German Retailer KIK continues to deny full compensation for victims of three deadliest garment industry tragedies in history

German retailer KIK continue to delay paying full compensation to victims of the two deadliest garment factory disasters in history

 

Today, marks the second anniversary of the fatal fire at Ali Enterprises garment factory in Karachi, Pakistan, which killed at least 254 garment workers and injured 55. Two years on, the victims families and the survivors are still waiting for the compensation they are entitled to.

Just weeks before the fire, the factory was audited on behalf of Italian social audit firm RINA for SAI (Social Accountability International) SA8000 certification – and passed – even though it had no emergency exits, barred windows, was not registered and had an entire illegal mezzanine floor built on.

The survivors and victims families fate is shared with the families of more than 1,300 garment workers who have been killed in unsafe workplaces in Asia since the Ali Enterprises fire, and the thousands more who survived fires and building collapses but whose lives have been changed forever.

German retailer KiK had clothes produced in each of the three factories to witness the greatest loss of life – Ali Enterprises, Tazreen Fashions and Rana Plaza – and yet to date has failed to provide full and fair compensation for all the victims.

In December 2012 KIK, the only known buyer at Ali Enterprises factory, signed a memorandum of understanding with the Pakistan Institute of Labour Education and Research (PILER) committing an initial US$1 million for immediate relief and agreeing to negotiations surrounding the amount required to pay compensation. However the negotiation is being delayed by KiK, who most recently pulled out at the last minute of planned negotiations in July and compensation remains unpaid.

KIK has committed US$1 million to the Rana Plaza Donor Trust Fund, just a fifth of what Clean Clothes Campaign estimates they owe, based on their annual turnover. And for the victims of Tazreen Fashions they have failed to contribute a cent.

 “KIK were sourcing from the factories involved in three of history’s deadliest tragedies – Tazreen, Ali Enterprises and then or course Rana Plaza, – these were not accidents, these were the result of continuous price pressures by discount retailers like KIK causing factory owners to cut corners and to keep pay at poverty levels, forcing workers to risk their lives to keep their families from destitution. Over 1,600 people died in these three tragedies and two years later the injured workers and surviving families are barely able to make ends meet. KIK must pay full and fair compensation to all those who have paid the highest price for KIK’s low cost products, their refusal to accept their responsibility for full compensation just prolongs the suffering of the very people their profits are built on.” Kate Nolan, Clean Clothes Campaign Ireland

The tragedies in the garment industry over the last two years have highlighted the urgent need for a more long term and sustainable compensation system for workplace accidents as per ILO standards and in line with the UN Guiding Principles on Business and Human Rights right to remedy framework. The framework makes clear that “when … there is a failure to protect and respect human rights in the workplace then governments and companies must ensure effective remedies, including adequate compensatory payments.”

It is not charity that the survivors want, it is their right to full and fair compensation,” says Mr. Karamat Ali, Executive Director of PILER.

As workers and campaigners around the world hold candlelight vigils to commemorate those who died in the fire, Clean Clothes Campaign renews it’s call to KiK to resume negotiations based on the legally binding agreement with PILER, and pay up, ensuring all the victims families and survivors receive the compensation they are owed before another year passes.

 

One year on from the tragic death of over 250 garment workers, the victims’ families still await full redress.

Still awaiting compensation in Pakistan: one year after Ali Enterprises burnt down

  • Families of more then 250 workers killed during fire still awaiting full and long-term compensation

  • Brands and auditing organisations called on to take responsibility for garment factory fire

German cost-cutter KiK discusses compensation for the victims of the collapse at Rana Plaza during the meeting in Geneva on Septmember 12th 2013, meanwhile survivors of the fire at the Ali Enterprises garment factory in Karachi, Pakistan, still await full, long-term and fair compensation. German retailer KiK remains the only known buyer of Ali Enterprises garments.

When the fire broke out during the late shift, the workers were sewing jeans for KiK, which were left strewn around the debris. The fire killed more then 250 people and left many injured.

Investigations into the fire found that workers were trapped inside the overcrowded factory by blocked exits and barred windows. Yet, just weeks before auditors from RINA, an Italian audit company contracted by the Social Accountability Accreditation Services SAAS, visited that factory and awarded it an SA8000 certificate. The SA8000 system, run by Social Accountability International (SAI) is supposed to ascertain that workplaces meet international labour standards and local laws, including on fire and building safety. An investigation carried out into the audit failings showed that fire safety certificates collected by auditors had been issued by an entirely fictitious company. Auditors failed to notice an entire mezzanine floor where many contract workers were employed. Another auditing company UL Responsible Sourcing also audited the factory in 2011 and 2007.

In December 2012, following sustained public pressure, Kik signed a Memorandum of Understanding (MoU) with the Pakistani workers’ rights organisation Pakistan Institute of Labour Education & Research (PILER), in which they agreed to pay one million US dollars in emergency relief. Most of this has now been distributed to families through a commission established by the Sindh High Court. According to the December MoU the amount paid by Kik is not payment in full, and will be subtracted from the final compensation agreed upon.

Long term compensation will be negotiated with all involved stakeholders, employers, audit bodies and possible other buyers, Kik included. SAI, SAAS and Rina have, to date, refused to enter into negotiations on compensation with labour rights groups.

One year on, PILER, together the National Trade Union Federation Pakistan (NTUF) and other organisations hold a rally with the victims’ families and labour and trade unions with protests also held in Islamabad, Lahore and Multan. 

The Clean Clothes Campaign is calling on all stakeholders, including social auditing organisations SAI and Rina, KiK, the Pakistani government and the employer, to actively participate in negotiations to provide full, long-term and fair compensation to the families of those killed and those workers injured in the fire.

The deaths of hundreds of workers at Ali Enterprises has highlighted, in the most tragic way, that audits do not protect workers rights. Worse, it has shown that these organisations have no regard for those workers it claims to be benefiting” says Sam Maher from the Clean Clothes Campaign. “The auditing organisations have to be held accountable for their severe negligence and must take their share of responsibility for compensating the victims. The Clean Clothes Campaign will, together with its partners, continue to take action to make sure that the long term compensation is paid.”

Karachi fire – Initial payments made to victims

JANUARY 2013

UPDATE ON COMPENSATION FOR THE VICTIMS OF KARACHI

After much campaigning, finally in January 2013 KIK signed an agreement with the Pakistan Institute of Labour Education and Research (PILER) to make an initial payment to the victims and their families of US$ 1 million for immediate relief, and to negotiate a long term compensation package with all other involved stakeholders. The initial payment is to be used to compensate the families of those victims who have not received any government compensation as the bodies have not been identified due to the severity of the burns and the decomposition of the bodies. “KIK also expressed a willingness to compensate workers who faced severe injuries in the fire leading to disability and loss of future employment. The remaining workers will be assisted in the next step after a compensation amount is agreed upon through a consensus between all stakeholders including employers and other international companies,” added Karamat Ali.

Ineke Zeldenrust, International Coordinator at CCC: ‘We welcome this agreement and look forward to having the full compensations and relief package, which we estimate will be at least EUR 20 million, to be negotiated soon. We continue our campaign towards other international stakeholders, notably auditing organisations SAI and Rina, to also take their responsibility and pay their share of the compensation needed.”

The National Trade Union Federation in Karachi state that although the high death toll at Ali Enterprises had led to extensive coverage of the fire, this is not an isolated incident but a regular occurrence in an industry that is poorly regulated and largely non unionised.

The fire  follows a pattern of negligence occurring not just in Pakistan but throughout the garment industry. Brand and retailers must therefore take more action to address the root causes of such disasters. Brands and retailers need to take responsibility for improving conditions, enforcing international labour standards and need to work with worker representatives to address safety issues in every country they source from if future tragedies are to be avoided.