Saturday, October 24, 2020

Review finds “many failings” in Boohoo’s Leicester supply chain

An Independent Review of Boohoo has “identified many failings in [its] Leicester supply chain.”

Alison Levitt QC was appointed to conduct the Independent Review, the purpose of which was to consider Boohoo’s obligations and duties of care in relation to the workforce in its Leicester supply chain.

The review considered whether the allegations about working conditions and low pay are well-founded, and if they are, consider the extent to which boohoo monitored its Leicester supply chain and had knowledge of the allegations, consider the Group’s compliance with the relevant law, and make recommendations for the future.

It comes after a damning report from Labour Behind the Label, indicating that conditions in Leicester’s factories, primarily producing for Boohoo, are putting workers at risk of COVID-19 infections and fatalities.

Ms Levitt’s Independent Review states that there is ample evidence that the steps which Boohoo is now taking in relation to remedying problems in its Leicester supply chain had been implemented nearly a year ago. These are said to be a product of processes it had itself put in place and not just a reaction to the negative publicity in July and August 2020.

Boohoo noted: “Nevertheless, with the benefit of hindsight we regret that these processes did not advance quickly enough.”

Ms Levitt has said she is satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them, and its business model is not founded on exploiting workers in Leicester.

In its conclusion, the report states that “if Boohoo is willing to take a different approach to how it both views and interacts with the Leicester supply chain, it has within its power to be a tremendous force for good.”

In addition, Ms Levitt is “confident that the adaptations which Boohoo should make involve a relatively easily-achieved realignment of its priorities and governance systems and that the Board should not feel discouraged. It has already made a significant start on putting things right.”

Implementing Ms Levitt’s recommendations, the company will improve levels of Corporate Governance, redefine purchasing practices, raise standards across its supply chain, and support Leicester’s workers and workers’ rights.

John Lyttle, Group CEO, said: “Today we publish Ms Levitt’s Independent Review in full. This has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance. As a result, the Group is implementing necessary enhancements to its supplier audit and compliance procedures, and the Board’s oversight of these matters will increase significantly.

“As a Board, we recognise that we need to rebuild confidence that these matters will be dealt with appropriately and sensitively, and that they will not recur. Garment workers in Leicester, and our suppliers across the city, are an important part of our success.  We recognise that boohoo has been a major force in driving the textile industry in Leicester and today want to reinforce our commitment to being a leader for positive change in the city, alongside workers, suppliers, local government, NGOs and the community at large.

“Today we are setting out the further steps we are taking to drive long-lasting and meaningful change that all stakeholders in the boohoo group will benefit from.”

Brian Small, Group Deputy Chairman and Senior Independent Director, and Boohoo representative for the Independent Review, said: “Although in some parts it makes for uncomfortable reading, I would like to take this opportunity to thank Ms Levitt on record for her diligent and thorough Independent Review, which we are making public in full today

“We welcome in particular her clear recommendations, which we accept, and as a Board are committed to driving up standards in our supply chain and business practices. The Board is also committed to adding further independent experience, increased oversight on matters of compliance and business practices, and adopting higher standards of corporate governance.”

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