Last week, the renowned furniture retailer IKEA agreed to pay €6 million ($6.5 million) towards a government fund, which compensates victims of forced labor under Germany’s communist dictatorship, a move that campaigners hope will prompt other companies to follow suit.
During the Cold War era, political and criminal prisoners in Germany were forced to build flatpack furniture for IKEA. Prompted by growing concerns, IKEA launched an investigation, which revealed that prisoners had been manufacturing furniture for the company as late as the 1970s and 1980s, discovered by the auditing firm Ernst and Young.
East Germany, a Soviet-controlled territory from the late 1940s to 1990, was known as the German Democratic Republic (GDR), a nation with a communist government. Many political prisoners had been incarcerated for merely opposing the one-party communist state. Dissent to the state was immediately oppressed by East Germany’s Stasi secret police, which maintained surveillance on citizens’ daily lives. “Tens of thousands of its prisoners were forced into factory labor, creating a source of cheap labor that many Western companies are now believed to have benefitted from.”
The government fund was established specifically to compensate victims of the East German dictatorship. After decades of advocacy by victim support groups, the German government proposed the hardship fund in 2021 to address the long-standing injustices.
IKEA clarified in their statement that the €6 million payment follows years of discussion between the company’s German branch and the Union of Victims’ Associations of Communist Dictatorship (UOKG), an organization dedicated to ensuring justice for those wrongly convicted under Germany’s communist rule. Walter Kadner, the CEO and Chief Sustainability Officer of IKEA Germany, provided a statement to CNN: “We deeply regret that products for IKEA were also produced by political prisoners in the GDR. Since it became known, IKEA has consistently worked to clarify the situation.”
As the first company to contribute to this fund, IKEA’s action is a landmark. Dieter Dombrowski, the chairman of UOKG, expressed hope “that other companies will follow IKEA’s example” in supporting justice for those affected.
By making this payment, IKEA has set a significant example of corporate social responsibility and transparency. Their acknowledgment of their past mistakes, alongside a financial commitment – though it is recognized that monetary compensation cannot fully atone for the prisoners’ suffering – reinforces the importance of honesty and accountability in the workplace.
