Boohoo admits supply chain failings

Poor conditions and low pay in supply chain highlight the need for supply chain transparency

Image by pasja1000 from Pixabay

According to the Financial Times, allegations against online fashion retailer, Boohoo, of paying workers less than the minimum wage have been validated following an investigation commissioned by the company.

62 suppliers were investigated with failures in identity verification, recording of hours, wage payments, health and safety violations and possible furlough fraud being recorded.

Lawyer Alison Levitt who led the investigation said she was satisfied that the company had not deliberately allowed poor conditions and low pay and had not intentionally profited from them. She also said the company had not broken any laws but Boohoo’s chief executive, John Lyttle, said the review had identified unacceptable issues in the company’s supply chain.

Ms Levitt said supply chain oversight had been inadequate for years. The company has said it plans to add two non-executive directors to its board and appoint an independent person to oversee the implementation of the necessary changes.

Shares in the company which went from a family start-up in 2006 to a public company with sales topping $1bn in 2019, had almost halved following the allegations.

Recommendations made in a risk assessment by PwC in 2017 had not been acted upon. Dominique Muller, policy director at Labour behind the Label asked Boohoo to sign up to the Transparency Pledge which is a global initiative urging companies to present supply chain information clearly. The Ethical Trading Initiative has said Boohoo’s continuing refusal to engage with trade unions was disappointing.

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