CETRI
Conclusion
The labor practices described in the preceding sections raise concerns about systemic labor rights risks within garment workshops reportedly linked to Shein’s supply chain. According to worker interviews, these include indications of excessive working hours, piece-rate pay without overtime, informal work arrangements lacking social protections or grievance mechanisms, patterns of gender-based task segregation, and limited access to health and safety protections.
Based on these findings, there appears to be a risk that such practices may not align with certain principles outlined in Shein’s publicly stated Supplier Code of Conduct, Responsible Sourcing (SRS) Policy, or its Supply Chain Transparency Statement. They also appear inconsistent with national labor laws and international frameworks, such as standards set by the International Labor Organization (ILO), the EU Corporate Sustainability Due Diligence Directive (EU CSDDD), the UN Guiding Principles on Business and Human Rights (UNGPs), and the OECD Due Diligence Guidance for Responsible Supply Chains. More specifically:
1.Excessive work hours and piece-rate compensations
CLW identified that small Shein suppliers often pay workers at a piece-rate, leading to unstable income and excessive work hours. These conditions may raise concerns under:
a. Section 1.5 and 1.6 of Shein’s Supplier Code of Conduct;
b. Chapter IV and V of the Labor Law of the People’s Republic of China;
c. ILO Convention No. 1 and 30 (Hours of Work); No. 95 on Protection of Wages;
d. Article 4 & Article 5 (due diligence obligation & integration into policies) of the EU CSDDD.
2. Gender discrimination and children ‘s welfare
Investigations suggest that some women workers face workplace harassment and lack access to family-friendly policies. These concerns, which may disproportionately affect children’s welfare, appear to be inconsistent with:
a. Section 1.4 and 2.6 of Shein’s Supplier Code of Conduct;
b. Chapter VII of the Labor Law of the People’s Republic of China;
c. ILO Convention No. 190 (Violence and Harassment);
d. Article 6 (identify adverse impacts) of the EU CSDDD.
3. Lack of occupational safety measures and social benefits
CLW’s investigation found that many workers work in unsafe conditions and are not enrolled in social insurance programs through their employers. These issues may not align with the standards of:
a. Section 2.1, 2.2, and 2.3 of Shein’s Supplier Code of Conduct;
b. Chapter VI and IX of the Labor Law of the People’s Republic of China; the Social Insurance Law of the People’s Republic of China;
c. ILO Convention No. 102 (Social Security Minimum Standards) and No. 155 (Occupational Safety and Health).
4. Possible unauthorized subcontracting
CLW’s investigation uncovered a network of hundreds of small suppliers, some of which appear to have been converted from residential units and employ fewer than 10 workers. This strongly suggests the possibility of unauthorized subcontracting, which may be inconsistent with:
a. Section 5.8 of Shein’s Supplier Code of Conduct and Responsible Sourcing (SRS) Policy;
b. Article 14 of the Labor Contract Law of the People’s Republic of China;
c. UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Due Diligence Guidance for Responsible Supply Chains;
d. Article 7 of the EU CSDDD on ‘preventing potential adverse impacts’.
The EU CSDDD obligates large EU and non-EU companies operating in the EU to identify, prevent, mitigate, and account for adverse human rights and environmental impacts in their operations and value chains, while Section 307 of the U.S. Tariff Act prohibits the importation of goods “mined, produced, or manufactured wholly or in part” in any foreign country by forced labor. Based on our field-based observations, Shein’s current sourcing practices —particularly those involving small workshops and informal labor—may expose the company to regulatory, reputational, and commercial risks if adequate safeguards are not in place.
Based on these preliminary findings, we encourage Shein to consider strengthening its due diligence and transparency measures to mitigate regulatory, reputational, and operational risks. This extends to the entire supply chain, not only within its Tier 1 and 2 suppliers, but also extending to downstream suppliers and their subcontractors. This action must be guided by a worker-centered approach that prioritizes the rights, safety, and well-being of workers at all levels of production.
More broadly, the issues documented in this report reflect structural challenges that extend beyond any single company. The precarity experienced by informal workers and the lack of enforceable labor standards highlight a global need for systemic reform and accountability within transnational supply chains.
