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Potential for US Import Ban against Boohoo and Leicester East Garment Manufacturing Industry


BACKGROUND:


Section 307 of the U.S. Tariff Act of 1930 (Act) has proven to be an effective tool in the global fight against modern slavery. Since 2016, US Customs and Border Patrol (CBP) has substantially increased the issuance of Withhold Release Orders (WROs) when information indicates that merchandise is being, or is likely to be, imported into the United States that is made in whole or in party with forced labour. CBP may issue a WRO for merchandise from a specific manufacturer or for a type of good produced in a particular location, country, or region. CBP may then detain a shipment of the relevant merchandise subject to the WRO at a U.S. port of entry. The Act may also lead to the criminal investigation of the importing party.


Currently there are 47 active WROs in place affecting various regions and industries across the globe. They include bans against the import of Chinese-manufactured hair products, garments and apparel, cotton, and computer parts; Malaysian disposable gloves and palm oil; and seafood harvested by two specified Taiwan-flagged fishing vessels and a Vanuatu-flagged fishing vessel.


In January 2021, CBP issued its first ever region-wide WRO, banning the import of all cotton products and tomato products produced in China’s Xinjiang Uyghur Autonomous Region (“Xinjiang”) with immediate effect. It is likely that the Biden administration will go even further to increase WRO activity as part of a larger US policy and commitment to combat forced labour.


BOOHOO GROUP AND EAST LEICESTER GARMENT INDUSTRY:


Early last month, news broke that Boohoo Group and the East Leicester garment industry are the subject of two petitions filed earlier this year by Liberty Shared, a Hong Kong-based anti-modern slavery NGO. Liberty Shared has a successful track record of pursuing import bans on goods tainted by forced labour into U.S. markets. The Liberty Shared petitions rely in large part of the findings and conclusions of the Boohoo-commissioned independent Levitt Report, as well as a research report prepared and published by The Centre for Social Justice and Justice and Care entitled “Parallel societies: slavery, exploitation, and criminal subculture in Leicester.”


CBP has completed its initial review of the petitions and determined there is sufficient evidence to initiate a case and investigation into both Boohoo Group and the East Leicester garment industry (excepting two companies). Among other factors, the petition cites: (1) ineffective UK government, institutions, and infrastructure; (2) deprivation, poverty, and overcrowding; (3) limitations of UK Modern Slavery Act and National Referral Mechanism; (4) lack of coordination and information sharing across the sector; (5) re-victimisation/fear of deportation; (6) lack of intelligence gathering and identification of individuals responsible for factories; (7) worker collusion, in-work poverty, and benefits fraud.


FINANCIAL AND COMMUNITY IMPACT:


Boohoo, with its sister labels Nasty Gal and Pretty Little Thing, is a major client of Leicester East factories, last year accounting for 75-80 per cent of Leicester’s garment production. With one fifth of Boohoo’s sales currently coming from the U.S., the impact of a WRO would result in severe financial losses not just for Boohoo, but for the entire Leicestershire workforce and economy. Factory conditions in Leicester may well be replicated in other garment industries across Blackpool, Burnley, Oldham and parts of Manchester. The financial impact to brands and businesses that export products into US markets would be significant and immediate.


Recent media reports and private communications reflect confusion amongst brands, industry professionals, manufacturers, and government officials and agencies as to the authority and scope of the US Tariff Act. They also suggest unawareness of the extent of the potential economic, societal, and reputational repercussion; a WRO against Boohoo/East Leicester would be the first-ever issued against a developed country in the Northern Hemisphere. The Liberty Shared petitions and WRO threat highlight the immediate need for a renewed call for action to drive out corruption and worker exploitation in the UK garment industry.


For more information, please contact Jennifer Wascak at Jennifer@justiceinfashion.com or by telephone at +44(0)7506902136.


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Updated: 2 days ago

PIONEERING INNOVATION IN THE CREATIVE INDUSTRY


Sustainability plays an integral role in the fashion industry by providing ecological and environmentally friendly tools and materials to sustain the world of fashion. With the garment industry already contributing to 10% of annual global carbon emissions according to statistics provided by the United Nations Environment Programme (UNEP), it is essential for changes to be implemented, with efforts to reduce their carbon footprint.

Fast fashion companies such as Boohoo and Missguided are the main perpetrators of contributing to pollution according to the UK’s Environmental Audit Committee’s investigation into the environmental and social impacts of disposable ‘fast fashion’ in June 2018. The design process takes place in the United Kingdom and the United States, but the production and manufacturing occur in developing countries such as Bangladesh. However, exploitation has also been in effect more locally in areas such as Leicester, United Kingdom, where several violations were found at factories, resulting in the Trade Union Congress (TUC) demanding for better working conditions. Fast fashion companies utilise and exploit developing countries as regulations around pollution are often less strict, as opposed to regulations in the European Union, such as Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) which was introduced in 2007 to address the production and use of chemical substances and improve the protection of human health and the environment from the risks that can be posed by chemicals.

Buyers are more inclined to purchase products from manufacturers who highlight the importance of the words ‘ethical’ and ‘sustainable’ and are able to execute this effectively when put into practice. As the demand for sustainability increases, manufacturers are eager to take the necessary steps in providing ecologically sustainable products for their consumers. With the recent COVID-19 pandemic threatening global trade flows, nearshoring has become the appealing method in distributing products. Nearshoring allows the transfer of business operations between nearby and neighbouring countries, as opposed to distant countries, thus rapidly reducing the carbon emissions caused by shipping. Furthermore, nearshoring focuses on providing value to the client whilst offering a higher return on investment, instead of aiming to provide the lowest possible rates (Tiempo Development, 2020). However, nearshoring does have its negatives with it being less cost effective in comparison to trading with offshore partners, such as China, which offers low wage rates for their millions of workers, cheap loans, lands and factories, and have few workers’ rights laws (Fishman, 2006).


Although trading via nearshoring is less cost-effective, it will impact the annual carbon emissions substantially, which has the potential to lessen annual carbon emissions substantially, which will hopefully result in a positive net impact in the fashion industry and for the environment. It is vital for all contributors in the garment industry to participate in reducing their carbon footprint to ensure that sustainability practices are in full effect. This includes buyers ensuring that they purchase from manufacturers who use sustainable criteria when generating clothing, as well as consumers being more commercially aware of the companies that they purchase from. With all contributors making environmental commitments, the venture of sustainable fashion production and retail will come into fruition, providing a greener future for fashion.


Written by Doushali Jogeeah - https://www.linkedin.com/in/doushali-jogeeah


REFERENCES:

BBC News. 2020. Fast fashion must give 'better deal' for Leicester factory workers. [online] Available at: <https://www.bbc.co.uk/news/uk-england-leicestershire-53892765> [Accessed 7 April 2021].

Business & Human Rights Resource Centre. 2018. UK: Environmental Audit Committee investigates sustainability of fashion industry - Business & Human Rights Resource Centre. [online] Available at: <https://www.business-humanrights.org/en/latest-news/uk-environmental-audit-committee-investigates-sustainability-of-fashion-industry/> [Accessed 7 April 2021].

Fishman, T., 2005. China, Inc.. New York: Scribner.

Fleischmann, M., 2019. How Much Do Our Wardrobes Cost to the Environment?. [online] The World Bank. Available at: <https://www.worldbank.org/en/news/feature/2019/09/23/costo-moda-medio-


ambiente#:~:text=Every%20year%20the%20fashion%20industry,needs%20of%20five%20million%20people.&text=The%20fashion%20industry%20is%20responsible,flights%20and%20maritime%20shipping%20combined.> [Accessed 7 April 2021].

Petter, O., 2019. Boohoo and Missguided among worst offenders in sustainability inquiry. [online] The Independent. Available at: <https://www.independent.co.uk/life-style/fashion/fast-fashion-boohoo-missguided-brands-sustainability-environmental-audit-committee-2019-a8754496.html> [Accessed 7 April 2021].

Tiempo Development. 2020. Nearshoring Benefits & Disadvantages | Tiempo Dev. [online] Available at: <https://www.tiempodev.com/blog/nearshoring-benefits-disadvantages/> [Accessed 7 April 2021].






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