KARACHI: German company KiK Textilien has signed an agreement with the Pakistan Institute of Labour Education and Research (Piler) to disburse $5.15 million to the families of victims of the Baldia Town factory fire.

Under the agreement, a specific compensation amount will be given to the families of the victims every month.

It is described as a lifelong compensation “which will look after the financial needs of the families”.

The agreement was signed during a ceremony on Thursday which was attended by the German consul general, the country director of the International Labour Organisation (ILO) and members of the business community.

Country director of ILO Ingrid Christensen confirmed that her organisation had received the amount of $5.15m in December 2016 and a mechanism to disburse the amount was being designed.

She said that the ILO was working on implementation modality, oversight mechanism and establishment of a trust fund.

She added that the ILO “would be able to disburse the funds within three months”.

The agreement brings to an end a two-year-old feud between the German textile company and Piler.

Soon after the fire at the garment manufacturing company (Ali Enterprises) in which 259 workers were killed in Sept 2012, Piler and German textile company KiK — that bought garments from Ali Enterprises — deliberated on a compensation process for the families of victims.

In a memorandum of understanding signed between the two parties in Dec 2012 three points were decided: payment of one million dollars as an immediate relief would be given, which was later distributed through the judicial commission set up by the Sindh High Court.

Retired Justice Rahmat Hussain Jafery was the head of the commission ensuring that the disbursement reached the rightful heirs of the victims.

Second point was that lifelong compensation would be given to the families as pension for the rest of their lives.

And third point was that an assistance of $250,000 would be given to Piler to enforce and inspect labour laws in Pakistan.

The German company backed off from the second point of the agreement, counsel for the Baldia factory fire victims advocate Faisal Siddiqi had announced at a press conference.

Through the subsequent cases filed in Dortmund, Germany, by the heirs of the victims and the counsel himself, the textile company was once again brought to discuss the compensation.

Also, timely intervention by the German Federal Ministry of Economic Cooperation and Development led to the decision to choose the ILO as mediator between KiK and Piler which was accepted by both parties.

In the latter half of 2016, the ILO officials came to Karachi to meet rights activists and review the incident which some ILO officials believed was “falling prey to over-compensation”.

At present, some 30 factories are providing their products to KiK and 20 of them are located in Karachi.

Chief executive officer of KiK Patrick Zahn said his company fulfilled its commitments.

“No amount of money can bring back the family members or can [undo] this incident. But, money can help to better deal with the consequences of the accident,” he said.

He added that the responsibility for the safety of the factory remained with the owner and not with KiK.

Executive director of Piler Karamat Ali said: “KiK approached us soon after the incident and offered to compensate.”

Soon after his speech, the agreement was signed between them.

Protest against instalments

Meanwhile, representatives of the National Trade Union Federation along with families of the Baldia factory fire victims held a protest at the Karachi Press Club.

They protested against the disbursement of amount in instalments and demanded that the amount should be given in a lump sum.

Deputy secretary general of the NTUF Nasir Mansoor said the CEO of KiK should have met and consoled the families of the victims.

Published in Dawn, February 3rd, 2017