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Kik trial questions 'customer is king' mantra

January 9, 2019

Four Pakistani citizens are suing German discounter KiK over a fire that broke out at one of its suppliers in Karachi in 2012. A regional court in Dortmund decides on Thursday whether the statute of limitations applies.

Karachi fire
Image: picture-alliance/dpa/R. Kahn

Remo Klinger has often used this sentence to explain what the gist of the trial in Dortmund is: It's not just about fighting for compensation for the pain and suffering caused to workers in the Karachi factory where the fire broke out in 2012, causing the deaths of more than 250 people.

"Globalization is coming home," Klinger said, pointing out that the trial is a precedent, a test case. Klinger is the lawyer defending the claims of four Pakistanis suing the German clothing discounter KiK.

What he's saying is that companies from the rich global North that have relocated their production to the poorer South cannot dodge their responsibility. "Adhering to human rights standards is not just an obligation for states, but also for private companies," Klinger said.

So, who bears responsibility for what happened on September 11, 2012, in Karachi — what in Asia has come to be called Pakistan's 9/11? Is it Pakistan's protection money mafia, which allegedly set the Ali Enterprises clothing factory on fire? Nine people are currently being sued for this in Pakistan.

Or does responsibility lie with Germany's KiK discounter, which had clothes manufactured in that building?

KiK 'should have reacted'

For Klinger, the case couldn't be any clearer. "All windows were grilled and could not be opened from the inside in case of a fire," he said. "The wooden floors caught fire quickly, and there was only one emergency exit in the whole building." The lawyer said KiK had neglected fire safety regulations and hence shared responsibility for the high number of casualties.

"The real boss was KiK, and it should have reacted," Klinger said.

KiK (which stands for "der Kunde ist König": The customer is king) logged annual revenues of over €2 billion ($1.7 billion) in 2017 and has so far paid more than €6 million in damages to people affected by the fire. The Dortmund trial, however, is a civil suit for pain and suffering. Four Pakistanis are suing for €30,000 each, and the regional judges have to decide whether to dismiss the claim because of the statute of limitations, according to Pakistani law.

Only if no statute of limitations applies will the trail be continued at a later stage. "The plaintiffs are frustrated that KiK doesn't want to pay a single cent in pain and suffering damages," Klinger said. "They do not understand this and are not willing to put up with it."

'Planned attack'

Executives see things differently: "KiK didn't cause the fire in the factory and hence doesn't have to pay pain and suffering damages — we're not talking about a cable fire or an electrical short circuit, but a planned attack." 

The company adds that the real culprits are currently being sued in Pakistan, adding that German companies should not be held responsible for the criminal acts of Pakistani attackers.

KiK also points to the international SA 8000 quality seal, which Italian surveyor Rina bestowed on the factory weeks before the fire broke out. The seal is also awarded for high security standards. As a result of the incident, KiK in 2016 became the first company to hold the surveyor responsible for the correctness of the assessments given.

The Bönen-based clothing discounter noted that textile companies in Bangladesh and Pakistan had been thoroughly checked for safety regulations since 2013. "Engineers have been inspecting those firms regularly, with necessary changes already implemented or in the process of being implemented."

It argues, though, that fire safety regulations should actually be monitored by the building supervision agencies on the ground. "It should be a matter dealt with by the respective states, but we Western firms have de facto assumed that obligation."

'Expert report completely made up'

Thomas Seibert from the human rights organization medico international, which supports the plaintiffs, is familiar with KiK's reasoning. He thinks little of the company citing an expert report from Italy's Rina. "Such reports are simply made up: Rina is known for compiling such reports for its clients."

Seibert asks why KiK didn't initiate any legal proceedings against Rina, considering that the results of the report wildly contradicted the realities on the ground. The answer, he says, is simple. "You need such reports to be on the safe side, and companies know where exactly to get the 'right' report from."

By supporting three plaintiffs, medico international wants to make sure that German companies will also be held responsible for their policy abroad. "Time's run out for voluntary self-commitments — they are not worth the paper they are written on," says Seifert. Instead, he wants unambiguous regulations.

"German companies' impunity for any misbehavior abroad must finally be stopped."

How many pairs of jeans do we need?

Seibert hopes that German Development Minister Gerd Müller will soon initiate a bill to make German firms adhere to safety standards. "The next incident is bound to come, and there are already injured people and casualties abroad which don't get any media attention at all."

But Seibert also targets consumers. He notes that clothing consumption has risen dramatically over the past three decades; that is during the time when a lot of the production facilities were relocated to poorer nations.

"We have to alter our consumption patterns," Seibert demands. "The simple question is, do I really need to wear five new pairs of jeans every year?"

Oliver Pieper | Analysis & Reports
Oliver Pieper Reporter on German politics and society, as well as South American affairs.