IKEA has announced that it will reimburse former German Democratic Republic citizens whose forced labour was used to produce goods for the Swedish home furniture company.

IKEA promises six million euros to former GDR workers

IKEA has said it will atone for using political prisoners’ labour to produce its goods by paying six million euros into a hardship fund for victims of the SED, the party which ruled the German Democratic Republic (GDR).

Establishing The Hardship Fund for Victims of the SED Dictatorship is part of a draft law that the Bundestag has not yet passed. If it does pass, the federal government will contribute one million euros to the new fund. The money is earmarked to help victims in financial emergencies and will also be used to increase the pension payments of former GDR political prisoners. 

“We deeply regret that IKEA goods were produced by political prisoners in the GDR,” said IKEA Germany CEO Walter Kadnar.

More recently, IKEA came under fire in the UK for selling products which use cotton and yarn processed by the forced labour of Uyghur people in the Chinese region of Xinjiang. 

The company is also yet to sign an International Accord for Health and Safety in the Textile and Garment Sector, which was written up after the 2013 Rana Plaza factory collapse in Bangladesh.

30.000 GDR political prisoners used for forced labour

In 2014, two years after details surfaced about IKEA using forced GDR labour, the furniture company commissioned a report which found that around 30.000 inmates in GDR prisons were forced to produce goods for companies operating in the West. 

Around 170.000 people are thought to have been imprisoned during the GDR’s 40-year lifespan. Political prisoners included people who had criticised the East German state, attempted to leave East Germany without a passport and visa, taken part in strikes or uprisings and certain religious groups such as Jehovah’s Witnesses.

Siemens, Karstadt, Otto, Aldi and Woolworths are among the more than 6.000 West German companies which are said to have benefitted from GDR prisoners’ labour. In his announcement, Kadnar added that IKEA hoped other companies would follow suit and pay reparations.

Prisoners in Germany still produce goods for private companies

While prisoners in Germany are no longer producing goods for IKEA, the German Prisoners’ Union maintains that inmates face economic exploitation. 

In many German federal states, prisoners are obliged to work while serving their sentence, the idea being that doing so will aid their return to work once they are released. 

According to a report by SPIEGEL, many prisoners in Germany work for private companies. The magazine claims that in prisons in Lower Saxony, around 33 percent of sales are made to entrepreneurial customers, such as car companies or lift manufacturers.

Unlike other working people in Germany, all of whom are entitled to a minimum wage of 12,41 euros per hour, historically there has been no minimum wage for prisoners. 

In 2023 this policy was reviewed for the first time in 20 years when two German prisoners won wage dispute cases at the Federal Constitutional Court in Baden-Württemberg. 

The court ruled that paying prisoners in the federal republic less than two euros per hour is unconstitutional and that state governments have until June 2025 to implement the new laws.

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