Wal-Mart sets new rules for China suppliers

[October 22, 2008]  BEIJING (AP) -- Wal-Mart Stores Inc., the world's largest retailer, said Wednesday it will set new quality standards for its suppliers amid a scare over toxic milk products that have sickened tens of thousands of babies across China.

Meanwhile, the United Nations released a report that recommends China increase oversight of its food safety system and hold businesses accountable for their products.

Mike Duke, vice chairman of Wal-Mart's international division, said the company is expecting "greater transparency ... from our supplier partners" beginning next month.

They will be required to "tell us the name and location of every factory they use to make the products we sell," according to Duke's prepared remarks delivered at a company conference in Beijing. "Essentially, we expect you to ask the tough questions, to give us the answers and, if there's a problem, to own the solution."

Wal-Mart will apply the new standards to apparel first and eventually use them on all its products, Duke said. No other details were given.

The measures by Wal-Mart, China's largest foreign retailer, come as confidence in Chinese exports has been shaken after a series of product safety scandals.

Last year, high levels of industrial toxins were found in exports ranging from toothpaste to toys.

China is still reeling from the revelation last month that the chemical melamine, which is used to make plastics and fertilizer, was added to infant formula to artificially boost nitrogen levels and make it seem higher in protein when tested. The deaths of four babies have been linked to the practice and some 54,000 children have been sickened.

Contamination has since turned up in powered and liquid milk, yogurt and other products made with milk. Dozens of countries have pulled Chinese-made goods with dairy ingredients off their shelves to test for melamine.

Health experts say ingesting a small amount poses no danger, but in larger doses, the chemical can cause kidney stones and lead to kidney failure.

Wal-Mart sold Chinese-made cribs which were part of a recall this week by New York-based Delta Enterprises. The 600,000 cribs of various models with spring-loaded safety pegs were manufactured in China and sold between January 2000 and January 2007.

Another 985,000 cribs were recalled because of the potential for missing safety pegs. Those products were manufactured in Taiwan and Indonesia and sold between January 1995 and September 2007.

The recall was instituted after the deaths of two babies.

In its report released Wednesday, the United Nations recommended that China tighten oversight focusing on high-risk areas of the food chain, have an all-encompassing food safety law that would cover the whole industry and hold businesses responsible for the products they sell.

"The national system needs urgent review and revision," U.N. Resident Coordinator in China Khalid Malik said.

Additionally, China needs a unified regulatory agency, the report said, and a place consumers can go for reliable information. The task is currently split between different government agencies, creating uneven enforcement that is further complicated by numerous laws.

In the southern Chinese territory of Macau, government officials said late Tuesday that three more children have developed kidney stones, bringing the total number of sick children to seven.

Ultrasounds confirmed the diagnoses in two 6-year-old girls and an 11 year-old boy, Macau government information officer Elena Au said.

The boy is currently hospitalized but the two girls developed small stones and did not require hospital treatment, Au said.

The girls drank milk made by Chinese dairy Yili Industrial Group Co., whose products have been confirmed to contain melamine.

Au said officials are still investigating what brand of milk the boy drank.

Also Wednesday, Malaysia has lifted a blanket ban on the import of a baking agent from China after most shipments were found to be safe for consumption and free of melamine.

Health Minister Liow Tiong Lai said the three Chinese companies whose ammonium bicarbonate was found to contain excessive amounts of melamine will continue to be prohibited from importing the banking agent.

However, ammonium bicarbonate from all other companies will be allowed into the country after being tested at the border, Liow said.

In South Korea, the Agriculture Ministry says traces of melamine were found in five egg products imported from China. South Korea banned imports of the products, and the ministry and the watchdog Korea Food and Drug Administraton plan to collect and destroy the products already in the country.

The U.S. Food and Drug Administration says less than 2.5 parts per million of melamine are not harmful in most foods, except baby formula. Only one of the five products in South Korea had traces higher than that level.

[Associated Press; By AUDRA ANG]

Associated Press writer Henry Sanderson in Beijing contributed to this report.

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