In a significant revelation, fast-fashion giant Shein discovered two instances of child labor within its supply chain, prompting an overhaul of its supply chain policies.
- The violations were detected between the first and third quarters of 2023, according to Shein’s 2023 Sustainability Report.
- Contract manufacturers employing child labor were given 30 days to address the violations, including settling wages and providing medical checkups.
- Following the October 2023 policy revision, Shein now immediately terminates contracts with any supplier found guilty of such violations.
- This revelation coincides with speculation over Shein’s potential public listing valued at £50 billion.
In a critical announcement, Shein disclosed the identification of child labor cases in its supply chain, specifically within two contract manufacturer facilities. These violations were uncovered in the first three quarters of 2023, as detailed in Shein’s recently published 2023 Sustainability Report. This finding necessitated an immediate response from Shein to address and rectify these grave issues within its operations.
Initially, the manufacturers were given a 30-day ultimatum to resolve the problems associated with employing underage workers. Shein’s directive included mandatory steps for these manufacturers to settle any overdue wages and ensure necessary medical assessments for the affected young individuals, alongside facilitating their repatriation. After these conditions were met, the manufacturers could resume operations with Shein under specific contractual agreements.
Subsequently, in October 2023, Shein revised its supply chain policy to enact stricter regulations. Under the newly implemented policy, any supplier discovered engaging in child labor practices would be subject to immediate contract termination. Shein’s previous approach allowed 30 days for suppliers to rectify their practices before business relations were permanently severed. “Our approach prior to October 2023 was to immediately suspend orders from the supplier and give them 30 days for remediation, failing which Shein would terminate our business relationship with them. Now, however, we will immediately proceed to terminate the business relationship with the supplier upon discovering the violation,” Shein stated. This policy modification underscores Shein’s commitment to ethical practices and adherence to legal labor standards.
Amid this significant policy shift, discussions have emerged regarding Shein’s potential flotation on the London Stock Exchange. Industry reports speculate that the company might prepare for a public offering, possibly valuing the fashion retailer at approximately £50 billion. This potential move represents a substantial progression in the company’s strategic business endeavors.
Shein’s swift policy changes highlight its dedication to ethical supply chain practices while navigating potential market expansions.
