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UPDATE 1-Primark pays more compensation to Bangladesh factory victims

Emma Thomasson
Thursday, 24 Oct 2013 | 7:14 AM ET

* Primark makes new short-term payment to victims of factory collapse

* Calls on other chains supplied by Rana Plaza to follow suit

* Vigil to mark six-month anniversary of disaster

* Progress on improving fire and building safety

BERLIN, Oct 24 (Reuters) - Clothing chain Primark laid out plans to pay more compensation to victims of the Rana Plaza factory disaster in Bangladesh on Thursday as workers' groups held a vigil at the site demanding other western brands follow suit.

The collapse on April 24 that killed 1,129 people has galvanised some of the clothing industry's big names to try to improve safety standards at suppliers but they have failed to agree on a compensation fund for victims despite months of wrangling.

Primark, the only retailer supplied by the factory to pay compensation so far, said it would pay out for the third time to 550 workers who worked for its partner New Wave Bottoms at the building. Each will receive another three months wages.

It has already paid six months salary to all 3,621 workers affected by the collapse and their families, committing some $2 million in short-term financial support and food distribution.

The chain owned by Associated British Foods, whose low prices have helped it expand to more than 250 stores in Britain and Europe, said it was also pressing ahead with plans to pay long-term compensation in the New Year despite the lack of an industry-wide agreement.

"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," it said in a statement.

Primark, whose supplier occupied the second floor of the eight storey building, pledged to pay a further three-months salary to all Rana Plaza workers or their families if the other brands fail to contribute.

About 3.6 million people work in Bangladesh's clothing industry, making it the world's second-largest garments exporter behind China, but some of the workforce, which is mostly female, earn as little as $38 a month. About 60 percent of garment exports go to Europe and 23 percent to the United States.

Bangladesh's factory owners are currently pencilling in a rise of about 50 to 80 percent in the minimum wage in a bid to end a wave of strikes that hit nearly a fifth of workshops last month.

ANNIVERSARY VIGIL

The International Labour Organisation has been coordinating talks to try to get an agreement on setting up long-term funds for Rana Plaza workers and for victims of a fire at the Tazreen factory in November 2012, which killed 112 workers - thus far to little effect.

IndustriALL and UNI, two global trade unions that have been involved in the process, are planning a candlelit vigil at sundown at Rana Plaza to mark the six-month anniversary. On top of those killed in the disaster, hundreds were seriously injured and will need support for years to come.

"Survivors and victims' families at Rana Plaza today remembered their loved ones and all ask the same question: When will we finally receive compensation for our loss?" the unions said in a statement.

Rock bottom wages and trade deals have made Bangladesh's garments sector a $22 billion industry accounting for four-fifths of exports in the country of 155 million. Retailers such as Wal-Mart Stores Inc, JC Penney Co Inc and H&M Hennes & Mauritz AB all buy clothes from its factories.

Some of the 28 brands supplied from Rana Plaza say their production was outsourced to the factory without their knowledge, while others say they prefer to pursue their own compensation plans.

Advocacy groups, the Clean Clothes Campaign (CCC) and the International Labor Rights Forum, noted that Canada's Loblaw Cos Ltd had also committed to provide short-term relief, while Italian retailer Benetton and Spanish chain El Corte Ingles were participating in attempts to establish a fund.

They said Zara-owner Inditex, Britain's Bonmarche and Mascot of Denmark had signalled their intent to contribute to a fund, but said scores of other brands were doing too little.

"It is time that all brands linked to the tragedies step up and ... pay into the fund, and thereby take financial responsibility for a disaster that they failed to prevent," said Ineke Zeldenrust of the CCC.

A group of North American retailers and apparel makers set up after the disaster has already completed inspections of more than half of Bangladesh garment factories with whom they do business in an effort to improve fire and building safety, the group said this week.