The compensation fund for victims of the Rana Plaza disaster two years ago is $8.5 million short of its $30 million goal.
More than 1,133 workers were killed on April 24, 2013, when the eight-story building housing five apparel factories collapsed in Savar, a suburb of Dhaka, and compensation for the injured, survivors and dependents has been slow in coming.
With less than 30 days left for the second anniversary of the tragedy, the urgency to pay the second tranch of compensation to the 5,000 victims identified by the Rana Plaza Coordination Committee has become imbued with the need for a quicker resolution.
Survivors of Rana Plaza have been asking for a speedier settlement, too.
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Rehana Begum, who lives in Savar, lost the only breadwinner in her family in the disaster. She said she had followed the procedures, filled in forms, opened a bank account and had received some money as compensation already. “I don’t know how much it was,” she said, but added that she knew that her need for the next payment was urgent for her own survival as well as for her orphaned grandchild.
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“There are sufficient resources to make another 30 percent payment,” said Dan Rees, who is overseeing this project on behalf of the International Labor Organization. The Rana Plaza Donors Trust Fund, which has the ILO as neutral chair of the organization, has raised around $21.5 million.
These donations include contributions from global brands, trade unions and the Bangladeshi Prime Minister’s Fund.
Rees explained that payments were running late because there had been “lots of technical issues to sort through,” and that efforts were being made to get the process done as quickly as possible.
The first 40 percent of payments were completed by December. “We have opened over 5,000 bank accounts for all beneficiaries,” Mojtaba Kazazi, executive commissioner of the Rana Plaza Coordination Committee, explained. “Whenever anyone came in for a claim, an account was opened with the Dutch-Bangla bank. We have paid 50,000 taka [$644 at current exchange] first to everyone before we received the claims in April 2014. We have had five installments of claims to cover this 40 percent,” he said.
The initial plan to pay a total of $40 million in compensation was lowered to $30 million in December.
“That was because the $40 million estimate was made before the start of the claims and with limited information about the claimants. It was based on some profiles of some of the claimants that were available at the time. But $30 million is the real figure. This is based on the claims processing and what has happened and what actually has been awarded,” said Kazazi.
But even with the lowered figure, the fund is still $8.5 million short of the amount needed.
On Tuesday, the three organizations negotiating compensation for the victims or their dependents — Industriall Global Union, UNI Global Union and the Clean Clothes Campaign —launched a countdown to the second anniversary of Rana Plaza, calling on brands to fill the gap in compensation before April 24.
The unions continue to push for all Western apparel brands and retailers to contribute to the fund, not just those that sourced from the factories at Rana Plaza. Some retailers and brands have done so, while others have either declined because of the potential ramifications or made their own compensation in other ways.
“For an industry that is all about image, the garment brands are taking shockingly long to do the right thing and close one of the most shameful chapters in the history book of the global clothing industry,” Jyrki Raina, general secretary of Industriall, said Tuesday.
The unions have also made a list of the brands still expected to pay into the fund, including Benetton, whose announcement in February that it would pay into the fund has yet to be followed up with details of the amount. Benetton said last month that the amount would be calculated by an independent third party and disclosed once the figure was determined.
But Benetton wasn’t the only company criticized by the unions. They claimed retailers such as Wal-Mart, Mango and The Children’s Place made donations that fell “far short of expectations,” while Lee Cooper, J.C. Penney, Matalan and Kik still have not contributed. The Children’s Place gave an estimated 450,000 pounds, or $669,150 at current exchange, through the charity BRAC USA; Wal-Mart has paid an estimated $1 million into the fund through BRAC USA. The unions said the discounter has indicated it may make further contributions but has yet to do so.
“Garment industry brands pride themselves on being trendsetters and responding to the fast-changing fashion world. In this case the brakes have been firmly slammed on,” said Philip Jennings, general secretary of the UNI Global Union.
The three unions are a part of the steering committee of the Bangladesh Accord on Fire and Building Safety, which has been signed by almost 200 global brands, covering around 1,500 factories and two million workers. Many of the firms it criticized are members of the alternative group, the Alliance for Bangladesh Worker Safety.
“By any account this has been a successful story in terms of global effort. Many nongovernmental organizations have helped, as has the ILO, the government. But if we had a bit more funding we could finish it quickly and plan a systematic measure for the future without the need to go into these things,” said Kazazi.
Talking about the focus on compensation, government officials have expressed concern about setting a precedent for a compensation amount that they will not be able to match in the future should there be any subsequent tragedies.
Rees observed that the compensation amount for Rana Plaza had been publicly agreed upon, but in terms of the future, it would be a good time for the government and all the stakeholders to come together and devise an accident insurance scheme for the industry.
“There are some gaps in Bangladesh laws and practice on this and now, together with the Bangladesh government, the ILO has begun to reach out publicly and discuss and begin a consultation process on this. So our hope is that the long-term future of this issue be a social security-based action for the industry, one that is paid for as a part of doing business, so that each stakeholder in the industry bears the cost of this,” he said.
Rees pointed out that this was a recognized way of proceeding “so that you’re not left asking who should pay after the situation and spending years fund-raising to deal with a particular incident. Instead there is an agreed way stakeholders have in the industry of calculating appropriate, fair and equitable compensation for paying it out. I think that’s the way to go in the future. If there is a national consensus on this it would be a result of proper consultations within the industry, in the context of Bangladesh and based on international conventions but very much in the local context,” he said.
Kazazi agreed there were important lessons from this process, which could be helpful for the future. “By any account this has been a successful story in terms of global effort,” he said.