New York:
Amid fierce opposition to Foreign Direct Investment (FDI) in multi-brand retail and the Indian government agreeing to an inquiry into lobbying by Wal-Mart, the global retail giant says it's confident of setting up shop in the country.
Mike Duke, President and CEO of Wal-Mart Stores Inc, believes the hurdles in India will eventually get ironed out. "I still believe that in India things will get worked out. I am confident that is a country that has such an opportunity to help both the farmers, the consumers all the way up to the supply chain. I have travelled in India. I feel for the people of India. India is missing on the opportunity because of inefficiency of the supply chain. I believe that over time, the process will get worked out in India and we can help people in India live a better life," Mr Duke said.
Wal-Mart is one of the world's most successful and also one of its most controversial companies. Its model of global-sourcing at a very large scale helps ensure that prices are low for customers. Wal-Mart says this allows them to give people a better life.
But the retail giant also has many critics. Labour unions, environmental activists and community groups have been protesting against its policies, business practices and foreign product sourcing methods. Wal-Mart even faces charges of racial and gender discrimination.
Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency. In November, in another setback, the multinational retailer revealed it had ordered an internal probe into potential violations of anti-corruption law in Brazil, China and India.
"We will take appropriate action on the conclusion of this investigation, but rest assured we are not waiting for the outcome. We are using every opportunity to improve. This will make Wal-Mart an even better company. We look at markets around the world and have included a new office of compliance. This focus will make us a better company," Mr Duke said.
So why did Wal-Mart volunteer to probe corruption charges in countries like India and China? Most large US corporations have established internal procedures for investigating corruption. Given the strict US laws, and the potential reputational damage, US companies often alert the government when they find evidence of violations of the Foreign Corrupt Practices Act or FPCA, investigate these violations and settle with the government.
Sometimes, looking at the large scale of expansion and potential for growth in emerging markets, it may make sense to large corporations to pay whatever fines and legal costs may be imposed while continuing to pay bribes in countries where corruption is rampant as it may be the only way to get anything done.
Roland Riopelle, co-founder of law firm Sercarz & Riopelle, LLP, described as "very significant" Wal-Mart's decision to make public its corruption probe in India.
"To perform an investigation is enormously expensive. If they are announcing the investigation before they know the results, it is a clear indication they are expecting to find some sort of wrongdoing in India," Mr Riopelle said.
At a protest outside the venue where the Wal-Mart chief was speaking, the atmosphere was all charged up. One protester said he was not surprised at all by the charges of corruption against the retail giant in countries like India and China.
"Wal-Mart always puts profit over everything else. Recently we had a fire in a Bangladesh factory. Wal-Mart did not support improving security for workers because it would mean more costs for them. So I am not surprised they would be bribing to see growth in developing countries," the protester said.
Asked what message the protesters were trying to send out, he said: "Mike Duke has the audacity to come to New York and speak on women's economic empowerment while his corporation in countries across the world pays minimal wages to workers, a majority of whom are workers. So it's really audacious of him to come here and speak."