A civil trial opened at a Dortmund court on Thursday, in which four plaintiffs are demanding financial compensation from the German textile discounter KiK for its alleged role in a fatal fire at a clothing factory in Pakistan in 2012.
Roughly six years ago, the "Ali Enterprises" factory in Karachi gained international notoriety as the site of the worst industrial catastrophe in Pakistani history. A fire which was set by arsonists at the textile manufacturing facility killed at least 289, an outcome which was partially attributed to a lack of escape routes especially after windows were shuttered by management with iron bars.
KiK, a European discounter known for its low-cost garments, was the main wholesale customer of Ali Enterprises at the time. One survivor and three plaintiffs who lost family members in the blaze are now each seeking individual payments of 30,000 euros (34,000 U.S. dollars) from KiK whom they accuse of being partially responsible for inadequate health and safety provisions at the factory.
If the plaintiffs succeed in convincing the jury of their case, the trial could set a significant precedent for the legal treatment of manufacturing activities which have been outsourced to foreign-based suppliers under German law. A company has never been held responsible for labor safety breaches at a plant which it does not own itself in Germany before.
KiK rejects all of the claims against it and has said that it expects the lawsuit to flounder on the grounds of statute of limitations concerns given the length of time that has passed since the fire.
Speaking to the newspaper Handelsblatt on Thursday, the company's chief executive officer (CEO) Patrick Zahn defended the practice of manufacturing goods in countries with controversial labor conditions.
"To retreat from countries like Bangladesh is not an option. I stand by this. This would not help the people in these countries at all," Zahn said.
The KiK CEO emphasized that retailers had the possibility to improve labor conditions for employees in such factories in incremental steps. He pointed to the example of the recent "Bangladesh Accord" which was signed by large multinational companies after another devasting blaze at a textile factory in the South Asian country.
Zahn further highlighted that the 2012 "Ali Enterprises" fire was caused by a criminal syndicate seeking protection money and was hence not suited as an example to set a precedent for the legal obligations of German companies towards the employees of their suppliers. "This was not a case of breaching corporate due diligence obligations," he told Handelsblatt.
So far, KiK has provided individuals affected by the Pakistan factory fire with a total voluntary compensation of 5.3 million euros, amounting to around 15,000 euros per head.
