German firm to compensate Karachi factory fire victims

By AFP
Published: October 24, 2012
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Kik has agreed to pay initially 500,000 euros, would soon pay another half-a-million euros, says NTUF head. PHOTO: AFP/FILE

Kik has agreed to pay initially 500,000 euros, would soon pay another half-a-million euros, says NTUF head. PHOTO: AFP/FILE

KARACHI: A German discount clothing retailer has agreed to pay more than $1.2 million compensation for victims of a Pakistan factory fire, a union leader said Wednesday.

The blaze in September at the Ali Enterprises factory in Karachi, which made ready-to-wear garments for Western stores, killed 289 workers and injured 110 more.

German news magazine Der Spiegel reported in its online edition on Tuesday that the Kik chain, which the factory supplied with jeans, had agreed to pay a total of $500,000 compensation – less than $2,000 for every life lost.

Nasir Mansoor, head of the National Trade Union Federation (NTUF), a local union for 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 up the 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 euros ($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 evidences 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 were 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 fire.

“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 has 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.

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Reader Comments (9)

  • usman
    Oct 24, 2012 - 8:25PM

    I don’t get this logic!? Why should this company pay?

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  • romm
    Oct 24, 2012 - 8:39PM

    AT-LEAST THEY HAVE NOT BEHAVED LIKE OUR POLITICIANS/INDUSTRIALISTS/FEUDAL S. I APPRECIATE THIS GESTURE

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  • Hasnain Ali
    Oct 24, 2012 - 8:42PM

    Corporate Social Responsibility by Kik…. what about the investigation result of fire incident?

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  • Cautious
    Oct 24, 2012 - 9:29PM

    So the customer is responsible but the owners/operators aren’t — classic Pakistan. No doubt the customer paid because the amt was considered immaterial compared to the bad press and legal hassle — bad president.

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  • A. Khan
    Oct 24, 2012 - 10:47PM

    Kik is not obliged to pay any compensation as they are not the employers. The fact that they have made a small gesture should be appreciated. What is really needed is a worker’s compensation fund that is funded by all manufacturer’s in Pakistan. The fund collected can be invested until it is needed in a factory disaster such as this one.Lets not complain that they have paid too little. I would like to see the same tenacity in getting money out of the current owners of the factory. Furthermore, the owner’s property should be attached by the courts and used to compensate the workers for providing unsafe working conditions.

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  • Fools
    Oct 25, 2012 - 12:53AM

    It’s called moral obligation …ethics..csr.. But no legal responsibility. That rests with the owners.

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  • curious
    Oct 25, 2012 - 2:10AM

    How come the owners of the factory are not paying. It is not really up to the German firm to pay. At least they have a bit of conscious unlike the the Pakistani owners who should pay blood money.

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  • usman786
    Oct 25, 2012 - 2:28AM

    There is an EOBI fund but factory owners do not register daily wagers to avoid paying their share. I re Nike has to pay for Bagladeshi workers uplift though they had only contract with owners

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  • Mirza
    Oct 25, 2012 - 2:52AM

    @A. Khan:
    @curious: Thank you both for being thoughtful.
    @usman:
    You said “I don’t get this logic!? Why should this company pay?”
    So please start a campaign to stop this payment if it is not fair to you. On the other hand some countries and organizations are more humane than we can even think. Why has God given so much to the relatively small countries of Europe? Rewards of their fairness, human dignity, equality and hard work among other.
    Regards,
    Mirza

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