On 5 July, the Sunday Times published allegations of gross labour abuses at a garment factory in Leicester producing clothes for Boohoo. The factory was said to be underpaying wages, and failing to provide appropriate protective equipment or ensure social distancing. Boohoo said they were ‘shocked and appalled’ by the allegations: they hadn’t known.
This is not the first time Boohoo’s production, and manufacturing in Leicester more broadly, have come into the spotlight. In 2019, Boohoo was one of the many brands that provided oral evidence to the Environmental Audit Committee’s inquiry into the social and environmental impact of fast fashion. One of the inquiry’s three main areas of focus was sustainable manufacturing in the UK; in particular, whether the government was doing enough to protect workers’ rights and ensure safe working conditions.
Marks and Spencer, Primark, the Arcadia Group, ASOS, Stella McCartney, Burberry and Paul Smith all sent senior staff to the inquiry. And most leading UK brands submitted written evidence detailing their commitment to environmental and social goals. Boohoo ticked all the boxes: they submitted 3000 words of written evidence; one of the founders, Carol Kane, attended in person; the other, Mahmud Kamani, wrote to Mary Creagh, the committee chair, inviting her to discuss, over lunch, the Boohoo group’s ‘British success story’ and ‘sustainability journey’.
The committee received just one, anonymous submission from a supplier. It said that they supplied Boohoo, Missguided, ASOS and others, and that all these brands were constantly asking suppliers to reduce their prices. Even when CEOs and managers at top brands knew the cost of clothing, the witness said, they squeezed prices and watched wages get cut. The brief testimony finishes by predicting that when the exploitation comes to light, the CEOs and managers – who know the cost of clothing – will wash their hands of it, shift the blame to suppliers and say they did not know. ‘They do know,’ the supplier concludes.
How could they not? The appalling state of working conditions in the Leicester garment industry has been known for at least a decade. Channel 4’s Dispatches broadcast an investigation in 2010 that revealed all the trademarks of endemic exploitation: pay at half the minimum wage; dangerous and unsanitary conditions; harassment and abuse. In 2015, the Ethical Trading Initiative commissioned research that found significant under or non-payment of wages; excessive working hours; a captive, vulnerable and exploited workforce; absence of contracts; egregious health and safety violations.
Dispatches aired a follow-up documentary in 2017, with many of the same findings. There was nuanced, forensic analysis in the Financial Times in 2018. The Joint Committee on Human Rights conducted an investigation in 2017 and ensured it received attention during the Environmental Audit Committee hearings in 2019. The EAC published some straightforward recommendations. The government did nothing.
Meanwhile, as poor working conditions have persisted or deteriorated, Boohoo has thrived. As the Sunday Times report broke, the company was valued at £5 billion, and was on course to dole out bonuses amounting to £150 million. It may be uniquely ‘successful’ in some ways, and uniquely aggressive in others, but Boohoo is far from a ‘bad apple’ in an otherwise functional industry.
All brands and retailers ask manufacturers to produce clothes at impossibly low prices, regardless of whether they meet the costs of production, including labour. A manufacturer who wishes to pay decent (or even legal) wages, and to ensure health and safety, may say: ‘Given what you offer, what you ask is not possible’ – but another manufacturer will assent.
When labour abuses come to light, the supplier is guilty, the brand is shocked. The latter cannot be held legally accountable for the transgressions of the former, even if it created the conditions for those transgressions. This is not to exonerate suppliers and manufacturers, but to describe the madness of a situation in which it is not illegal for retailers to demand a price below the cost of production even if that price creates the circumstances in which the law will be broken and labour rights abused.
Companies around the world use the privilege of low pricing and plausible deniability to structure their supply chains and extract the maximum value from labour at a legally convenient remove. None of this is even remotely ‘under the radar’. Labour abuses in the cocoa industry have been documented and raised in the US Congress for almost two decades. Forced labour on coffee plantations in Brazil is a known fact. Asian fishermen working in supply chains connected to leading supermarkets are trapped at sea for months on end and subjected to harrowing abuse. More than 24 million people work in conditions of forced labour. Meanwhile, Tesco is in the papers for demanding aggressive – yet entirely legal – price reductions from its suppliers.
For things to change, it will take more than calling out and castigating Boohoo. Gross systemic failures need to be overhauled, and all brands and retailers held accountable. According to the United Nations Guiding Principles on Business and Human Rights, endorsed in 2011, companies are expected to undertake due diligence for the impact not only of their own activities but also of their business relationships. The UN guiding principles, however, are only guiding principles: quasi-legal instruments with no binding force. With the possible exception of the Proceeds of Crime Act, which has not yet been used for this purpose, there are currently no legal mechanisms to establish a lead firm’s civil or criminal liability for human rights abuses in its supply chain.
That may at last be changing. In 2017, the Joint Committee on Human Rights proposed a ‘failure to prevent’ mechanism modelled on Section 7 of the Bribery Act 2010. A campaign has been launched to demand that UK firms be compelled to carry out mandatory human rights and environmental due diligence, based on the UNGP framework. Such legislation has enormous potential to shift the burden of proof: to avoid liability, companies would have to demonstrate that harm occurred despite their best efforts to prevent it. ‘Best efforts’ should include setting a decent price.