KiK accused of "stalling tactics" to avoid paying compensation to victims of Ali Enterprises factory fire in Pakistan - company responds

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Article
10 September 2016

Landmark compensation arrangement reached on 4th anniversary of deadly Pakistan factory fire

Author: Clean Clothes Campaign

After four years of campaigning and months of negotiations, an agreement has been reached to pay compensation in excess of US$5 million to the survivors and families of workers killed in Pakistan’s worst industrial accident...On 11 September 2012, more than 250 workers lost their lives and over 50 were injured in a fire at the Ali Enterprises garment factory in Karachi.  Workers burnt to death trapped behind barred windows and locked doors. Others jumped for their lives from the upper floors, sustaining permanent disabilities...German retailer KiK, Ali Enterprises’ only known buyer, has now agreed to pay an additional US$5.15 million to fund loss of earnings, medical and allied care, and rehabilitation costs to the injured survivors and dependents of those killed in the disaster.

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Article
30 May 2016

Pakistan: Resumption of Baldia factory fire compensation talks welcomed

Author: Daily Times [Pakistan]

The international level talks on the issue of compensation to the affectees of Ali Enterprises fire tragedy are welcomed, noted a general body meeting of the Ali Enterprises Factory Fire Affectees Association (AEFA)....A large number of the heirs of the martyred workers and affectees were present in the meeting that was specially attended by legal experts Dr Remo Klinger, Attorney at Law, Germany; Dr Caroline Terwindt, Senior Legal Adviser ECCHR, Dr Miriam Saage-Maab, Vice Legal Director ECCHR, and Tara Scally from Clean Clothe Campaign, Netherlands....The representatives of the affectees praised the role of mediator of the International Labour Organisation (ILO) and termed the resumption of talks for the payment of compensation as an important development. They thanked the participants of the Asia Living Conference in Islamabad for observing a one-minute silence in the memory of the Ali Enterprises martyrs and expressing solidarity with them....The meeting thanked the trade unions, labour organisations and governments of Germany and Holland for their efforts to persuade the German brand KIK to resume talks. It reiterated that the most important stakeholder are the affectees, represented by the association of Ali Enterprises Factory affectees; therefore, their participation in any talks or agreement is a must.

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Article
22 November 2015

Pakistani widow of Ali Enterprises factory fire visits Germany to appeal to German Retailer KiK

Author: Clean Clothes Campaign

From 23 to 27 November 2015, Shahida Parveen and Farhat Fatima from Pakistan will visit Berlin to draw attention to the global campaign demanding KiK provide long term compensation to the families affected by the Ali Enterprises factory fire in 2012. Shahida Parveen, a widow of one of the workers who was killed in the fire, intends to deliver her #MakeKikPay petition to KiK representatives during her stay in Germany. She will be accompanied by Farhat Fatima from the Pakistan Institute of Labour Education and Research (PILER), an organisation that signed a legal agreement with KiK for a negotiated settlement of long-term compensation to the survivors and victims’ families of the Ali enterprises tragedy. 

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Company response
25 September 2015

KiK's response

Author: KiK

We refer to your letter dated September 10, 2015, in which you describe your concerns regarding the approach of our company with respect to the tragic consequences of the factory fire at Ali Enterprises in September 2012. At several occasions, we have already expressed our regret and compassion for the victims and survivors. We may once again draw attention to the fact that KiK was the first party to provide substantial financial support immediately after the incident. In a non-bureaucratic procedure, KiK has made available assistance for the victims amounting to one million US dollar. In addition, KiK has approached PILER to deal with the situation on the ground independently. The parties have agreed to act in KiK’s sense and continue negotiations with all involved stakeholders. This was supposed to happen with regard to the participation of the government, the employer, the audit institutes and other possible buyers of Ali Enterprises. To our knowledge, in the meantime, some of these parties have made payments to the victims and their families as well. Instead of opening negotiations with all parties, PILER has only called on KiK to pay a million lump sum for long-term compensation. We have asked several times for the calculation basis of such a claim, however, there was no willingness to do so until today. In addition, we have asked to provide transparency about the allocation of the disbursed funds and again, have not received anything so far...

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NGO rejoinder
17 September 2015

Joint statement: Global Unions reject KiK’s attempts to dodge compensation for Pakistani fire victims

Author: IndustriALL Global Union, UNI Global Union, Clean Clothes Campaign

IndustriALL Global Union, UNI Global Union and the Clean Clothes Campaign reject KiK’s assertions in its recent statement and its attempts to obfuscate issues related to compensation for the victims of the Ali Enterprises factory fire in Pakistan. We would like to clarify that in the aftermath of the disaster an immediate relief fund was set up in order to provide emergency assistance to the survivors and victims’ families. The fund acquired US$ 1.7 million in total, including the US$1 million from KiK, which was distributed to the victims’ families by the Commission established by the Sindh High Court. KiK’s claim that the victims received several million dollars is therefore incorrect...We welcome KiK’s proposal for compensation for loss of income and medical costs based on ILO Convention 121, which KiK initially rejected. However, it is crucial that it comes with the necessary financial commitment and is adapted to the specific national context of Pakistan, for which we could use the technical assistance of the ILO. The ongoing court case filed by four victims against KiK in Germany does not cover all victims and covers different losses than ILO Convention 121. Therefore, the court case does not release KiK from its responsibility to negotiate long-term compensation as set out in the MOU signed by the company...We therefore invite KiK to return to the negotiating table in good faith and reach an agreement to pay long-term compensation to all victims, including those victims who have filed legal cases, without further delay. We also call on KiK to develop a robust strategy to prevent such accidents from happening again.

 

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Company response
10 September 2015

KiK rejects accusations of international trade unions

Author: KiK

It was with great astonishment that KiK has learned of the recent accusations and untruths by some international unions. But constantly repeating false allegations does not make them more true. KiK therefore rejects the accusations as incomplete and knowingly misleading. KiK has always explicitly stated to welcome the recently initiated judicial examination to finally clarify the accusations. The proper location for this clarification should, however, not be the public media, but rather the court. Therefore, it is less about "losing patience" as the organizations claim, but about showing respect for a German court and its ruling...From the outset, KiK has agreed to provide the necessary assistance for reasons of human compassion. As first institution, KiK therefore has paid an amount of USD 1 million to help the victims of the factory fire at Ali Enterprises quickly and unbureaucratically. Moreover, those affected by the fire have received several million US dollars of the Pakistani government, the factory owner and a private individual.KiK had also offered to provide further long-term assistance, if required. For this purpose, KiK has proposed a process in accordance with Convention 121 of the International Labor Organization, which was successfully applied in the Rana Plaza collapse. At the time, international unions have expressively supported this process. In the case of Ali Enterprises, however, stakeholders have rejected an analogous application, which in the end would have provided more assistance to those concerned. They have instead demanded lump sum payments in millions of dollars by KiK. In the interest of those affected KiK has always been interested to reach a quick and unbureaucratic agreement.

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Article
9 September 2015

German retailer KiK must pay promised compensation to Pakistani factory fire victims

Author: IndustriALL

On the third anniversary of Pakistan’s worst-ever industrial disaster, global unions IndustriALL and UNI, together with the Clean Clothes Campaign, are calling on a major German retailer to honour its promise to provide long-term compensation to victims.  Two-hundred-and-fifty-four people burnt to death and 55 were seriously injured when a factory supplying budget-clothing brand, KiK, exploded into flames on 11 September 2012... In the aftermath of the disaster, KiK... signed a Memorandum of Understanding (MOU), legally committing the company to make an initial payment of US$ 1 million to the victims and their families for immediate relief. As per the agreement, KiK paid $1 million to the interim fund. However, it has so far failed to fulfill its obligations under the MOU to engage in good faith negotiations to determine long-term compensation for victims....[T]he company has engaged in various stalling tactics to avoid paying long-term compensation for loss of income, medical costs, pain and suffering, and more.

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