Kirsten Iler
Reparation after the Bangladesh garment factory disaster

| September 26, 2013
Reparation after the Bangladesh garment factory disaster

In the wake of the Rana Plaza factory collapse in Bangladesh this April, the corporations who use the factory expressed grave concern for the deceased workers and their families and committed to helping them.

Built on swampland outside the capital city of Dhaka and housing five factories, when the Rana Plaza building collapsed, 1,100 workers were killed and 1,900 injured. Most of the workers, and thus the victims, were women.

Although one of the world's worst industrial disasters, to date only one retailer has given compensation to the victims of the Rana Plaza disaster.

No agreement was reached at the recent Geneva meetings to address compensation, which many called a failure. Meanwhile, trade unions report that many victims and their families are barely surviving and may lose their homes.

Ongoing but separate talks on safety, rather than compensation, have proven more fruitful. Over 80 retailers ‑- but reportedly not Wal-Mart or Gap, which insist on self-regulation ‑- have agreed to a binding, five-year accord to improve safety in Bangladeshi garment factories.

The agreement includes a binding arbitration process that can be enforced through the court system in the country where the retailer is based.

However, according to Ikeke Zelderust of Clean Clothes Campaign, many brands "want to be associated with prevention," but they do not wish to be associated with reparation.

Indeed, only nine of 28 retailers whose garments were made by Rana Plaza workers bothered to show up at the compensation talks held in Geneva on September 11 and 12, 2013.

Called by the global trade union IndustriALL and chaired by the International Labour Organization, the meeting was intended to address compensation for the Rana Plaza disaster as well as the Tazreen factory fire, which killed 112 workers and injured over 120 in Bangladesh in November 2012.

Among the brands and retailers that skipped the meetings were Benetton, The Children's Place, JC Penney and Wal-Mart.

In a statement, Benetton's chief executive claimed many retailers did not attend the meetings due in part to a "lack of clarity" in respect of the meetings, stating that Benetton intended to put its efforts into "working directly with those affected by the Rana Plaza disaster." For instance, Benetton has reportedly paid for limb replacements for several Rana Plaza workers.

Wal-Mart was a particularly notable absentee, since it is one of the world's largest buyers of Bangladeshi garments. Given that Bangladesh's clothing export industry ‑- where workers earn as little $38 per month -‑ is one of the largest in the world, second only to China, Wal‑Mart has a large stake in Bangladesh.

Wal‑Mart has stated that its focus is on safety, rather than compensation and, in any case, it does not owe compensation to Rana and Tazreen victims since its clothing found at the factories was there "without its knowledge via unauthorized subcontracting."

Labour activists dismissed Wal‑Mart's position as yet another excuse to avoid taking responsibility.

At the Geneva talks, a long-term compensation framework was proposed by IndustriALL, the Clean Clothes Campaign and the Workers Rights Consortium.

According to IndustriALL: "[T]he formula sets out clear guidelines for payment to families of dead and injured workers and takes into account loss of earnings, pain and suffering, and also medical costs, funeral costs and other important family expenses."

Developed by IndustriALL and its Bangladeshi partners after a 2005 Bangladeshi factory collapse, this same model has been used to address retailer compensation for other factory disasters in Bangladesh as well, such as the factory fires in December 2010 and January 2013.

Under the model, retailers would share the responsibility for compensating victims with factory owners, the Bangladeshi government and the garment industry association. A compensation fund would be established, to be run by a multi-stakeholder committee.

For Rana Plaza, over US $70 million would be required to fully compensate workers under the framework, of which retailers together would be responsible to pay 45 per cent.

The Geneva talks were intended to determine each retailer's share of this 45 per cent. However, given the high number of no-shows, it appears many retailers may not be committed to compensation in the first place, let alone to debating their share.

While no accord on compensation was reached, some progress was made in Geneva. In a statement, IndustriALL reported that the brands who attended committed to: 1) having another meeting in two weeks' time "to share information and tools, exchange views, and consider next steps," 2) providing funds for injured workers and victims' families, and setting up a fund quickly, and 3) working on a co-ordinated basis going forward.

IndustriALL also acknowledged the initial financial aid already to victims by U.K. retailer Primark. Primark was the only retailer to provide emergency aid to Rana workers following the disaster, reportedly making payments to 3,000 workers, regardless of whether or not they worked for Primark.

In a statement released after the Geneva talks, Primate said it was "concerned about the length of time it is taking to agree to a framework for long-term compensation" and consequentially, it would move independently to pay a second round of emergency aid, to last three months, for needs such as food, medicine and housing.

ZM Kamrul Anam of IndustriALL Bangladeshi Council has called on all companies to "match that three-month salary for these people in urgent need."

Apparently no other brand has provided funds for emergency relief.

One of the nine brands that participated in the Geneva meetings was Loblaw, which owns clothing retailer Joe Fresh. The Globe and Mail reported that Galen Weston of Loblaw said it had set money aside for compensation, but would not specify how much. He stated said Loblaw previously agreed to give $1 million to the charity Save the Children and a rehabilitation hospital in Bangladesh.

IdustriALL Assistant General Secretary Monike Kemperle decried those who failed to attend the compensation meetings, stating: "The disregard of the absent brands for the plight of workers in Bangladesh whose lives have been destroyed by the avoidable accidents at Tazreen and Rana Plaza is shocking in the extreme. Empty promises and direct untruths since the Tazreen fire and the Rana Plaza collapse all so that these Western multinationals can avoid making payments that amount to a minute percentage of turnover."

Commentators say retailers are fearful of setting a precedent and opening themselves up to lawsuits by acknowledging responsibility by paying compensation. In addition, some retailers insist that intermediaries also be forced to contribute to compensation.

Others have claimed that part of the delay in providing compensation flows from the challenges of compiling a list of victims and their families. The Bangladeshi government is reportedly awaiting DNA proof before it will provide further compensation.

Primark has reportedly created a comprehensive list of 3,000 workers inside Rana Plaza at the time of the disaster, while IndustriALL says it expects to complete a list of beneficiaries in the next few weeks.

The next compensation meetings are due to happen shortly. If an accord can be reached by this time by the nine retailers, perhaps it will give them some leverage to increase pressure on the remaining nearly 20 brands to come to the table to discuss compensation.

Iler Campbell LLP is a law firm serving co-ops, not-for-profits, charities and socially-minded small business and individuals in Ontario.

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