CNN
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Furniture giant IKEA has agreed to pay 6 million euros ($6.5 million) to a government fund to compensate victims of forced labor the communist dictatorship of Germanyin a move campaigners hope will pressure other companies to follow suit.

Political prisoners as well as criminals in Cold War Germany were forced to build flat pack furniture IKEA. The revelations emerged in Swedish and German media reports more than a decade ago, prompting the company to order an independent investigation.

Prisoners had been making furniture for IKEA, a global giant in the home furnishings industry, since the 1970s and 1980s, the investigation by auditors Ernst & Young found. IKEA representatives at the time were likely aware that political prisoners were being used to supplement the work, the report said.

The former East Germany was occupied by the Soviet Union from 1949 to 1990, which installed a rigid communist state known as the German Democratic Republic, or GDR. Tens of thousands of its prisoners were forced to work in the factory, making it a key location for cheap labor that is understood to have benefited many Western companies.

Many of the GDR’s political prisoners were allegedly imprisoned for the simple “crime” of opposing the one-party communist state. Opposition to the state was quashed by East Germany’s dreaded Stasi secret police, which spied on almost every aspect from people’s everyday life.

In a statement this week, IKEA Germany announced that it will voluntarily invest 6 million euros for the new government fund set up to grant compensation to victims of the East German dictatorship.

After decades of campaigning by victims’ groups, Germany’s ruling coalition government proposed in 2021 to set up the hardship fund. The German parliament will vote on its establishment in the coming weeks, although this step is seen as a mere formality.

IKEA’s statement added that the payment was the result of years of talks between the company’s German subsidiary and the Union of Associations of Victims of the Communist Dictatorship (UOGK) – an organization which describes itself as working to ensure that those wrongfully convicted in communist Germany receive justice in the state today’s constitutional.

In a statement provided to CNN, Walter Kadner, CEO and Chief Sustainability Officer at IKEA Germany, said: “We deeply regret that products for IKEA were also produced by political prisoners in the GDR. Since it became known, IKEA has worked steadily to clarify the situation.

“We have given our word to those affected that we will participate in providing support. We therefore welcome the implementation of the hardship fund and are delighted to be able to deliver on our promise.”

IKEA’s flagship payment is the first of its kind. The move was welcomed by victims’ advocacy organisations.

Dieter Dombrowski, president of UOGK, described the development as “revolutionary”.

“After it became known that the company was involved in forced labor in the prison, IKEA accepted our invitation to speak. Together we took the path to enlightenment, and IKEA met those affected on an equal footing.”

“We hope other companies will follow IKEA’s example,” added Dombrowski.

According to the UOGK, IKEA is one of many companies that benefited from forced labor in communist Germany’s prisons. Former UOKG president Rainer Wagner warned in 2012 that IKEA was “only the tip of the iceberg” as he called on the companies to compensate ex-prisoners who still bear the psychological scars of incarceration and forced labour.

Evelyn Zupke, special representative for victims of the GDR in the German parliament, said: “IKEA’s commitment to support the hardship fund is an expression of a responsible approach to dealing with the dark chapters of its own company’s history.

“We cannot undo what the prisoners suffered in GDR prisons, but we can treat them with respect today and support them.”