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Benetton takes heat over Rana Plaza fund

The Clean Clothes Campaign says it has confirmed authorisation of another round of compensation payments to victims of the Rana Plaza clothing factory collapse.

Rana Plaza, in the Bangladesh town of Savar, was the scene of the 2013 disaster where 1129 workers were crushed to death in the collapse of sweatshops producing clothing for western fashion brands.

The Rana Plaza Coordination Committee has this month approved compensation payments to 5000 claimants, who are dependents of the deceased and injured workers. This round of payment is sufficient to pay an additional 30 per cent of each award, making the total amount received by each eligible beneficiary only 70 per cent of the amount they are entitled to.

The Clean Clothes Campaign has singled out Italian fashion house Benetton for failing to make a promised payment, inferring the company is largely responsible for the short payment.

“Other companies such as Children’s Place, Inditex (Zara), Mango, Matalan, and Walmart have failed to contribute a significant and proportional amount.

“With this payment the majority of the funds received into the fund will be distributed and the payment of the final 30 per cent of each compensation claim will only take place once more donations are made to the Rana Plaza Donors Trust Fund, which remains at a US $9 million shortfall,” the campaign said in a statement.

In the past year, the fund, set up by the International Labour Organisation in January 2014, has received around US $21 million in donations from global brands, the Bangladeshi Prime Minister’s Fund, trade unions and civil society.

Benetton released a statement at the end of February confirming its intention to donate to the fund, but since then Benetton has remained silent on the matter.

“Benetton claims it is delaying to allow time for a consultant to advise it on a fair amount of payment, but refuses to disclose any information about who will carry out this work, the methodology with which they will determine the amount, or a date for when a donation will be announced,” said the campaign.

“The Clean Clothes Campaign urges Benetton to make an immediate payment of at least $5 million to the Rana Plaza Donors Trust Fund – an amount believed to be proportional according to Benetton’s ability to pay, the size of its relationship with Bangladesh and its relationship with Rana Plaza.”

The campaign says compensation payment amounts are calculated “in line with international standards”. Despite this, brands continue to be reluctant to make “meaningful payments” to ensure that the victims of the Rana Plaza collapse receive full and fair compensation.

“Now that the next round of payments have been authorised, the fund urgently needs more donations. There will be no more money in the fund, which means that families will then be placed in a precarious situation of not knowing if they will ever receive the full compensation that they are entitled to”, said Sam Maher of the Clean Clothes Campaign.

“Every single brand has the responsibility to ensure that the victims receive full and fair compensation. Until this is accomplished, brands should recognise that their responsibility to the victims has not been fulfilled.

“The $9 million shortfall is totally unacceptable, and we need to see all stakeholders involved, particularly Benetton and other brands, step up and fulfill their responsibility”, said Maher.

“In the immediate aftermath of the disaster, when the industry made all sorts of commitments to the victims of Rana Plaza, we never imagined that full and fair compensation would still be an issue almost two years later.  Any of the companies – Benetton, Walmart, Inditex, Mango – have the ability to fill the gap.  All earn hundreds of millions of dollars in profit each year; money earned on the backs of the workers like those who died in the Rana Plaza collapse.

“Its time for these brands to stop playing politics with people’s lives, and fill the gap immediately.”

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