Primark to pay $10M more to victims of Bangladesh factory collapse

British clothes retailer Primark announced Monday that it will pay an additional $10 million in compensation to victims of last year’s Bangladeshi clothing factory collapse that killed more than 1,100 people.

The disaster has galvanized some of the clothing industry's biggest names to work together to improve safety standards at factories, but many brands have shunned a fund that is trying to raise $40 million for the over 2,000 people injured and the families of the dead.

Campaigners are demanding that 27 brands linked to factories in the Rana Plaza complex should contribute to the fund run by the International Labor Organization (ILO) by the first anniversary of the April 24 collapse.

In November 2014 the New York Times reported that many American companies, including Walmart, Sears and The Children's Place, had refused to donate to the fund.

Some of the brands supplied from Rana Plaza have said they will not contribute as their production was outsourced to the factory without their knowledge, or ended some time ago, while others said they preferred to pursue their own compensation plans.

Primark has already paid $2 million in short-term financial support and food distribution. It said it would pay out the extra $10 million in long-term compensation — $9 million directly to the 580 workers of its supplier in Rana Plaza or their dependents, and another $1 million to the fund.

It said cash payments to the workers of its supplier, New Wave Bottoms, would begin this week, with the amount to be paid based on estimates of lost earnings for the dependents of those killed and on the level of disability for those injured.

"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," a spokesman said in a statement.

Rock-bottom wages and trade deals have made Bangladesh's garments sector a $22 billion industry that accounts for four-fifths of exports, with around 60 percent of garment exports going to Europe and 23 percent to the United States.

Owned by Associated British Foods, Primark's low prices have helped it expand to more than 250 stores in Britain and Europe. It urged other retailers to donate to the industry fund so it could pay out in full to all victims.

Campaigners from the Clean Clothes Campaign and trade unions IndustriALL and UNI Global Union last week called on Primark to pay into the ILO-run fund, saying that separate voluntary corporate schemes were less effective.

"There is a long way to go before the $40 million needed to make payments to all workers is found," they said in a statement.

The claims process for the fund is due to start on March 24. Campaigners said only a few brands have so far publicly pledged initial donations: Canada's Loblaw, Britain's Bon Marche and Premier Clothing, Mascot of Denmark and Spanish chains El Corte Ingles, Mango and Zara-owner Inditex.

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.

Reuters