Overview
Abstract
OECD National Contact Points (NCPs) have traditionally provided a non-legal forum to resolve sustainability-related disputes with reference to the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (Guidelines). In the wake of proliferating mandatory sustainability due diligence regulation, however, their findings may have increased legal weight, since NCPs interpret terms—including international human rights and due diligence expectations—that are the wellspring of emerging law.
A recent decision from the French NCP concerning SHEIN1 is noteworthy for what it augurs. The decision suggests a few key potential trends for companies to track. First, the NCP extended its jurisdiction to SHEIN based on its sales in France, not its headquarters or country of incorporation. Second, the NCP considered French, European Union, and Chinese law in assessing SHEIN's compliance with the Guidelines. Third, the NCP scrutinized not only SHEIN's policies but the inner workings of its due diligence program—at the level of specific rights—with reference to the Guidelines. Fourth, the NCP emphasized that audit programs built to assess supplier compliance with domestic law do not align with the Guidelines.
Overview
On September 18, 2025, the French NCP for the OECD Guidelines issued its final statement in the specific instance against SHEIN.2 The case was brought in June 2023 by two French MPs who challenged the fast-fashion model of SHEIN's global operations. SHEIN cooperated procedurally during the proceedings but refused to disclose detailed financial or governance information, claiming to be a non-listed private entity. After a two‑year procedure, the NCP concluded that SHEIN does not comply with several provisions of the Guidelines and must significantly improve its policies and practices.
Complainants' Arguments
According to the MPs, SHEIN's production system, based on a strategy of production and marketing of garments at very low prices and in massive quantities, drives overproduction and overconsumption while relying on highly fragmented, outsourced manufacturing concentrated in China. Reports cited in the complaint3 documented poor working conditions in supplier facilities, including excessive working hours, lack of labor protections and hazardous chemicals in products. They also denounced the company's lack of transparency, arguing that SHEIN's business model harms consumer interests by offering low-priced products without accurately disclosing manufacturing conditions and composition.
NCP Analysis
Jurisdiction
While SHEIN is headquartered in Singapore and conducts most of its operations out of China, the NCP found that the Company was caught by the Guidelines by virtue of its downstream activities in France (and in other OECD countries). SHEIN was subject to the Guidelines and the French NCP's jurisdiction because the Company's "activity on French territory is very real," including online and physical marketing campaigns, and because those activities impact the interests of French consumers.4
Substantive Analysis
The French NCP considered a range of issues under the Guidelines, including human rights, environment, financial disclosure, and consumer interests. Our analysis focuses predominantly on the human rights issues and implications.
Compliance with Domestic Law
The NCP first assessed compliance with domestic law, the "first obligation" under the Guidelines, holding that, while SHEIN is headquartered in Singapore and most of their products are manufactured in China, its operations fall under French and EU rules. On these regulations, the NCP largely focused on whether SHEIN was obliged to follow them—without conducting any assessment of compliance—while pointing to investigations and requests for information filed by French and EU authorities. According to the NCP, the proceedings "highlight questions… as to the respect of domestic laws by SHEIN, in contravention of the recommendations of the OECD Guidelines."5
Interestingly, the NCP then considered whether Chinese labor law aligned with the International Labor Organization (ILO) Conventions incorporated into the Guidelines to further assess whether SHEIN was doing enough to respect the Guidelines. After concluding that Chinese law does not sufficiently protect core labor rights—notably freedom of association and collective bargaining—the NCP critiqued the domestic law focus of SHEIN's audit program: "The standards imposed by SHEIN on its suppliers do not appear to contain sufficiently binding mechanisms nor to provide clear incentives for suppliers to go beyond the requirements of domestic law, since their wording does not, as it stands, guarantee their operability on the ground."6
Disclosure Obligations
Regarding disclosure obligations, the NCP found a significant lack of transparency. SHEIN does not publish basic information about its ownership, governance, group structure or financial results, nor does it disclose sufficient non‑financial information on risk identification or sustainability performance. The NCP also found that SHEIN's Sustainability and Social Impact reports do not provide meaningful information on material risks, their prioritization, or how due diligence is embedded in management systems.
Due Diligence Obligations
The NCP's most extensive criticism concerned due diligence. SHEIN's policies make little reference to OECD, UN, or ILO standards, and the company has not published any supply chain mapping or disclosure of its environmental7human rights, and consumer impacts. To illustrate, the NCP mentions that the 2023 Sustainability and Social Impact Report does not include a risk analysis of China—even though the bulk of SHEIN's manufacturing, raw-material supply, and storage activities are in China, where the effectiveness of international standards for responsible business conduct is regularly questioned.
Supplier standards are largely declarative and do not appear to be contractually binding. The audit system—distinguishing between severe ('ITV' for 'Immediate Termination Violation') and remediable ('IRV', for 'Immediate Remediation Violation') violations—is opaque. SHEIN does not disclose audit criteria, weighting, or methodology, and some new suppliers are assessed through limited or remote checks, which the NCP deemed inadequate for a high‑risk sector.
Human Rights and Labor Rights
Referencing OECD research,8 the French NCP noted that the textile and garment sector is a "high-risk sector in terms of respect for human and labor rights." The NCP identified structural deficiencies in SHEIN's supplier expectations on both fronts. Specifically, these include ambiguous rules on working hours that allow exceptions without clear limits9; insufficient safeguards against forced labor; unclear enforcement of age‑verification procedures to address child labor; and a lack of meaningful provisions on freedom of association and collective bargaining. The French NCP highlighted that SHEIN's requirement for suppliers to pay workers the legal minimum wage is insufficient to meet the Guidelines' expectation to pay workers "decent wages" and critiqued SHEIN's opacity regarding whether (and how) audits consider whether suppliers pay workers more than the legal minimum.
Environmental risks
The NCP also found that SHEIN had not implemented sufficient measures related to its environmental risks. Although SHEIN has announced decarbonization targets and other environmental initiatives, its greenhouse gas emissions nearly doubled between 2022 and 2023, undermining its stated trajectory. The NCP found no comprehensive environmental risk-mapping covering the full life cycle of products—from raw materials to end‑of‑life—and noted that external reports about the sector describe SHEIN's business model as inherently incompatible with low‑carbon requirements.
Consumer Risks
Lastly, the NCP found non‑compliance with consumer‑interest provisions. The final statement concludes that product information on traceability and environmental impact is often incomplete or difficult to access, despite mandatory requirements under French law. The French consumer protection authority's—Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF)—sanction for misleading environmental and pricing claims reinforced the NCP's concerns.10
NCP Recommendations
The NCP issued eight recommendations for SHEIN specifically to improve its legal compliance, management, and disclosure of human rights and environmental risks. The last of these recommendations incorporates 10 measures tailored to all companies in the textile and garment sector; the NCP also suggested five more general proposals for all multinational enterprises. In general, the NCP urged the company to modernize its business model, adopt risk‑based due diligence aligned with OECD standards, strengthen labor and environmental protections, and improve transparency.
Practical Implications
NCP-specific instances do not have the force of law. But they can shape brand, investor, and customer risk—and they are likely to become increasingly intertwined with law as mandatory sustainability due diligence and disclosure legislation referencing the OECD Guidelines take hold. This case reveals five trends for multinational companies to track and anticipate.
- First, fast fashion faces increasing sustainability scrutiny from regulators. This specific instance was notably brought by French MPs, reflecting a broader political backdrop. France has adopted a fast-fashion bill aimed at reducing the environmental impacts of the textile industry.11 The bill provides for penalties if companies do not meet certain environmental criteria, reaching 10 euros per item of clothing by 2030, or up to 50% of the product's price excluding tax. It also provides for a ban on all direct and indirect advertising for fast-fashion products and for brands engaged in fast-fashion practices. In addition, SHEIN is facing intensive scrutiny and formal investigations in France and by the European Commission:
a. The company was fined €40 million by the French consumer protection authority (DGCCRF) for misleading commercial practices.12 In November 2025, the French government initiated proceedings to suspend SHEIN's online platform, but the request was rejected by a French court as "disproportionate."13 This month, the EU Commission opened an investigation under the Digital Services Act over the sale of childlike sex dolls, the platform's "addictive design" and the lack of transparency in its recommendation algorithms.14
- Second, in the wake of the revised 2023 Guidelines, NCPs may have much more expansive jurisdiction, extending to companies based only on downstream activities. That significantly enhances the likelihood of forum-shopping by complainants to find the most receptive NCPs.
- Third, the French NCP's decision highlights the interdependence of sustainability-related legal and non-legal risks: much of the factual foundation for the MPs' complaint came from NGO reports; the NCP's decision incorporated references to relevant laws and administrative proceedings, including those still underway; and the NCP interpreted terms, including those regarding human rights, which are also incorporated into legal instruments. It remains to be seen how probative such findings might be before regulators and courts, but, if they are referenced, then specific instances could become a springboard to bring future legal claims.
- Fourth, the NCP's close examination of the workings of SHEIN's supplier due-diligence program—including audit protocols—suggests that NCPs may be getting much more sophisticated about what constitutes effective due diligence. Companies facing such scrutiny should no longer expect that well-worded policies will suffice. More importantly, companies should be aware that audits built around national law compliance for standards like working hours and wages (which are quite common) may be vulnerable to critique by NCPs and under Guidelines-aligned regulation like the EU Corporate Sustainability Due Diligence Directive (CS3D).
- Fifth, the NCP's attention to "decent wages"15 in SHEIN's supply chain is notable because this is an area of vulnerability for virtually every multinational company. Adopting a policy requiring suppliers to pay more than local law requires has proved complex for many companies, because it affects pricing and risks alienating key suppliers. Implementing a due-diligence process to monitor the decency of wages is substantially more complex because of the hyper-localization of any calculation.
1 For the non-official translation, please see: https://www.tresor.economie.gouv.fr/Articles/d8cfb135-59fe-4596-a359-6af441ade597/files/c8dcccc1-af72-49d7-9503-c04ff747c130
3 See "Taking the Shine off SHEIN," Greenpeace Germany (2022), https://www.greenpeace.de/publikationen/S04261_Konsumwende_StudieEN_Mehr%20Schein_v9.pdf; and "Toiling Away for SHEIN," Public Eye (2021) https://stories.publiceye.ch/en/shein/
4 NCP Final Statement, 18 September 2025. For the non-official translation, please see: https://www.tresor.economie.gouv.fr/Articles/d8cfb135-59fe-4596-a359-6af441ade597/files/c8dcccc1-af72-49d7-9503-c04ff747c130.
5 id.
7 With the exception of the calculation of greenhouse gas emissions caused by the Company's activity.
8 OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, OECD Publishing, Paris (2018) http://dx.doi.org/10.1787/9789264290587-en.
9 The Supplier Responsibility Standards document states that working time must not exceed 60 hours per week, and that workers must be entitled to at least one day of rest out of seven days worked. However, those provisions are systematically accompanied by a clause making it possible to go beyond 60 hours per week and 1 day of rest per week in 'emergency or unusual situations', without those situations being defined.
10 DGCCRF fined SHEIN with €40 million claiming it misled customers on price deals and on its environmental impact. See "France fines retailer Shein 40 million euros for misleading discounts," Reuters (2025) https://www.lemonde.fr/en/france/article/2025/07/03/france-fines-shein-40-million-over-deceptive-commercial-practices_6742986_7.html. Accessed on 17 February 2026.
11 "French Senate backs law to curb ultra fast-fashion," Reuters (2025) https://www.reuters.com/sustainability/land-use-biodiversity/french-senate-backs-law-curb-ultra-fast-fashion-2025-06-10/. Accessed on 9 February 2026.
12 "France fines retailer Shein 40 million euros for misleading discounts," Reuters (2025) https://www.reuters.com/sustainability/boards-policy-regulation/france-fines-shein-40-million-euros-deceptive-business-practices-2025-07-03/. Accessed on 17 February 2026.
13 "French court rejects Shein suspension," Le Monde (2025) https://www.lemonde.fr/en/france/article/2025/12/19/french-court-rejects-state-s-request-to-suspend-site-of-e-commerce-giant-shein_6748674_7.html. Accessed on 17 February 2026.
14 "EU to investigate Shein over sale of childlike sex dolls and weapons," The Guardian (2026) https://www.theguardian.com/business/2026/feb/17/eu-investigate-shein-sale-of-sex-dolls-recommender. Accessed on 17 February 2026.
15 NCP Final Statement, 18 September 2025. For the non-official translation, please see: https://www.tresor.economie.gouv.fr/Articles/d8cfb135-59fe-4596-a359-6af441ade597/files/c8dcccc1-af72-49d7-9503-c04ff747c130