Two dozen lawmakers have demanded the Securities and Exchange Commission (SEC) require an independent third party to verify fast-fashion retailer Shein does not use Uyghur forced labor before allowing it to go public.
The letter sent Monday to SEC Chair Gary Gensler from Reps. Jennifer Wexton (D-Va.), John Rose (R-Tenn.), and 22 additional members of Congress asked that any potential initial public offering (IPO) for Shein be delayed until such an inquiry can be conducted.
“We strongly believe that the ability to issue and trade securities on our domestic exchanges is a privilege and that foreign companies wishing to do so must uphold a demonstrated commitment to human rights across the globe,” the letter said.
The company is reportedly aiming to IPO as soon as 2024.
The letter said Shein “has come under heavy criticism for utilizing underpaid labor in its supplier factories and violating human rights” and that several news organizations have linked cotton used in its products to China’s Xinjiang region, in which the country is accused of holding members of its Uyghur minority in forced labor camps.
Under the Uyghur Forced Labor Prevention Act (UFLPA), which took effect in June 2022, goods from the Xinjiang region in northwestern China are assumed to have been made with the forced labor of Uyghurs, unless a company can prove otherwise. Any goods “mined, produced, or manufactured wholly or in part in Xinjiang or by an entity on the UFLPA Entity List are prohibited from U.S. importation,” according to the law.
Since it was enacted, the UFLPA has proven difficult to comply with because companies might not know with certainty from which region within China their goods or raw materials were sourced.
An SEC spokesperson said Gensler will respond to the members of Congress, rather than through the media.
Shein, launched in China but now headquartered in Singapore, has nearly 10,000 employees and is selling products in more than 150 countries, according to its website. The company does not manufacture the clothes it sells but instead relies on a system of third-party suppliers.
Shein said in an emailed statement it has no suppliers in the Xinjiang region.
“Our suppliers are based in regions including Brazil, Southern China, and Turkey,” the company said. “We take visibility across our entire supply chain seriously, and we are committed to respecting human rights and adhering to local laws in each market we operate in. 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.”