Compensation: German retailer to pay US$ 5m to Baldia factory victims

GENEVA: After four years of tragic incident of Baldia Factory fire, German retailer KiK has agreed to pay over US$ 5 milllion in compensation to the families of 259 workers burnt alive.

According to a statement issued by the International Labour Organization (ILO), KiK has voluntarily agreed to pay an additional US$ 5.15 million to fund the gap to top up the statutory benefits due from the Sindh Province Employees’ Social Security Institution to meet the requirements of Convention 121.

The tragic fire at the Ali Enterprises garment factory in Baldia on 11 September 2012, have taken the lives of more than 255 workers and left 57 workers injured, in the worst industrial disaster of the country.

It added: “An agreement in excess of US$5 million has been reached to provide compensation for loss of income, medical and allied care as well as rehabilitation, to the victims of one of the worst industrial accidents in Pakistan. It results from the ILO facilitation and coordination of consultations during a recent mission to Pakistan from 25 July to 5 August”.

On requests of the German Federal Ministry of Economic Cooperation and Development and Ministry of Overseas Pakistanis and Human Resource Development, the International Labour Organization (ILO) has been enabling talks with the German retailer KiK, IndustriALL Global Union and the Clean Clothes Campaign since May 2016 to arrive at the compensation arrangement, in accordance with the ILO’s Employment Injury Benefits Convention 121 .

KiK, which was Ali Enterprises’ main customer, had already paid US$1 million in emergency compensation in December 2012. The company would start paying the compensation from early next year.

Gerd Müller, German Federal Minister for Economic Cooperation and Development, said: “What had not been possible in four years of controversy between the parties has now been achieved through our mediation work and will provide tangible assistance to the victims and bereaved family members.

While commenting on the agreement Deputy Director General of the ILO, Gilbert Houngbo, said: “It is satisfying that the ILO facilitated resolution to the long standing discussions on compensation for workers around the fire of the Ali Enterprises is now completed.

Lamenting on the state of industrial and labour laws in Pakistan, stakeholders called for more robust social insurance schemes and a pressing need to improve garment factory safety and inspection procedures as well as compliance with social security laws to prevent another such tragedy from occurring.