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Asos, Primark Urge UK to Enact Mandatory Due-Diligence Law

A consortium of 36 companies, investors, business associations and initiatives, including Asos, Primark and the Business & Human Rights Resource Centre, urged British lawmakers Wednesday to introduce a legal requirement for companies and investors to carry out human-rights and environmental due diligence in the United Kingdom.

Such legislation to “prevent abuse of human-rights and environmental harm in global operations and value chains,” they said, would “deliver on the government’s commitments to the leveling up agenda and to the transition to a net-zero economy” as it “builds back better.”

“As we recover and rebuild, we recognize the need for new binding standards which benefit all and promote sustainability,” the organizations said. “Mandatory human-rights and environmental due diligence is key to ensure that efforts by companies that respect people and the planet, both during and after the Covid-19 recovery, are not undercut by the lack of a uniform standard of conduct applying to all business actors.”

The call aligns with the recommendations of a 2017 report from the U.K. Parliament’s Joint Committee on Human Rights, which received a large amount of evidence on human-rights abuses in the garment industry. The British Institute of International and Comparative Law has also determined that such a law would be legally feasible within the U.K. context, while more than 30 British civil society groups have called for the “urgent introduction” of a new law that would fortify the 2015 Modern Slavery Act and tackle the root causes of potential harms.

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“The Modern Slavery Act established the U.K. as a pioneer in shaping the standards expected of businesses,” the companies said. “The U.K. government is also considering limited due diligence requirements for forest risk commodities. However, a more comprehensive approach is urgently needed. The U.K. now has an opportunity to retain its leading role, rather than following the footsteps of others.”

“Legislation can contribute to a competitive level playing field, increase legal certainty about the standards expected from companies, ensure consequences when responsibilities are not met, promote engagement and impactful actions between supply chain partners and, above all, incentivise impactful and effective action on the ground,” they added.

Mandatory human-rights and environmental due diligence legislation is gaining traction in several countries, including France, Germany and the broader European Union. At least some of these laws, the consortium said, will apply to British businesses operating in other jurisdictions.

“Asos called for mandatory human-rights and environmental due diligence legislation in April, and it’s incredibly encouraging to see so many brands and organizations now coming together with one voice to support its introduction in the U.K.,” Simon Platts, responsible sourcing director at the e-tailer, said in a statement. “Such legislation has the power to protect workers and deliver positive benefits for people around the world by driving up standards and making companies legally responsible for identifying and stamping out human-rights and environmental risks, wherever they occur.”

A British Queen’s Counsel, commissioned by the Business & Human Rights Resource Centre and Corporate Justice Coalition, said that Boohoo Group would have been liable for its role in exploitative working conditions and illegal subminimum pay in the English garment manufacturing hub of Leicester had such a law been in effect.

According to legal review from Timothy Otty of Blackstone Chambers, the ultra-fast-fashion e-tailer could have been found in breach of the United Nations Guiding Principles on Business and Human Rights under a mandatory human-rights due-diligence/U.K. “failure to prevent” legislation in the form of the British Institute of International and Comparative Law Model Legal Provision “had such legislation been in place during the relevant period of time.” Boohoo did not immediately respond to a request for comment.

“Of course, it is difficult to speculate as to whether Boohoo might have behaved differently had such legislation been in place, but such incentivization of better practice simply underscores the value of such legislation,” Otty said.

Still, the independent review that Boohoo commissioned in the wake of the imbroglio was plenty damning on its own. Following a three-month investigation, Alison Levitt, a former legal advisor to the Crown Prosecution Service, determined that allegations of unsafe working conditions and low wages at many Leicester factories were not only well-founded but “substantially true” and that the BoohooMan, Nasty Gal and PrettyLittleThing owner’s own monitoring of the “many failings in the Leicester supply chain” proved “inadequate” because of “weak corporate governance.”

Levitt noted that Boohoo did not maintain a comprehensive list of its suppliers and subcontractors, failed to install a system of sanctions for non-compliance that could be enforced and that even “some very senior people” lacked a good understanding of how the supply chain worked. Senior Boohoo directors also “knew for a fact that there were very serious issues about the treatment of factory workers in Leicester,” including pay rates as low as 3.50 pounds ($4.83) per hour when 8.72 pounds ($12.03) was mandated by law for those aged 25 and older. She also highlighted a “significant number” of factories with a “significant risk of disaster in the future,” including several that lacked accessible fire escapes.

“Boohoo has not felt any real sense of responsibility for the factory workers in Leicester and the reason is a very human one: it is because they are largely invisible to them,” Levitt wrote in her review. “It is hard for people to empathize with the plight of those of whom they know little.” She added that there was a “degree of tacit reliance” on poverty wages, excessive hours and a lack of holidays or sick pay “in the sense that it allowed suppliers to handle volumes of orders which were placed in a way which did not pay real attention to levels of capacity.”

Boohoo’s operations, as seen through Levitt’s review, flouts the Guiding Principles in several key ways, Otty said. The International Bill of Human Rights, which the Guiding Principles cite, recognizes the right for those who work to just and favorable remuneration, the right to just and favorable conditions of work, the right to join trade unions and the right to rest and leisure, including “reasonable limitation” of working hours and periodic holidays with pay.

As Levitt pointed out, however, the Guiding Principles have “no force of law in the U.K. and thus a breach could not by and of itself amount to the commission of a criminal offense.” Though Boohoo responded by revamping its business practices through its so-called Agenda for Change, publishing a list of its global suppliers, pivoting to “forensic“ auditing and establishing the Leicester Garment and Textile Workers Trust, labor campaigners say that stronger regulations might have prevented such offenses from happening in the first place.

“Voluntary commitments to ensure human rights are respected by businesses have failed. It speaks volumes that leading business and investors themselves are uniting to call for a level playing field and a clear regulatory environment to ensure that the rights of the most vulnerable are respected,” said Thulsi Narayanasamy, head of labor rights at the Business & Human Rights Resource Centre. “We want to see this requirement backed up by strong liability provisions that will hold companies legally accountable if they fail to prevent abuses.”