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Primark to Pay Long-Term Compensation for Rana Plaza Victims

Primark, the budget fashion chain owned by Associated British Foods Plc (ABF), will pay long-term compensation to victims of the collapsed Rana Plaza factory in Bangladesh and called on others to follow suit.

Under the plan, 550 workers, or their dependents, of New Wave Bottoms, which made clothing for Primark, will receive long-term benefits starting in early 2014, the U.K. retailer said today in an e-mailed statement.

To tide them over, Primark has extended a short-term financial aid plan and it will also guarantee a further three months’ salary to about 3,600 victims, “many of whom worked in the supply chain of other brands.”

Six months ago, when 1,127 Bangladeshi workers were killed in the collapse of a high-rise warren of garment factories, international outcry led to pledges by western retailers and the government to set up a large-scale inspection regime and a new wage system. Primark said 27 other clothing brands should meet their responsibility to the victims and end delays in adopting a compensation program.

“Primark is calling 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,” the company said. “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.”

Primark’s plan is being devised with assistance from the Dhaka University Department of Vulnerability Studies and Disaster Management, Dhaka University medical facility, independent doctors and trade unions. The company has also tabled the plan with the International Labor Organization.

Primark doesn’t yet know how much the long-term plan will cost, as it depends entirely on the needs of the individual worker or dependents, a spokesman said. Primark has spent more than $2 million on benefits since the factory collapsed.

To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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