Shein says exposé claims partly untrue, doubles investment in conditions

By

Sandra Halliday

Published
Dec 5, 2022

Chinese fast-fashion giant Shein has announced a $15 million investment to “help upgrade hundreds of factories in its supply chain”. That’s a doubling of its current investment.

The move comes a week after it emerged The Rolling Stones wanted to exit a licensing deal with the retailer after being alerted to allegations of poor working conditions in its supply chain following a UK TV exposé.

At the same time as it announced the new investment, it released details of the independent investigation launched in the wake of the allegations about working practices at two garment factories. 

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It said the independent audits carried out by experts at Intertek and TUVR mean it “can refute most of the allegations”. However, there were some issues uncovered and it has also “reduced orders from the two producers by three-quarters until they fully comply with” its Code of Conduct.

It said workers at the factories “receive wages that are in accordance with local labour laws and regulations” that are “significantly higher than” the local minimum wage in Guangzhou and more than the average wage of workers in the region’s textile and garment production industry.

Claims that “factories withhold worker's salaries or illegally deduct wages are also untrue,” it added.

And it said that allegations workers are only paid per completed garment are also wrong with workers paid for each step in a garment’s construction.

On working hours, it admitted that while the hours aren’t as high as claimed in the documentary, they are nonetheless high, while days off are few. It has given the suppliers by the end of this month to “rectify the situation and reserves the right to take action against them if they fail to do so by then”.

Meanwhile, the new investment announced Monday is a three-to-four-year project that “focuses on making physical enhancements to its suppliers’ factories and is part of Shein’s Supplier Community Empowerment Programme (SCEP). More than 30 projects will be completed by the end of this year, 100 by the end of 2023 and up to 300 within four years”.

The company said it builds on its Responsible Sourcing (SRS) programme, “which is designed to ensure that employees working for its suppliers are treated fairly and with respect in safe and comfortable working environments”.

As part of Shein’s SRS programme, “all contracted manufacturing suppliers agree to comply with the Shein Code of Conduct, which is aligned to International Labour Organization core conventions, local laws and regulations. They also accept that violations of the Code could lead to their contracts being terminated if they fail to rectify serious infringements within a set timeframe”.

The company added that more than 2,600 independent audits were carried out in past 12 months “by leading testing and quality control agencies, but Shein is determined to do more and is today committing to double the amount it invests in the SRS to $4m per year”. 

The implications of the extra spending mean that it can increase the frequency of unannounced spot-checks and invest more in training suppliers on how to comply with the Code.

Fast-fashion is increasingly in the spotlight over its environmental impact but also over working conditions. A number of fast-fashion retailers have been spurred into action following media probes with Boohoo Group famously having earlier launched a massive programme after an exposé of conditions in Leicester in the UK.