Global retailers pledge help for Bangladesh factory victims

May 1, 2013

Western retailers have begun pledging compensation for garment workers killed or injured in last week’s building collapse in Bangladesh as rescuers have abandoned hope of finding any more survivors.

The official death toll from the collapse of the Rana Plaza outside Dhaka, which housed five factories that produced clothing for many major Western retail brands, passed 400 Wednesday, according to police, with hundreds more suffering severe injuries.

Officers said that 399 bodies had been pulled from the debris and that three of the injured had died in the hospital. Authorities expect to find many more bodies, possibly hundreds, as they dig through to the bottom of the mountain of concrete and iron.

With their business ties in Bangladesh coming under intense global spotlight, Western retailers that used suppliers located in the doomed building have begun offering ill-defined compensation to the victims.

But aid groups have been unimpressed by some of the vague promises, such as British discount retailer Matalan’s pledge to “provide financial and other support.” The offer to those affected fell short of fulfilling victims’ rights, said the British group War on Want.

“Matalan’s words of sympathy will be cold comfort to those affected without action that would ensure such a disaster never happens again,” said Ruth Tanner, campaigns and policy director at the anti-poverty charity.

The Ethical Trading Initiative (ETI), a Britain-based alliance of companies, trade unions and voluntary organizations, said it would be a “travesty” if brands did not seize the opportunity to work with the Bangladeshi government to effect changes in labor practices.

“Now there is an opportunity for the international partners, brands and retailers and labor organizations to say, let’s work with you, government, and hold you accountable for putting in appropriate changes to the industry,” said Peter McAllister, director at ETI. “If we don’t take that opportunity, there will be new disasters, and that will be an indictment on everyone involved.”

Matalan said it was not using any suppliers housed in the building, but a spokeswoman said a previous supplier had been based there. The British discount retailer Primark, which early on acknowledged its use of a factory in the Rana Plaza, was the first Western brand to pledge compensation to the families of the dead and to injured employees of its supplier.

In a statement this week, Primark, owned by Associated British Foods, promised “long-term aid for children who have lost parents, financial aid for those injured and payments to the families of the deceased.”

“We are fully aware of our responsibility,” the company said, noting that many other major Western brands also were buying stock from factories located in the building.

Subsequently, Canada’s Loblaw, which had a supplier of products for its Joe Fresh clothing brand in the building, said it, too, would provide compensation for the families of victims employed by the factory.

In a statement, Loblaw said that it was still working on the details of how to deliver this support in the “best and most meaningful way possible” but that the company’s goal was to ensure that “victims and their families receive benefits now and in the future.”

But even as some retailers are offering aid, other brands have sought to distance themselves from the tragedy. Spain’s Mango, for example, whose orders for children’s leggings were found by the Financial Times in the wreckage of the building, said it had placed only a “trial order” with one of the factories there. One surviving manager of that factory said workers had been trying hard to complete the order, which had prompted them to go back despite the discovery of a crack in the building the day before the collapse.

McAllister said, “Frankly, it’s a travesty that some of the other brands have not been as proactive as Primark.”

Meanwhile, Bangladesh’s $19 billion export-oriented garment industry, which has been badly hit by political turmoil in the past few months, is struggling to reassure Western retailers and their buyers that it remains a reliable supplier.

On Monday, representatives of 35 major Western brands and buyers met with the leaders of the Bangladesh Garment Manufacturers and Exporters Association, an industry body, and they agreed to form a panel to lay down a plan to address safety issues.

Meanwhile, the association this week instructed all its members to have their factory buildings examined by structural engineers and submit proof of the inspections by the end of the month.

— Financial Times

Joseph Allchin in Dhaka, Barney Jopson in New York and Louise Lucas in London contributed to this report.

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