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Clothing firm increases fire compensation offer
Photo: DPA

Clothing firm increases fire compensation offer

Published: 24 Oct 2012 12:46 GMT+02:00
Updated: 24 Oct 2012 12:46 GMT+02:00

German discount clothing retailer Kik has agreed to pay more than $1.2 million compensation for victims of a Pakistan factory fire, a union leader said Wednesday, after an initial offer worked out to less than €1,500 per life lost.

At least 289 workers were killed and 110 more injured as fire swept through the Ali Enterprises factory in Karachi, which made jeans for Western shops, including large contracts with Kik.

Der Spiegel magazine reported on Tuesday that Kik had agreed to pay a total of $500,000 compensation to be shared between the relatives of those who died. This worked out as less than €1,500 for each death, a sum which drew heavy criticism from Pakistani trades unions.

Nasir Mansoor, head of the National Trade Union Federation (NTUF) representing Pakistani factory workers, said his organisation and the Clean Clothes Campaign, an international group striving for better conditions for garment workers, had forced Kik to increase its compensation.

"We did not agree with the compensation they had announced. We warned them that we would seek for international justice if they did not share responsibility and deservedly compensated the families," Mansoor told AFP.

"Now, Kik has agreed to pay initially €500,000 ($650,000). They would soon pay another half-a-million euros."

Mansoor said NTUF was in talks to secure an even bigger payout for the workers.

Kik agreed to compensate the victims and their families only after activists presented them with evidence that most of the factory's output was destined for its Okey brand, Mansoor said.

"We saw the labels on the merchandise, checked invoices and interviewed the workers to know that at least 90 percent of the garments the Ali Enterprises was producing, was the Okey brand for Kik," he said.

"We contacted the company and asked for the compensation. Initially, they declined to accept the fact, but they finally gave in to the concrete evidence we had."

The Pakistani government has paid more than 100 family members 700,000 rupees ($7,000), but many families say they are still waiting for cheques, which have been held up by governmental red-tape.

Of the 110 workers who were injured, dozens suffered disabling injuries. About 2,000 other workers have lost their livelihood.

"Life has become hell since that fire," said Mohammad Khalid, 29, who worked at the factory with his elder brother Majid. Majid died and Mohammad lost his left arm in the inferno.

"I have to take care of my brother's family as well, but cannot find a job because of my disability," he said.

His family have not yet received compensation from the government and he sees the German company's money as inadequate to offer a better life for the two families.

"We have lost both male breadwinners. This compensation will not help for long. Our women and children will have to work hard to feed all of us," he said.

Two of the three factory owners are facing murder charges. Their application for bail last week was rejected and they were sent to jail on remand.

AFF/hc

The Local (news@thelocal.de)

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Your comments about this article

16:48 October 24, 2012 by Englishted
The trade union would be better doing something about the poor working conditions of the workers in clothing and other trades on the sub-Continent.

Because I don't see how it would be a legal responsibility of a customer to see to the heath and safety of a sweatshop.

I am glad that a payment has been made but it must not set a president .
17:10 October 24, 2012 by zeddriver
I'm with you on this Englishted. Kik does not own nor did they build this factory. They offered for bid, a contract to supply them with jeans. It should be the owners of this factory that have to pay compensation for the fire trap they built.

I say kudos to Kik for doing the right thing to help. But it should not be required.
18:44 October 24, 2012 by IchBinKönig
@Englishted

'The trade union would be better doing something about the poor working conditions of the workers in clothing and other trades on the sub-Continent.'

That is exactly the 'precedence' they are trying to establish. The unions would love to collect dues on all goods sold in Europe. The dues from Germany has plateaued, time to expand.
18:45 October 24, 2012 by nstaubach
@Englishted:

just for your information, according to EU norms and laws a European entity is suppose to dod an assessment to verify the working conditions and plant layout before placing any orders to a third world country. Yes, Pakistan is known for poor work conditions, but I presume it was already known to Kik. Having said that, I appreciate the efforts of Kik management and wish to buy some products from Kik in future to contribute for such a noble cause.
20:02 October 24, 2012 by Englishted
@ nstaubach

Therein is the problem if " a European entity " followed the E.U. norms and laws (which would follow that the working conditions on heath and safety were of E.U. standard ) then NO firm in Europe would be able to place a order on the Sub-Continent or in China.

Or does the E.U. believe that these countries employees should have lower standards which would be racist would it not?
20:10 October 24, 2012 by IchBinKönig
@Englishted

And wouldn't it be racist if the EU bailout mechanism was only open to European Countries and their 'White' leaders?
20:23 October 24, 2012 by nstaubach
@Englishted:

exactly........so the bottom line is everyone wants to make profit by outsourcing and sometimes they tell lies for it.
07:51 October 25, 2012 by die_Unbekannte_müller
I dont know what EU laws say about working conditions but they should make sure the products they are busing are not risking human life.

I appreciate the help even if it is a marketing, the German govt. is not responsible for the lives of > 200.

The contractors of such companies enjoy lives in sub-continent much better then owners of LIDL, etc in Europe because they are earning like crazy by abusing labors ,labor laws, with-out caring for lives, child labor, over-work hours and the list goes on .... Again it is not responsibility of the consumer but Govt of Pakistan. Unfortunately, there is not rule in any govt. department in Pakistan people live under loaded guns or they are part of corruption. The lawlessness situation makes a moral responsibility of companies like KIK to thread owners (the corrupts) to make sure at least lives of workers otherwise the company will stop dealing.

But why would KIK would do this, they also need to have cheap labor and money. The story will be trashed with another killings tomorrow ... :(
08:05 October 25, 2012 by ChrisRea
@ nstaubach #4

Can you please point out the EU laws and norms you mentioned? Links would be sufficient. Thanks!
21:23 October 25, 2012 by nstaubach
@ChrisRea

please check the following link;

http://ec.europa.eu/consumers/cons_safe/action_guide_de.pdf

· Bei Produkten, die außerhalb der EU hergestellt und vom Hersteller mit

dessen Marke versehen werden, sollten die Verpflichtungen des

Herstellers von dem Unternehmen wahrgenommen werden, das das

Produkt in die EU einführt (wobei es sich um den Vermittler des Herstellers in der EU handeln kann). In der Praxis wird es in der Regel erforderlich sein, dass der Importeur den eigentlichen Hersteller bei Korrekturmaßnahmen miteinbezieht.

· Bei Produkten, die außerhalb der EU hergestellt und vom EU Zwischenhändler mit dessen Marke versehen werden, sollten die

Verpflichtungen des Herstellers vom Zwischenhändler wahrgenommen

werden. Vermutlich wird dem Zwischenhändler daran gelegen sein,

den eigentlichen Hersteller oder dessen Vermittler bei Korrekturmaßnahmen

miteinzubeziehen.
07:47 October 26, 2012 by ChrisRea
@ nstaubach #10

Thanks for the link provided. It deals however with the safety of the consumer, not of the workers at the factory where the product originates. So the responsibilities and measures listed do not include checking the working conditions.

Do you have another link?
10:59 October 26, 2012 by raandy
you can mollify this for KIK, but they knew the conditions at this factory ,and they exploited the workers for profit with out any concern for their safety, surely they the buyers for KIK would have declined a job there. Exploiting people like this, with out being held responsible sends the wrong message.

We all should boycott this company. It is a shame that it takes a tragedy like this to expose this kind of blatant exploitation.
15:23 October 30, 2012 by ChrisRea
OK, so it seems that there are no EU norms and laws saying that "a European entity is suppose to dod an assessment to verify the working conditions and plant layout before placing any orders to a third world country".
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