Unions oppose Wal-Mart's entry into South Africa

The first front in Wal-Mart s battle to win over public opinion in Africa opened up yesterday when two unions fired shots across the bow of the world s largest retailer, criticising its labour and procurement record.

The Western Cape branch of the Congress of South African Trade Unions (Cosatu) said it would oppose any bid to open stores in the province by Wal- Mart, which said on Monday that it was in talks to buy Massmart .

We call on urgent national action from government to investigate this hostile move by Wal- Mart. Companies whose practice it is to abuse workers rights are not welcome in SA, it said.

The South African Commercial, Catering and Allied Workers Union (Saccawu) said it opposed Wal-Mart s practice of procuring from other countries, as this would undermine the precarious local manufacturing industry.

Wal-Mart s procurement has seen not only the collapse of local manufacturing in many instances, but has also fuelled the use of child labour and extreme low wage labour in other parts of the world , Saccawu said.

Johannesburg-based Massmart, the subject of a R29,8bn bid by the Bentonville, Arkansas- based retailer, said it intended to protect the rights of all stakeholders, including labour unions.

It also said it contacted Cosatu and Saccawu leaders early on Monday to discuss the announcement with them.

While this can be seen as the opening gambit in a lengthy battle, it will be a test for Wal-Mart as it seeks to ease its way into a growing African continent with nearly 1-billion consumers. It will have to overcome perceptions created by a history of anti-unionism and a lengthy record of lawsuits.

In January 2005, the company was fined 135540 by US authorities for charges of violating child labour laws in three states. The company denied the charges. The same year, it was ordered to pay 7,5m in damages to a disabled former employee who claimed it unfairly reassigned him. Also that year, it paid the US government 11m to settle an investigation into the use of illegal immigrants by Wal-Mart contractors.

The company is fighting a class action lawsuit brought against it by 1,5-million US women claiming systematic discrimination in pay and promotions.

Wal-Mart has shown better conduct in countries with stronger labour laws, a point it stressed yesterday. We respect and honour pre-existing union relationships and are committed to abiding by South African labour laws, said Doug McMillon, president and CEO of Wal-Mart International.