Sweatshops and Million Dollar Bonuses – the Boohoo Slavery Scandal
Boohoo was making headlines again yesterday, but this time not for the right reasons. Just a couple of weeks ago industry experts were looking to the e-commerce giant as a shining example of how to triumph during the Covid19 crisis, as it closed its first quarter with a 45% increase on sales over the previous year and topped off its success by snapping up failing high-street names Warehouse and Oasis for a cool £5.25m. But shares in the fast fashion group dropped by almost 25% overnight, a loss of around £1bn of the company's market value, due to allegations having come to light of modern slavery and putting workers' safety at risk at their Leicester factories.
The undercover investigation by the Sunday Times, which accuses Boohoo of working with suppliers who pay factory workers as little as £3.50 per hour, has come at an unwelcome time for the fast fashion brand which recently announced it had created a £50m “incentive scheme” for top bosses based on ambitious targets over the next 3 years. The undercover reporter, who spent two days working in the Leicester factory, covertly filmed himself packing Nasty Gal products (a subsidiary of the Boohoo brand), and claimed he was told to expect just £3.50 per hour – over £5 less than the national minimum wage of £8.72 for over 25's. Coming just days after allegations that Boohoo suppliers were forcing workers to continue working despite the lockdown rules (and even if displaying symptoms), Boohoo's lacklustre response has drawn widespread criticism reaching all the way to the parliament, with Home Secretary Priti Patel labelling the allegations “truly appalling” and calling for the National Crime Agency to investigate Boohoo's complicity in the scandal.
In a statement to shareholders yesterday, Boohoo announced that “We will not hesitate to immediately terminate relationships with any supplier who is found not to be acting within both the letter and spirit of our supplier code of conduct”, including “very clear expectations on transparency about second tier suppliers”. However, it's clear that brokerage firms were not convinced, particularly as this is not the first time that the company has been embroiled in such allegations. Over 3 years ago Channel 4's Dispatches created an exposé documentary which now feels jarringly familiar, as their undercover reporter was paid just £3.25 per hour to package Boohoo brand jackets. Boohoo dismissed the issue at the time as a “rogue situation” and pledged to take rapid action to deal with it, promises which now ring painfully hollow.
The shocking report brings to light a wider issue in the sector, as claims arise that working conditions in Leicester were an “open secret”, and as recently as 2019 the government rejected all 9 of the Environmental Audit Committee's recommendations, including those related to preventing modern slavery. The working conditions in these “sweatshops”, which continued to operate surreptitiously during lockdown without recommended social distancing or additional hygiene measures in place, are deemed by many to have been a major cause of the spike in cases which have forced Leicester back into lockdown.
Recent surveys among consumers have suggested a rise in conscientious shopping, with over half of those questioned wanting the fashion industry to become more sustainable, and 74% citing fair pay and good working conditions as a priority. Most of us were concerned about working conditions in third-world countries without workers' rights laws, however it now seems that a “Made in the UK” label is no guarantee that garments are made ethically. Perhaps now, in the aftershock of Covid19, as consumers begin to require accountability from the government, it will prove more politically expedient to tackle these issues than it is to sweep them under the carpet in the pursuit of jobs and economic growth. As for Boohoo, if they take this unfortunate situation as an opportunity to be transparent with their customers they may even be able to use it to their benefit - by making sure that they are working with factories to provide better working conditions they can be at the forefront of much needed industry progress.
Written by Amber Domenech Patey
