Identify key ethical issues in the Case Study focus on A/ workers rights and B/ environmental issues

Describe perspectives on ethics

A/deontological

B/ consequential

C/ justice

D/ virtue ethics, and apply them to the case study in relation to the actions of Boohoo's suppliers or sub-contractors

case study

Most doors in Leicester's ramshackle Imperial Typewriter building were padlocked this week, seemingly in retreat from a Victorian-era scandal pulling at the seams of Boohoo's fast-fashion business. Garment workshops that fill this disused factory sew clothes that go to retailers such as Boohoo, the city's main buyer, for barely more than the price of a coffee.

They are at the heart of an unlikely resurgence of Leicester's textile trade, which came in tandem with the stellar 14-year rise of Boohoo, from a Manchester market stall to a retailer worth, until this week, more than 5bn. But the rickety iron staircases and filthy corridors in the Imperial building symbolise allegations that some clothes makers have relied, in part, on flouting labour laws. At the few units still operating this week, workers shied away from questions.

'I'd rather manufacture in Bangladesh than in Leicester, because they're far further advanced [in terms of labour protection],' said Anders Kristiansen, chief executive of the retailer Esprit.

Manufacturers in Leicester who stick to minimum standards complain of the fierce competition, orchestrated by retailers, that has driven down prices and forced others down a darker path.

'We're kind of put into a cage and we have to run around like rats,' said Mohamed Karbhari, general manager at Top Fashion, which produces clothes a short distance from the Imperial building. '[Retailers] say, this person is doing it for three [pounds an item]. Can you do it for that? This person is doing it for four. Can you do it?' He is one of three manufacturers that told theFinancial Timesthey do not bid for Boohoo work as its prices do not cover their costs. This week Boohoo was selling discounted bikinis for just 2.50.

Leicester's problem of illegal factories has been an open secret for almost a decade. But never before have Leicestershire Police, who are stationed a few metres away from the Imperial building, paid such close attention to their neighbours. This week officers - in a group involving at least seven government agencies - walked the dilapidated corridors looking for evidence of modern slavery. On that visit, none was found.

The urgency came from squalid, cramped rooms of garment workers being blamed, in late June, for helping Leicester develop twice the coronavirus infection rate of the next worst-hit English area. Then an undercover Sunday Times reporter was offered a job for as little as 3.50 an hour - half the minimum wage - to pack clothes destined for Boohoo.

Ministers spoke out and Boohoo's share price plunged - just a few weeks after it proposed a bonus scheme for executives worth up to 150m. The online business prospered during lockdown, while some of its high street rivals faced ruin. The company, which has said it takes a 'zero-tolerance' approach to malpractice, has terminated contracts with one supplier and one subcontractor and launched an independent review into its supply chain. John Lyttle, chief executive, this week insisted: 'we have nothing to hide'.

Over the past 15 years, the revival of Leicester's textile trade has been the story of Boohoo's rise. Abandoned by big retailers three decades ago, Leicester's industry splintered into 1,500 mini-factories, typically employing fewer than 10 people.

After a wave of allegations over illegal conditions - including a groundbreaking FT investigation in 2018 - fashion retailers such as Asos, New Look and Missguided reduced their reliance on the city. Boohoo, by contrast, maintained a significant presence. Manufacturers say most of the city's output goes to Boohoo and its brands, such as Nasty Gal and Pretty Little Thing. The retailer sources around a third of its stock there, with orders worth at least 100m last year, according to FT analysis of company filings.

Leicester's flotilla of small workshops competed with rivals in Bangladesh and Turkey by offering an ultra-flexible service, handling small orders in quick time. It helps Boohoo test almost 3,000 lines of clothes every week and ramp-up production of trends that catch on, be they brassy bodycon dresses or lockdown loungewear. The retailer's founder, Mahmud Kamani, has a famed back-story: the former market trader, who often slept in the back of his van, managed to build Britain's fastest-growing fashion group and become a billionaire.

Mr Kamani long gave up manufacturing but still has close connections with Leicester's clothes trade. One of the factories that Boohoo ended its contract with this week is controlled by a director who has business interests with Mr Kamani's elder brother. His sons now enjoy playboy lifestyles, draped with celebrities, while Mr Kamani's entrepreneurial flair has been lauded by ministers. 'The motto of Boohoo is ' thing' and I want everyone in Britain to be able to do their thing,' declared Liz Truss, then a Treasury minister and now trade secretary, in 2019.

Boohoo's decision to keep a large chunk of production in Leicester is now facing a critical test, as some of its biggest shareholders ramp up pressure over working conditions. 'In Leicester ... it is slave like conditions,' said Mr Kristiansen, who was previously chief executive of New Look. 'Everybody knows about it and some firms are clearly ignoring it.' 'I knew we had to move production out of Leicester in 2017 after we had meetings with local authorities who were just stalling, afraid to destroy the industry,' he said. 'I could have expected to have those kinds of meetings in Myanmar but not in the UK.' Nitin Passi, chief executive of fast fashion brand Missguided, said his company reduced its Leicester supply base in 2018, from roughly 80 suppliers to 'around a dozen', to 'properly get our arms around issues there'.

Official statistics show workers making basic apparel are Britain's worst paid sector, on average earning gross wages of around 350 a week. In practice, for some the pay is much worse. As far back as 2015, a Leicester university study found below minimum wage employment to be 'endemic'. More than three-quarters of garment workers surveyed earned 3 an hour on average. So cheap were rates that subagents directed work to Leicester that was supposed to be completed in Romania.

One reason manufacturers could was the state: many Leicester workers were told to 'make up' the wage shortfall by under-reporting hours and claiming welfare benefits. Leicester-based manufacturer Bhavik Master, a director at Paul James Knitwear, said some employers preyed on the vulnerability of local workers who are often South Asian immigrants with poor English and few options. 'Modern fast-fashion retailers exploit this poverty in Leicester, and people in Leicester start exploiting the benefit system,' he said. 'Fast-fashion retailers completely take advantage.'

The Resolution Foundation, a thinktank, has calculated that under-reporting hours never pays more in benefits than full-time work on the minimum wage. Yet it still remains attractive to some workers and offers employers a cushion to get away with illegal wages. Mick Cheema, manager of Basic Premier, said he was desperate to hire garment workers on legal wages, but that potential employees often demanded he under-report hours. 'It's been so hard to crack this issue because there's collusion between ... sweatshop operators and workers [who want] lower wages in return for still being able to receive welfare benefits,' he said. He struggles to believe Boohoo would be unaware of such practices: 'You legally can't make clothes at those prices without corners being cut in a big way'. But he added that the retailer may be the wrong target for blame. 'It's under the jurisdiction of HMRC not Boohoo. The crime is being committed here in Leicester - why isn't anything being done?'

Since 2001 there has been a stream of initiatives to raise standards: two pilot projects, four multi-agency efforts to work with industry, and an immigration crackdown dubbed 'Operation Serbal'. Two parliamentary committees touched on Leicester's problems - making recommendations the government duly ignored. Critics said little had changed. Andrew Bridgen, an MP in Leicestershire, said whistleblowers had told him that 'across the whole city, there are over 200 units like one the Sunday Times went into. If you go to any of them, you'll find they're paying 3.50, 4 an hour.'

Confusion reigns over who is responsible for enforcement. HMRC, which patrols the minimum wage, was notably absent from recent factory visits. David Metcalf, the former director of labour market enforcement, said at a recent event that HMRC tended to focus on larger employers whose records showed less serious rule breaches, affecting many people, rather than more serious abuses. 'Often, HMRC doesn't go after the people who don't have records,' he said. Unions said local authorities lacked capacity to conduct spot checks on unsafe workplaces.

Boohoo is confident about its main suppliers. But to root out any problems it has brought in a top QC and two 'ethical auditors' to review its supply chain. One of the auditors said it was hired in March but did not visit factories until June because of virus-related health risks to inspectors. Other retailers attest to how hard it is to monitor supplies in Leicester. Missguided's head of sourcing, Paul Smith, told MPs in 2018 that one of his colleagues 'was chased out of the building' he was supposed to inspect. Another was 'gripped by the throat and pushed out the door'.

Manufacturers in Leicester who say they play by the rules have an air of despair. 'We've literally done things the right way the last 10 years and we've really struggled to keep ourselves afloat,' said Mr Karbhari at Top Fashion. 'Other people have bloomed and bloomed within that same time period. It's a little bit confusing as to how that happened.'