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KiK is paying! Four years after the deadly factory fire in Pakistan, there is agreement on compensation for the victims

After four years of public protest and months of negotiations, there is now an agreement to compensate the victims. The victims and relatives of the killed workers of the Ali Enterprise factory in Pakistan are to receive US$5 million in compensation.

The agreement on compensation for victims is the result of long negotiations between IndustriALL, CCC, and KiK, which were conducted by the International Labour Organization (ILO) at the request of the Federal Ministry for Economic Cooperation and Development (BMZ).

On September 11, 2012, more than 250 workers lost their lives and over 50 people were injured in the worst factory fire in Asia, the Ali Enterprise factory in Karachi. The workers burned alive as they were trapped behind barred windows and locked exits. In order to save their lives, others jumped into the depths from the upper floors of the factory, suffering permanent injuries and disabilities.

The German company KiK, the only known customer of Ali Enterprise to date, has now agreed to pay an additional US$5.15 million in compensation for loss of wages, medical treatment and rehabilitation costs to the injured survivors and the relatives of those who died in the accident.

Previously, KiK had already paid $1 million into a compensation fund after signing an agreement with Pakistan's labor rights organization PILER in December 2012. In it, KiK also promised to financially support the long-term compensation of the victims.

Nevertheless, public campaigns and protests by the Pakistani National Trade Union Federation (NTUF), PILER, IndustriALL Global Union, of which NTUF is a member, Clean Clothes Campaign (CCC) and other allies, such as UNI Global Union, were needed to ensure adequate compensation.

Nasir Mansoor, NTUF Deputy Secretary General, said: "This agreement is historic and unprecedented in the history of the Pakistani workers' movement. After four years of struggle, the victims of this tragedy finally experience justice and their pain and suffering are internationally recognized. We thank the trade union IndustriALL and the Clean Clothes Campaign CCC, who have successfully represented the concerns of the workers. The ILO has also made an important contribution to the achievement of this landmark agreement. May she remind us that safety in the workplace is a right and not a privilege. "

Saeeda Khatoon, widow and deputy chairman of the Ali Enterprise Factory Fire Affectees Association, has lost her only son in the fire: “It is a day of respite for the relatives of the victims, because their pain and screams were heard. We know that our loved ones will never return to us, but we hope that such a tragedy will never happen again in the future. The government, companies and factory owners must comply with factory labour rights and safety regulations.”

The agreed compensation is in accordance with ILO Convention 121 on benefits in respect of accidents at work and occupational diseases and is intended to supplement the small payments made to victims by Pakistan's social security system.

Just a few weeks before the devastating fire, the Ali Enterprises factory received an SA 8000 certificate from the certification company Social Accountability International. This states that the factory supposedly met international safety standards in nine points, including occupational health and safety. However, the subsequent tragedy illustrates the failure of social audits and certifications, leaving serious doubts about the quality of security inspections in Pakistan, but also about compliance with labour rights and security codes.

This is the third compensation agreement after further factory failures at the Tazreen Fashions factory in 2012 and the collapse of the Rana Plaza building in Bangladesh in 2013, which was negotiated by the international labour movement.

Summary of the Agreement:

  • The ILO will help establish a compensation process in consultation with relevant stakeholders so that compensation payments can begin in early 2017.
  • Beneficiaries receive a monthly pension. The amount varies and depends on both the financial situation of the person and the number of dependent relatives.
  • The pension does not correspond to a wage for living, as the international standards on accidents at work are based on the wage actually paid. However, in the Ali Enterprise Victim Compensation Agreement, the wages used are generous and the pension amounts are calculated to take into account the inflation rate.
  • The agreement does not cover claims for compensation for pain and suffering.

Contact person:

Laura Ceresna-Chaturvedi, Rapid Action Coordinator of the Clean Clothes Campaign,
Tel.: +49 (0)30-42 08 202-52, Mobile: +49-(0)1636839353
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Shortened and slightly modified press release of the campaign for clean clothing, from 10.09.2016

Note:

In parallel to the compensation negotiations in Pakistan, a lawsuit against KiK in Germany is currently taking place.

Press release of 30.08.2016:
Complaint about factory fire at KiK supplier: District Court of Dortmund: Affected persons from Pakistan receive legal aid in the proceedings against KiK