The German discount clothing chain KiK Textilen signed a compensation agreement with the Pakistan Institute of Labour Education and Research (PILER) to make a US$1 million payment to victims of the Ali Enterprises fire in Pakistan.
KIK Textilen, one of the major buyers of Ali Enterprises, agreed on 5 January 2013 to make the US$1 million payment to victims of the textile factory fire in Baldia Town, create a long-term compensation plan, and improve labour protection in Pakistan.
The compensation package came after demands by Pakistani trade unions, supported by international organizations including IndustriALL Global Union and the Clean Clothes Campaign.
According to the agreement between PILER and the KiK, the disbursement will take place in two phases. The first phase focuses on families of victims who have not received any compensation from the government where the bodies of the workers at Ali Enterprises are decomposed beyond the point of identification.
KiK has also expressed willingness to compensate workers who faced severe injuries in the fire leading to disability and loss of future employment.
The remaining workers will be assisted in the next step after a compensation amount is agreed upon through a consensus between all stakeholders including employers and other buyers, he added.
To facilitate the compensation process PILER also filed a petition with the Sindh High Court (SHC). The petition sought that the court constitutes an independent commission to oversee the compensation process and determine all necessary details for the purpose.
On 15 January the Sindh High Court (SHC) issued notices to the owners of Ali Enterprise to submit PKR 50 million (US$ 512,000) compensation before the Nazir of the court. The court also directed the advocate general of SHC to submit the inquiry commission report with regard to the factory fire.
According to a statement by PILER, the German buyer, KiK, has been engaged in a dialogue not only to seek compensation for the victims of Ali Enterprises, but is also involved in a plan towards building a long-term workplace safety regime for Pakistani workers.