KiK rejects criticism of Pakistan factory compensation
German retailer KiK says it is committed to ensuring high safety and social standards across its global manufacturing base, after being accused of failing to honour its long-term compensation pledge to victims of a deadly clothing factory fire in Pakistan.
Ahead of the third anniversary of the fire at the Ali Enterprises factory in Karachi, which killed at least 254 workers and injured 55 others, global unions IndustriAll and UNI, together with labour rights group the Clean Clothes Campaign (CCC), are urging KiK to provide long-term compensation to victims.
KiK was the only known buyer of garments from the factory, with production dedicated to making jeans for KiK’s own brand Okay Men.
Following the fire, KiK, which operates 3,200 stores across Germany, Austria and Eastern Europe, signed a Memorandum of Understanding (MoU), legally committing the company to make an initial payment of US$1m to the victims and their families for immediate relief.
Although the retailer paid this into the interim fund, the labour rights groups argue it has not fulfilled obligations to determine long-term compensation for victims. In addition, they say a sum of $250,000 for future labour standard enforcement is yet to be paid.
The NGOs believe KiK has “engaged in various stalling tactics to avoid paying long-term compensation” for loss of income and medical costs.
IndustriAll general secretary Jyrki Raina says: “It is an insult that three years on, the survivors and families of the dead are still waiting for KiK to act.”
While UNI Global Union general secretary Philip Jennings adds: “We cannot build a sustainable supply chain in the garment industry if companies like KIK do not commit.”
However, KiK says it rejects these accusations as "incomplete and knowingly misleading," adding that it is waiting for a judicial examination in the German courts to "finally clarify the accusations." The case was filed earlier this year for the payment of compensation to the victims' families.
In a statement sent ot just-style today (10 September), the retailer says that it paid the initial US$1m "quickly and unbureaucratically," with those affected by the fire also receiving "several million US dollars [from] the Pakistani government, the factory owner and a private individual."
KiK adds that it has also offered to provide further long-term assistance, if required, and has proposed a process in accordance with Convention 121 of the International Labor Organization (ILO) to calculate the compensation. But it says stakeholders have rejected this and have instead demanded lump sum payments amounting to millions of dollars from the retailer.
Regarding the cause of the fire, KiK says the original report by the Pakistani public prosecutor’s office has been withdrawn due to "significant deficiencies", and a re-examination by five investigating authorities has been ordered. The circumstances of the fire will also be the subject of this new investigation.
"As member of the Bangladesh Accord on Fire and Building Safety, KiK is committed globally to ensuring high safety and social standards in [its] commissioned manufacturing operations," the company adds.
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