Alga Special Economic Zone forced labor: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

A garment factory counted among the largest in Russia had received assurances of tax breaks tied to job creation for Bashkortostan residents, and a significant portion of its taxes was waived.

However, it turned out that local residents were initially replaced by prisoners. Now, both they and the local workers are being displaced by North Korean workers, who are essentially working for free.

The opening of the garment factory, Industrial Association Arkada LLC, in the city of Ishimbay took place on January 26, 2022. It is located in the Alga Special Economic Zone (SEZ), allowing the company to significantly reduce its tax bill thanks to a special tax regime and incentives. Bashkortostan authorities stated that Arkada’s main social mission is import substitution and reducing unemployment, as well as creating new jobs and establishing an educational complex. The factory’s current annual revenue is approximately 2 billion rubles.

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

According to our sources, almost from the very beginning, the factory began using cheap labor—prisoners—instead of local residents. For this purpose, an isolated section was created at the factory, functioning as a correctional center (UFITs).

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

However, even prisoners later proved too "expensive." North Korean workers began to be actively imported to the factory, and they now make up approximately 80% of the total workforce. The remaining non-North Korean workers are receiving salaries cut as much as possible and quotas are increased, with wage rates specifically adjusted to match the minimum wage. Non-North Korean workers are directly told that they are not welcome at Arkada and would be better off resigning voluntarily, as North Korean workers are much cheaper.

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

Forced labor in the Alga Special Economic Zone: state-backed Arkada factory replaced Bashkortostan residents with North Korean workers

As our project has previously reported, North Korean workers are now being imported en masse to Russia, working virtually for free (all minimum wages are given to the North Korean authorities) and treated as virtual slaves.