Paying the price for clothing factory disasters in south Asia

Pakistan factory fire victims sue KiK
 
Justice, not hand-outs. Liability, not voluntary giving. These are the calls made by survivors and relatives of victims of the fatal fire at the Ali Enterprises textile factory in Karachi (Pakistan). 260 people were killed in the fire on 11 September 2012, a further 32 were injured. German discount clothing retailer KiK was by its own admission the factory’s main customer.

Stage win in proceedings against KiK before German Court

On 13 March 2015, four of those affected by the disaster filed a compensation claim against KiK at the Regional Court in Dortmund. Muhammad Hanif, Muhammad Jabbir, Abdul Aziz Khan Yousuf Zai and Saeeda Khatoon are all members of the Baldia Factory Fire Association, the organization run by those affected by the fire, and are seeking 30,000 euro each in compensation.
 
On 30 August 2016 the court issued an initial decision: the court has accepted jurisdiction and granted legal aid to the claimants to cover their costs. This decision is a first step towards dealing with human rights violations by German companies abroad before German courts.

Agreement in ILO proceedings

Shortly afterwards, on 10 September 2016, KiK announced in the course of a dialogue moderated by the International Labour Organization that the company was prepared to pay 5.15 million US dollars in pecuniary damages to those impacted by the fire. However, KiK continued to refuse to pay damages for pain and suffering or to officially acknowledge its share of the responsibility, as called for by those affected in the lawsuit they filed in Germany.

ECCHR supports Baldia Factory Fire Affectees Association

On 13 March 2015, four of those affected by the disaster filed a compensation claim against KiK at the Regional Court in Dortmund. Muhammad Hanif, Muhammad Jabbir, Abdul Aziz Khan Yousuf Zai and Saeeda Khatoon are all members of the Baldia Factory Fire Association, the organization run by those affected by the fire, and are seeking 30,000 euro each in compensation. The European Center for Constitutional and Human Rights (ECCHR), medico international and the National Trade Union Federation (NTUF) from Pakistan are assisting with the case, which was filed by Berlin lawyer Dr. Remo Klinger.

Case Report: KiK/Pakistan

KiK_Pakistan_CaseReport.pdf (360.6 KiB)

Video: "Pakistan - Cheap clothes, fatal working conditions"

Legal Opinions on the KiK case in Germany (English and German)

The court case received support from a number of outside experts. Law professors from the Essex University Business and Human Rights Project (UK) submitted a legal opinion on KiK’s liability. An expert opinion on social auditing was contributed by Dr. Gisela Burckhardt from FEMNET, a German organization that specifically supports women in the garment industry in Asia. Finally, Ms. Zehra Khan, the Education and Research Secretary of the National Trade Union Federation in Karachi contributed with an expert opinion based on worker interviews on the actual working conditions in the Ali Enterprises factory before the fire.

Textile production in South Asia: European companies have to take responsibility

“As in many south Asian countries, the workers in Karachi have paid for KiK’s clothes with their health and their lives,” says ECCHR General Secretary Wolfgang Kaleck. Hanif survived the fire but suffered serious injuries. Jabbir, Zai and Khatoon each lost a son in the fire. “They want justice to finally be done.” The case against KiK should make it clear that transnational corporations’ responsibilities also extend to the working conditions in their subsidiary and supplier companies abroad. “KiK tried to silence the survivors with charity hand-outs. Now they are fighting back. With their case they are sending a strong signal against the policies of impunity,” says Thomas Seibert, south Asia coordinator at medico international.

Justice instead of short term payments

KiK made relief payments in the immediate aftermath of the fire. But the company subsequently refused to pay compensation for the loss of income from many family breadwinners. After two years of negotiations an unsatisfactory compensation offer was tabled in December 2014. “KiK made it clear: there would be no compensation payments,” says lawyer Klinger. KiK was unwilling to commit to specific sums for long-term compensation. The Baldia Factory Fire Affectees Association rejected the offer and selected the four claimants.

Transnational legal proceedings in the KiK case: Criminal investigations into RINA in Italy

ECCHR also supports the Affectees Association in the criminal proceeding into the auditing company RINA in Italy where they are represented by Italian lawyers Stefano Bertone and Marco Bona from Turin.
 
In 2014 Bona and Bertone submitted a report on the factory fire and the role of RINA to the Italian state prosecutor in Turin. The prosecutor opened criminal investigations (case number 1003/16/45) into the matter and ordered an independent assessment by fire experts. In early 2016, the case was transferred to the prosecutor in Genova because RINA’s headquarters are located there.
 
In March 2016, ECCHR sent a letter to the prosecutor’s offices (Procura della Repubblica of Genova), emphasizing the state duty to uphold human rights.

Case Report: RINA certifies safety before factory fire in Pakistan

Rina_Pakistan_CaseReport.pdf (376.4 KiB)

RINA/Ali Enterprises: Letter to Prosecutor in Genva

Letter_Procura_Genova_Rina_AliEnterprises_Pakistan_2016March.pdf (760.1 KiB)

Globalization of industry – privatization of monitoring? (Policy Paper)

KiK_Pakistan_PolicyPaper_supply chains.pdf (343.9 KiB)

ECCHR's legal action in the fire factory proceedings in Pakistan

On 9 May ECCHR submitted a brief to the High Court of Sindh in Karachi calling for investigations to be broadened in the criminal proceedings against Ali Enterprises, the owner of the destroyed Karachi clothing factory. In the submission ECCHR calls on the court to expand the scope of the proceedings and examine the role played by European companies KiK and RINA. “There is evidence to suggest that KiK and RINA contributed to the fire through their failure to take action on safety standards”, said Miriam Saage-Maaß from ECCHR. “Under international human rights norms, the Pakistani authorities have a duty to examine the evidence and, where appropriate, to hold these international companies to account”

 

The Ali Enterprise textile factory in the industrial district of Baldia Town in Karachi burned to the ground on 11 September 2012. Bars on the windows as well as obstructed and locked emergency exits meant that factory workers were unable to escape the blaze in time. Over 280 employees lost their lives and hundreds were injured. The disaster represents the most devastating fire to occur to date at a Pakistani factory. At least 70% of the textiles produced at the factory were sold to German discount store KIK, according to the retailer’s own information. Just a few weeks before the fire, Italian company RINA had issued the factory with an SA 8000 certificate, which is supposed to act as a guarantee of safety and other workplace standards. While KIK has come to a preliminary agreement with local Pakistani organizations on the payment of damages, the Italian certification firm RINA has to date not demonstrated any interest in participating in a compensation scheme. The distribution of the compensatory funds offered by KIK is being overseen by an independent commission appointed by the High Court of Sindh.

 

The owners of the factory are currently the subject of a criminal investigation in Pakistan. Lawyers for those affected by the disaster have also commenced legal action against the negligence of the Pakistani regulatory and prosecutory authorities responsible for examining the circumstances of the fire. ECCHR considers it essential that a comprehensive investigation is undertaken into the circumstances of the fire and the role of the international companies involved. For this reason we are lending our support to the legal proceedings underway in Pakistan. If, however, the proceedings in Pakistan prove to be ineffective or unfair, we will consider taking legal action in Europe.

Amicus Curiae Brief in criminal proceedings in Pakistan

Summary Amicus Brief to the High Court of Sindh_20140814.pdf (103.1 KiB)

European companies liable for subsidiaries: The KiK, Lahmeyer, Danzer and Nestlé cases

Policy Paper, Corporate Due Diligence_20150616.pdf (247.0 KiB)