Lawmakers urge SEC to look into Shein use of Uyghur forced labor before IPO offering
Julia Johnson
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A bipartisan group of congressmen is asking the Securities and Exchange Commission to force the popular clothing store Shein to prove that it does not use forced Uyghur labor in the making of its products before it is allowed to launch an initial public offering.
On Monday, Reps. Jennifer Wexton (D-VA) and John Rose (R-TN) led 22 other lawmakers in sending a letter to the SEC expressing their concerns.
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According to the group, “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.”
Signatories included Reps. John Rose (R-TN), Gregory Meeks (D-NY), French Hill (R-AR), James McGovern (D-MA), Blaine Luetkemeyer (R-MO), Earl Blumenauer (D-OR), Chris Smith (R-NJ), Linda Sanchez (D-CA), Eric Crawford (R-AR), Seth Moulton (D-MA), John Moolenaar (R-MI), Haley Stevens (D-MI), Alex Mooney (R-WV), Jake Auchincloss (D-MA), Neal Dunn (R-FL), Jill Tokuda (D-HI), Ralph Norman (R-SC), Scott Fitzgerald (R-WI), Scott Franklin (R-FL), Carlos Gimenez (R-FL), August Pfluger (R-TX), Michael Lawler (R-NY), and Zach Nunn (R-IA).
The House members are concerned about a possible IPO from the company, headquartered in Singapore, due to its possible use of forced Uyghur labor.
In the letter, they ask that the SEC “set forth regulations” to mandate the company to independently verify that it doesn’t employ forced Uyghur labor. “We further request that you notify the national securities exchanges registered under Section 6 of the Securities Exchange Act of this requirement,” it continues.
“We strongly support this bipartisan effort to force U.S. stock exchanges to protect human rights and it’s past time for them to stop allowing CCP-controlled companies like this to access our markets,” said Chris Iacovella, president & CEO of the American Securities Association.
The lawmakers cite the company’s business model, which “harvests vast amounts of consumer data using complex algorithms and manipulates an enormous supply chain across China to manufacture goods rapidly to meet consumer demand,” as well as “credible allegations of utilizing underpaid and forced labor,” in their request.
They also note that if the company is using underpaid and forced labor, it “would be in violation of the Uyghur Forced Labor Prevention Act.”
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Shein told the Washington Examiner in a statement, “SHEIN has no suppliers in the Xinjiang Region. Our suppliers are based in regions including Brazil, Southern China, and Turkey. 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.”
Notably, Wexton is also the sponsor of the Uyghur Forced Labor Disclosure Act.