(MENAFN- Colombo Gazette) Singapore-headquartered fast fashion retailer Shein, which was founded in China, released its 2023 sustainability and social impact report last week, confirming US lawmakers' concerns about labour violations by the company's Chinese suppliers, media reports said.
The online fashion seller has admitted it found two cases of child labour and minimum wages violations by the factories in its supply chain last year, as it tries to gain backing for a potential £50bn UK stock market flotation, according to The Guardian.
Swiss-based non-profit group Public Eye in a probe also found that people employed to produce garments for Shein routinely work more than 70-hour weeks, said the report.
Workers' rights campaigners in the UK earlier urged the authorities to oppose Shein joining the stock market listing in London (The Financial Times Stock Exchange or FTSE), arguing that a London listing would be“yet another betrayal to working people everywhere and the planet”. Shein's efforts to list in New York were derailed after US lawmakers raised concerns about alleged labour malpractices and lawsuits from competitors, reported The Guardian.
Shein, which was founded in China's Nanjing in October 2008 as ZZKKO, grew to become the world's largest fashion retailer as of 2022.
During audits, Shein uncovered two cases of child labour, defined as any person under the age of 15, or under the minimum age for employment in the local region or country.
The minimum age in China is set at 16, as per reports.
The report, which was released on August 22, states Shein suspended contracts with the manufacturers and that“both cases were resolved swiftly,” after which it resumed working with the manufacturers.
Shein found this was a decrease from 2022, when 0.3 percent of its audits uncovered child labour violations.
“In accordance with the SRS Policy in place at the time, errant suppliers were given 30 days to remediate their offenses,” according to the report.
“Both cases were resolved swiftly, with remediation steps including terminating contracts with underage employees, ensuring the payment of any outstanding wages, arranging medical checkups and facilitating repatriation to parents/legal guardians as needed,” the report added.
The company states that regulations in this area have been strengthened by requiring manufacturers to check identification and maintain records when screening new hires, and it also updated its policy to terminate suppliers that violate child or forced labour regulations in the future.
The report, however, did not identify cases of forced labour. Shein had uncovered forced labour in 0.1 percent of audits in 2022. The report also found wage violations, such as paying below the local minimum wage or delaying payments, in 0.5 percent of audits conducted in China.
The Shein report stated that all cases were remedied in 30 days. Shein relied mainly on third-party verification agencies to conduct an audit on 3,990 supplier and subcontractor sites in China, giving each a grade from A to E, the report said.
The company has more than 16,000 employees worldwide and works with about 5,800 contract manufacturers, as per the report.
Last year, Shein terminated contracts with three suppliers for failing to remedy policy violations, one for receiving two consecutive failing grades, and one for refusing an audit, the report reads.
The majority (51 percent) of the suppliers received a grade of C, though the report does not detail the criteria for the grade levels.
The company is a signatory to the United Nations (UN) Global Compact and is required to uphold international labour laws that prohibit the use of forced and child labour, as per the report.
Shein added more specific language banning forced labour in its contracts last year, such as prohibiting suppliers from collecting recruitment fees or requiring workers to surrender their identification.
“Balancing remediation and penalization, we have supported our suppliers with training to address compliance risks within their operations, while taking the firm but necessary step to terminate working relationships where warranted,” Sky Xu, the CEO of Shein, wrote in a note prefacing the report.
Lawmakers in the United States repeatedly raised concerns about labour violations in Chinese companies that sell goods to American consumers, as the CCP is known to use forced labour camps.
In recent months, there have been several confirmed cases of forced labour in China, reports The Epoch Times.
The Uyghur Forced Labour Prevention Act (UFLPA) went into effect in 2022, prohibiting imports of forced labour products. The name of the act refers to the Chinese regime's persecution of the Uyghur ethnic minority in Xinjiang region.
According to a 2022 US federal report, the Xinjiang region, which is known to involve forced labour, accounts for 87 percent of China's cotton production, while a recent study found that Xinjiang cotton was used in 19 percent of US imports, up from 16 percent found in a third-party survey in 2022.
Bipartisan groups of lawmakers have repeatedly called on Shein to do more to ensure it is not benefitting from the CCP's forced labour projects.
Fast fashion retailer Shein and Chinese online marketplace Temu have pointed out that UFLPA does not apply to their imports because the packages shipped from China to consumers are individually valued under $800 and not subject to inspection at the border, reports The Epoch Times.
Shein, in November last year, filed for an IPO in the US, drawing renewed calls from lawmakers demanding the e-retailer prove it does not benefit from slave labour if it wants to go public on a US stock exchange.
In June 2024, the company filed for an IPO in London confidentially, and US Senator Marc Rubio (R-Fla.), who introduced UFLPA, urged British lawmakers to investigate the company before allowing it to go public, as reported by The Epoch Times.
British officials have echoed US lawmakers' concerns, as per reports.“To be absolutely clear, if any company had forced labour in its supply chain, it shouldn't be doing business in the UK at all, it shouldn't be a question of where it lists,” British Business Secretary Jonathan Reynolds told London-headquartered digital news radio station Times Radio.
(voicesagainstautocracy)
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