Statement in response to Leveson reports from the Business & Human Rights Resource Centre, Labour Behind The Label and ShareAction

Rights groups express serious concerns regarding Boohoo’s efforts to improve supply chain practices in a joint statement released on the eve of the fashion brand’s AGM.

Most significantly, Business & Human Rights Resource Centre, Labour Behind The Label and ShareAction, who have been monitoring the situation in Leicester over the past year, found little evidence Boohoo had addressed one of the fundamental drivers of poor labour practice in the supply chain – its commercial purchasing practices.

The organisations reviewed the report by Alison Levitt QC, and three subsequent reports by Brian Leveson QC, and found the positive conclusions reached in these reports to be unsubstantiated, concluding the Agenda for Change is simply providing a veneer of progress without corresponding improvements for workers.

Boohoo’s purchasing practices drive labour rights abuses and illegal non-payment of minimum wage – this has not been adequately addressed. 

In Leveson’s words, Boohoo needs to have, “A buying process capable of being audited to justify the price of whatever is being bought so any failure by a supplier to comply with boohoo’s Code of Conduct cannot be the consequence of aggressive pricing by boohoo”. Yet the set of six responsible purchasing practices (RPPs) outlined in the June Leveson report does not address the fundamental issue of ring-fencing labour costs to ensure the costs negotiated with suppliers cover the reasonable cost of production. Other British garment brands which source from Leicester have demonstrated how Boohoo’s pricing is too low to factor in fair labour costs and the aggressive pricing competition between suppliers driven by Boohoo is well documented.

The onus of labour abuses cannot be placed squarely on the shoulders of Leicester’s factory owners when it has been estimated that a majority of Leicester’s factories are producing for Boohoo. Boohoo’s commercial practices – the low prices paid, the price competition encouraged among suppliers and short order times – are drivers for illegally low wage payments, informal labour and poor working conditions.

Boohoo (and enforcement agencies) are trying to place the blame solely on exploitative suppliers, thus ignoring the central role Boohoo and similar brands play in generating and continuing the root causes of labour abuses and exploitation.

Leveson says he has been provided with everything he asked for; therefore we would urge him to ask the same question posed by ShareAction ahead of the Boohoo AGM: “…for evidence of how price calculations have changed to factor in labour costs, and whether this change in costing practices has led to an increase in the average price paid to suppliers?”

ShareAction elaborated: “Without confirmation from Boohoo that the price paid to suppliers has changed to ensure workers are paid at least minimum wage and all expected benefits (such as national insurance contribution, holiday pay, pension auto-enrolment and statutory sick and maternity pay) the conditions for labour rights abuses that have persisted for the past decade will continue unabated.”

Boohoo were aware of the abuses from at least 2018 and failed to act 

The Boohoo Group have a long track record of avoiding addressing poor labour practices in their supply chain by denying knowledge of workers’ experiences. Labour Behind the Label’s 2020 report echoed what was exposed by BBC Dispatches in 2017, by the Financial Times in 2018, then in the 2018/19 Environmental Audit Committee (EAC) hearings where Boohoo was called to testify. Ahead of the 2020 EAC hearings, EAC chairman Philip Dunne said: “It is incredible that over a year since the committee highlighted illegal working practices in its supply chain, Boohoo has publicly denied any knowledge of what has been happening for years.”

Similarly, Boohoo’s lack of engagement with trade unions, who could play a fundamental role in ensuring better labour practices, remains a serious concern. Indeed, the promise made to the EAC in 2018 to engage with the unions at their warehouse still remains unfulfilled.

Overseeing the implementation of the Agenda for Change independently should require a commitment to engaging with suppliers and workers directly, while any shift in policy must translate into concrete outcomes. A commitment to change does not automatically translate into a shift in practices.

It is also clear from Boohoo’s Agenda for Change that offering redress to their workers is not a priority – thousands of workers are owed millions in unpaid and underpaid wages over the years and no remediation has been offered. Unless Boohoo ensure fair pricing, this wage theft will continue to grow.

The expansion of Boohoo’s supply chain to Italy, Morocco and Pakistan runs the risk of exporting a business model that results in poor labour practices to other countries. This would not be unprecedented. In December 2020, the Guardian reported that Boohoo was selling clothes made by Pakistani workers who earned 29p an hour in dangerous working conditions. In response, Boohoo claimed they did not know. The pattern of media expose, claims of not knowing, and subsequent commitments to change is well trodden.

The Business & Human Rights Resource Centre, Labour Behind The Label and ShareAction call for:

1. Evidence Boohoo Group has ringfenced labour costs and all workers are being paid at least the legal minimum wage.
2. Immediate engagement with trade unions to ensure organising within factories and warehouses can take place.
3. Strong governance: Boohoo should move their registration from Jersey, move their listing from the AIM to FTSE and sign up to the UK Corporate Governance Code.

Thulsi Narayanasamy, Senior Labour Rights Lead at the Business and Human Rights Resource Centre, said: “Adopting policies and implementing them are two very different things. It appears the Boohoo Group is going to great lengths to appear committed to change, but this hasn’t necessarily translated into action. Sources in Leicester suggest there is serious cause for concern with workers still being paid well below the minimum wage at £5 – 5.50 an hour. By over-emphasising the role of factories, Boohoo is wrongly exonerated for its central role in creating the necessary conditions of labour abuses.”

Dominique Muller from Labour Behind the Label said: “One year on from our report nothing has changed for workers in Leicester – indeed we now know that many workers still receive wages well under the minimum wage, that prices being asked of suppliers fail to cover the legal wage costs. Boohoo must do more than simply stating a much-delayed commitment to change and investors must hold Boohoo to account and not simply chase the ever-increasing profits that are being made on the backs of workers”.

Martin Buttle from ShareAction said: “Investors should be concerned about Boohoo business model and approach to managing labour standards in its supply chain as they have proven to be both material to the business and salient to rights-holders. Investors in Boohoo should continue to engage with company until the Agenda for Change has delivered a robust approach to managing their human rights risks. Investors should pay particular attention to ensure the commercial practices are not undermining the standards they set for suppliers.”

Notes to editors:

• Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts of more than 10,000 companies across nearly 200 countries.
• Labour Behind the Label is a campaign that works to improve conditions and empower workers in the global garment industry.
• ShareAction is a campaigning organisation pushing the global investment system to take responsibility for its impacts on people and planet, and use its power to create a green, fair, and healthy society.
• The Boohoo Group’s Annual General Meeting will be held at 49 - 51 Dale Street, Manchester, M1 2HF on Friday, 18 June 2021 at 14:00.

Media contacts: 

Thulsi Narayanasamy, Business and Human Rights Resource Centre, +44 (0) 7724 580885, [email protected].

Dominique Muller, Labour Behind The Label, +44 (0) 7596098399, [email protected].

Conor Quinn, Media Communications Manager, ShareAction, +44 (0)7444 696 214, [email protected]