Ikea and Germany's Bundestag parliament announced Tuesday that the Swedish furniture colossus would contribute €6 million (roughly $6.5 million) to a new German government fund designed to compensate victims of the former East German dictatorship.

Thousands of people were subjected to forced labor for Western companies while imprisoned in the former communist East Germany under a system that operated almost right up to reunification in 1990. Many had been waiting for the German division of Ikea to make good on its 2012 promise to donate compensation for former prisoners.

Ikea's initial promise came after a report on the exploitation of prisoners in the former German Democratic Republic (GDR), published in 2012. According to the report, West German companies were also involved in the GDR's system of compulsory labor, including the mail-order companies Otto and Quelle, and low-cost supermarket chain Aldi.

Evelyn Zupke, federal commissioner for victims of the Socialist Unity Party of Germany (SED) dictatorship —  which founded and ruled the former communist East Germany — said Ikea's commitment to compensation is groundbreaking. Ikea's decision to face up to its responsibility for its role deserves respect, Zupke told DW.

"This path also very impressively shows how we can still help those who suffered under the dictatorship, even today," she said.

Ikea's payment would go into Germany's federal "hardship fund," which the Bundestag, the lower house of parliament, is expected to approve by the end of the year. Until recently, compensation funds for victims of the GDR have only existed in the states that make up the former GDR, and pay out several hundred euros per month to resident victims. Those who moved to Germany's western states have not been eligible for compensation. But that's now set to change.

Prisoners 'exploited for the benefit of planned economy'

The "SED victim's pension," currently €330 (about $360) per month, is paid out to people who were deprived of their liberty for at least 90 days between 1945 and 1990 in the GDR in violation of the rule of law, and whose economic situation is particularly impaired today.

Zupke calculated that Ikea's pledge of millions of euros could provide financial support to around 2,000 victims, and she hopes German companies will now also step up and participate in the fund. "In concrete terms, I would like companies like Aldi and Otto to finally look into this issue in more depth," she said.

These companies have so far refused to compensate former forced laborers. In April, Berlin's Humboldt University published a study documenting numerous incriminating cases — though the report has so far resulted in no consequences.

The study detailed how political prisoners were forced to produce, among other items, pantyhose sold by Aldi. Some of the products made by forced laborers in East German prisons found their way into West German shops and mail-order catalogs. Prisoners in Cottbus, for example, had to make Praktica cameras, which the German companies Quelle and Otto sold to their customers. Prisoners in Dessau were forced to produce audio cassettes for the German chemical and media company, Magna. This is how the former communist East Germany was able to collect urgently needed foreign currency from capitalist countries abroad.

The GDR's system of forced prison labor existed for several decades. "Prisoners' labor was exploited for the benefit of the state's planned economy," said the study. "From the 1950s until the end of the GDR, between 15,000 and 30,000 prisoners were forced to work every year, mainly in areas in which civilian workers did not want to work due to poor working conditions."

Prisoners who resisted the forced labor risked severe punishments. "A refusal to work inevitably led to disciplinary measures, ranging from the withdrawal of privileges, such as receiving visitors and packages, to three weeks in solitary confinement with minimal food," said the report.

Aldi, other companies drag feet on compensation

Responding to the study, an Aldi spokesperson made the following statement: "We regret and condemn the practice — which was apparently common in the former GDR — of using political prisoners and convicts under duress to produce goods."

In 2013, it was revealed that some of Aldi's products were also manufactured at the notorious East German women's prison, Hoheneck. Aldi has justified its refusal to compensate forced labor victims, to date, arguing that "due to the length of time since the events, it is no longer possible to process the details sufficiently to make a final assessment of a compensation solution."

The recent agreement with Ikea resulted from long-running discussions between the company, SED Victims' Commissioner Evelyn Zupke and the Union of Victim Commissioners of Communist Tyranny (UOKG). The UOKG's chairman, Dieter Dombrowski, was himself a forced laborer in a GDR prison in the 1970s.

"Together, we have followed the path of resolution. And Ikea has met the people affected on an equal footing," he said, adding that he was pleased with the planned financial compensation. "We hope other companies will follow Ikea's example."

This article was originally written in German.

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