Bangladesh factory disaster victims still waiting for compensation

Leading brands yet to agree arrangements for injured workers and families of 1,129 people killed

Six months after the collapse of the Rana Plaza garment factory building in Bangladesh, more than 15 brands whose clothes were produced there have yet to agree to pay long-term compensation to injured workers or the families of the 1,129 people who died.

The Clean Clothes Campaign, an international workers’ rights pressure group, has written to brands including Spanish fashion brand Mango, UK workwear producer Premier and US supermarket Walmart, all of which had sold clothing made within Rana Plaza, calling on them to help victims of the disaster.

It says: “Clean Clothes Campaign would like to see all brands who were sourcing either directly or indirectly from factories housed in Rana Plaza commit, and implement, the payment of full and fair compensation for all victims’ families and the survivors of Rana Plaza.

“They must also agree a way forward in dealing with compensation when accidents do occur, to avoid making a tragic situation worse with months of uncertainty for the survivors and families left behind, who are left with no income, high medical bills and a real risk of destitution.”


In recent weeks, Benetton, the Italian fashion brand, joined nine other companies, including Primark, Matalan and Bonmarche from the UK and Loblaw from Canada, in discussing long-term compensation arrangements for Rana Plaza victims.

It is unclear when workers will receive compensation from all the brands with suppliers at Rana Plaza as negotiations continue about the scale of payments and how workers will be paid.

Primark and other brands have paid out short-term financial aid to Rana Plaza workers but that money will run out at the end of this month and no firm plans for further financial assistance are in place at this point.

Primark issued a statement today saying it would take “unilateral steps to deliver long-term compensation to victims, or their dependents, of the disaster”.

The company said it has set a timetable for beginning long-term compensation payments to the 550 strong workforce or their dependents of the supplier of New Wave Bottoms housed in Rana Plaza which was producing clothing for Primark.

Primark also said it was committed to making a third short-term financial payment to the 550 New Wave Bottom workers, or their dependents.

Jyrki Raina, the general secretary of international union IndustriALL, says: "The immediate concern is to keep the money flowing to victims."

The debate about compensation comes amid a fraught atmosphere in Dhaka as the Bangladeshi government prepares to announce an increase in the minimum wage which will affect millions of factory workers.

Workers have demanded 8,000 taka a month, more than double the current 3,000 taka rate, but the government is expected to set rates at 5,500 taka.

Anger at low wages could be fuelled by protests about compensation timed to take place six months after the Rana Plaza collapse and by political unrest as the country prepares for an election early next year.

The Bangladeshi government is also moving to improve factory safety in the garment industry, which accounts for the majority of the country’s exports.

It is supporting a £15 million (€17 million) programme backed by the International Labour Organisation (ILO) as well as the UK and Dutch governments, that will provide technical expertise for building and fire safety assessments, strengthen and support labour, fire and building inspections and build occupational safety and health awareness and systems. It is hoped that the deal will focus on those factories which are not covered by two other international safety deals supported by brands and retailers.

Under those two agreements, leadership teams have been appointed and have set up offices in Bangladesh, but they have yet to start inspecting more than 2,000 factories used by their signatories or begin action to improve building safety.

However, individual brands have inspected more than 500 factories themselves and it is hoped that work will meet the standards of the international safety deals.

Sam Maher, a campaigner from pressure group Labour Behind the Label, says: "Today workers in Bangladesh probably are safer than they were in April as brands had never looked at building safety before and now they are. Some factories have been closed or improved but there is a long way to go before Bangladeshi workers can feel sure that the factory they work in is safe."

Katherine Kirk, Primark's ethical trading director, says: "We've no doubt that Rana Plaza has been a big wake-up call for the industry as a whole. From Primark's point of view we are having a lot of constructive conversations with suppliers."

She also believes Primark’s work on building a compensation system can be picked up by other companies.

The British retailer, which bought clothes from a factory that took up one floor of the Rana Plaza building, has built a database of just over 3,600 people who were affected by the collapse, including family members of those who died. This took months because of poor record keeping and the loss of documents in the disaster. About 300 people have yet to be identified and some have slipped through the net.

Nazrul Islam (28) worked as a sample man at New Wave Style on the eighth floor of Rana Plaza. He broke his spinal cord when the factory collapsed but says he has only received financial aid from other members of the public and the government.

Kirk admits a small number of those due compensation are still to be registered but Primark has worked with a local bank to sign up thousands of people to bank accounts to enable two rounds of short-term support to be paid to those workers. This system should ensure that funds from the international compensation effort can be distributed easily.

Primark has also developed software to help the medical and vulnerability assessment of everyone affected by the factory collapse. Trials of its system, which runs off tablet computers which can be taken to workers’ homes across Bangladesh, will begin next month.

The process is being assessed by experts from the ILO and may be used as the basis for all compensation, which would be split between brands, the government and factory owners. IndustriALL is supporting the idea but has said it would prefer a simpler system funded by a central pot of money.