With just days to the second anniversary of the Rana Plaza disaster, the CCC warns of a funding crisis

With only 3 days to go to the second anniversary of the Rana Plaza collapse, the Rana Plaza Trust Fund set up by the UN International Labour Organization to collect funds to compensate all the Rana Plaza victims fully and fairly is still 6 million USD short.

With a few exceptions brands have either provided no indication as to whether they will increase their contributions or openly refused.  It is currently unclear how the remaining shortfall will be covered, and as a result the compensation scheme as outlined under the Arrangement has reached a funding crisis.  

The CCC is dismayed to see that even after all massive lobby and campaigning efforts and political support at the highest level from governments and international institutions only a few companies actually made contributions in the last weeks, and those that did came in too low.  

“Over the past year, well over a million consumers called upon Benetton, Children's Place, Mango, Walmart and other companies to make sure we would not have to betray the victims of the biggest tragedy in the global garment industry again” says Ineke Zeldenrust of CCC. “There is no legitimate reason for the emergence of this funding crisis.  Instead of putting the slightest fraction of their profits towards the very people that suffered the most making their clothes, these brands choose to make ever more flimsy excuses”.

Benetton's so called 'independent credible expert' was recently revealed as PricewaterhouseCoopers (PwC), which is one of the biggest global for profit companies, and lacks any of the necessary expertise or experience on human rights issues. The amount PwC recommended that Benetton donate is based on assumptions that have not been verified by any independent data collection, as the report itself actually admits.  Interestingly, the report does finally confirm that Benetton knew all along that they were sourcing from the Rana Plaza building, which is a fact Benetton denied emphatically during the first days after the collapse. 

“It is clear that the primary purpose of this elaborate exercise was to confer moral legitimacy on Benetton’s otherwise disreputable decision to save itself several million dollars, while leaving the families of those killed in the Rana Plaza collapse still without adequate compensation” says Scott Nova of the Workers Rights Consortium.  
The emerging funding crisis is having a negative impact on the compensation process, known as the Arrangement.  The success of the Arrangement is reliant on receiving sufficient funding of $30 million. Currently, all beneficiaries are still owed 30% of their compensation award. This will only be paid when the remaining funding gap is filled.   

“The Rana Plaza Coordination Committee (RPCC) designed and agreed on a transparent, predictable, timely and fair process, as outlined under the Arrangement,” says Ineke Zeldenrust of the CCC. “In the immediate aftermath of the tragedy it was believed by all stakeholders that creating such a process was essential.  Brands in particular pledged their support to such a process and insisted that once the Arrangement was established donations would be forthcoming.  Despite acquiescing to open and voluntary contributions at the brands insistence, the CCC and partners have had to spend the last year fighting for almost every donation made, and there still remains a notable gap in the Fund.   Meanwhile, beneficiaries are being kept in a limbo of uncertainty, not knowing when or even if they will be able to get the rest of the money they are entitled to.  These people and their families are reliant on this money to rebuild their lives”.      

According to local Bangladeshi trade unions, all the Rana Plaza victims and their families have been damaged by the Rana Plaza tragedy, given its nature and size, the impact it had on society, and the uncertainty of the last two years.

In December 2014, the RPCC discussed and agreed to make supplementary payments to all claimants, which would be separate and subsequent to the compensation amount each person is entitled to.  These supplementary payments are included in the 30 million USD target and will ensure that each beneficiary receives an equal amount of minimum payment, which essentially equates to establishing a minimum floor for all beneficiaries.  The 30 million USD target also includes money for long-term medical costs, and for adjusting awards following complaints.

“Resolving the funding crisis is essential first and foremost for the victims”, says Zeldenrust.  “Additionally, getting closure on the Rana Plaza compensation will allow the establishment of the foundation for a more permanent system of social security following workplace accidents based on the ILO conventions and building on the lessons learned from the Rana Plaza Arrangement.”  

The supplementary payments are totally dependent on first, all compensations claims being paid in full, and then on the extent that additional funds become available.  Currently, there are not enough funds to guarantee full payment of compensation claims let alone for the subsequent minimum payment.  

Today, the CCC renews its calls for governments of donor countries and of the host countries of brands sourcing from Bangladesh to put an end to the current impasse and funding crisis.