$40 Million Compensation Fund For Bangladesh Factory Victims Formed Without The Help Of Any U.S. Companies

Burgess COMMENTARY

Peter Burgess

$40 Million Compensation Fund For Bangladesh Factory Victims Formed Without The Help Of Any U.S. Companies
Bangladesh-factory-collapse 3x2 ... CREDIT: AP

Some American retailers that outsourced clothing from suppliers inside a Bangladesh factory that collapsed in April, will likely not take part in a $40 million compensation fund to aid the families of workers who died, according to the New York Times.

The eight-story Rana Plaza factory collapse on April 24 changed the lives of thousands of families when 1,132 workers were killed and more than 2,500 people were injured. Four non-American retailers, El Corte Ingles, Bonmarché, Loblaw and Primark, have promised to help contribute to the $40 million fund. Bangladesh Garment Manufacturers and Exporters Association, IndustriAll Global Union, the Bangladesh Employers Federation and the main Bangladesh coalition of labor unions have also pledged to contribute to the fund.

Meanwhile, Walmart, Sears, the Children’s Place, and other American retailers have all refused to comment on whether they would contribute to the fund. Both Sears and Walmart responded that unauthorized contractors had produced garments at Rana Plaza without their consent. The Children’s Place, which had used one of the factories inside Rana Plaza as a supplier in the past, said that the factory had not been making clothing for the company at the time.

Families of workers who died will be compensated with $25,000 each and families of workers who were maimed or injured will also receive compensation. The per capita income in Bangladash hovers around $1,900 a year.

Industry experts believe that the American companies are too afraid to commit to the fund because it may expose them to “legal liability” or it would make them “[appear] hypocritical after denying that they knowingly did business at Rana Plaza at the time of the collapse.”

In the eight months since the factory collapse, retailers and the Bangladesh government have done little to advance on promises to improve factory conditions. The Bangladesh government raised the minimum wage 77 percent, and while that is equivalent to about $66 more a month, the wage would still put workers at 14 percent of what’s considered a living wage. The government has also allowed workers to form unions, but protests have only been met with violence. Retailers promised to upgrade factory safety, but there have yet to be actual factory inspections.