Rana Plaza compensation fund pays first installments to 1,587 beneficiaries.

French brand Auchan have become the latest donor to the Rana Plaza Donor Trust Fund. The brand committed US$1.5 million to the survivors and and victims families through the official ILO backed compensation fund, bringing the total in the fund to just under US$20 million.

When announcing the donation, Auchan cited the Ministerial statement, signed by seven EU governments including France, in June, as a factor in donating now.  The statement recommended “companies that sourced in Rana Plaza donate generously to the Trust Fund, either for the first time or with a second contribution to come to an appropriate amount”.  This commitment from Governments was reiterated last week by those in attendance at the ILO-OECD roundtable on responsible sourcing in the textile and garment sector.

The fund now has just under half the estimated US$40 million that it is needed to ensure all the survivors and families of the 1,138 victims and the over 2000 injured receive full and fair compensation.

Clean Clothes Campaign and our partners in Bangladesh welcome this donation but continue to express dismay that almost 18 months after the worse industrial accident to hit the garment industry there is still not sufficient funds to ensure all victims families and survivors receive the much needed compensation they are entitled to according to the “Rana Plaza Arrangement” set up by all key stakeholders involved.  

The process to ensure all victims and beneficiaries have been identified and assessed, has now been completed.  A total of 2,849 claims were received, comprised of 5,099 injured persons and dependents of the deceased and missing workers. For all beneficiaries bank accounts were opened.  

At the start of October, awards were approved for the first 1,587 beneficiaries. They received an installment in their bank account that (after deduction of previous payments) comes to  40% of the calculated compensation each of them is individually owed. The awards for the remaining almost 2,500 beneficiaries are expected to be approved in the coming few weeks, and they also will receive payments to the level of 40% of the amount they're entitled to. The remainder of the payment will be paid when more funds are collected.

“CCC is very pleased that the first batch of awards have been approved and paid through a transparent and independently overseen process, according to international standards. We are however dismayed that the industry has failed to pay up sufficiently for the full awards to be deposited in the bank accounts. “What are brands waiting for? They all say they support  the Rana Plaza Arrangement and that the calculations, overseen by the ILO, are fair and just. But unless all brands up the amounts they've paid in so far, the Arrangement can't pay the claims in full. ” Says Ineke Zeldenrust, Clean Clothes Campaign, adding  " whilst we welcome Auchan's contribution it still falls short of the €5million we believe they should contribute given the size of the company and their presence in Bangladesh.”

As well as the inadequate amounts the brands who have contributed have made, the fund also is lacking all the funds needed as major clothing brands such as Italian brand Benetton, and French megastore Carrefour, one of the biggest buyers in Bangladesh, have still failed to make even an initial contribution.  

Ms. Zeldenrust adds, “It is unacceptable that a brand the size of Carrefour have not paid a single cent in compensation when their US$2 billion profits rely on the work of thousands of Bangladeshi women and men. Carrefour remains the only French brand with a possible link to Rana Plaza not to have paid up. They say the evidence linking them to the site is insufficient, but other brands, including Auchan, also denied direct sourcing,  but chose to pay anyway -  in line with  their position in the industry and in Bangladesh,  and out of respect to the victims. Brands have an opportunity to do the right thing for those that lost everything – and it will barely cost them anything compared to the profit they make out of Bangladeshi workers."