The Financial Times reported in an October 27th, 2008 article that Walmart’s CEO recently handed down its gospel in China:

“Lee Scott, Wal-Mart’s chief executive, told a meeting of 1,000 Chinese suppliers in Beijing: ‘I firmly believe that a company that cheats on overtime and on the age of its labour, that dumps its scraps and its chemicals in our rivers, that does not pay its taxes or honour its contracts, will ultimately cheat on the quality of its products.’”

Logical; but it’s pretty much agreed that China’s eighth-largest trading partner contributed mightily to much of the corner-cutting amongst its vendors it is now condemning.

“Wal-Mart would begin demanding Chinese suppliers to stores in the US, UK and Canada sign up to rigorous environmental and social standards in three months. Within three years, all suppliers to Wal-Mart stores anywhere in the world would have to sign up.”

And so Walmart leaps to the head of MNC-pack in pushing for a new way to manage business:

“So how is Wal-Mart planning to marry improved factory practices with dirt-cheap products? Wal-Mart does not actually talk much about corporate responsibility. Its phrase, following recent corporate fashion, is ‘sustainability’. It has proved to be a sophisticated way to cut costs.

Sustainability involves reducing the amount of energy used in production and the amount of waste thrown away. Getting rid of unnecessary packaging also helps.”

But it’s not going to be easy herding Chinese suppliers that have weathered the Perfect Economic Storm of 2008 to get behind sustainability. As the article points out:

“… paying workers their overtime is more expensive than not paying it. Suppliers will be hard pressed to provide Wal-Mart with the products it wants at the price it demands – reduced energy inputs or not. Many will struggle.”

And some will die.