BANGLADESH: Compensation fund created for Rana Plaza victims
Eight months after the Rana Plaza garment factory complex collapsed in Bangladesh with the loss of more than 1,190 lives, a landmark agreement has been reached to deliver an estimated $40m in compensation to victims of the disaster.
The agreement provides a single approach for compensation and is backed by UK retailers Primark and Bonmarche, department store chain El Corte Ingles, and Canadian supermarket chain Loblaw, which also owns the Joe Fresh clothing brand.
While talks on the final details are still ongoing, a framework has been agreed to calculate and distribute compensation, alongside a voluntary international fund into which brands and retailers can contribute.
It has also been signed by the Bangladesh Ministry of Labour, Bangladesh Employers' Federation (BEF), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), IndustriAll Bangladesh National Council, Bangladesh Institute for Labour Studies (BILS), Industriall Global Union and the Clean Clothes Campaign.
Supported by the UN's International Labour Organisation (ILO), the scheme will deliver compensation to both injured workers and the families of the deceased.
As well as covering income replacement needs and medical costs for all beneficiaries, it also uses the newly increased Bangladesh minimum wage as the basis for calculation.
The families of those killed will receive on average more than $25,000. The money will be paid in instalments, ensuring recipients have a steady source of income.
Disbursements to injured workers will be made on a case-by-case basis after a medical assessment to determine the level of disability.
To finance the payments to victims, international brands and retailers are making voluntary contributions into a humanitarian International Trust Fund, managed by a global bank and open to other international donors.
Local funds will be kept in a local bank, which will provide payments directly to the beneficiaries' bank accounts.
The first instalments are due to be delivered from February - providing sufficient pledges are received by mid-January. Other companies and donors, are now being urged to pledge sufficient contributions to the fund.
North American labour rights groups have also stepped up their calls for Walmart, Children's Place and other US clothing companies that sourced from Rana Plaza to join the agreement.
The building was constructed with poor quality materials, on top of a drained swamp, with multiple stories illegally added to the original structure. No structural safety inspections were carried out.
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