German retailer KiK must pay promised compensation to Pakistani factory fire victims

Geneva, 9 September 2015: On the third anniversary of Pakistan’s worst-ever industrial disaster, global unions IndustriALL and UNI, together with the Clean Clothes Campaign, are calling on a major German retailer to honour its promise to provide long-term compensation to victims.

Two-hundred-and-fifty-four people burnt to death and 55 were seriously injured when a factory supplying budget-clothing brand, KiK, exploded into flames on 11 September 2012. Desperate workers were trapped in the inferno behind locked exits and barred windows.

In the aftermath of the disaster, KiK, with 3,200 stores across Germany, Austria and Eastern Europe, signed a Memorandum of Understanding (MOU), legally committing the company to make an initial payment of US$ 1 million to the victims and their families for immediate relief.

As per the agreement, KiK paid $1 million to the interim fund. However, it has so far failed to fulfill its obligations under the MOU to engage in good faith negotiations to determine long-term compensation for victims.

Additionally, the MOU required KiK to pay a sum of US$ 250,000 for future labour standard enforcement; this has also yet to be paid.

Since it signed the MOU on 21 December 2012, the company has engaged in various stalling tactics to avoid paying long-term compensation for loss of income, medical costs, pain and suffering, and more.

Rifit Bibi’s husband, Muhammad Asghar Khan, burnt to death at the Ali Enterprises fire leaving her a widow with four young children to support.

“I get a tiny amount of PKR. 5000 (US$ 47) a month as a pension, which is not enough to buy food for my children. Life is miserable since my husband died,” she said.

Shahida Parveen, a 37-year-old mother of three, lost her husband Muhammad Akmal in the disaster. Her three sons, aged 11 and under, are afraid of a future working in a factory in case they die in a fire: “They want to work in offices, for which they need a good education. But I don’t have enough money to afford their education,” said Parveen.

Jyrki Raina, general secretary of IndustriALL Global Union, said:

“We are sick and tired of KiK’s broken promises and attempts to block negotiations for compensation. It is an insult that three years on, the survivors and families of the dead are still waiting for KiK to act. KiK must get into line and pay what’s due to the victims of the worst industrial accident in Pakistan’s history.”

KiK has a track record of sourcing from some of the most dangerous factories in the world. It is the only company that is linked to the three most deadly disasters to hit the garment industry in recent times – the Ali Enterprises factory fire in Pakistan; the Tazreen factory fire in Bangladesh (2012); and the Rana Plaza factory building collapse, also in Bangladesh (2013).

A total of 1,500 garment workers are dead as a result of these tragedies.

UNI Global Union General Secretary Philip Jennings said, “KIK is the only retailer involved in all three recent major factory disasters – Ali Enterprises in Pakistan and the Tazreen fire and Rana Plaza building collapse in Bangladesh. Why is KIK refusing to pay compensation to the victims of Ali Enterprises and their families – does KIK really believe that the lives of these workers are worth less than those in Germany? We cannot build a sustainable supply chain in the garment industry if companies like KIK do not commit. KIK it is never too late to do the right thing.”
Ineke Zeldenrust from the Clean Clothes Campaign said:

“KIK signed an agreement more than two years ago to negotiate in good faith so that all the victims would receive full and fair compensation according to internationally agreed standards. They are now failing to live up to their promise to the families of the 254 people who died horribly producing KIK jeans, after they also failed to live up to their promise to their consumers produce under safe conditions. Now is the time for us to act, and make KiK pay.”


  • KiK was the only confirmed buyer at the Ali Enterprises factory. At the time of the fire, the factory’s production was dedicated to making jeans for KiK’s own brand ‘Okay Men’.
  • KiK ranks among the top ten largest suppliers in the German retail sector, with around 3,200 branches in Europe. It has over 20,000 employees and is adding 200 new stores per year.
  • As the fire ripped through the Ali Enterprises factory, survivors reported that plant managers forced workers to stay, ordering the gates shut to try and save the company’s stock – piles of jeans destined for KiK stores in Europe.
  • Despite the fatal safety breaches, the Ali Enterprises factory had achieved SA8000 certification from auditing firm Social Accountability International just weeks before the fire, meaning it had supposedly met international standards in nine areas, including health and safety, child labour and minimum wages.