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Thursday 21 August 2014

Primark to pay $10m more to victims of Bangladesh factory collapse

Published 18/03/2014 | 08:12

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BERLIN, GERMANY - JULY 12:  Shoppers enter a Primark clothing store a day after the store's opening on July 12, 2012 in Berlin, Germany. Primark is expanding aggressively in Germany and is becoming a serious competitor to other low-cost clothing store chains.  (Photo by Sean Gallup/Getty Images)
Primark, which trades as Penneys in Ireland

PENNEYS/PRIMARK will pay a further $10m in compensation to victims of the collapse of a Bangladeshi factory last year that killed more than 1,100 people.

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The disaster has galvanized most of the clothing industry's big names to work together to improve safety standards but many brands have shunned a fund that is trying to raise $40 million for the over 2,000 people injured and the families of the dead.

Campaigners are demanding that 27 brands linked to factories in the Rana Plaza complex should contribute to the fund run by the International Labour Organisation (ILO) by the first anniversary of the Apr. 24 collapse.

Primark has already paid $2m in short-term financial support and food distribution. It said it would pay out the extra $10m in long-term compensation - $9m directly to the 580 workers of its supplier in Rana Plaza or their dependants, and another $1m to the fund.

It said cash payments to the workers of its supplier, New Wave Bottoms, would begin this week, with the amount to be paid based on estimates of lost earnings for the dependants of those killed and on the level of disability for those injured.

"With the first anniversary of Rana Plaza fast approaching, we are determined to meet this responsibility to workers in our supply chain. We are therefore pleased to be in a position to now press ahead with payments," a spokesman said in a statement.

Rock-bottom wages and trade deals have made Bangladesh's garments sector a $22bn industry that accounts for four-fifths of exports, with around 60pc of garment exports going to Europe and 23 percent to the United States.

Owned by Associated British Foods, Primark's low prices have helped it expand to more than 250 stores in Britain and Europe. It urged other retailers to donate to the industry fund so it could pay out in full to all victims.

Campaigners from the Clean Clothes Campaign and trade unions IndustriALL and UNI Global Union last week called on Primark to pay into the ILO-run fund, saying that separate voluntary corporate schemes were less effective.

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