Primark long-term compensation payments draw to a close

  • 95% of workers and beneficiaries have received payments in full
  • Only final payments to recently identified beneficiaries and extremely vulnerable people remain outstanding
  • Ongoing support to continue

Primark announced today that it has completed more than 95% of long-term compensation (LTC) payments to the 668 workers (or their dependents) of Primark supplier, New Wave Bottoms, which occupied the second floor of the eight storey building, who died or were injured as a result of the Rana Plaza building collapse in Bangladesh on 24 April 2013.

Total payments now stand at $14 million, of which long-term payments amount to $11 million and have been made in full, in cash, directly by Primark. Payments have been delivered to victims through BRAC Bank and bKash.

Payments began 12 months ago and have been completed within 12 months. There are a very small number of claimants yet to receive compensation because either the individuals require a high level of support and / or the victims and / or their dependents have only very recently come forward. Primark is making the payments with great care. Victims (or their dependents) who have final payments outstanding are being supported by the company while the formal payment process is completed.

Primark is working with local partners in Bangladesh to ensure its approach to compensation is rigorous. It has also liaised closely with the International Labour Organisation (ILO) throughout. This approach to compensation involved medical and vulnerability assessments. Payments have been made according to the impact of the injury and the level of disability resulting from the collapse, and in the case of the dependents of the deceased and missing workers, according to actuarial estimates of lost earnings. Primark has also sought to address the complex issues relating to the vulnerability of those receiving payments and their capacity to control and manage large sums of money.

A Primark spokesman said:

“This process has taken time to complete because the company was determined that its approach to compensation should be as fair, rigorous and sustainable as possible. Some 95% of payments have been made. The company is supporting victims, or their dependents, in the handful of cases where final payments remain outstanding. The company would like to thank its partners for their assistance and support.”

With total aid standing at $14 million, the balance of $3 million is comprised of aid to workers in its competitors’ supply chain. Primark has already distributed some $2 million to these workers, or their families, in aid and cash. The company has additionally made a payment of $1 million to the Rana Plaza Donors Trust Fund, chaired by the ILO for distribution to workers in its competitors’ supply chain.

Primark has signed the Accord on Fire and Building Safety in Bangladesh, which is carrying out factory building inspections. Primark has also carried out building surveys of factories in Bangladesh from which it sources garments.

Primark will continue to monitor the welfare of victims with long-term injuries or loss of earnings, in conjunction with local partners that have advised the company on its approach to compensation.

For further information, please contact:

Citigate Dewe Rogerson +44 20 7638 9571

Chris Barrie

Shabnam Bashir

Georgia Colkin

Notes to editors

Primark was the first brand, as far as it is aware, to acknowledge it had a supplier in the Rana Plaza building, and to pledge that it would meet its responsibilities. Primark’s supplier was on one floor of 8, and one factory among many in the huge building. Primark was one of 28 brands acknowledged to be supplied with clothing by the building.

The company committed swiftly to pay long-term compensation to the workers in its supplier’s factory.

Immediate Food Aid:

The company provided weekly food aid for a month, to some 1,300 families within a week of the building collapse, through one of its local NGO partners.

Short Term Financial Assistance:

The company then provided short-term financial assistance to all workers (or their families) from the Rana Plaza building, to alleviate hardship. This aid was paid to some 3,600 workers (or their families), most of whom made clothes for Primark’s competitors. The aid was the equivalent to nine months wages, paid in three instalments. No other brand orchestrated similar payments, as far as the company is aware.

To pay this compensation, the company had to register the details of the workforce – most of whom worked for suppliers to other brands. This was a huge logistical exercise. The company understands it holds the largest researched registration details of the workforce as a result.

Long-Term Compensation:

The company engaged external experts to devise a detailed approach to compensation, involving medical and vulnerability assessments. The company has sought to be transparent about how it operates, and its methodology. All details have been shared with the ILO-chaired Coordination Committee that oversees the Rana Plaza Arrangement, and Primark continues to provide information on the medical and vulnerability assessment tools that have been used.

Primark has made its long-term payments, for purposes of recognition, as compensation under the auspices of the Coordination Committee of the Rana Plaza Arrangement. Under the terms of an arrangement with the Coordination Committee, Primark has made any upwards adjustments necessary to its long-term payments in individual cases to meet the requirements of the Coordinated scheme based on Convention No. 121 under the Rana Plaza coordinated claims process. Equally, any overage paid by Primark in individual cases beyond the Convention No. 121 requirements was considered to be further financial aid to New Wave Bottoms workers and not compensation.

Vulnerability assessments were carried out to identify vulnerable groups such as widows, the severely injured and disabled workers. The assessments enabled Primark to identify those individuals that required additional support, in order to offer appropriate assistance so that the individuals concerned retained control and free access to their compensation payments.

Primark has been assisted in its medical and vulnerability assessments by the following: Dhaka University Institute of Vulnerability Studies and Disaster Management, Dhaka University Medical College, doctors from Complejo Hospitalario Universitario Juan Canalejo (La Coruna, Spain), The Bangladesh National Womens Lawyers Association, and Naripokkho, Primark’s NGO implementation partner. Primark would like to thank all these institutions for their support over a lengthy period.

Primark’s latest estimate is that 1,142 people will have received compensation by the end of the process, these being either victims or their dependents.

Rescue Workers:

Primark also recognised the support needed by the voluntary rescue workers, many of whom put their lives at risk to support the Rana Plaza rescue efforts.

Through one of its local NGO partners, Primark has supported a ‘healing and skilling’ project for 100 rescue workers. These rescue workers include students, local business owners, garment workers from nearby factories and relatives of Rana Plaza workers.

Primark has also provided medical support and long-term compensation to severely injured rescue workers as it identified the need for assistance.

Building Inspections

Primark is a signatory to the Accord on Fire and Building Safety in Bangladesh, a contract between more than 190 apparel brands and retailers, international and local trade unions and NGOs. The Accord is carrying out factory building inspections and working to improve conditions in the Bangladeshi garment industry. Primark has also carried out building surveys in Bangladesh to assess the structural integrity of the factories from which it sources garments.