A new “clothing trade adjudicator” could soon be introduced in the UK to monitor large fashion retailers’ relationships with their suppliers.
UK fashion giants like Boohoo, Missguided and Asos could soon have to answer to a new regulatory body which could impose significant fines on retailers who fail to abide by a strict industry code of conduct.
A cross-party group of MPs have suggested the introduction of a new industry adjudicator, similar to the UK’s grocery adjudicator, amid an investigation into both domestic and international labour rights abuses in fashion supply chains, The Guardian reported.
The proposals put forward by the parliamentary Environmental Audit Committee (EAC) are just one of several proposals designed to help improve working conditions for garment workers, amid fears that self-regulation and voluntary measures had continually failed to enforce any real change.
Business secretary Kwasi Kwarteng responded to the proposals stating that the grocery adjudicator had worked well, helping ensure “large grocery retailers treat their direct suppliers lawfully and fairly”.
The grocery adjudicator has the power to fine retailers up to one per cent of annual turnover, forcing Tesco to pay out £1 million in fines after deliberately delaying payments to suppliers.
“There are significant differences between the groceries sector and the fashion industry, in terms of scale and distribution of market share, so we need to understand whether this model would be as effective in driving compliance in garment manufacturing,” he added.
It comes as Boohoo, which became the centre of a supply chain scandal last year after it was accused of paying workers just £3 an hour, said it was considering linking senior executive bonuses to its environmental, social and governance (ESG) improvements.
The company’s chairman Mahmud Kamani has told the EAC about the retailer’s plan.
The EAC made the recommendation in a letter to the group following an evidence session in December, attended virtually by Kamani and executives.
The committee said aligning executive remuneration to ESG improvements would demonstrate a “genuine commitment to environmental and social responsibility”.