If you saw the performance of SHEIN’s General Counsel for EMEA before the UK Parliament’s Business and Trade Committee, this news won’t be surprising. The French government has published their Final Statement on the “Specific Instance of the French NCP: SHEIN in France”. In 2023, two members of the French Parliament brought accusations against SHEIN questioning the company’s “lack of responsible business conduct” in accordance with the OECD Guidelines for Multinational Enterprises, which is implemented by the French National Contact Point (NCP).
The NCP undertook an investigation and, in the Final Statement (which is interesting reading, by the way), concluded:
“… while the Group’s sustainability policy has been further developed, its concrete implementation faces several non-compliances with an effective implementation of the Guidelines in the management of its supply chain as well as in the identification, assessment, prevention, mitigation as well as remediation of social and environmental impacts and compensation of these damages associated with all the Company’s products and services. The NCP also notes that there is a clear lack of progress on transparency in the governance and financial reporting of the group. SHEIN stated that it disputes this analysis.
Accordingly, the NCP recommends that SHEIN continue to develop its internal policies with the objective of effectively integrating the OECD Guidelines regarding: (i) respecting of local law in France and in the European Union and respecting the OECD Guidelines in China without contravening domestic law, (ii) conducting due diligence with respect to its activities, products and services, and in relation with its supply chain, (iii) respecting human rights and working conditions, (iv) respecting the environment, (v) public disclosure of financial and non-financial information and regarding its governance, (vi) respecting consumer interests and (vi) lobbying.”
Section 5 of the document provides their detailed analysis and specific recommendations for remediation. The Statement contains no fines, penalties or other legal mandates, although it references obeying “domestic law in the countries where the Group markets its products, in the case at hand in France where EU law also applies.” A few examples are noted in Section 5.1.
This isn’t a good look for a company that is still shopping for an IPO venue.
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