Lawmakers are urging US regulators to require fast fashion giant, Shein, to disclose alleged forced labour practises ahead of its possible IPO in the US.
The company has come under intense scrutiny over accusations of mistreatment of labourers in the Uyghur-occupied territory of China.
It has also been accused of falsifying reports of forced or underpaid labor of its supplier factories, some of which are allegedly located in the Xinjiang Uyghur Autonomous Region of China.
Shein has responded by saying it has no suppliers in the region.
According to 2021 Uyghur Forced Labor Prevention Act, Reps Jennifer Wexton, D-Va., and John Rose, R-Tenn, the alleged practises violate the act.
The reps voiced their thoughts to Securities and Exchange Commission Chairman Gary Gensler in a letter written on Monday.
“As a global company, Shein takes visibility across our entire supply chain seriously. We are committed to respecting human rights and adhering to local laws and regulations in each market we operate in,” a Shein spokesperson told CNBC.
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“Our suppliers must adhere to a strict code of conduct that is aligned to the International Labour Organization’s core conventions. We have zero tolerance for forced labor.”
The reps, who are heading up a bipartisan group, which includes 22 other lawmakers, are demanding the SEC requires Shein to independently verify that it does not use forced labor before being allowed to issue securities in the US.
Shein, which is valued at around $64bn, is reportedly planning an IPO in the US in the coming months.
“While Shein claims its products do not utilize Uyghur forced labor and it works with third parties to audit its facilities, experts counter these types of audits are easily manipulated or falsified by state-sponsored pressure,” the lawmakers wrote to Gensler.
“Other experts argue that it is appropriate to presuppose that any product made in the XUAR is made with forced labor.”
Products that are manufactured in the Xinjiang region are not permitted to enter the US under the 2021 act.
According to Politico, Shein hired its first federal lobbyists in 2022 with the goal of expanding its distribution in the US market.
