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

Mon Mar 17, 2014 9:10am EDT
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By Emma Thomasson

BERLIN (Reuters) - British clothes retailer Primark will pay a further $10 million in compensation to victims of the collapse of a Bangladeshi factory last year that killed more than 1,100 people.

The disaster has galvanized most of the clothing industry's big names to work together to improve safety standards 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 Labour Organisation (ILO) by the first anniversary of the Apr. 24 collapse.

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 dependants, 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 dependants 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 (ABF.L: Quote), 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.   Continued...

A garment worker who survived the Rana Plaza building collapse, carries her child during a protest to demand for compensation, on the six month anniversary of the incident, in front of the site in Savar October 24, 2013. REUTERS/Andrew Biraj