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Primark pays out again to Bangladesh factory victims

A shopper passes demonstrators outside clothing retailer Primark in London April 27, 2013. REUTERS/Suzanne Plunkett
A shopper passes demonstrators outside clothing retailer Primark in London April 27, 2013. REUTERS/Suzanne Plunkett

By Emma Thomasson and Ruma Paul

DHAKA (Reuters) - Clothing chain Primark laid out plans on Thursday to pay more compensation for the Rana Plaza factory disaster in Bangladesh as victims and their families demanded other western brands follow suit.

The collapse on April 24 that killed 1,129 people has galvanized some of the clothing industry's big names to try to improve safety standards at suppliers but they have failed to agree on a compensation fund for victims despite months of wrangling.

Hundreds of victims and their families held a rally at the site of the world's most deadly industrial accident since the 1984 Bhopal disaster in India. Children carried placards reading: "Please come forward, our parents were killed while working for you. Compensate us."

Primark, the only retailer to pay compensation so far, said it would pay out for the third time to 550 workers employed by its partner New Wave Bottoms at the factory. Each will receive another three months wages.

But with many workers making as little as $38 a month, there is anger that little progress has been made on a broader scheme to compensate the families of the dead and hundreds more injured in the disaster who will need years of support.

"Survivors and victims' families at Rana Plaza today remembered their loved ones and all ask the same question: When will we finally receive compensation for our loss?" two global trade unions involved in the process said in a statement.

About 3.6 million of Bangladesh's 155 million people work in the clothing industry, making it the world's second-largest garments exporter behind China. Around 60 percent of garment exports go to Europe and 23 percent to the United States.

A factory fire on the outskirts of the city on October 8, in which seven people died, has raised concerns that standards have not changed significantly since the April collapse and the International Labour Organisation (ILO) launched a $24 million project this week to improve safety in the industry.

But while workers say that better safety standards are essential, many of them are equally worried about their low wages. A wave of pay strikes last month hit nearly a fifth of the country's garment workshops and looks set to force a rise of between 50 and 80 percent in minimum wages.

Rock bottom wages and trade deals have made Bangladesh's garments sector a $22 billion industry that accounts for four-fifths of exports. Retailers such as Wal-Mart Stores Inc, JC Penney Co Inc and H&M Hennes & Mauritz AB all buy clothes from its factories.

LUCRATIVE

The International Labour Organisation has been coordinating talks to try to get an agreement on setting up long-term funds for Rana Plaza workers and for victims of a fire at the Tazreen factory in November 2012, which killed 112 workers - but there has been little progress.

Some of the 28 brands supplied from Rana Plaza say their production was outsourced to the factory without their knowledge, while others say they prefer to pursue their own compensation plans.

Primark, whose low prices have helped it expand to more than 250 stores in Britain and Europe, has already paid six months salary to all 3,621 workers affected by the collapse and their families, committing some $2 million in short-term financial support and food distribution.

"Primark is calling on other brands involved in the Rana Plaza disaster to make a contribution by paying short-term aid to some 3,000 workers or their dependents who made clothes for their labels," the company, owned by Associated British Foods, said in a statement.

The company said it would press ahead with plans to pay long-term compensation in the New Year despite the lack of a response from others in the sector. The unions and families have proposed 1.8 million thaka ($2,300) per family of the deceased.

Primark, whose supplier occupied the second floor of the eight storey building, also pledged to pay a further three-months salary to all Rana Plaza workers or their families if the other brands fail to contribute.

Advocacy groups, the Clean Clothes Campaign (CCC) and the International Labor Rights Forum, noted that Canada's Loblaw Cos Ltd had also committed to provide short-term relief, while Italian retailer Benetton and Spanish chain El Corte Ingles were participating in attempts to establish a fund.

They said Zara-owner Inditex, Britain's Bonmarche and Mascot of Denmark had signaled their intent to contribute to a fund, but said scores of other brands were doing too little.

"It is time that all brands linked to the tragedies step up and ... pay into the fund, and thereby take financial responsibility for a disaster that they failed to prevent," said Ineke Zeldenrust of the CCC.

(Editing by Patrick Graham)

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