Leave it to the Norwegians to show what needs to be done with abusive corporations. The Norwegian government is dropping Wal-Mart stock from its $285 billion pension fund. Could this spark a broader dumping of Wal-Mart stock around the world because of the company's abhorrent behavior?
Norway has very strong ethical guidelines for its government pension fund, requiring that the fund, "...recommend disinvestment from companies when there is an unacceptable risk that they might contribute to serious or systematic human rights violations." And they err on the side of human rights, with the standard being that "it is not necessary to prove that such complicity will take place - the presence of an unacceptable risk suffices."
In its 2006 Annual Report, released on March 20, 2007 (and, as far as I can tell, this action got very little attention--I was alerted to it by my friends at the National Labor Committee), the Council on Ethics for the Government Pension Fund reached the following conclusions:
"There is no doubt that working conditions at textile factories in Asia, Africa and Latin America can be abysmal, and that Wal-Mart purchases a number of products that are manufactured under unacceptable conditions. There are numerous reports of child labour, serious violations of working hour regulations, wages below the local minimum, health-hazardous working conditions, unreasonable punishment, prohibition of unionisation and extensive use of a production system that fosters working conditions bordering on forced labour, and of employees being locked into production premises etc. in Wal-Mart's supply chain."
And:
With regard to the violations of labour standards taking place at the company's own production facilities and stores in North America, it is clear that the company is directly responsible.
When it comes to the treatment of women, the Norwegians are just as critical (referring to the mass class action gender discrimination lawsuit against Wal-Mart):
"It is relatively well documented that Wal-Mart pursues a consistent practice of gender discrimination, inter alia by pursuing a wage policy in which women and men receive different pay for the same position and work."
Here is the conclusion of the investigation conducted by the fund's committee--and I quote it at length because it's incredible to read how a large governmental pension fund will just be honest, call it like it is and do so based on an ethical compass:
The first element in the assessment is whether there exists some kind of linkage between the company's operations and the existing violations of the Guidelines which is visible to the Fund. In the view of the Council, this is clearly the case. The violations of standards discussed above have taken place either in connection with the company's operations and activity in North America, or in connection with the manufacturing of goods for sale in Wal-Mart's stores. While it may be difficult to prove that Wal-Mart is directly responsible for violations of labour rights at its suppliers in the developing world, the Council considers there is an unacceptable risk that such a linkage exists. Where the violations of standards in the company's own business are concerned, the linkage between this business and the violations is relatively clear-cut. The linkage in this case is highly visible due to the keen public interest in Wal-Mart shown by the press and by a number of NGO's.
The second element in the assessment is whether the violations have been carried out with a view to serving the company's interests, or to facilitate conditions for the company. In the view of the Council, the type of violation focused on in this recommendation in Wal-Mart's business operations has been undertaken with the intention of increasing the company's profits. The Council considers that even though all companies aim at maximising their profits, it is ethically unacceptable to do so by committing, or tacitly accepting, serious and systematic violations of ethical norms. The Council finds that the violations have been undertaken with a view to facilitate or serving the company's interests.
The third element in the assessment is to consider whether the company has contributed actively to the violations, or has had knowledge of the violations, but without seeking to prevent them. Where the violations in North America are concerned, the Council considers that Wal-Mart is directly responsible for the reported violations, and must therefore be said to have actively contributed to them. Where the reported patterns of violations in the supply chain are concerned, the Council assumes that Wal-Mart is largely aware of them and largely refrains from seeking to prevent them. The Council also recognises that Wal-Mart wields substantial influence in regard to working environment, wages etc., particularly in relation to the manufacturers which the company itself describes as direct suppliers. This is due not least to the company's size and widespread presence in many countries, and thus to its engagement in a large number of suppliers. In this respect too, the Council therefore considers that the company's acts and omissions fall within the scope of this element of the assessment. The fourth and final element in the assessment is whether the violations of standards are ongoing, or whether there exists an unacceptable risk that violations will occur in the future.
Here, earlier violations might indicate future patterns of conduct. The Council assumes that the patterns of action reported where Wal-Mart is concerned, are ongoing. To the Council's knowledge, there are no indications that the company plans to revise its approach in terms of seeking to prevent violations of labour rights at its suppliers, or as regards violations of standards for labour rights, including gender discrimination and prohibition of unionisation, within its own business operations. The Council has not received a reply to its enquiry to the company, nor do approaches from other investors appear to be prompting changes in the company's practices. Hence in this case, it would seem that previous patterns of action may be an indication of future patterns of action. This implies, in the view of the Council, the presence of an unacceptable risk that serious and systematic violations of international standards are taking place today and may continue in the future.
And, then, we get to the bottom line (The Petroleum Fund, by the way, is the name for the government pension fund):
The Petroleum Fund's Council on Ethics accordingly considers that there is an unaccept- able risk that the Fund, through its investments in Wal-Mart Stores Inc., and Wal-Mart de Mexico S.A., may be complicit in serious or systematic violations of human rights. The Council recommends that Wal-Mart Stores Inc. and Wal-Mart de Mexico S.A. be excluded from the Petroleum Fund's portfolio.
The strong language used by the Norwegians makes you wonder why the Democratic Party can't understand the issue. Our party has very disturbing connections to the Beast of Bentonville, as I pointed out here and here.
At the time, I suggested and raise again the idea that no Democratic consultant who works for Wal-Mart should get a dime from any union or any Democratic candidate or any Democratic political committee. I would suggest that the AFL-CIO and Change To Win both write to the Democratic Party leaders--Howard Dean, Nancy Pelosi, Harry Reid, Chuck Schumer et al.--and demand that the spigot be turned off to people working on Wal-Mart's behalf.
Let's follow the Norwegians.