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30 Jun 2024

Tobias Schwab, Frankfurter Rundschau

Pakistan/Germany: KiK failing to adequately support implementation of supplier-union agreement, NGOs allege; incl. co. comments

'Missed opportunity: No improvements in sight for labor and union rights at KiK supplier in Pakistan'

...In September 2023, the Pakistani trade union NTUF, along with the women's rights organization FEMNET and the human rights organization ECCHR, confronted the textile company KiK with the results of a study, conducted in the first half of 2023 [here on our website]. The investigation once again confirmed well-documented structural violations of labor rights in Pakistani textile factories, including within a KiK supplier factory...

On the basis of the German Supply Chain Act (LkSG)... the organizations called on KiK to comply with legal due diligence obligations and take appropriate measures... Initially, KiK reacted quickly and encouraged its supplier to sign an agreement with NTUF on the payment of minimum wages and compliance with national labor laws...

“The fact that KiK was finally willing to sit down with us as a local trade union to discuss solutions for improving working conditions made us hopeful that KiK had learned from the Ali Enterprises tragedy and that the German Supply Chain Act could indeed function as a catalyst for better working conditions in Pakistani textile factories,” said Nasir Mansoor of NTUF.

Unfortunately, it quickly became apparent that KiK’s supplier was unwilling to work to improve the situation for employees... Shortly after the final agreement was signed in February 2024, the supplier attempted to install a fake workers' representative council in the factory by holding a staged election. This was followed soon after by the dismissal of over 140 workers, in violation of labor law regulations...

“It was a mistake that KiK was not willing to sign the agreement from the outset, despite our repeated requests. Without the buyer's commitment and support, such an agreement remains mere lip service,” said Gisela Burckhardt of FEMNET. ”As soon as difficulties arose on the ground, KiK, despite the multiple concerns raised, once again opted for unreliable social audits instead of seeking solutions in dialogue with the union and their supplier in the spirit of the agreement.”
"With their commitment to a binding agreement between their supplier and a local union to improve wages and working conditions, KiK could have been a front-runner," said Annabell Brüggemann of ECCHR. “But for this, KiK would have had to take responsibility for the actual implementation and enforcement of the agreement, for example, by contributing to the costs and modifying their own purchasing practices....”

KiK's actions do not satisfy its obligations under the LkSG. The measures taken thus far are neither suitable for effectively combating the specific labor law violations of its suppliers in Pakistan, nor for ensuring the payment of adequate wages and the compliance with other local labor laws in its supply chains in the long term. NTUF, FEMNET and ECCHR have therefore decided to suspend negotiations with KiK for the time being.

See also: KiK comments on the allegations e.g. in an article from Tobias Schwab, Frankfurter Rundschschau, published on 1 July 2024 in German:

"A social partnership agreement is a matter between a supplier and the local trade union. KIK as a client has no place in such an agreement," explained Ansgar Lohmann, Head of Corporate Social Responsibility at KIK, in an interview with the FR... However, KiK sees itself as a "watchdog" with the task of "monitoring whether the agreements and legal provisions are being complied with"[, he said]. KiK fulfilled this responsibility under the Supply Chain Act, [he added].

Following the dismissals and accusations against Mount Fuji Textiles, KiK investigated the allegations and commissioned further audits[, he said]. "With the result that there is no truth to the allegations," said Lohmann[, adding that a]ll legal provisions were complied with when the employees were dismissed.

NTUF Deputy Secretary General Mansoor contradicted this when asked by the FR... [inofficial English translation by BHRRC]