(Sharecast News) - More than 35 retailers, manufacturers and investors including Tesco, John Lewis, Primark, Asos and Unilever have called on the UK government to introduce a legal requirement for companies to carry out human rights and environmental checks on their global supply chains.
In a letter to ministers, the firms said the Covid-19 crisis demonstrated the "fragility of global supply chains, and the vulnerabilities this creates and exacerbates for workers, communities, indigenous peoples and businesses around the world", and warned there was "a real risk that recent progress will be reversed".
A legal review by Blackstone Chambers commissioned by the Business & Human Rights Resource Centre (BHRRC) found that fashion brand Boohoo could have been held liable for rights abuses in its Leicester supply chain, under proposed legislation.
Boohoo came under strong investor pressure to review its supply-chain practices after reports emerged of poor conditions for workers and sub-standard wages.
The fast-fashion retailer commissioned a report by lawyer Alison Levitt which found that that Boohoo's monitoring of the factories was "inadequate" because of "weak corporate governance".
Timothy Otty QC, commissioned by the BHRRC, said Levitt's findings indicated that historically Boohoo did not have in place reasonable procedures to prevent poor working conditions and low pay in its suppliers' factories and so potentially would have been liable under the proposed "failure to prevent" law.
BHRRC head of labour rights Thulsi Narayanasamy said voluntary commitments to ensure human rights are respected by businesses "have failed".
"It speaks volumes that leading businesses 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," she said.
"We want to see this requirement backed up by strong liability provisions that will hold companies legally accountable if they fail to prevent abuses. As workers face unprecedented rights abuses with no recourse, the UK simply can't afford to waste more time, it's time to bridge the regulatory gap."
The letter was signed by 36 organisations including the Cadbury owner Mondelez, Mars, Twinings, Unilever and Microsoft and the investors Aviva, Jupiter and the Local Authority Pension Fund Forum.
European countries are adopting new HREDD laws, such as the corporate duty of vigilance law in France and legislation under development elsewhere on the continent.
The European Union is set to table a new initiative later this year that will apply to all UK firms operating in the single market.
LONDON BROKER RATINGS: RBC cuts SSE; UBS raises easyJet to buy