IKEA Will Pay $6M in Reparations for Labor Exploitation

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Facts

  • Furniture firm IKEA will pay 70M kroner (about $6M) as reparations to political prisoners of the former German Democratic Republic, or East Germany, whom it used as forced labor in the 1970s and 1980s. Ikea's exploitation was documented in 2012 by the SVT television network.[1][2]
  • The Swedish company has handed over a declaration of intent in this regard to Evelyn Zupke, the German government commissioner handling affairs related to injustices in former East Germany. The German parliament will soon vote on the establishment of a hardship fund.[3][4]
  • SVT showed that IKEA sourced from furniture makers who employed prisoners and the Swedish firm's top management reportedly knew about it. Its founder, Ingvar Kamprad, had claimed that only one supplier was involved. Often, the prisoner-made goods were exchanged for West German hard currency.[1][5]
  • An independent probe also confirmed in 2012 that political prisoners made furniture for IKEA during the Cold War. Ikea Germany Chief Executive Officer Walter Kadnar on Tuesday said, "we deeply regret that this happened." In 2021, Germany's ruling coalition proposed a national fund for the survivors.[6][7][8]
  • Zupke said IKEA's award is "an expression of a conscientious approach" to affairs of the "darker chapters" of its history. Dieter Dombrowski, head of a former political prisoners' group, hoped other firms would emulate Ikea's "groundbreaking" decision.[9][10]
  • IKEA and German budget retailer Aldi Nord were among the other Western companies that reportedly exploited the prisoners — 15K-30K a year by some estimates — jailed by East Germany's notorious Stasi secret police for crimes of opposing the one-party communist state.[5][11]

Sources: [1]Le Monde, [2]Agenzia Nova, [3]ABC, [4]RFI, [5]The Times, [6]MSN, [7]Fortune Europe, [8]CTVNews, [9]DW, [10]European Interest and [11]CNN.

Narratives

  • Narrative A, as provided by BBC News. This is a commendable step in IKEA acknowledging and addressing its historical involvement in a horrible situation. IKEA is now providing compensation for affected individuals and funding additional research on forced labor in East Germany. Victims' groups have praised Ikea for its transparency and for pioneering an effort to recognize this shameful chapter of history, and they're hoping that other companies will follow suit.
  • Narrative B, as provided by Workers' Liberty. IKEA may be doing the right thing for East German prisoners but its track record tells another story. From Belarus to Poland, IKEA's labor practices frequently clash with its public commitment to workers' rights. Though reparations are a step forward, IKEA's treatment of labor continues to fall far short of its professed values and it must do better moving forward.