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April 25, 2012
Investors Speak Out on Wal-Mart Bribery Allegations
    by Robert Kropp

Members of the Interfaith Center on Corporate Responsibility, who have been engaging with the retail giant on social issues for decades, express their dismay over allegations of bribery and subsequent efforts to impede an investigation.


The sustainable investors associated with the Interfaith Center on Corporate Responsibility (ICCR) have been, for decades, far ahead of the curve on aligning critically important social issues with corporate financial performance. Starting in the 1970s, ICCR members led the divestment campaign that contributed greatly to the end of apartheid in South Africa.

And, as the organization states in the most recent edition of its Corporate Examiner, "ICCR members…began sounding the alarm about the dangerous risk-taking of 'too big to fail' banks a decade before the crisis."

ICCR responded today to allegations published in Sunday's New York Times, detailing evidence of widespread bribery practiced by Wal-Mart in its strategy of rapid expansion in Mexico. Upon learning of the bribes, however, executives at Wal-Mart's headquarters "focused more on damage control than on rooting out wrongdoing," The Times found.

In its statement, ICCR demonstrates yet again that its members had voiced concerns about the potential for corporate abuses long before Wal-Mart's alleged bribery came to light. The statement includes a letter from 1999 to Wal-Mart's management, endorsed by nearly 400 organizations.

The letter—which should be read in its entirety—stated, "The unparalleled growth of Wal-Mart as an aggressive and competitive global retailer raises serious concerns that the company's strategic vision to achieve success in the marketplace comes without an ethical standard of measurement on which to base decisions about the company's support of human rights, a living wage for employees world-wide, a diverse work force with attainable upward mobility in management, respect for Indigenous rights, environmental improvement and transparency, and a commitment to sustainable communities in its service areas."

"The company has been successful in building stores but not building community; in providing low prices to consumers but not in assuring them that the products are made under fair labor standards; in charity but not justice for the thousands of workers who contribute to Wal-Mart products but have few benefits and low wages," the letter continued. "We challenge Wal-Mart to place its vast human and financial resources at the service of sustainable development and support for the human rights of workers of all races who have played a major role in Wal-Mart’s success."

In today's statement, ICCR reports that its members "are dismayed by recent reports in the New York Times alleging systemic bribery and corruption to facilitate the rapid expansion of (Wal-Mart's) retail operations in Mexico."

Sr. Barbara Aires, of the Sisters of Charity of Saint Elizabeth, New Jersey, has led Wal-Mart engagement efforts for more than 20 years. She said, "We have a tremendous investment in this company in terms of our time, expertise and yes, capital, and find these allegations deeply disturbing on so many levels. Should these reports be confirmed, we deem this a significant breach of trust and a loss of management credibility."

"We are most concerned about reports that management participated in impeding a more thorough, independent investigation into these allegations of corruption," Aires continued.

The statement call on Wal-Mart's management to specifically endorse the Foreign Corrupt Practices Act (FCPA), which requires corporations to monitor the acts of their agents, consultants, and business partners in foreign locations. According to C tW Investment Group, an organization that works with labor union pension funds on issues of effective shareowner activism, the US Chamber of Commerce "has embarked on an expensive and controversial campaign to curb the power of the FCPA, which critics charge would create massive loopholes that will set back decades of progress in the global struggle against corruption."

Wal-Mart is a Chamber member. In January, CtW called on Siemens AG, which paid a $1.6 billion fine under the FCPA in 2008, to end its relationship with the Chamber.

 

 
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