Compensation for the Victims of the Rana Plaza and Tazreen Fashions Disasters

Since November 2012, Bangladesh has experienced the worst two garment factory disasters in the country’s history. More than 1,100 persons died when the Rana Plaza building, which housed five factories, collapsed on April 24, 2013. Five months earlier, on November 24, 2012, Tazreen Fashions caught fire, killing at least 112. The disasters left many more workers with serious physical and psychological injuries. All the factories were making garments for well-known western retailers.

Human Rights Watch interviews with the dependents of those who died as well as with survivors shows that many are still suffering. Despite a high profile international campaign drawing attention to their plight, the support they have so far received from the government, the garment manufacturers association, and the western retailers linked to the factories has not been enough to meet their needs.

For example, while an independent commission has estimated that US$30 million needs to be paid to the survivors of the Rana Plaza and the dependents of those that died, only about US$21 million had been paid or pledged as of March 2015.[194] British retailer Primark is one of the biggest contributors with US$14 million in total aid payments so far.[195]  By contrast, 15 companies whose clothing and brand labels were found in the rubble of Rana Plaza by journalists and labor activists have not paid anything into the trust fund established with the support of the ILO to manage the payments.[196]

According to the UN Guiding Principles on Business and Human Rights, companies have a responsibility “to prevent or mitigate adverse human rights impacts that are directly linked to their operations,” and to take remedial action should abuses occur.[197]

The Rana Plaza Collapse

Human Rights Watch spoke to 46 survivors and relatives of the deceased, and while all said they had received some financial support, the amounts were small and inadequate, in some cases grossly inadequate. There is little opportunity for victims to seek adjustments.

For instance, Rabeya Begum, whose legs had to be amputated eight months after the accident due to the injuries she sustained, explained:

I have four children and my husband can no longer work because he needs to look after me. We are now only living off the money I received when I was in hospital. This is about to be finished and I don’t know what we will do once we spend this money.[198]

Several people spoke of psychological trauma that prevents them from working. Mohammed Khokan says he is now dependent on relatives to feed his family. “I can’t work because I am terrified every time I step into a building.”[199]

Alamgir Hossain says he is struggling to support his family because he cannot tolerate loud sounds.

After I left the hospital I took a job at a factory, but I could not continue for more than four months. Whenever there was a fire alarm I started screaming. Even if there was a small sound I had to run away. People thought I was going mad. I had to leave the job, now I am struggling to support my wife and a kid.[200]

Like many survivors, Rita, age 17, has decided to leave Dhaka and return to her village. As she explained:

I had to return home because I no longer worked. When I worked, my stepmother was looking after the family because I was sending money for my siblings. But now I still can’t do any strenuous work because I have pain. One of my younger brothers who is eight years old is working, he takes care of cattle. So now I skip medicines because there is no money. I only buy medicines when there is an emergency.[201]

Rita says that she has not yet received compensation because she was too late to register. “I don’t know how to feed my younger siblings. Earlier I worked in a factory I had a job but now I worry about them. It saddens me to think that I have put my younger brother to work.”[202]

The Rana Plaza Donors Trust Fund

Chaired by the ILO, the fund was set up in January 2014 by the Bangladeshi government and representatives of the garment industry (both domestic and international), trade unions, and non-governmental organizations to establish “a systematic and transparent claims process.”[203] The fund’s website explains that the fund is open to any company, individual, or organization that “wishes to contribute as a way of expressing solidarity and compassion with the Rana Plaza victims.”

The Rana Plaza Fund received a total of 2,849 claims related to injured persons and dependents of deceased workers.[204] On the first anniversary of the accident in April 2014, the fund paid an initial amount of about US$650 to each beneficiary.[205] By December 2014, the fund had paid the first installment to nearly all beneficiaries.[206] This amounts to about 40 percent of the total compensation each of them is due.[207] The rest of the payment will be paid depending on future contributions into the fund.

Many international retailers have paid into the fund, including some that did not do business with the Rana Plaza factories. Other retailers connected to Rana Plaza have not donated at all, or donated relatively small sums.[208] Some of the companies have chosen to give money directly to NGOs supporting victims instead of to the ILO-chaired fund.

In April, 2014 Human Rights Watch wrote to the companies that have not paid into the fund, asking them to explain why they have not done so.[209] Benetton replied that it preferred to directly fund a project run by an NGO.[210] Danish retailer PWT wrote that it was not producing garments in Rana Plaza at the time of the accident, but had in any case “donated in sympathy, already in July 2013, a significant 6-figure sum to the victims of the disaster.” This was given partly to the BGMEA and partly to a hospital that treated the survivors.[211] German firm Adler wrote that a former supplier had placed two small orders with one of the Rana Plaza factories without its permission and “against our supplier policy.”[212] Since this factory was not an approved supplier to Adler and the company did not have a direct “business contact” with it, Adler wrote that it was not necessary to join the fund. Nevertheless it had donated €20,000 “directly to victims of Rana Plaza.”

Human Rights Watch also wrote to the 14 companies that are listed as donors to the Rana Plaza Trust Fund asking them to explain why they had contributed to the fund and what further steps they might take.[213] Twelve of the companies responded, including some that said they had done so even though were not linked to Rana Plaza.[214] Britta Schrage-Oliva of KIK, for example, said KIK was not linked but hoped her company’s contribution of $500,000 would encourage others to donate.

Many experts see the Rana Plaza fund as a model that could be replicated following industrial accidents in the future—both in Bangladesh and in other countries. Roy Ramesh Chandra, secretary general of the IndustriALL Bangladesh Council, part of the global trade union federation IndustriALL Global Union and a member of the Rana Plaza trust fund arrangement committee, explained that it had helped to include all stakeholders in setting up and managing the fund. But he suggested improvements, such as including psychological suffering and loss of future earnings when computing compensation. He also felt that financial counseling should be provided to all beneficiaries so that they can use the compensation funds to better secure their futures. But most importantly, he said, the process should work much faster. “On principle, I feel the workers should get compensation within the shortest possible time,” Chandra said.[215]

“The Rana Plaza compensation arrangement has given us a number of lessons,” Srinivas B Reddy, ILO country director for Bangladesh told Human Rights Watch. The ILO is conducting talks with the Bangladesh government to work out a mandatory employment injury insurance program. The idea, he explained, is to have all workplace injuries covered under it so that workers have full protection in case of minor or major accidents.[216]

Tazreen Fashions

In November 2014, on the second anniversary of the deadly fire at Tazreen Fashions, the European retailer C&A announced that it had reached an agreement with the IndustriALL Global Union and the Amsterdam-based Clean Clothes Campaign to finally deliver a “significant amount towards full and fair compensation” for the many victims.[217]

The Savar-based Tazreen Fashions factory was engulfed in flames on November 24, 2012, killing 112 workers and injuring many more. Managers had barred workers from leaving by the stairs since they said it was a false alarm, survivors said.[218] The exits were also blocked with cartons as the factory was rushing to fill an order. Workers were badly injured as they jumped out of the upper floors of the burning factory. Hundreds continue to suffer from their injuries and cannot afford medical treatment.[219]

Hong Kong-based company Li & Fung made a donation to support victims soon after the disaster, according to the Clean Clothes Campaign.[220] At this writing, the amount pledged by C&A had not yet been disclosed or dispersed, but its decision to participate is welcomed.

Prior to the C&A pledge, workers who survived the fire told Human Rights Watch that they had received only 100,000 Bangladesh Taka each (US$1,267) in compensation from the Bangladesh government and the BGMEA, but they had spent most of the funds within the first year of the disaster on medical costs.[221]

In November 2013, Human Rights Watch wrote to the other companies whose products were in some way associated with the Tazreen factory. These were Dickies (USA), Disney (USA), NTD Apparel, Amerella of Canada, El Corte Ingles (Spain), Karl Rieker (Germany), KiK (Germany), Piazza Italia (Italy) Sears (USA), Sean Combs/Enyce (US), Teddy Smith (France), and Walmart (USA). To date, none have replied.[222]

Several companies publicly emphasized that their products were being manufactured or stored in the Tazreen Fashions factory without their knowledge. For example, in a statement released soon after the fire, Walmart blamed a supplier for subcontracting an order to the plant without informing them. It stated that, “the Tazreen factory was no longer authorized to produce merchandise for Walmart. A supplier subcontracted work to this factory without authorization and in direct violation of our policies. Today, we have terminated the relationship with that supplier.”[223]

Mohammed Sulaiman, a sewing supervisor, said a big order was due to be completed the day of the fire and the management officials had given strict instructions not to leave the building. Sulaiman, like several other workers, said that managers had initially ordered people to stay at work even after fire alarms sounded. Some exits were locked and others were blocked by stock prepared for delivery. Sulaiman fractured his right leg when he jumped out of the burning building. Like others interviewed by Human Rights Watch he said he received 100,000 Taka(US$1,267), but had spent the money, mostly for medical care. He recalled his experience:

When the fire broke out, many of the workers died of suffocation from smoke. Those who could, tried to save their lives by jumping off the building. I jumped too but broke my leg… I was the only earning member [in my family]. My brother stopped studying because of my accident and now works as a daily wage laborer. I have not done any work since the accident because the doctor told me not to do any heavy work. I still have to spend money on medicines. I cannot sit on the floor anymore. I cannot sit or stand for too long at a time.[224]

Aleya, who worked on the sixth floor, said she seriously injured her back, neck, and head when she jumped to escape the fire. She spent over a month in hospitals. She told Human Rights Watch that the initial compensation has run out but she is unable to go back to work due to her continued poor health.[225] “We are in much misery and pain. When Eid [religious festival] came, everyone else was celebrating with much happiness, but we spent the day crying, we could not buy clothes for our children.”[226]

Roy Ramesh Chandra of the IndustriALL Bangladesh Council told Human Rights Watch that there was a failure all around to ensure fair and full compensation for Tazreen victims, and that the current state of affairs was “unacceptable and unethical.”

I again request all global stakeholders to raise their voice because these victims are really suffering. Some money was given to deceased families from the Prime Minister’s fund, and some companies may have given some money. This is not compensation. When there is compensation, everyone should get it and there should be proper calculation.[227]