Loblaw among retailers to contribute to $40M Bangladesh compensation fund
Published Tuesday, December 24, 2013 9:50AM EST
Last Updated Tuesday, December 24, 2013 11:28PM EST
Four global retailers, including Canada’s Loblaw, are pledging to contribute to a $40 million compensation fund for the survivors and families of victims of the garment factory building collapse in Bangladesh last April.
More than 1,100 people were killed when the illegally constructed eight-story Rana Plaza garment factory collapsed. It is expected that each family affected by the tragedy will receive about $25,000, which will be paid out in installments beginning in February.
The newly established fund was facilitated by the United Nation’s International Labour Organization, and was signed by local and national trade unions, employer associations and the Bangladeshi government.
The companies that have signed the pact, known as the “Arrangement,” include the Spanish department store El Corte Ingles, French department store Bon Marche, U.K. retailer Primark, and Loblaw, which produced its clothing line Joe Fresh in the Rana Plaza.
According to various human rights groups, about 25 companies had business dealings within the Rana Plaza, including Walmart, JC Penney and Children’s Place. But so far, no American companies have signed on to the agreement.
Scott Nova, a member of the Worker Rights Consortium, said the American companies have not indicated that they plan to compensate the victims of the tragedy.
“There is now a compensation plan in place, which a number of the world’s leading brands and retailers have signed,” Nova said in a news release. “The question now is: what will Walmart and Children’s Place do?”
Pierre Martel, a political science professor at the University of Ottawa, says American retailers may be wary of contributing to the fund for fear of admitting legal responsibility.
“But eventually, I think it’s going to create a momentum and corporations will want to demonstrate that they have corporate responsibility at heart,” he told CTV News.
Meanwhile, Lynda Yanz of the Maquila Solidarity Network said in the release that if the companies “refuse even to compensate the families of those who died, they will have reached a new low in the annals of corporate irresponsibility.”
In a phone interview with CTV News, Yanz said that Walmart admitted its products were being produced in the Rana Plaza, and said that the company has indicated it is now focused on preventing tragedies from occurring.
“If they had done any prevention prior to going to where the Rana building was, they would have known that there should have been no factories on that location, and it’s well to be about prevention now, but over 1,000 workers lost their lives and they have a responsibility,” she said.
And while the $40 million pledge to the victims may not appear to be a significant amount in the North American context, Martel says the compensation fund will make a difference for workers in Bangladesh, where the average income is about $1,900 a year.
“It may make a difference between a child being forced into going to work, or a child going to school and perhaps having a better future,” he said.
With a report from CTV’s Omar Sachedina