PAKISTAN: Baldia factory fire tragedy-the compensation is not the only solution to deal with such an incident

The worst ever industrial disaster in Pakistan’s history occurred on 11th September 2012 when a massive fire in the three-storied garment factory called Ali Enterprises situated in the Baldia Town area of Karachi caused the deaths of 259 workers and serious injuries to 55 more.

Two years have passed since that tragic accident sent shock waves across the country. Let us on this day recall that horrific event and take another look at the circumstances which led to it and see to what extent the problem of payment of adequate compensation to the families of the dead and injured workers have been addressed by the parties concerned and also whether there has been any perceptible improvement in the otherwise pathetic state of health and safety arrangements in the textile industry.

Textile Industry and Labour

Textile Industry plays a central role in Pakistan’s economy; it claims 55 percent of the country’s exports.  In the year 2012, it earned 13 billion US dollars worth foreign exchange. Its share in the GDP is 8 percent. The Textile Sector provides employment to 40 percent of the country’s workforce i.e. about 2.5 million workers.

Workers in the textile industry have to endure long working hours, low wages, curbs on unionization and collective bargaining, besides poor and inadequate health and safety facilities. Major part of the industry operates in the informal sector. A large number of small-scale textile units are not registered with the authorities and  those which are registered, the owners do not show the names of all the workers in their records, with the result that they are deprived of even the limited facilities under the Social Security Scheme. The Labour Inspection scheme is as good as non-existent.

The Accident at Ali Enterprise Garment Factory – Brief History

Ali Enterprise Garment Factory was housed in a 3-storey building situated at F-76, SITE, Baldia Town,  Karachi employing a labour force of around 1,500 workers. The accident happened in the evening, when about 650 persons were at work. In addition, there were also a number of employees who had come to collect their wages. The factory had four doors for entry and exit. At the time of accident, three of the four doors were locked from outside. Windows were laced with strong wire gauzes. The casualties occurred because the workers had no way to escape from the burning building. The factory had large stocks of inflammable materials like chemicals, cloth, electric cables, paper and cardboard.

Violation of Labour Laws in the Factory

  • According to the report of the tribunal appointed by the government to investigate into the causes of the accident, Ali Enterpprise factory was not registered with the Labur Department under Factory Act 1934 which is one of the reasons labour inspection was never done there.
  • Ali Enterprise was registered with Employees Old age benefits Institution (EOBI) but instead of 1500, the names of only 200 employees were documented.
  • Similarly, only 258 employees were registered with Sindh Employees Social Security Institution (SESSI).)
  • The factory was not registered with the Civil Defence Authority, which lays down the principles of protection against accidents and fire risk. As a result, the laws and principles governing electricity and electric wiring was being violated. No inspection was carried out by the Electricity Department after 2004.
  • Sindh Building Control Authority (SBCA) stated that the Sindh Industrial Trading Estate (SITE) area did not come within their jurisdiction; therefore they never conducted any inspection of the factory. According to the files of SBCA, the owners of the factory did not allow the Inspector to conduct the inspection in 2005. SITE authorities had issued two notices in 2005 calling for the demolition of unauthorized structures in the factory building as they violated building control rules and regulations, particularly the constructions in the generator room, boiler room and godown, which were declared as illegal.
  • Rules and regulations relating to electricity were violated.
  • CCTV Cameras were out of order. There was no fire alarm system in the building.
  • There were no emergency exits or fire-escape ladders in the factory building.

Conditions of workers in Ali Enterprise

In the immediate aftermath of the accident, Pakistan Institution of Labour and Research (PILER) conducted a survey covering 100 employees, to gather information on the condition of the workers. The survey brought to light the following facts:

  • 87 percent of the workers were employed on contract basis. They were not enlisted either in the SESSI or in the EOBI.
  • There was no worker’s union in the factory which could have raised its voice in support of the rights of the workers.
  • Average age of the workers was 30 years, i.e. majority of workers were youth.
  • Average daily working hours were 12.
  • Only 15 percent of the workers were aware that products of the factory were being exported to the German firm KIK.

Legal measures taken after the Baldia factory accident

  • The day after the accident,  on 12th September 2012, a First Information Report (FIR) No. 343 was filed by the area police station SHO about the deaths of the workers and accusing the factory owners of criminal negligence.
  • On 17th September 2012, PILER, along with 4 other civil society organizations ,  filed a constitutional petition No. 3318 in the Sindh High Court, requesting the Court to appoint a Judicial Commission to investigate and determine the causes of the accident,  fix the responsibility for criminal negligence, pay adequate compensation to the affected families and file charges against the individuals, organisations and institutions, including provincial government agencies and related departments, and issue orders to the Government of Sindh and its Labour ministry and other related departments to carry out a comprehensive survey of all the factories in Sindh and submit concrete proposals for the prevention of such industrial accidents  in the future.
  • After filing of the FIR, the owners of the factory were kept in police custody for 2 days and the trial court began proceedings as directed by the 2-member Tribunal. The factory owners obtained bail before arrest from a Larkana Bench, but the Sindh High Court rejected it. The owners then approached Lahore High Court and obtained bail. Sindh High Court on the other hand granted bail to one of them namely Abdul Aziz on medical grounds, but rejected the bail pleas of his two sons, Arshad Bhela and Shahid Bhela.
  • After recording eye-witness accounts of 301 witnesses, on 3rd October 2012, the Sindh High Court issued the charge sheets and subsequently  on 6th October, ordered that the owners Arshad Bhela and Shahid Bhela along with two of their employees be arrested under Sections 302, 322, 337, 435 and 436 of Pakistan Penal Code and sent to jail.
  • Acceding to the request submitted by PILER, the Sindh High Court ordered the freezing of the assets and bank accounts  of the owners and placing their names on the Exit Control List.
  • On 14th November 2012, during the hearing of the case, the Sindh Building Control Authority, Sindh Labour Department Sindh Industrial Trading Estate and the high-ranking officials of the Civil Defence department were found guilty of criminal negligence and warrants of arrest were issued against them. However, on 17thNovember 2012, they were granted bail before arrest by the High Court.
  • On 11th February 2013, the High Court set free the two employees of Arshad Bhela and Shaid Bhela but they were not absolved of the charges. Nevertheless, due to lack of progress in the hearing of the case, they are still free on bail.
  • This was the first time in Pakistan’s history when the owners of a factory had to spend   3 months in jail.

Obstacles in legal proceedings

  • The Government prosecutor was changed thrice during the trial.
  • The petitioners’ lawyer Faisal Siddiqui kept receiving death threats during the trial, and eye-witnesses were coerced to disown their earlier statements made in the court. These threats came from the owners.
  • PILER filed petitions in the court against these threats.  On 12th December 2012, the Court issued notices to Sindh Home Secretary and I.G. Police ordering them to provide security to the lawyer and the witnesses.
  • On 29th December 2012, high-ranking office bearers of the Karachi Chamber of Commerce & Industry appealed to Prime Minister Raja Ashraf Parvez to withdraw the charges under Section 302 against the owners of Ali Enterprise on the plea that these deaths occurred due to an accident. Subsequently, the Prime Minister directed the Chief Secretary Sindh to review the case.
  • On 22nd January 2013, the indictment under Section 302 (willful murder) was withdrawn on the directives of the Prime Minister, the announcement of which was made by the Federal Minister of Finance, Saleem Mandviwala.
  • On 26th January 2013, PILER and other organizations filed a Constitutional Petition No.D295 in the Sindh High Court against interference in the case by the Prime Minister and pleaded for declaring Prime Minister’s order as illegal and maintaining the charge under Section 302.
  • After duly considering the Petition, the Sindh High Court, on 27th January 2013, issued notice to the Principal Secretary to Prime Minister summoning him in the Court on 14thFebruary 2013 and declared the notice of withdrawal of Section 302 as invalid.
  • The case has not been dismissed; last hearing took place on 23rd August 2014. Since then till now (i.e.11th September 2014), there has been no progress.
  • The status of a case is often determined by the First Impression it creates, i.e. this being a case which has no precedence of not raising any legal point, nothing can be said about its outcome.
  • This being a case in which the government, state functionaries and the powerful representatives of the Private Sector are being proceeded against, there is always the possibility of them bringing into play their respective clout to bear upon the outcome.
  • Payment of Compensation to the affected families
  • On 24th September 2012, an amount of Rs.7 lakhs each was paid to 210 affected families on behalf of the government of Pakistan (Rs.4 lakhs) and Government of Sindh (Rs.3 lakhs). In addition, the government paid Rs. 1 lakh each as relief aid to 15 injured workers. Payment in relief aid was also made to other affected families but only in September 2013 after completion of the complicated legal formalities and identification requirements.
  • 90 percent of goods produced in Ali Enterprise factory were for the German Company KIK.  As a result of incessant pressure from PILER, Clean Clothes Campaign and local civil society organisations, KIK had signed an agreement with PILER in September 2012 under which that foreign company agreed to pay a compensation amount of 1 Million US Dollars to the affected families and also promised to negotiate long term compensation.
  • In order to ensure the promised payment by KIK, Sindh High Court, in response to an application made by PILER and other allied organisations, ordered the appointment of  a Commission headed by Justice (Rtd) Rahmat Husain Jafri. The Commission wasinter alia empowered to oversee the disbursement of money from the Joint Fund to the affected families. The Joint Fund consisted of Rs.10 crores (10 Millons US Dollar) from KIK Company, Rs.5.7 Million individual philanthropists and Rs.61.8 Million from the factory owners.
  • By 27th March 2013, the One-member Commission presented its complete List. On 11th April 2013, the Commission ensured the distribution of the compensation amounts among the affected families/individuals. In the event of any dispute arising among the family members, the Commission made sure that money distribution will be done in accordance with Sharia principles.
  • In August 2014, the Commission oversaw the payment of Rs. 6.1 lakhs each to 255 families of dead workers. 8 seriously injured workers were paid Rs.2.5 lakh each and 45 persons with minor injuries were paid Rs. 1.25 lakh each.
  • On 28th August 2014 the Commission made its final report public and announced the satisfactry completion of the assigned task.

Steps taken by Government after Baldia tragedy to improve health and safety systems in industrial units

The deaths of such a large number of textile workers in an industrial accident naturally raised waves of anger and anguish among all sections of the society and rattled the government and its related departments. Citizens’ forums and labour organisations began to exert pressure on the government, so much so that the ministers of labour and industry and trade resigned from their posts. On 15th September, Sindh Government’s Labour Department suspended two of its officers and set up a 2-member Enquiry Commission with orders to present its report within 7 days. During the hearing of the case, Sindh High Court issued orders to concerned state institutions to present reports on the strict observance of standard health and safety arrangements in the factories of Sindh.

A chaotic situation emerged in the industrial circles. Federation of Chambers of Commerce and Industry convened a Seminar in which it was revealed on the basis of a research report that in Karachi, only 10 percent of factories meet the prescribed environmental standards. Environmental inspection stood suspended since 2000 and was revived only in 2010 following a Supreme Court order but its actual implementation is open to doubt. In the course of the Enquiry, open differences emerged between Sindh Government and the industrialists. Labour Director informed the Enquiry Commission that after a labour inspector was tortured by the factory owners during inspection, the whole process of inspection came to a stop. A high official of the Sindh Industrial Trading Estate reported that labour inspectors demand bribe (Bhatha) and called for the suspension of labour inspection. On 15th September 2012, the Commissioner of Karachi convened a meeting which was attended by industrialists from SITE, Korangi, Federal B Area and North Karachi. The Commissioner called for observing the provisions of Factories Act 1934 and issued orders to the effect that the industrialists should set up a joint fund for addressing emergencies like the Baldia fire disaster.

On 18th October, Government of Sindh formed a Coordination Committee consisting of Administrator KMC, Commissioner Karachi, Inspector General Police, Director Karachi Water and Sewerage Board, Commissioner SESSI, Director General, Civil Defence and Director, Labour Department. The Committee was directed to meet at least once in every three months. On 13th November 2012, Sindh High Court issued orders to the Sindh Government that all factories be registered in Sndh. Yielding to pressure from above, the Labour Department accelerated the process of registration a little and according to the Department, 700 factories had been registered by December 2013.

Joint Action Programme and its implementation

On 20th September 2012, an agreement was signed in Islamabad between the federal government and the Employers’ Federation of Pakistan and Pakistan Workers Federation under ILO-Pakistan’s Decent Work Country Programme number 2, in which it was affirmed that in the next 6 years, provincial government shall be provided necessary financial and technological assistance to enable them, particularly to improve their labour inspection mechanism. In order to help members of affected families to obtain jobs, ILO- Pakistan carried out a survey and enrolled 50 persons in its training programme and also announced that 400 persons shall be provided with free training.

On 6th December 2012, ILO-Pakistan organised a tri-partite conference in Karachi which was attended by 300 participants representing labour department of Sindh Government, industrialists and trade unions.  A 3-year Joint Action Plan (JAP)to improve the state of health and safety in industrial units in Sindh was announced and a Task Force and 3 Working Groups were formed  who, after due tripartite consultations, gave final shape to the JAP, which subsequently began to be implemented from January 2013 onwards.

As proposed in the JAP, Sindh Government has already formulated a new health and safety policy and finalised a draft of the related law,  which  will be made public in the course of this month, i.e. September 2014.  Simultaneously, 3 existing health and safety centres (OHS Centres) lying in limbo since several years, in Karachi, Hyderabad and Sukkur shall be made operational.