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The Labour chair of the business select committee has called on his own government to prohibit the import of products made by forced labour in the Chinese region of Xinjiang as he called for greater scrutiny of Shein’s potential listing in London.
Liam Byrne, a former minister, told the Financial Times that he would like to see a British version of the Uyghur Forced Labor Prevention Act introduced in the US in 2021.
The Chinese-founded fast-fashion giant, valued at $66bn during the latest funding round, has disrupted the garment industry with its model of shipping cheap clothes directly from factories in China to western shoppers.
Shein launched its plan for an initial public offering at the end last year, at first targeting New York but shifted to London after being rebuffed by US regulators. Shein is still waiting for Chinese regulators to give approval to list overseas — they are unhappy with the company’s move to loosen its ties with China, according to people familiar with the matter.
Byrne, who was this week re-elected as chair of the House of Commons’ committee that scrutinises business policy, had hoped to call Shein executives to a session in July along with other Chinese companies, including TikTok, but that was postponed because of the general election.
The new committee has not yet been assembled but it remains a personal priority for Byrne to summon the executives to be grilled by the committee.
Shein told the FT it had a “zero-tolerance policy” regarding forced labour.
“Visibility across our entire supply chain is of the highest importance to us and we are wholly committed to respecting human rights. To comply with applicable laws, we not only require that our contract manufacturers only source materials from approved regions but we also verify this independently,” it said. A source close to the company said a lot of its cotton comes from Australia and increasingly the US.
Shein also partners with Oritain, a company that tests the origin of its cotton supply chains. Oritain found that in November 2023 less than 2 per cent of Shein’s cotton tested positive for unapproved cotton — lower than the industry average.
Byrne said he met representatives from the New York Stock Exchange earlier this year where they discussed the Shein listing. “They said it was clear there were some due diligence issues that hadn’t been cleared,” he said.
“My view is that we don’t have a Uyghur Forced Labour Prevention Act in Britain and therefore it’s incumbent on ministers to satisfy themselves that Shein passes the highest standards on forced labour protections,” he said. “That is something a Labour government might want to address.”
The US act created a task force to stop imports of goods manufactured wholly or in part in Xinjiang, which is a major source of cotton and where they allege widespread use of forced labour.
Shein has privately tried to convince western politicians and regulators that it does not use cotton from the region, while shying away from saying so explicitly for fear of angering Beijing.
Other fashion labels have publicly ditched Xinjiang cotton, even though experts say that in practice it is very difficult to completely eliminate it from supply chains.
Byrne said if a Labour government wanted to build closer trade ties with the US government then it needed to raise standards on such issues. “We are not going to get closer with the US on trade until we match the new US benchmarks on labour and environmental standards,” he said. That included making sure critical minerals imported into Britain also met those standards, he said.
Earlier this month, business secretary Jonathan Reynolds told the Commons that under the Modern Slavery Act any business with revenue more than £36mn has to make sure there is no slavery in any part of its supply chains. “Where there are specific allegations, I will look at those . . . it is an area where we have existing legislation and indeed we would go further if that was required.”
James Alexander, chief executive of the UK Sustainable Investment and Finance Association, welcomed potential parliamentary scrutiny of Shein.
“Strong governance standards and safeguards for shareholders have been an important part of the London market’s success in recent years,” he said.
Campaign group Say No To Shein, which is backed by figures including former Green MP Caroline Lucas and retail entrepreneur Mary Portas, welcomed Byrne’s comments but said they had wider concerns about the company’s business model, including its environmental impact.
Additional reporting by Laura Onita
