowledge the importance of the issue and make similar changes in their recruitment policies and practices.

Said Margaret Weber of the Basilian Fathers of Toronto who has co-led the decades-long investor dialogue with Walmart, “By virtue of its purchasing clout, Walmart has the power to reframe the way companies in a wide array of sectors do business on a variety of issues including labor and recruitment practices. Walmart’s impact is both broad and deep and as investors we are gratified that it has chosen to lead on this important human rights issue.”

Unethical recruitment practices, including demands for fees in exchange for work, are ubiquitous in global supply chains and most prevalent in industries employing migrant workers such as the agricultural and electronics sectors and notoriously, the seafood and palm oil industries. In paying recruitment fees, workers enter into a debt bondage arrangement which can easily escalate into situations best characterized as modern slavery.

Of all the human rights risks present in global supply chains, recruitment abuses are some of the most egregious and call for companies in all sectors to address these abuses through changes in their supplier codes that eliminate employee-paid fees, the retention of passports and other documents and, when possible, provide direct employment contracts.  Eradication of worker-paid fees will require an ongoing collaboration with industry peers, civil society, governments and international institutions.

“Many supply chains are plagued with forced labor risks, most notoriously seafood, agriculture, and food and beverage, as well as the electronics and apparel industries,” said ICCR’s Valentina Gurney. “The majority of these risks stem from overlooked or poorly managed cross-border recruitment practices where migrant labor is prevalent. Walmart sources from over 70 countries in all of these high-risk sectors, so putting controls in place to manage recruitment of migrant workers is a critical step towards responsible sourcing and slave-free supply chains. We hope to see the company take concrete steps to implement comprehensive ethical recruitment standards.”

About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 45th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to financial and health care services for communities in need.

Susana McDermott, Director of Communications, ICCR

[email protected]