Wal-Mart Wins Ruling on Foreign Labor, Sets up Communist Party in China Wal-Mart

Wal-Mart Stores cannot be held liable under United States law for labor conditions at some of its overseas suppliers, a federal judge has ruled.

A complaint filed last year in Los Angeles by the International Labor Rights Fund contended that employees of Wal-Mart suppliers in China, Bangladesh, Indonesia, Swaziland and Nicaragua were forced to work overtime without pay and in some cases were fired because they tried to organize unions. The group sought to represent hundreds of thousands of employees of Wal-Mart’s overseas suppliers. The New York Times Reports here.

International Herald Tribune
Communist Party branch set up at Wal-Mart’s China headquarters
Sunday, December 17, 2006

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Employees at Wal-Mart’s China headquarters have set up a Communist Party branch, the company and party said Monday, amid a campaign to expand the ruling party’s presence in foreign companies.

The move follows the success of China’s state-sanctioned labor body this year in setting up unions at the U.S. retailer’s outlets. Wal-Mart is one of China’s biggest and most prominent foreign employers, with a workforce of 36,000 and 68 stores.

The party branch was set up Friday at Wal-Mart headquarters in the southern city of Shenzhen, according to the party newspaper People’s Daily and a Wal-Mart Stores Inc. spokesman, Jonathan Dong.

“Quite a few of our associates (employees) are party members already, so they have a right to establish branch organizations,” Dong said.

Dong said he didn’t know whether Wal-Mart would have any formal interaction with the branch or whether its establishment would affect operations. Employees who answered the phone at the party’s Shenzhen office and wouldn’t give their names said they had no information on what the branch at the Wal-Mart headquarters would do.

China’s 70 million-member Communist Party and its affiliated All-China Federation of Trade Unions are trying to expand their presence in foreign companies to keep pace with a fast-changing society amid capitalist-style economic reforms.

State industry, their traditional base, has slashed millions of jobs while private companies are creating tens of millions more.

In a bid to stay relevant, the party has begun offering membership to entrepreneurs and others in the new private economy.

The ACFTU, the umbrella body for unions permitted by the government, has announced a target of setting up unions at 60 percent of China’s 150,000 foreign companies by the end of this year.

An ACFTU spokesman, Li Jianmin, said Monday he had no figures on how close the body is to meeting that goal.

The party has not disclosed its own expansion target.

The party branch at Wal-Mart headquarters is the company’s sixth in China, according to Dong.

The first was set up Aug. 12 in the northeastern city of Shenyang. Party officials there said it would not interfere in store management. An official quoted by the state Xinhua News Agency said the Shenyang branch would encourage members to “to play an exemplary role in doing a good job” and to help Wal-Mart grow.

Many foreign companies in China already have party branches, either officially or unofficially.

One of the earliest was at U.S.-based cell phone maker Motorola Inc. in the eastern city of Tianjin. The branch officially was established in 1997, but news accounts say it was set up as early as 1990 and kept secret in order to avoid alarming Motorola management.

Wal-Mart, based in Bentonville, Arkansas, resisted the creation of unions at its Chinese stores for two years before agreeing in August to help the ACFTU organize its workers.

The party and labor expansion campaigns were ordered in March by President Hu Jintao, who also is the party’s general secretary, according to Chinese media.

“Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises,” the order said, according to the newspaper Beijing News.