The Rana Plaza disaster – a quagmire of considerations

On 24 April 2013, the Rana Plaza in Bangladesh collapsed. Described as the deadliest garment factory accident in history, it left 1,129 dead and nearly 2,500 people injured. Among the rubble were found the labelled garments of 29 well known manufacturers who were outsourcing production to this factory.

Outsourcing on this scale is big business. Of Bangladesh’s total exports, garments account for 78 per cent. Some 59 per cent of these exports is destined for the European market. In Ireland, for example, CSO figures attribute €277 million of garment imports from Bangladesh since 2010. With big business in this context, however, comes little regulation and it is not surprising that it often results in corruption, collusion and most seriously, cutting corners for workers and workplace safety.

The Rana Plaza disaster is one among many but the scale means its victims are in need of immediate financial assistance. In reaction to this, the Rana Plaza Donors Trust Fund was established by the International Labour Organisation (ILO), an agency of the UN. The aim is to provide monies to those injured in the collapse and to those who have lost their principal breadwinner. Operating in contrast to a charity, the fund seeks to provide compensation to the most needy to spend as they see fit and not invested according to where the ILO deems appropriate.

So who funds the fund? While open to all, companies manufacturing in Rana Plaza are asked to contribute towards an overall goal of $40 million. Any contribution, it states, ‘does not imply legal responsibility or obligation for the accident’ and there is no onus on the company to disclose how much it has contributed.

Being included on the list of donors does not mean standing among equals. Of all companies, Primark has stepped up to the plate, contributing $8 million to the fund. It is also making contributions directly to workers which will be in the region of $4 million – a total of $12 million overall. It sits on the list beside companies such as C&A, Mango and Gap which made a contribution of $200,000 each. ‘Nearly all of these brands,’ states Clean Clothes Campaign Ireland (CCCI), ‘have failed to make a significant enough contribution and we are calling on them to increase their donations.’

On 4 July 2014, the fund stood at $17.7 million – substantially short of its $40 million goal. As donations dribble in, Matalan in the UK has come in for particular flak and attention. The last big British company to contribute, it only paid in the past few days. Susannah Compton, Campaigns Manager with ‘38 Degrees’ believes it did so after tens of thousands of people emailed, called and tweeted Matalan to tell them they could not walk away from their responsibilities. It chose not to disclose the amount contributed. Compton believes that ‘Until Matalan says exactly how much it has paid, its customers will still be waiting to see what kind of business it really is.’

Why did Matalan hold out this long? In its opinion, it didn’t. While it did not contribute to the ILO-managed fund until recently, it has already donated to BRAC, an NGO which will rehabilitate and retrain survivors of the Rana Plaza disaster (a similar approach to that taken by Benetton). Maintaining that it only ran a small pilot scheme from February to March 2013, Matalan states it had no interests there at the time of the factory collapse even if garments bearing one of its labels were found amongst the debris. It says it has donated the equivalent of what it made during this short time to BRAC. Calling for Matalan to contribute £3 million to the fund, the ‘Labour Behind the Label’ campaign group does not think duration is a relevant factor: “Quibbling over the exact status of an order at the time of a collapse is petty given the scale of the disaster.” There is no information, however, on how this amount was arrived at and why one company out of 29 should be obliged to contribute the equivalent of $5 million to a fund total of $40 million.

Paying into the fund is voluntary. While no company is forced to contribute, public and political pressure to do so is significant. But should all companies contribute equal amounts? There is no scale of contribution. David Babbs, executive director of ‘38 Degrees’ argues “If Primark can pay, why can’t Matalan?” Is this acceptable? Surely, a company which has benefitted most from the workers at Rana Plaza should contribute more than a company there momentarily? Morally, Matalan might contribute but from a business perspective, it makes little sense. With unsafe work practises throughout the region, there is the danger of setting a precedent that it might be required to contribute at the same level each time.

Matalan and many other companies, for example, Benetton, Walmart and the Gap Foundation, have opted, however, to contribute to BRAC. Why did Matalan pick this over the ILO fund? According to a company spokesperson, “In order to come to this decision, we have undertaken a significant level of due diligence and have moved to avoid public debates of where the right place to put our support should be.” Contributions to BRAC have been largely overlooked by the campaign groups which say that monies should be paid to the ILO fund specifically and have garnered public support to make this happen.

Should companies willing to contribute, however, not retain the right to place their money where they believe it can have most impact? As the largest NGO in the world, BRAC seeks to pull people out of poverty. It invests in communities’ own human and material resources, ‘catalysing lasting change and creating an ecosystem in which people who are poor have the chance to take control of their own lives.’ This is the approach being taken to those directly affected by the Rana Plaza disaster – seeking to arrange integrated livelihood options for people to ensure sustainable futures and to help them gain control of their own lives and those of their dependents. It seeks therefore to contribute to long-term goals rather than compensate short-term recovery.

Like Primark, Matalan was one of the main beneficiaries from the economic downturn and the demise of Woolworths in the UK. In all this discussion of which companies should pay and how much, little attention is given to the actual consumer who is creating, and sustaining, the demand for cheaper clothes. Companies manufacturing garments in Bangladesh and the surrounds are meeting that demand. An emphasis on higher standards and regulations will inevitably drive prices up. With the threat of increasing prices, companies can move elsewhere to less regulated areas to feed the demand for cut-price clothing. And so the cycle continues.

The Rana Plaza Donor Trust Fund is open to all but campaigns focusing on companies don’t promote this point. They simply highlight the cause without addressing the demand which perpetuates this practice. Saying this is not to divest companies of moral and financial duty to their workforce wherever they are located. Reading through all the materials on this subject, however, it makes one wonder how many of the writers, researchers and representatives are wearing clothes from the companies they now hold so culpable…

 Published online: 2014


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