Dying to produce low-cost clothing: German textile giant lambasted


On 11 September 2012, in the Baldia industrial area of the Pakistani city of Karachi, a fire broke out in a textile factory. Two hundred and sixty workers died. Trapped in by barred windows and blocked emergency exits, they were either burnt alive or suffocated to death. Thirty two survivors were left seriously injured.

Like many textile factories in the region, the Ali Enterprise factory that caught fire that day makes up orders for western companies. Some 70 per cent of this factory’s output went to KiK, the low-cost German textile giant that has 3,400 shops throughout Europe, a turnover of €1.8 billion (US$2 billion) and factories in China, Bangladesh, India, Turkey, Pakistan and Cambodia. Only 4 per cent of its merchandise is made in Germany.

Four years after the deadly inferno, a compensation agreement was finally reached on 10 September 2016 between the German enterprise and representative of the victims and their families. It foresees the creation of a US$5 million compensation fund, on top of the US$1 million that the group paid out immediately in 2012 to aid the victims.

The negotiations, carried out under the aegis of the International Labour Organisation (ILO), the IndustriALL global union, the NGO Clean Clothes Campaign and a representative of the German government, dragged on for years. Frustrated at the failure to make any progress, in February 2015 the Baldia Factory Fire Affectees Association decided to suspend the discussions.

One month later, four of its members lodged a complaint against the company in the German courts. “More victims would like to have made a complaint, but collective “class action” complaints are impossible in Germany” notes Anabel Bermejo, from the NGO European Centre for Constitutional and Human Rights (ECCHR), which supported the complaint.

“It is a complaint under German civil law, a very standard procedure for physical damages.”

Three of the complainants are victims’ parents. Muhammad Jabbir lost his 22-year-old son in the fire. He earned about €120 (US$134) a month. Saeeda Khatoon also lost her 18-year-old son in the factory, where he earned €100 (US$111) a month. The son of Abdul Aziz Khan, Yousuf Zai, was only 17. The fourth complainant, Muhammad Hanif, 26 years old, worked in the factory himself and earned between €155 and €175 (US$138 and US$156) per month. He has severe respiratory problems as a result of the accident.

Each are demanding €30,000 (US$26,850) in damages from KiK.

Does this complaint, lodged with a German court by Pakistanis about a disaster that took place at a sub-contractor’s factory, have any real chance of succeeding? The first hurdle was cleared, at any rate, on 30 August. A German court in Dortmund declared itself to be competent to judge the complaint and has granted legal aid to the plaintiffs. It’s a first.

The decision opens up the possibility for a German enterprise to be tried in its own country for the working conditions at its sub-contractors, even if they are on the other side of the world.

The short time between the decision by the German court and KiK’s announcement of its compensation for the victims suggests that it was the former that prompted the company to do the latter. KiK says otherwise. “It has been claimed that KiK was influenced by the complaint that has been brought. That is not true. The negotiations had begun long before the complaint. An agreement could have been reached much earlier if the victims’ representatives had not suspended the discussions to prepare their complaint,” the press office of the German textile group told Equal Times.

KiK refuses to accept any responsibility for the 2012 fire. It repeated this at the time of the Dortmund court decision and the announcement of the 10 September agreement. The compensation was about “KiK voluntarily taking responsibility for the victims” wrote the company in a press release.

“The agreement is really positive progress,” says Berndt Hinzmann, from the Inkota network, an NGO that is part of the international Clean Clothes Campaign, which followed the negotiations. “But it is hard to say whether this is really an improvement in KiK’s attitude, because for years the company totally denied any responsibility for the disaster.”

The German textile group is also one of the western companies that were clients of the Bangladeshi factory Rana Plaza which collapsed in April 2013, killing more than 1,100 people. The compensation agreement reached last month for the Karachi victims is based on the same model as the one devised for the Rana Plaza victims that was finalised in 2014 under the guidance of the ILO.

“Working conditions in the sub-contractors’ factories is a structural problem in this industry,” insists Hinzmann.

“This concerns both the discounters, such as KiK, and the luxury brands. We have situations where there are very low salaries, discrimination and trade union repression”. With disaster after disaster the structural failings in the textile industry are becoming so acutely apparent that an “alliance for a sustainable textile industry” was created in Germany two years ago. It includes textile companies, NGOs and representatives of the German trade unions and German government, who together are seeking “social, ecological and economic improvements in the supply chain”.

Since its creation, the alliance has come up with two action plans aimed at setting common standards for the whole industry. But nothing specific has been defined as yet. And the future standards will not be legally binding.

For Hinzmann, this is not good enough: “If we are to achieve structural change in the industry, companies have to be held accountable. The law has to change. But there isn’t the political will for that, even though the UN’s Guiding Principles on Business and Human Rights adopted in 2011 explicitly call on states to enshrine in law the responsibilities of enterprises with regards to human rights.”

“Unfortunately we still have to rely on the good will of each company,” laments Niema Movassat, a representative of the left-wing Die Linke party in the German Bundestag. Last year the member of parliament and her parliamentary group tabled a bill that would make German companies criminally responsible for the working conditions at their sub-contractors.

The German government has not yet seen fit to debate the bill.


This story has been translated from French.