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Rana Plaza compensation fund raises less than half its target

Less than half the funds being sought by NGOs and the UN’s International Labour Organisation have been raised for the victims of the Rana Plaza factory collapse, a year after the incident, which claimed 1,129 lives.

Pressure groups have called for retailers that had floor space in the Rana Plaza factory to donate $40m (£23.8m), but only $15m has been raised so far - more than half of which came from Primark.

A collective of NGOs and union IndustriALL claim that 29 international brands were using the factory; of these 20 have donated to the ILO fund, which is due to make its first interim payment on April 24.

Some of the remaining nine firms - including big high street names like Benetton and Matalan – told Drapers that while they have not paid into the ILO fund, they have contributed to relief efforts run by local development charity BRAC.

The NGO, formerly known as the Bangladesh Rural Advancement Committee, has been working with Rana Plaza survivors since the initial collapse.

As well as an initial donation, Benetton has committed to long-term support of BRAC’s work with Rana Plaza victims, instead of donating to the ILO fund. As of today (April 23), 350 families had been assisted.

Benetton said it pursued this course of action because the multi-stakeholder approach was taking too long.

We ended our involvement in the round table when we realised that times were lengthening and we were coming to the point of envisaging a purely voluntary contribution system, one which was not at all proportionate to each company’s presence in Bangladesh,” a spokeswoman said. “We did not share this principle because it does not take into consideration the fact that companies generate production risks also in terms of the size of their orders to suppliers.”

Matalan said it was not working with suppliers within Rana Plaza at the time of its collapse but has nevertheless supported victims, again via BRAC.

In particular, Matalan is providing medical insurance for survivors suffering with long term injuries or mental illness, as well as setting up a reserve fund to cater for those survivors unable to work.
Neither company was willing to give an exact figure on how much it has donated to BRAC.
Despite these contributions, pressure groups have called on Benetton and Matalan to pay $5m (£3m) each into the official ILO-backed scheme.

Sam Mayer, of NGO Labour Behind the Label explained: “Mapping responsibility in a situation like this is incredibly hard. Some of the brands are denying responsibility because they had no orders being made in Rana Plaza on the day of collapse. Of course, it’s not that simple. If your order was finished a week before the disaster, that doesn’t absolve you of guilt”.

Mayer added that some retailers who have paid up should be paying more. “Working out what percentage of floor space you had in the factory on the day of collapse isn’t sufficient - the unsafe floors that collapsed were put in during 2008,” she told Drapers.

“Your presence in the factory over time, your presence in Bangladesh as a whole and your ability to pay are all important factors that should be taken into account when working out what you should be paying in”.

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