KARACHI (ILO News) – More than five years after the deadly Ali Enterprises factory fire in Baldia, Karachi, victims and their families start receiving regular payments from a US$ 5.15 million additional compensation package financed by German retailer KiK Textilien, the main buyer at the Pakistani company.

A ceremony was held in Karachi on 19th May 2018 to mark the occasion, attended by the parties to the arrangement, including beneficiaries and representatives of the Pakistani and German Governments, the Sindh authorities, employers, trade unions, civil society organizations and the ILO. Minister for Labour and Human Resource, Sindh, Mr. Syed Nasir Hussain Shah presided over the ceremony as Chief Guest.

More than 255 workers were killed and 57 injured in the fire at the garment factory on 11 September 2012, considered the most serious industrial accident in Pakistan’s history.

KiK Textilien initially provided US$1 million in emergency benefits in December 2012. This was distributed through the Sindh High Court to the dependants of the identified victims. The beneficiaries also received payments from public social security schemes with the provisions of local legislation.

In September 2016 KiK Textilien agreed to pay on a voluntary basis an additional amount of US$ 5.15 million for long term compensation, to ensure that regular payments go to beneficiaries in line with the minimum requirements of ILO’s Employment Injury Benefits Convention (C 121). Additional beneficiaries, including the disabled victims of the factory fire, are in the process of having their compensation rights fully established.

In January 2018, all parties agreed on how the funds would be disbursed to the different categories of beneficiaries.

“The tragedy and its aftermath highlighted the importance of protecting workers at the bottom of the value chain in Pakistan, and that means safety measures at the workplace and the right to adequate compensation for workers and their families in case of accidents,” said Ingrid Christensen, Director of the ILO office in Pakistan. “The resolution of this complex issue also demonstrated the importance of robust and continuous dialogue based on social dialogue and technical expertise.”

German Development Minister Gerd Müller, for his part, said: "The case of Ali Enterprises is a dramatic reminder of how important it is that social and labour standards are implemented in the global textile sector. We are pleased that more than five years after the incident the victims will finally receive compensation. The Partnership for Sustainable Textiles was able to play a key role as mediator between civil society and the industry."

The ILO, with the financial support of the German Ministry for Economic Cooperation (BMZ) through Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is currently providing technical assistance to the Sindh Employees Social Security Institution (SESSI) for the next 1-2 years to deliver the lifetime benefits to victims of the 2012 fire and to strengthen the systems and institutional capacities.

Local stakeholders, including beneficiaries of the additional compensation, conveyed their satisfaction with the process which they considered a precedent that would safeguard the welfare of Pakistani workers in the future.

For more information, please contact ILO Country Office Pakistan, +92512276456/58 - islamabad@ilo.org