Shein in Hot Water for Labor Law Breaches

In April 2023, a US federal commission issued a report raising concerns about Shein's procurement of cotton from China's Xinjiang region, an area restricted in the US due to its association with Uyghur forced labor. Shien denied that it ships from the Xinjiang region, and reiterated its “zero tolerance” for forced labor, citing standing requirements that suppliers follow the International Labor Organization’s core conventions. 

In May, a bipartisan coalition of two dozen US representatives urged the US Securities and Exchange Commission to postpone Shein's initial public offering (IPO) until the company could confirm the absence of forced labor in its operations.

"We are willingly collaborating with the Commission and are dedicated to collaborating on this issue," says a Shein representative. The spokesperson further emphasized the company's dedication to upholding human rights and abiding by the relevant laws and regulations in every market of operation. Moreover, they affirmed Shien’s "zero tolerance" stance toward forced labor, pointing to standing requirements that demand suppliers comply with the fundamental conventions of the International Labor Organization.

Nevertheless, various independent inquiries have cast doubt upon Shein's commitments to lawful and ethical labor practices. In November 2022, Swiss monitoring entity Public Eye published a report alleging that Shein had established makeshift factories within residential structures. Activist organizations and journalists revealed that Shein's inexpensive items, such as US$11 bikinis and US$7 crop tops, were being produced under hazardous conditions in workshops devoid of safety measures like windows and emergency exits. This is in addition to numerous first-hand accounts from workers who alleged they operated without contracts or adherence to minimum wage standards. 

Calling attention to these concerns, a documentary titled "Inside The Shein Machine" by Channel 4, shed light on the plight of factory workers who endured grueling 17-hour shifts to produce numerous garments daily. The documentary revealed that in certain factories, workers earned a daily base wage of US$20, which was subject to deductions of US$14 for any errors found in the garments they crafted. 

Acknowledging the infractions, Shein has admitted responsibility for worker well-being in their supply chain, stating: "We know we have a responsibility to safeguard the welfare of workers in our supply chain. In light of the recent report in the news, we launched an investigation into the claim that 2 of our suppliers had unacceptable working conditions at their facilities." However, skepticism persists among critics, pointing to Shein's history of unfulfilled labor practice improvements and questioning the company's transparency commitments. 

In Mexico, Shein is actively pursuing the establishment of a manufacturing unit to facilitate localized production and extend its influence throughout Latin America. Additionally, the company has taken steps to enhance consumer engagement by inaugurating a brick-and-mortar store in Monterrey, Nuevo Leon.