Boohoo Signs Pakistan Accord

Jasmin Malik Chua
·9 min read
3

Boohoo Group confirmed Friday that it has signed the Pakistan Accord, the first expansion of the International Accord for Health and Safety in the Garment Industry outside of Bangladesh.

“Pakistan continues to play an important role in our growth and the move builds on our existing social audit programs across the region,” a spokesperson said. “We are already witnessing the positive social and economic impacts of our involvement with the International Accord in Bangladesh and look forward to extending them to Pakistan.”

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The British e-tail giant said that the move builds on its participation in the broader agreement formerly known as the Accord on Fire and Building Safety in Bangladesh, which holds its brand and retailer signatories legally liable for safety conditions, including training and essential improvements, at the factories that churn out their products.

To date, 77 fashion purveyors, including H&M Group, Uniqlo owner Fast Retailing, Hugo Boss, Mango, Calvin Klein parent PVH Corp., Zara owner Inditex, and most recently, Gap Inc., have backed Pakistan’s version, which opened on Jan. 16 for an interim term of three years and covers textile mills in addition to ready-made garment facilities.

“The acceptance of the Pakistan Accord by Boohoo is an important step towards the implementation of responsible business practices in the fashion industry,” said Zehra Khan, general secretary of the Home-Based Women Worker’s Federation, a trade union federation based in Islamabad. “We are hopeful that Boohoo, together with other brands, will play a significant role as a driving force for the effective implementation of the Pakistan Accord.”

Radio Pakistan reported last week that the Debenhams’ parent has expressed “keen interest” in establishing a long-term buying relationship with the country despite allegations of safety hazards, severe underpayment and 24-hour shifts by workers from two Faisalabad suppliers in 2020. Boohoo denied placing any orders at the factories, which themselves refuted the accusations, at the time.

While Boohoo signing the Pakistan Accord spells “good news” for the country’s workers, said Anna Bryher, policy lead at Labour Behind the Label, the agreement has its work cut out for it.

“This industry takes a toll on workers’ bodies,” she said. “Many workers reach the end of their careers and find they have serious health issues linked to repetitive, loud unsafe conditions but no access to healthcare and no pension.”

On Thursday, the U.K.-based workers’ solidarity group published a report implicating the Nasty Gal and PrettyLittleThing operator, along with the likes of Adidas, Asda, Gap, H&M, Levi Strauss & Co., Marks & Spencer, Primark, Puma and Inditex, in the erosion of wages and labor rights in Pakistan.

Co-authored by Global Rights Compliance, an international human rights firm headquartered in the Hague, “Hanging by a Thread” blamed brands’ continued pricing squeeze on suppliers for trickling down into cost-cutting measures at workers’ expense, resulting in “routine” minimum wage violations, excessive hours, temporary contracts and health and safety concerns such as noise pollution and dust and chemical exposure.

“There is little recognition of the health problems for workers,” said Khalid Mahmood, director of the Labour Education Foundation, a workers’ rights group from Lahore. “Workers think they will continue working like this for years. But by the end of their service, they face a lot of health issues, especially lung diseases and joint pains, hearing loss and eyesight depletion. All these are health issues which are connected to the work and there is really no recognition in the industry of the need to take care of this or support worker health.”

Labor department inspections and third-party audits have failed to pick up violations, the report said. Among the 270-plus workers surveyed in early 2023, more than 65 percent said they didn’t think that inspectors did an efficient job, while 72 percent said that inspectors didn’t even speak to workers on the production floor.

“The main issue with auditing is that the employer hires the auditor,” Khan said. “They can simply ask them to write what they want the report to say. The other key issue is that the auditors do not share the reports with employers, workers or the labor department.”

She brought up Ali Enterprises, the Karachi textile factory complex that exploded into flames on Sept. 11, 2012, killing more than 250 workers and injuring 60 others in what is now regarded as Pakistan’s worst industrial accident.

“When I read the auditing reports from before the Ali Enterprises fire, for three years they had mentioned that there was one unit in which there was a wiring issue. But if workers are not informed, if they do not have a trade union, if they do not have an appointment letter, then they cannot speak out on these issues. This is why we demand a tripartite auditing system, in which workers’ representatives sit in to ensure we get accurate reports [and] amendments can be demanded and followed up.”

Low wages, coupled with slumping exports and mass inflation that blew past 36 percent in April, the highest rate in nearly five decades, are another persistent pain point. Of the workers polled, the majority took home less than the minimum wage of 32,000 Pakistan rupees ($111.21), with 33 percent earning 25,000 Pakistani rupees ($86.88) and 42 percent making no more than 30,000 Pakistan rupees ($104.26).

One reason for this is the increase in piece-rate contracts in recent years, unions told researchers. Some 37 percent of respondents reported being on a piece rate, compared to 64 percent on a monthly wage. More than half of the workers were unaware of the price of the end product they were helping to make.

“The piece rate means there is very minimum basic assurance like 5,000 to 10,000 Pakistani rupee ($17.38 to $34.75) per month, and then you earn based on how many pieces you have made,” Mahmood said. “That depends on the level of orders. If there are no orders the workers are not able to earn the minimum wage. And if there are more orders they have to work long hours, but then they are not getting the double overtime rate. There is a single piece rate, even after 5 o’clock. That is not legal.”

The post-Covid shift toward informalization has increasingly been used by employers to “deny workers their rights,” Khan added. Although 53 percent of workers researchers interviewed were permanently employed, a “significant proportion” were on temporary contracts (29 percent) or employed via a contractor (15 percent).

“I know many factories where previously the unit was working as permanent workers, but now the whole unit shifted and all the workers are now the employees of the contractor,” she said. “Management in some cases said to us, ‘These workers are not our employees,’ but at the same time, said to the contractor not to hire someone they don’t like.”

Stress and shrinking budgets have had a deleterious effect on the workers’ quality of life, the report found. Only 58 percent of those surveyed said they sent their children to school. Another 70 percent reported increased household expenses from inflation, in particular food and utility bills.

Lara Strangways, head of business and Human Rights at Global Rights Compliance, called the findings of the report an “urgent wake-up call” for brands that reveals the “gross failings” in their due diligence processes.

“Social auditing is failing to pick up violations and is clearly not fit for purpose,” she said. “Brands must act with urgency to reassess their approach to sourcing and engage in discussion on appropriate remedy with the labor movement. If they fail to do so, it is only a matter of time before we see another disaster, in which they would have played a part.”

Of the companies named in the report, only Asda and Levi’s haven’t signed either the International Accord or the Pakistan Accord. Adidas (which didn’t sign the Pakistan Accord) and Gap (which has shunned the International Accord) aside, the remaining brands are backers of both agreements.

When asked to comment, the brands emphasized their commitment to ethical trading, touting their strong third-party auditing programs. They said that they immediately investigate any breach in their codes of conduct, which require fair wages and safe working conditions, and work with suppliers to remediate issues where they arise. Two companies mentioned that the lack of named suppliers makes the investigation piece difficult. Adidas further added that it rejected the allegations and that it maintains close contact with its partners in Pakistan to “ensure that both local legal requirements and global Adidas workplace standards are fully upheld.”

Bryher said, however, that fashion buyers can do much more by curbing the informalization of labor in Pakistan, ensuring that workers receive both social security benefits and the minimum wage and adopting policies that work toward the payment of a living wage. They can also fix spotty monitoring by installing worker-driven complaints mechanisms at their suppliers, improving and publishing audit reports, mapping and publishing full supply chain data, actively promoting “genuine” freedom of association and collective bargaining and, for those that haven’t already, signing the Pakistan Accord.

“In the face of economic crisis, why should the people at the bottom of supply chains pay the cost? Children are being thrown into poverty and not sent to school because wages at these factories aren’t keeping pace with rising costs,” she said. “This isn’t just a problem for Pakistan. In Bangladesh too, workers are reporting they cannot afford to buy meat or even eggs…because inflation is outstripping wage growth.”

According to the World Bank, poverty in Pakistan is expected to reach 37 percent this year.

“Fashion brands make huge profits sourcing clothes from factories across Asia where families are being pushed into extreme poverty,” Bryher added. “Brands must act to stop this exploitation and ensure the people who make their clothes are paid enough to live with dignity.”

Regarding Boohoo’s adoption of the Pakistan Accord, Bryher looked on the bright side.

“Going forward we hope Boohoo will ensure their suppliers engage fully and that Boohoo seeks meaningful engagement with democratically elected worker representatives around safety in their factories,” she said.

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