Wal-Mart, Proverbial Illegality

Wal-Mart announced the removal of its president and general manager for Latin America, Eduardo Solorzano. This development comes on the heels of the scandal over alleged bribes given to Mexican authorities to expand Wal-Mart’s presence and dominance in the domestic market. The scandal was disclosed by The New York Times in April of last year, and enriched in a report released recently by U.S. Representatives Elijah Cummings and Henry Waxman. Solorzano is named in the lawsuits as the central figure of the alleged network of bribery and illegal disbursements that the company made in our country.

Although the U.S. firm reported that Solorzano will continue to lead the board of Wal-Mart Mexico, the measure has been largely interpreted as a damage control policy implemented by the largest retailer in our country and the world. The measure was accompanied by a promise of cooperation with the Attorney General’s office in investigating the case and indications that respect for Mexican laws and institutions is a core value for the company.

This brings to mind that the bribes allegedly handed over to Mexican authorities, with the apparent knowledge of senior executives of American colleagues, are far from the only case tying the multinational to illicit activities in the country. Long before the New York press published the story, Wal-Mart had been accused of unfair competitive practices and questionable legality. These illegal practices came at the detriment of small businesses and entire communities. Also harmful were Wal-Mart’s anti-labor policies such as the prohibition of unions, signing contracts of employer protection and the imposition of strenuous working hours without overtime pay.

Additionally, the company is known for launching an unscrupulous and harmful corporate expansion, which is damaging to the environment. Wal-Mart builds on communal and ejido land (community land broken into private plots, an Aztec system) adjacent to archaeological sites and protected areas, which, worse still, may have been gained through bribery. These actions are hardly consistent with the spirit of the country’s laws for the preservation of archaeological, historical and ecological sites.

It is wrong, in short, to say that the company has respect for the laws and institutions of Mexico as a fundamental value. Its main aim, instead, is to maximize profits and minimize costs, and according to that logic, it has engaged in predatory practices similar to those that characterize most of the multinationals, especially in countries with weak and dependent environmental institutions such as Mexico.

The most serious and infuriating aspect of this phenomenon, in any case, is that when the aforementioned practices become known, it is because the legislative, judiciary or police institutions in the United States, or the media of that country, decided to reveal them. In contrast, Mexican institutions responsible for seeking justice have shown persistent indolence in monitoring public and private foreign entities operating in our territory. This is evidenced by the fact that, more than eight months after Wal-Mart’s alleged corruption was revealed, the Attorney General has not announced any progress in the developing investigation. Such indolence generates, in short, a breeding ground for impunity, persistent violation of rule of law and the multiplication of corruption afflicting the country. It also steadily reduces the margins of national sovereignty in confronting foreign authorities, agencies and capital.