Online fashion retailer Shein has pledged $15 million to improve standards at its suppliers’ factories, after an undercover investigation revealed poor working conditions.

The documentary by Channel 4 claimed that employees worked 18 hour days and earned a few pennies per garment made.

The company said that the investment, part of Shein’s Supplier Community Empowerment programme (SCEP), will go towards upgrading supplier factories. Shein said that more than 30 factories will will upgraded by the end of the year, 100 by the end of 2023 and 300 projects within the next four years.

All contracted suppliers have agreed to comply with the retailer’s code of conduct under Shein’s Responsible Sourcing Programme (SRS), which it says “ensures all workers are treated fairly and have safe working environments”. Violations of the code of conduct can lead to contracts being terminated if serious infringements are not rectified within a set timeframe, it said.

Shein said that 2,600 independent audits were carried out over the past year but that is “determined to do more” and will double the amount it invests in the SRS to $4 million per year. This will allow more unannounced spot checks and training on how to comply with the code of conduct, it said.

Allegations

Shein has also released key details of an independent audit investigating the claims made by the Channel 4 documentary, refuting most of the allegations.

Shein said that claims of worker’s salaries being withheld or illegally deducted are untrue. All salaries are paid according to local laws and significantly higher than the local minimum wage in Guangzhou, it said.

On working hours, the documentary alleged that workers were working longer than permitted in two factories. Shein says that the independent investigation found that working hours were significantly higher than local regulations permit.

The company has reduced orders from these two factories until they comply with the code of conduct and has given them until the end of December to improve.

Commenting on the news Adam Whinston, global head of ESG for Shein said: “We take our responsibility to safeguard the welfare of workers at all our suppliers very seriously. Through the SRS programme we have been working diligently with our contracted partners to improve welfare and working conditions.

He added: “We are now looking to double our investment in the SRS programme to improve supplier management further. At the same time, I am pleased that workers in these two factories are earning significantly more than the minimum wage and many other workers in the industry in their region.

“While the audit did reveal an issue with working hours, this has been raised with both manufacturers and we have significantly scaled back our orders from them until they take effective action. Shein prizes its reputation as a responsible fashion group and will not hesitate to take action like this where necessary.”

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