Apparel Sourcing Intelligence - Worldwide

Loblaw and Primark call on other buyers to adopt their Rana Plaza compensation policy

UK-based Primark and its Canadian cousin Loblaw on October 24 voiced outspoken criticism of other buyers connected with the Rana Plaza collapse. It followed research showing that 92% of Rana Plaza survivors have not gone back to work, and 94% claim to have received no benefits, sick pay or compensation from their employers since April.

The research from activists ActionAid surveyed nearly two thirds of survivors and families of those who died in the eight-storey factory collapse on 24 April this year. It reveals that  63% of survivors said physical injury such as amputations, paralysis, severe pains in the head, leg and body have stopped them going back to work, while 92% reported being deeply traumatized, with over half experiencing insomnia and trembling from loud sounds. Some said they were scared to walk into a building or an enclosed room.  Half of those surveyed said they had mounting debts and over 90 per cent said they had no savings, due to low wages before the factory collapse.

The research was the basis for ActionAid to repeat earlier attacks on brands connected with the tragedy, calling on companies negotiating the compensation package to deliver “a fair deal for the survivors and families of the deceased”.  The IndustriALL Global Union, which  is leading the negotiations on compensation, chaired by the International Labour Organisation, has proposed that $74.6 mn will be needed to provide full compensation to all workers, with buyers asked to contribute $33.6 mn

Almost simultaneously, Primark, which has already made significant compensation payments (and, it points out, created the reliable database of victims and families, and the administrative framework,  other buyers will need to manage any compensation) increased its compensation offer. It also used relatively undiplomatic wording in its reference to other buyers involved with Rana Plaza.

It called “on other brands involved in the Rana Plaza disaster to make a contribution by paying short-term aid to some 3,000 workers (or their dependents) who made clothes for their labels. To date these workers have been supported by Primark, even though the workers involved did not make clothing for the company but for other brands.” It went on to offer that “while these brands continue to deliberate on long-term compensation…if the other 27 brands who sourced in Rana Plaza fail to make this contribution, Primark is guaranteeing today that it will pay another three months wages to all the workers concerned.”

It called “on other brands sourcing from Rana Plaza to now contribute a fair share of this tranche of aid.”

Loblaw endorsed its cousin company’s stance. “Loblaw joins Primark in encouraging all brands that have been involved in production at Rana Plaza to participate in the provision of compensation to the victims of this tragedy,” said Bob Chant, Loblaw senior vice president for corporate affairs. On October 25, Loblaw announced it would pay three months’ wages to all workers at New Wave Style, the company that makes its Joe Fresh clothes. The money “will assist in financial needs until long-term funds begin to flow,” Loblaw said.

The activist Clean Clothes Campaign (CCC) noted that Italian retailer Benetton and Spanish chain El Corte Ingles were participating in attempts to establish a fund, while  Inditex, Britain’s Bonmarche and Mascot of Denmark had signalled their intent to contribute.

Most Primark shares, ultimately, are owned by the same closed Weston family company that owns Loblaw in North America as well as Selfridge’s in London,  Holt Renfrew in Canada, Brown Thomas in Ireland and de Bijenkorf in the Netherlands. Loblaw chairman Galen G. Weston said shortly after the Rana Plaza collapse “I’m troubled by the deafening silence from other apparel retailers on this. Thirty companies were having goods manufactured, but only two have come forward to speak publicly”.  Both Loblaw and Primark were among the first garment buyers in their countries to sign up to the Bangladesh Accord, and Loblaw has made no secret of its intention to distance itself from other North American brands and retailers on this.

Opinion: Why are the Weston family happy not to toe the garment industry line?