Swedish furniture giant Ikea makes a payment to victim groups after a report finds that the company benefited from forced labour by prisoners in communist East Germany.

Ikea to release report on East German forced labour links. (Getty)

The report found that political and criminal prisoners manufactured goods for Ikea in the former German Democratic Republic (GDR) 25 to 30 years ago.

It also found thatalthough Ikea never condoned the use of forced labour, some Ikea group representatives at the time were aware of the possible use of political prisoners in the production process, and it failed to properly vet its suppliers' practices.

Independent auditor Ernst & Young was commissioned by Ikea to carry out the investigation after a Swedish television documentary repeated claims first aired in Germany last year.

"We deeply regret that this could happen," said Jeanette Skjelmose, Ikea sustainability manager. "The use of political prisoners in production has never been acceptable to the Ikea Group. At the time, we didn't have today’s well-developed control system and obviously didn't do enough to prevent such production conditions among our former GDR suppliers."

The Ikea Group also said it will make a financial contribution to the victim support group, UOKG, towards research on forced labour in the former GDR.

The use of political prisoners in production has never been acceptable to the Ikea Group. At the time, we didn't have today’s well-developed control system and obviously didn't do enough. Jeanette Skjelmose, Ikea

The head of a victims' group, Rainer Wagner, said he hopes the report will be the start of a broader investigation into forced labour in East Germany and praised Ikea for acting so quickly.

Between 1960 and 1980, the GDR did not differentiate between political and criminal prisoners, and many innocent individuals were sent to prison. The GDR's state planning commission used prison labour, both in prison and in state-owned companies, the Ernst & Young report found.

The report is based on an assessment of 20,000 pages of documents from the Ikea Group's internal archives and 80,000 archived objects at German federal and state archives. Researchers also interviewed 90 active and retired Ikea employee and GDR witnesses.

Mr Wagner has previously said his group has asked the German government, as the legal successor to the communist regime in East Germany, to consider compensation payments for the victims.

Mr Wagner said Ikea is only "the tip of the iceberg," adding that similar allegations have been levelled against west German mail order companies and former state-owned east German companies that were privatised after unification in 1990.

In the town of Dessau, where Mr Wagner was imprisoned from 1967 to 1969, inmates were forced to make goods out of sheet metal using hazardous machinery. One in ten lost fingers at work, he claimed. "If someone refused they were locked in solitary confinement and given only bread and water for up to 42 days," he added.

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