Boohoo said it needs to go” further and faster” to improve the governance, oversight and compliance of its supply chain, after an independent review identified ‘many failings’.
However the Independent Review, conducted by Alison Levitt QC, also found ample evidence that the steps which boohoo was now taking in relation to remedying problems in its Leicester supply chain had been implemented nearly a year ago.
Levitt’s report said that the problems in the supply chain were a product of processes it had itself put in place and “not just a reaction” to the negative publicity in July and August – which revolved around working conditions at Leicester-based Jaswal Fashions. However boohoo said that, with the benefit of hindsight, it regretted that these processes did not advance quickly enough.
Levitt said she was 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.
Group Chief Executive John Lyttle said the review had identified “significant and clearly unacceptable issues in our supply chain”, and the steps it had taken to address them.
“But it is clear that we need to go further and faster to improve our governance, oversight and compliance, demonstrate best practice, and develop our suppliers’ skills and capabilities in area. 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,” he said.
“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.”
Levitt’s report also identified six areas where boohoo could demonstrate ‘real change’.
Firstly, it will start with improved levels of corporate governance. Boohoo said it planned to enhance its governance and oversight, with supply chain compliance becoming a mandatory item on every Board Meeting.
It will also form Supply Chain Compliance Committee, comprised of “recognised cross-sector experts”, and will be headed by boohoo’s new Group Director of Responsible Sourcing
The Committee will also be tasked to ensure supply chain compliance in relation to Covid-19
Secondly it will seek to redefining purchasing practices and reassess how it manages and engages with businesses in its supply chain. this will included mandatory training and a new set of Purchasing Principles for its buying teams
Thirdly boohoo will seek to raising standards across its supply chain. To that end it will audit all of its tier one and tier two UK suppliers, after which it will publish the list in full, and will release an updated list annually
Its fourth action will be to support Leicester’s workers and workers’ rights through establish a Garment & Textiles Community Trust.
Boohoo’s fifth action will be ‘support for suppliers’. This will include working more closely with suppliers to ensure they are able to manage a more consistent and predictable flow of orders, to enable them to plan more effectively
The final action is ‘demonstrating best practice in action’. Boohoo said it is developing a “state-of-the art” manufacturing facility based in Leicester to demonstrate best practice, and develop suppliers’ skills and capabilities in area.