A facility in Barcelona, Spain, used by Mango, one of five brands and retailers that contributed toward a $40 million goal. Samuel Aranda for The New York Times

First Companies Give to Fund for Victims of Bangladeshi Factory Collapse

International New York Times | 23 Feb. 2014

ROME — Five global clothing brands and retailers on Sunday became the first contributors to a new fund raising $40 million for victims of the Rana Plaza factory disaster in Bangladesh, and activists are campaigning to pressure other brands to also make donations.

The collapse of the Rana Plaza building on April 24, killing more than 1,100 workers, was the deadliest disaster in the history of the garment industry. It focused global attention on the unsafe working conditions in some Bangladeshi factories, the rock-bottom wages earned by workers, and the lack of accountability and oversight in the supply chains for many global brands.

Compensating the victims has been an especially complicated issue, involving months of negotiations among clothing companies, labor groups, Bangladesh’s government and Bangladeshi factory owners. Those negotiations produced the Rana Plaza Donors Trust Fund, which on Sunday night reported the names of the first five companies to contribute: El Corte Inglés; Inditex, which includes the brand Zara; Loblaw; Mango; and Mascot.

On Monday, labor groups in Bangladesh are expected to hold public events to draw attention to the hardships faced by Rana Plaza victims with the anniversary of the accident two months away. Ineke Zeldenrust, the international coordinator of the Clean Clothes Campaign, a European anti-sweatshop group, said labor groups were also pushing for companies like Walmart, Children’s Place and Benetton — which have been linked to Rana Plaza — to make contributions so that payments can begin as soon as possible.

Dan Rees, a representative of the International Labor Organization, which is managing the fund, said formulas and a claims process had been established to pay lost wages, medical bills and other compensation to the roughly 4,000 victims, including survivors of the factory collapse, those who were injured and the families of the dead.

“The significance of this is we have a mechanism that the whole industry can support,” Mr. Rees said. “We haven’t been able to say that before. What we had before was the blame game.”

Much of the finger-pointing has centered on the question of what responsibility global brands should bear for accidents that occur in the factories that produce their garments. Some brands have been concerned that agreeing to participate in a compensation fund for Rana Plaza victims could be interpreted as an admission of guilt and become a vulnerability if litigation arises.

Mr. Rees said the Donors Trust Fund was designed so that donations are voluntary and do not imply any legal responsibility for the accident. Moreover, the fund is open to any company, organization or individual, meaning that brands not linked to the Rana Plaza factories can also contribute. Donations can be public or anonymous.

It was not yet clear how much money the five companies had contributed. This week, the fund is expected to make public how much money has been collected and to then keep a running tally.

Among those five companies, Mango, a Spanish brand, had initially signaled that it would not pay compensation. In the months after the accident, company executives argued that Mango had placed only a sample order with a factory inside Rana Plaza, and that work on the order had not yet begun, thus absolving the brand of responsibility.

In December, The New York Times reported that work had already begun on the Mango order, citing interviews with factory supervisors and workers. “There was an urgency among the bosses,” said one of the workers, Mohammed Mosharuf Hossain. “The managers told us to finish the Mango products urgently. They said if we could finish this work quickly, we might get more orders from Mango.”

In an interview on Friday, a representative for Mango confirmed that the company would contribute to help the victims but characterized the fund as having a “charitable background” and said the money should not be considered compensation. Nor had the company changed its position on its relationship to the factories in Rana Plaza, the representative said.

“We reassert and reaffirm our initial position,” the representative said.

Ms. Zeldenrust applauded Mango and the others that had agreed to pay into the fund but said more brands also must contribute to reach $40 million, the estimated amount deemed necessary to provide full compensation. She said two other retailers, Primark and Bonmarché, had signaled their intent to contribute, and Primark has already spent more than $3 million for short-term assistance to victims. But Ms. Zeldenrust argued that many others, including those not linked directly to Rana Plaza, must pitch in.

“It is a $48 billion industry worldwide,” she said. “This is nothing.”