Boohoo is facing renewed pressure from MPs on workers’ rights – days after Sky News revealed the online fashion retailer was facing the possibility of a US import ban over the issue.
The Environmental Audit Committee (EAC) has written to the group’s chairman Mahmud Kamani to request that a long-term bonus scheme announced last year, linked to share price growth and potentially worth £150m to top bosses, is linked to improvements in its supply chain.
Boohoo launched a new code of conduct in 2020 following fresh media allegations of slave labour within third-party factories in Leicester – manufacturing facilities that made up to 40% of its garments.
Boohoo founder Mahmud Kamani
An independent report commissioned by the company identified a historic failure by Boohoo to act quickly enough to tackle the issue, including low pay.
The company said it had taken action by severing ties with more than 60 businesses and improving oversight controls of their activities.
Mr Kamani appeared before the committee in December to insist big progress had been made in getting its supply chain in order, but Sky News reported on Tuesday how the retailer’s operations had come to the attention of US Customs and Border Protection (CBP).
The agency, which said it had seen enough evidence to launch its own investigation, has the power to seize goods deemed to have been produced under any type of “forced” or sub-standard conditions.
Boohoo responded by saying it had not been informed of any CBP inquiry.
It added that the company was “confident in the actions that we are taking to ensure that all of the group’s products meet and exceed the CBP criteria on preventing the product of forced labour entering the US (or any of our markets)”.
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Boohoo facing possible US import ban
It is a company that has expanded sales at pace since its launch in 2006 – and this year, Boohoo snapped up remnants of Sir Philip Green’s Arcadia empire and the Debenhams brand following their respective downfalls just before Christmas.
Both will trade online-only.
In their letter to Boohoo, the MPs also suggested linking board rewards to environmental sustainability following a separate inquiry into fast fashion in 2018 that criticised the textile sector’s footprint – declaring it worse than “international aviation and shipping combined”.
It said that while it welcomed the fact the company had signed up to three green initiatives, it required further information on action to date and on wider governance issues including supply chain pay and working conditions.
Committee chairman Philip Dunne said: “Boohoo’s rapid growth has taken the UK garment industry by storm. It has been linked to poor pay and conditions in UK garment factories. But to its credit, it has pledged to clean up its act.
“We have written to Mr Kamani to seek updates on a range of issues, including on supply chain transparency. We are asking Boohoo to put its money where its mouth is and link the multimillion-pound bonuses it has lined up for its bosses to the achievement of its ethical and environmental pledges.”
A Boohoo spokesperson said the letter had been received on Thursday morning and added: “We will take time to digest the contents and respond to Mr Dunne, the chair, in due course.”