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Labor rights groups hail $40mn compensation for Rana Plaza

December 28, 2013 (Bangladesh)

North American labor rights groups welcomed a landmark agreement, announced, to deliver an estimated $40 million in compensation to the families of those killed in the Rana Plaza factory collapse in Bangladesh and called on Walmart, Children’s Place and other US clothing brands that produced at Rana to join the agreement within one month.

The companies that have signed the pact – known as the “Arrangement” – are El Corte Ingles, one of the world’s largest department store chains; Bon Marche, a major high street fashion brand; Primark, the large UK retailer; and Loblaw, the largest supermarket chain in Canada and the owner of the Joe Fresh clothing brand.

The agreement, which was facilitated by the ILO as neutral and independent chair, has also been signed by a broad range of stakeholders, including the local and national trade unions, employer associations and the government of Bangladesh.

Under the agreement, the parties will establish an international trust fund that is scheduled to begin paying money to families of the dead and to injured workers this coming February. The fund must collect about $40 million in order to ensure that all those harmed by the collapse receive the full compensation to which they are entitled. The signatories have called on all companies that produced at Rana Plaza to make financial pledges over the next month.

The agreement establishes rules and methods for the delivery of compensation. The families of those killed will receive on average more than $25,000. The money will be paid in installments, ensuring that these families will have a steady and decent source of income.

The amount is based on the lost wages of the workers killed, using the newly increased Bangladesh minimum wage as the basis for calculation. Injured workers will also receive cash compensation and, where needed, ongoing medical care.

Said Scott Nova of the Worker Rights Consortium, “So far, companies like Walmart and Children’s Place have given no indication that they will pay anything to aid the victims. There is now a compensation plan in place, which a number of the world’s leading brands and retailers have signed. The question now is what will Walmart and Children’s Place do?”

It is estimated that 25 other brands, including JC Penney and Cato Fashions, were buying from the factories in Rana Plaza, at or near the time of the collapse. The building was constructed with poor quality materials, on top of a drained swamp, with multiple stories illegally added to the original structure. However, no brand or retailer that produced at Rana ever undertook a structural safety inspection.

Said Judy Gearhart of the International Labor Rights Forum, “Walmart and Children’s Place claimed they were deeply saddened over the loss of the life in their factories in Bangladesh, but not saddened enough, apparently, to lift a finger to help the families of the victims. These companies should join the compensation plan without further delay."


International Labor Rights Forum
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