Rana Plaza victims to receive first compensation payments from ILO-run fund

As the first anniversary of the Rana Plaza disaster nears, the 3,600 workers and families affected are set to receive the first round of compensation payments from a multi-million dollar ILO-chaired fund.

Some 1,138 people died and thousands more were injured when an eight-story building housing five garment factories collapsed in Savar, on the outskirts of the capital, Dhaka.

An initial payment of 50,000 taka (US$650) will be made to identified victims and their families ahead of 24 April, which marks the first anniversary of one of the worst industrial accidents in history.

The decision follows an announcement by British retailer Primark that it would pay US$10 million to the 581 workers at one of its suppliers, the New Wave Bottoms factory, which was based at Rana Plaza.

Primark has already paid US$2 million in short-term financial support and food distribution but said in a press statement on Monday:

“With the first anniversary of Rana Plaza fast approaching, we are determined to meet this responsibility to workers in our supply chain. We are therefore pleased to be in a position to now press ahead with payments.”

The payment will be made into the Rana Plaza Donors Trust Fund, run by the International Labour Organisation (ILO), and was announced following the 12th session of its Compensation Coordination Committee on Tuesday.

IndustriALL Global Union Assistant General Secretary and Committee member Monika Kemperle told Equal Times: “We are glad to have found a solution. It was a tough discussion but the victims have waited too long. Every single victim will start receiving payments before 24 April.”



In the wake of the tragedy clothing brands have worked together to improve safety standards in supply chains.

However, the fund to raise US$40 million for the victims and their families has so far only met half of its target.

IndustriALL, UNI Global Union and the Clean Clothes Campaign recently launched a campaign to urge the 27 brands affected by the tragedy to contribute to the Fund.

Italian fashion brand Benetton, French supermarket chain Carrefour and Walmart, the world’s biggest retailer, are amongst the brands that are yet to contribute.

The families of dead and injured workers have already received nine months’ pay since the tragedy, but many are in desperate need of money to cover hospital fees and everyday living costs.

In December 2013, a compensation plan for Rana Plaza victims was signed by a broad range of stakeholders, including local and national trade unions, employer associations and the government of Bangladesh.

The Rana Plaza Donors Trust Fund was established as part of the agreement but so far, only nine brands (including Primark) have paid their share of the US$40 million that needs to be raised.

A lack of finances isn’t so much of a problem as a lack of will.

As the world’s largest retailer, Walmart has contributed nothing to those affected by the Rana Plaza tragedy but that didn’t stop the company from paying its former CEO Mike Duke US$20.7 million last year.

For Roy Ramesh, general secretary of the IndustriALL Bangladesh Council, it’s crucial for brands to work through the Fund to “ensure effective and transparent payments to the victims of Rana Plaza.

“The Bangladeshi government, unions and employers have all worked together with international unions and brands to lay the solid foundations of the ILO-led scheme. It is the only viable way forward.”


Safety accord

Bangladesh is the second biggest garment exporter in the world after China.

However, labour costs are desperately cheap, making it an attractive option for international brands.

The monthly minimum wage of 5,300 taka (US$66), for example, is significantly less than the going rate in China.

Multinationals exploit this advantage by imposing low prices and short deadlines which leave little space for the possibility of decent work or safe working conditions.

The international outcry provoked by the Rana Plaza disaster has forced the global garment industry to look closely at its supply chains and production methods.

In May 2013, garment manufacturers and trade unions signed the Bangladesh Accord on Fire and Building Safety.

This legally-binding agreement guarantees 1,500 inspections in Bangladesh’s garment factories by early September 2014.

The Clean Clothes Campaign, which works to improve transparency in the global garment industry, describes the Accord as “an important step in ensuring such a terrible disaster doesn’t happen again but for the survivors and the families of the dead it provides little relief.”

So far, the Accord has resulted in two temporary factory closures where conditions did not meet established safety criteria.

But just last week, a factory housing two knitwear brands was forced to close down because of serious safety concerns, resulting in thousands of job losses.

Unions have criticised the companies involved for failing to compensate the retrenched workers.