Rana Plaza clothing factory disaster fund still short of target

Two years after the collapse of a Bangladeshi garment factory building killed more than 1,100 people, a fund to compensate the victims of the disaster remains $7m short of its $30m target.

Benetton, the Italian clothing company which has been under fire from activists for failing to support the fund, says it will contribute $1.1m, making it the last major western brand linked to the doomed Rana Plaza building to donate.

Benetton's contribution - which will be formally announced on Friday and brings the total to $23m - is likely to disappoint labour unions. They had appealed to the Italian company - known for championing liberal social causes - to fill all, or most, of the funding gap.

"We are talking about people's lives - people who had to amputate their own limbs to survive," said Ilona Kelly, an activist with Labour Behind the Label, which campaigns for better working conditions for garment workers. "All companies need to increase their donations. Let's put this behind us."

Marco Airoldi, Benetton chief executive, said $1.1m is double the payment it was advised to make by PwC, the professional services group, which Benetton commissioned to assess its fair contribution.

PwC estimated that Benetton's sourcing of some 267,000 shirts from a factory in Rana Plaza, from October 2012 until April 2013, was less than 2 per cent of the building's total output in the 12 months before the disaster.

"If you ask me if I am comfortable, I am more than comfortable," Mr Airoldi said of the contribution. "I am sure we are doing something which is absolutely fair. Not only fair. We have decided to double it."

The eight-storey Rana Plaza housed five Bangladeshi clothing manufacturers, which produced millions of trousers, shirts and leggings for nearly 30 European and American retailers or brands, including Primark, Walmart, Canada's Loblaw, Spain's Mango and The Children's Place.

It collapsed on April 24 2013, a day after developing large cracks. Although local officials ordered the building's evacuation, factory bosses pressured workers back inside. It was the biggest disaster in garment industry history, with 1,134 killed, and nearly 2,400 injured, many severely. Many survivors were trapped for days in the rubble before their rescue.

In the aftermath, the International Labour Organisation led a process, endorsed by both brands and unions, to assess full and fair compensation for medical expenses and lost earnings to victims or their next of kin, as required by global labour conventions.

But while their estimate of $30m was widely accepted as a minimum, fund contributions were left entirely voluntary, as brands refused to commit to a binding mechanism to allocate financial responsibility. Along with Benetton, unions have urged Walmart, Matalan and The Children's Place to make bigger contributions.

Primark, part of Associated British Foods and the UK's biggest fashion retailer by volume, won praise after it pledged to provide full compensation for 668 workers of New Wave Bottoms, one of its suppliers, which was housed in the Rana Plaza.

Primark has contributed a total of $14m, including $2m in short-term relief and $11m in long-term compensation. Of Primark's total donation, $2m has been for victims from its competitors' supply chains. "Primark gave good money," acknowledges Nazma Akhter of the Independent Garment Workers Federation.

Additional reporting by Victor Mallet in Dhaka.

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