
Notice of Exempt
Solicitation
Pursuant to Rule 14a-103
Name of Registrant:
Walmart
Name of Person Relying on Exempt
Solicitation: Oxfam America
Address of Person Relying on Exempt
Solicitation: 77 North Washington Street, Suite 5-1,
Boston, MA 02114
Written materials are submitted pursuant to Rule 14a-6(g)(1)
promulgated under the Securities Exchange Act of 1934. Submission
is not required of this filer under the terms of the Rule, but is
made voluntarily in the interest of public disclosure and
consideration of these important issues.
Oxfam America urges you to vote FOR Proposal 6 asking
Walmart to prepare a report on its human rights due diligence
(HRDD) process at its annual general meeting on Wednesday, May
31.
|
I. |
Resolved clause and supporting statement of the
proposal: |
RESOLVED, that the shareholders of Walmart Inc. (“Walmart”) hereby
request that the Walmart Board of Directors (the “Board”) prepare a
report, at reasonable cost and omitting proprietary information, on
Walmart’s human rights due diligence (“HRDD”) process to identify,
assess, prevent and mitigate actual and potential adverse human
rights impacts in its domestic and foreign operations and supply
chains.
Supporting Statement:
As
outlined by the UN Guiding Principles on Business and Human Rights,
we recommend the report identify:
|
· |
The human rights
principles used to frame its risk assessments; |
|
· |
The human rights
impacts of Walmart’s business activities, including domestic and
foreign operations and supply chains; |
|
· |
The types and extent
of stakeholder consultation; and |
|
· |
Walmart’s plans to
track effectiveness of measures to assess, prevent, mitigate, and
remedy adverse human rights impacts. |
|
II. |
Arguments in Favor of a “Yes” Vote |
Support for
this Resolution is Warranted Because:
|
1. |
As one of the largest employers in the United States, Walmart’s
business practices and relationships with suppliers operating in
high-risk sectors could expose Walmart and its investors to legal,
reputational and financial risk. |
|
2. |
Walmart can mitigate negative public perception of the company
with respect to allegations of poor working conditions for workers
throughout not only its global supply chains, but also for its own
workers in the US. |
|
3. |
Walmart’s existing policies and practices do not demonstrate
sufficiently robust or effective Human Rights Due Diligence
(“HRDD”) in line with the requirements of the United Nations
Guiding Principles (UNGPs), nor do they meet current investor
expectations. |
We recognize
and appreciate that Walmart published new human rights disclosures
in April 2023. However, despite the effort to utilize the language
of the UNGPS, the disclosures still fail to make sufficient
concrete commitments in line with the company’s recognized HRDD
responsibilities:
|
· |
The company is still
over-reliant on social compliance audits, which are notoriously
flawed and fail to identify human rights risks, in place of HRDD
tools like human rights impact assessments. |
|
· |
When identifying
salient human rights risks, there is no acknowledgement of the
level of responsibility of the company has toward those issues –
whether the company is directly causing those harms, contributing
to those harms, or linked to those harms. |
|
· |
Walmart is still
not disclosing the results of its HRDD process, or what steps it is
taking to mitigate the human rights concerns the company has
identified within its operations, which is the central pillar of
the UNGPs |
A. Media
Outlets are Reporting on Walmart’s Alleged Human Rights
Violations
As proof of
the insufficiency of Walmart’s current HRDD policies and
disclosure, the treatment of and conditions for workers within
Walmart’s operations in both the United States and within its
global supply chain continue to capture media attention. We are
concerned about the reputational, legal, and financial risks posed
to Walmart as a result of these reported offenses.
|
· |
Forced Labor.
Walmart’s current HRDD policy is insufficient to identify the use
of forced labor within its supply chain. For example, in December
of 2022, a federal court found that the owner of Los Villatoros
Harvesting LLC, a company that supplies watermelons to Walmart,
guilty of conspiracy to commit forced labor.1 This
prosecution occurred after an investigation by the Department of
Labor in 2017 which resulted in the finding that the owner violated
the Migrant and Seasonal Agricultural Worker Protection Act and the
Fair Labor Standards Act. The company employed workers to harvest
watermelons for Carlton Farms, Inc. who supplied watermelons for
sale at Walmart. These human rights violations occurred in
Walmart’s supply chain, within the United States in the past six
years. |
|
· |
Child Labor.
Walmart’s policy also failed to prevent or mitigate child labor
within its U.S. supply chain. In February of 2023, the New York
Times reported that migrant child laborers work for Walmart's
domestic suppliers.2 |
|
· |
Insufficient Sick
Leave. Additionally, Walmart is accused of providing
insufficient sick leave for its employees, particularly during the
pandemic.3 In 2022, one Walmart employee died after
suffering from a medical incident for two hours in the store
bathroom. Her mother stated that she stayed at work due to fear of
“losing a paycheck, or even her job, for putting her health
first.”4 |
_____________________________
1
https://www.dol.gov/newsroom/releases/whd/whd20230202-2;
https://www.business-humanrights.org/en/latest-news/usa-mexican-workers-contracted-by-lvh-subject-to-forced-labour-on-watermelon-farms-supplying-to-walmart-kroger-sams-club-schnucks/
2
https://www.nytimes.com/2023/02/25/us/unaccompanied-migrant-child-workers-exploitation.html
3
https://www.businessinsider.com/walmart-target-workers-describe-working-conditions-during-coronavirus-2020-3
4
https://arktimes.com/arkansas-blog/2023/01/16/no-more-walmart-associates-should-be-left-to-die-north-little-rock-family-battles-for-worker-rights-one-year-after-loss
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
|
· |
Treatment of
Pregnant Workers. Walmart has made headlines over the years for
allegedly denying pregnant workers light work duty and other
accommodations that were given to injured workers. In 2020, Walmart
paid $14 million to settle a class action suit on behalf of 4,000
pregnant women in 39 states who said they were discriminated
against because Walmart denied them necessary workplace
accommodations.5 In 2022, another discrimination suit
against Walmart was dismissed because the court found that Walmart
treated all employees the same in denying light work duty. However,
the case brought scrutiny from the public and created headlines
about the allegations put pressure on Congress to
intervene6. |
|
· |
Insufficient
Wages. Recent scholarship found that in 2022, at least half of
Walmart’s hourly workers earn under $29,000 annually,7
insufficient wages for a basic standard of living. |
|
· |
International
Supply Chain Concerns. The allegations are not limited to the
United States. Walmart has been accused of selling Milwaukee gloves
made from forced labor in a Chinese prison. Milwaukee Tools, The
Home Depot, Inc., and Amazon.com all responded to such allegations
while Walmart did not.8 Additionally, workers in
Taiwanese factories that allegedly produce goods for Walmart have
reportedly been forced to pay recruitment fees for such labor. It
was reported that Walmart has not disclosed whether it has audited
its Taiwanese suppliers.9 Human rights violations
ranging from extreme hours, inhumane conditions and low pay also
continue to plague sectors like the seafood industry which
retailers like Walmart source from in huge
numbers.10 |
B.
Walmart’s Current Policies and Practices Regarding HRDD are
Insufficient and its Reporting - including its most recent 2023
Disclosures - does not Satisfy the Proposal Request.
While Walmart
is currently taking some steps to address human rights, and
in particular its most recent human rights disclosures (published
in April 2023) utilize some of the language of the UNGPs, the
Proponent believes that the Company still has not implemented
robust HRDD processes in compliance with the requirements of the
UNGPs. Greater transparency, as requested in the Proposal, is
necessary to ensure that Walmart is properly overseeing the human
rights risks in its operations.
_____________________________
5
https://www.washingtonpost.com/dc-md-va/2020/04/29/walmart-pregnant-workers-discrimination-settlement/
6
https://news.bloomberglaw.com/daily-labor-report/walmart-pregnancy-accommodation-ruling-puts-pressure-on-congress
7
https://www.cbsnews.com/news/walmart-minimum-wage-20-an-hour-still-broke-rick-wartzman-author/
8
https://www.business-humanrights.org/en/latest-news/human-rights-advocates-raise-concerns-that-milwaukee-tool-gloves-are-made-with-forced-labour-in-a-chinese-prison-incl-co-responses/;
https://www.business-humanrights.org/en/latest-news/letter-to-walmart-ceo-doug-mcmillion-to-stop-selling-milwaukee-gloves-made-by-slave-labor/;
https://chinaaid.org/cheng-yuans-wife-petitions-against-milwaukee-tool-for-using-slave-labor/
9
https://www.business-humanrights.org/en/latest-news/taiwan-migrant-workers-reportedly-pay-up-to-usd6150-to-secure-low-wage-jobs-producing-goods-for-multinationals-incl-comments-from-loreal-walmart-others/
10
Behind the Barcodes | Oxfam
https://www.oxfamamerica.org/explore/issues/humanitarian-response-and-leaders/hunger-and-famine/behind-the-barcodes/
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
The Proposal’s
Resolved clause requests a report on Walmart’s HRDD process to
“identify, assess, prevent and mitigate actual and potential
adverse human rights impacts in its domestic and foreign operations
and supply chains.” In the opinion of the Proponent, while Walmart
may report generally on some of its approach, it does not
sufficiently report on critical issues such as how or if it
identified concerns within its high-risk supply chains, nor does it
disclose action plans that adequately establish how it is working
to prevent or mitigate those concerns.
Further, the
Supporting Statement explains the request further, by recommending
that the report identify:
(1)
The human rights principles used to frame its risk assessments and
the methodology it uses to generate them;
(2)
The human rights impacts of Walmart’s business activities,
including domestic and foreign operations and supply chains;
(3)
The types and extent of stakeholder consultation; and
(4)
Walmart’s plans to track effectiveness of measures to assess,
prevent, mitigate, and remedy adverse human rights impacts.
Unfortunately,
Walmart’s current reporting falls short of these requested elements
which are needed to ensure that Walmart is completing proper
HRDD.
C. Walmart
has not published the actual methodology and results of its HRDD or
action plans establishing how risks or violations identified in
them will be prevented, mitigated and/or remedied.
HRDD requires
that Walmart publish not only its general approachto HRDD, but the
specific methodology that HRDD utilizes as well as its findings.
The Proposal, in line with the UNGPs, requests that Walmart report
on the “human rights impacts of Walmart’s business activities,
including domestic and foreign operations and supply chains.”
Because
Walmart does not provide this necessary level of transparency, we
are unsure if Walmart’s HRDD policies have identified all relevant
human rights risks, if so, what concrete steps Walmart has taken to
mitigate or address those identified risks. At present, investors
are left in the dark.
It appears
that the company remains overly reliant on internal processes
and audits that are not made publicly available. Transparency
is a cornerstone of the UNGPs. No new commitment to implement a
more comprehensive HRDD strategy has been announced in its most
recent human rights disclosures; effectively the company has
repackaged existing activities, but refrained from integrating
more robust HRDD activities.
For example,
the company presents examples of the different actions they are
taking in several priority supply chains;, however, there is no
presentation of the main human rights issues associated with each
supply chain, no clear plan of what the company will do to
address these concerns, and no explanation of how Walmart is
connected to the issues identified.
To qualify as
a robust HRDD process, the company should commit to conduct human
rights impact assessments in its domestic operations and on its
high-risk supply chain. The results of those assessments should be
publicly available and published alongside a time-bound action plan
that includes sufficiently robust grievance mechanisms and tools
for redress of grievance for both their own employees and workers
in their global supply chains.
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
D.
Walmart has failed to complete human rights impacts assessments
(HRIAs), a critical piece of HRDD.
Because
Walmart has not committed to complete any HRIAs, and because HRIAs
are an important aspect of HRDD, this is an obvious example of the
insufficiency of Walmart’s current HRDD policies and disclosure.
While it appears that Walmart engages in different initiatives to
identify human rights risks, how they fit into the HRDD effort is
unclear.
It appears
that instead of completing HRIAs, the Company still relies on
social audits, which have been described as “a voluntary process
carried out to assess and verify a company’s compliance with
specified labour and/or environmental standards.”11
However, the inadequacy of social compliance audits as a tool for
protecting labor rights and working conditions for supply chain
workers (including on issues of health and safety, wages and
freedom of association) is well documented.12 Such
audits only offer a partial view into complex situations: they look
only at the actions of suppliers over a brief window (often no more
than two days) and often failing to include meaningful
rights-holder engagement. To engage in meaningful HRDD, Walmart
must move beyond such fragmentary processes and commit to conduct
human rights impact assessments, followed by the completion and
implementation of action plans for addressing any rights risks
identified.
As an example
of the possible full disclosure and commitment that Walmart could
complete, in Kroger’s Human Rights Policy, Kroger committed to
“assessing human rights risks on an ongoing basis” and further
stated: “We will also conduct human rights impact assessments
(HRIA) for specific commodities and countries to inform our risk
assessment and management.”13
To ensure the
greatest impact, Walmart’s specific initiatives should be
integrated into a structured HRDD strategy, and publicly reported
on as requested, as part of the company’s approach to identifying
human rights risks.
E. Walmart
has not sufficiently addressed the scope of its engagement with
rights holders and other stakeholders.
As expressed
in the Proposal, the UNGPs state that in order to gauge human
rights risks, businesses should “identify and assess any actual or
potential adverse human rights impacts with which they may be
involved either through their own activities or as a result of
their business relationships.”14 This assessment process
should include “meaningful consultation with potentially affected
groups and other relevant stakeholders.”15
In its
opposition statement Walmart states: “we seek to go beyond our own
policies and procedures by working collaboratively with other
stakeholders.” However, it is unclear whether Walmart is consulting
with the range of stakeholders that are at risk of human rights
violations including both throughout their global supply chains, as
well as in their own US operations and workforce. Accordingly,
Walmart’s direct engagement with affected rights holders as part of
the HRDD process is either nonexistent or not communicated
sufficiently.
_____________________________
11
https://media.business-humanrights.org/media/documents/Executive_Summary_EN_2021_CLA_Annual_Briefing.pdf
12
Decent
Work In a Globalized Economy.pdf | Powered by Box
13
https://www.thekrogerco.com/wp-content/uploads/2022/02/Kroger-Human-Rights-Policy-Feb-2022.pdf
14
https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf
(page 19).
15
Id.
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
For example,
such an engagement with the seasonal workers harvesting watermelons
for Walmart in Florida might have forewarned the Company about the
use of forced labor in its supply chain.
While Walmart
has better organized its commitment to engage with stakeholders,
its most recent disclosures still lack a clear explanation of which
communities it is drawing those stakeholders from, who within them
are considered rights holders and which rights holder groups
precisely Walmart engages with. It is also unclear which
stakeholders have been engaged specifically on which respective
human rights risks. It is important that Walmart communicate about
its engagement strategy specifying how and when the company engages
with which rights holders (including its own workers), as requested
in the supporting statement of the Proposal and in line with the
UNGPs. Compliance with the UNGPs would mean that the engagement is
ongoing and ensures significant participation of all potentially
impacted rights-holders.
F. Despite
the recent human rights disclosures, Walmart’s various reports are
disjointed and incomplete.
Walmart points
to at least six different reports in its opposition statement. The
lack of a structured approach to HRDD and the absence of a coherent
action plan showing how the company responds to all the salient
issues identified makes it difficult to understand and evaluate the
effectiveness of the human rights measures the company is taking.
As requested in the Proposal, Walmart should develop and disclose a
comprehensive and structured approach to HRDD which will clearly
specify how it is implementing its responsibility to respect human
rights, particularly with respect to how it assesses human rights
risks, how it engages all affected rights holders (including
workers in both the company’s own workforce and throughout its
global supply chain), in its HRDD processes (including the
assessment of potential human rights risks) , and an action plan
that would include and tie together the various initiatives it
engages in to respond to the salient risks identified.
For example,
the table presented in the Human Rights Section of the ESG report
about the North American Produce Corridor is informative as to
Walmart’s identified “Salient Human Rights Issues” and related
“Philanthropy” in the area, but such analysis has apparently not
been replicated beyond this specific geography for all of Walmart’s
salient human rights risks. Further disclosure is necessary to
ensure that Walmart is properly implementing HRDD policies in its
operations.
|
III. |
Why Further Human Rights Due Diligence Disclosure is
necessary: Comprehensive and robust HRDD, in line with the
requirements of the UNGPs, is an effective risk management process.
Failure to conduct HRDD poses significant threats to Walmart’s
bottom line, in the form of potential operational, reputational and
legal liability that in turn give rise to financial
liability. |
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
A. HRDD
Mitigates Against These Risks
To mitigate
the aforementioned risks and protect medium and long-term
shareholder value, conscientious companies conduct HRDDin line with
the UNGPs. 16 HRDD enables a company to detect emerging
human rights risks and redress harm, which in turn allow the
company to both protect itself against expensive fines and burnish
its reputation. HRDD includes four key steps: assessing actual and
potential human rights impacts, integrating and acting on findings,
tracking responses, and communicating about how impacts are
addressed.17 These proactive steps to identifying and
confronting human rights violations can allow companies to address
them before they develop into significant costs. Indeed, some of
the world’s largest agribusiness companies publicly embrace HRDD:
Coca Cola,18 Nestlé,19 and
Mondelez20 conduct HRDD on their operations, and are
transparent about the process on their website; this enables
investors to understand the manner in which these companies are
proactively addressing human rights risks.
B. HRDD
Safeguards a Company’s Bottom Line
HRDD not only
helps to protect workers and community members who may be harmed by
company operations, but also helps businesses minimize expensive
operational, reputational, and legal risks. As a result, preventing
human rights abuses benefits Walmart’s bottom line. For
example:
|
· |
HRDD mitigates
the risk that a company will face fines and lawsuits from
injured employees and others adversely impacted by the company’s
operations. |
|
· |
Poor HRDD
poses risks to recruitment and retention of
employees. The ability to recruit and retain a
diverse and talented workforce is critical to the uninterrupted
functioning of business operation. Respecting workers’ human rights
and protecting their health and safety is essential to avoiding
worker shortages, strikes, work stoppages, and legal battles.
Effective HRDD can support Walmart’s efforts to identify and
mitigate labor conflicts before they escalate. |
|
· |
HRDD confers
many direct financial benefits, including improving risk
management, strengthening brand reputation, reducing disruptions to
business, lowering employee turnover, increasing positive
recognition from civil society groups and shareholders, and
improving relationships with communities. These benefits can
ultimately contribute to protecting the company’s long-term
financial interests. |
|
· |
Risk of
falling behind competitor and peer companies that are already
taking meaningful steps toward robust HRDD. If Walmart
continues to fail to adopt a robust and comprehensive HRDD plan and
system, it risks falling further behind competitors. For example,
in 2021, Kroger committed to publishing a Human Rights Gap
Analysis, conducting and publishing HRIAs, and devising an action
plan in response to the findings of the
HRIAs.21 |
_____________________________
16
The United Nations Guiding Principles on Business and Human Rights
(UNGPs), adopted by the UN General Assembly in 2011, are the global
authoritative framework outlining states and companies’ human
rights-related roles and responsibilities. The UNGPs require all
businesses, regardless of size or industry, to respect the human
rights of stakeholders impacted by their operations and business
relationships.
https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.
17
https://www.ungpreporting.org/glossary/human-rights-due-diligence/;
https://www.ohchr.org/en/professionalinterest/pages/coreinstruments.aspx;
https://www.ilo.org/declaration/lang--en/index.htm;
http://www.oecd.org/investment/mne/1922428.pdf
18
https://www.coca-cola.ie/content/dam/journey/ie/en/hidden/PDFs/human-and-workplace-rights/addressing-global-issues/human-rights-self-assessment-checklists.10.2014.pdf.
19
https://www.nestle.com/csv/impact/respecting-human-rights/human-rights-impacts.
20
https://www.mondelezinternational.com/~/media/mondelezcorporate/uploads/downloads/mdlz_human_rights_report_2018.pdf?la=en.
21
https://politicsofpoverty.oxfamamerica.org/turning-point/;
https://www.thekrogerco.com/wp-content/uploads/2021/05/Kroger-Statement-on-Human-Rights.pdf.
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a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
Given the
low cost of conducting and reporting on HRDD relative to the
significant potential costs tied to human rights violations, we
urge the shareholders to vote “Yes” on Shareholder Proposal No. 6
as a cost-effective means of reducing exposure to risk and
protecting basic human rights.
For questions,
please contact Hana Ivanhoe at hana.ivanhoe@oxfam.org.
This is not
a solicitation of authority to vote your proxy. Please DO NOT send
us your proxy card; Oxfam America is not able to vote your proxies,
nor does this communication contemplate such an event
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