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Primark extends Bangladesh disaster compensation

Thursday, 24 Oct 2013 | 7:18 AM ET
Bangladeshi factory
Munir Uz Zaman | AFP | Getty Images
Bangladeshi factory

Primark has extended its compensation for the victims of the Bangladesh factory fire – which killed over 1,000 garment workers six months ago – and called on other companies to do the same.

The discount clothing retailer said it would pay another three months of salaries to the 3,600 victims of the disaster "to alleviate their immediate hardship." It has already paid out two short-term financial payments to those affected.

The Rana Plaza factory collapsed in April and killed more than 1,100 people. Primark supplier New Wave Bottoms was based in the building and producing clothing for the retailer at the time.

(Read more: Big Brands Face Scrutiny Over Factory Safety)

Primark said that it hoped to start paying long-term compensation payments to New Wave Bottoms' 550-strong workforce, or their dependents, in early 2014.

The disaster focused the world's attention on the often-hazardous working conditions in Bangladesh, and the International Labour Organization (ILO) on Tuesday launched a $25 million project aimed at improving workers' safety in the country.

Primark is one of a number of brands - including H&M, Zara-owner Inditex, and Abercrombie & Fitch - that have signed an ILO initiative to implement better health and safety measures across Bangladesh.

In a statement released on Thursday, a Primark spokesperson said: "Primark will guarantee a further three months' salary to the 3,600 or so victims of Rana Plaza to alleviate their immediate hardship, many of whom worked in the supply chain of other brands.

(Read more: H&M, Inditex Sign Bangladesh Factory Safety Agreement)

"The company calls on other brands sourcing from Rana Plaza to now contribute a fair share of this tranche of aid."

A number of other brands sourced garments from Rana Plaza, according to Primark, which urged them to pay short-term aid to the 3,000-plus workers supplying their garments.

But the spokesperson added: "If the other 27 brands who sourced in Rana Plaza fail to make this contribution, Primark is guaranteeing today that it will pay another three months wages to all the workers concerned."

Primark has tabled its compensation program with the ILO, and discussions are ongoing as to whether the scheme should be adopted as an industry-wide framework for delivering compensation.

Bangladesh's garment sector is crucial to its economy, employing four million people – mainly women – and generated £20 billion annually, according to Reuters.

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