No Deal On Bangladesh Garment Factory Compensation Fund

By Krishnadev Calamur

Published September 13, 2013 at 9:38 AM CDT

A Bangladeshi woman holds a photograph of a relative missing in the Rana Plaza building collapse, as she participates in a protest in Dhaka, Bangladesh, on Friday. Protesters demanded a minimum monthly salary of $103 and compensation for the victims and injured in the building collapse in April that killed more than 1,000 people.

Families and survivors of the Rana Plaza garment factory disaster in Bangladesh in April who are waiting for compensation from Western companies will have to wait a little longer.

A meeting Thursday of retailers and brands in Geneva, Switzerland, facilitated by the U.N.'s International Labor Organization, ended with only one company announcing measures for the victims: Primark said it would give the families of victims three months' salary.

More than 1,000 people died in the collapse of the building that housed garment factories, which made clothes for some of the world's biggest retailers. It was the worst disaster in the history of the global garment industry.

IndustriALL, the international trade union federation that coordinated the talks, said in a statement that only 9 of the 20 invited companies turned up for the meeting. Among those notable by their absence, Spain's Inditex, the company that owns Zara; Benetton, Wal-Mart and J.C. Penney. Those who attended included Bon Marché and Primark.

"Consumers will be shocked that almost a half-year has passed since the Rana Plaza disaster with only one brand so far providing any compensation to the disaster's victims," Monika Kemperle, IndustriALL Global Union assistant general secretary, said in the statement. "I respect those brands that came to these meetings. But I cannot understand brands that are not around the table."

IndustriALL wanted to set up compensation funds for victims of the Rana Plaza disaster as well as the Tazreen factory fire in November 2012 that killed 112 workers. Under its plan, brands and retailers would pay $33.56 million out of a total fund of $74.58 million for victims of the Rana Plaza collapse; they would pay $2.9 million out of $6.44 million for the Tazreen fire fund.

But in a statement, Benetton's CEO said the Geneva meeting lacked "clarity around the objectives," adding, "As a result, we decided to focus our efforts and resources in working directly with those affected by the Rana Plaza disaster and their families so that we can provide them with concrete help while they need it the most."

Bangladesh, one of the world's poorest countries, is about the size of Iowa, but it is home to more than 150 million people — approximately half the U.S. population. In recent years, it has become a garment-exporting power — second only to China. Its low wages and light regulation make it an attractive destination for Western brands.

International retailers have been under pressure since the Rana Plaza disaster to improve working conditions and wages. Two plans have been agreed to since the disaster: One, announced by mostly European retailers, would improve fire and building safety in Bangladeshi factories. Critics say it gives labor unions too much power over workplace safety. The other, announced by U.S. companies, including Wal-Mart and Gap, excludes unions. But some groups who monitor the industry have been highly critical.

NPR's Julie McCarthy visited some of the victims of the tragedy, and reported on how they were coping with the loss of their loved ones and their livelihoods.

Our Planet Money team is looking at the garment industry in Bangladesh and other countries as its creates own T-shirt. You can click here to listen to some of the team's podcasts.