NEWS - 2024

© FEMNET | Sina Marx

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

Joined press statement by FEMNET, ECCHR and NFUT

logo femnet ecchrLogo NTUF Pakistan

Berlin, Bonn. Unsafe workplaces, piece-rate contracts and starvation wages – almost 15 years after the devastating fire at the Pakistani textile factory Ali Enterprises, the German textile discounter KiK is still not fulfilling its responsibility to guarantee safe and fair working conditions in its supplier factories in Pakistan. At the time, when 260 people lost their lives in the fire, KiK was Ali Enterprises’ main client.

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. The investigation once again confirmed well-documented structural violations of labor rights in Pakistani textile factories, including within a KiK supplier factory. Almost no workers received a living wage, more than two thirds did not even receive the legal minimum wage, most had no written employment contracts, were employed through third parties, were working on a piece-rate basis, and were not covered by social security or pension insurance.

On the basis of the German Supply Chain Act (LkSG), which came into force in 2023, the organizations called on KiK to comply with legal due diligence obligations and take appropriate measures, in particular to ensure that workers in their supplier factories in Pakistan receive a living wage, or at least the legal local minimum wage. 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 agreement was further improved in several rounds of negotiations. In the final agreement, the supplier consented, among other things, to granting the union access to the workers.

"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. The agreement alone proved inadequate to the task of making these changes. 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 – among whom were those who had complained about the fake election. Protests by NTUF against this action were written off by the supplier as undue interference, while repeated attempts to involve KiK to persuade their supplier to adhere to the agreement failed.

"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. Despite our repeated demands, KiK was not willing to do this. KiK has missed a significant opportunity here."

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.

Presscontact

Anne Munzert (FEMNET)
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Maria Bause (ECCHR)
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