Wal-Mart, the world’s largest retailer, has launched a stinging attack on the quality of its supply chain in China and called for improvements in the quality of goods and the way they are produced.

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Speaking at a conference in Beijing hosted by the retailer, Wal-Mart CEO Lee Scott sent a “strong” message to the company’s supply chain.


“Meeting social and environmental standards is not optional… Cheating on the quality of products is just the same as cheating on our customers. We will not tolerate that at Wal-Mart,” he told his audience of more than 1,000 leading suppliers, Chinese officials and NGOs.


Wal-Mart will introduce a certification system whereby suppliers guarantee they comply with local laws, regulations and social and environmental standards, including emissions, treatment of waste and toxic substances.


These contracts will be applied to Wal-Mart’s global business by 2011.

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“A socially and environmentally responsible supply chain will not be optional… Make no mistake: we expect from suppliers a firm commitment to meet strict social and environmental standards, to be open to rigorous audits and to publicly disclose all appropriate information. If a factory doesn’t meet these requirements they will be expected to put forward a plan to fix the problem. If they still do not improve, they will be banned from making products for Wal-Mart,” Scott said. 


Scott did not provide details on what the new quality targets would be.


The initiative comes as Chinese export manufacturers feel the strain of collapsing consumer confidence in western markets in the wake of the melamine scandal.