A Year After Bangladesh's Deadly Factory Collapse, Western Companies Slow to Compensate Victims

Aklima Khanam didn't want go to work on April 24, 2013. The then-19-year-old worked in the Rana Plaza factory in Dhaka, Bangladesh's capital, sewing shirts, jackets and pants seven days a week from 8:00 a.m. sometimes until as late as 3:00 a.m. But it wasn't just exhaustion that made her hesitant to enter the factory that day.

"None of the other workers wanted to go in when we heard the building was cracked," she told Newsweek through an interpreter. But the staff threatened to fire them and, she says, were "physically abusive." They went to work. About a half hour later, the electricity went out. The management turned on a generator. And then the real disaster began.

"The roof collapsed onto a machine near me, and I was trapped under it," Khanam recalls. "One of my male co-workers was killed when a beam fell on him. Four or five other co-workers near me were killed." It was 12 hours until rescuers found Khanam in the rubble.

More than 1,100 people died in the Rana Plaza disaster, and more than 2,500 were injured. The vast majority were garment workers like Khanam. Some bodies have not yet been recovered.

The worst industrial disaster in Bangladesh's history sparked international outrage about conditions at the assembly level of the global garment supply chain. Everyone from Pope Francis to E.U. and U.S. trade officials expressed condemnation and concern. And the 28 corporations sourcing from the Rana Plaza factory—including familiar Main Street brands—felt the heat.

Among the many pledges came a plan to compensate survivors and the families of the dead. Together, Bangladeshi labor unions, international rights groups and representatives from the apparel industry established the Rana Plaza Donors Trust Fund under the supervision of the United Nations's International Labor Organization (ILO). But with the one-year anniversary of the disaster upon us, the fund is far short of its goal: Only $15 million of the desired $40 million have made it into the fund—due to foot-dragging from the brands.

That leaves people like Khanam suffering.

"Since [the collapse] I'm still afraid, I'm still ill, and I can't work," Khanam says. "I'm still very afraid to go into garment factories. But at the same time, what am I supposed to do? How am I supposed to make ends meet?" Compensation from the fund, she says, will allow her to cover the cost of living again.

Khanam is not unique, though.

The garment industry in Bangladesh employs about 3.6 million people. The minimum wage is $68 per month—and that is after a 77 percent increase in November 2013. And Bangladesh's garment industry is growing: A 2012 survey of decision-makers in the apparel found that 89 percent planned to increase sourcing from Bangladesh.

The Rana Plaza disaster was unprecedented in scale but industrial accidents are commonplace in the garment industry, which accounts for more than 75 percent of Bangladesh's exports. In November 2012 a fire at the Tazreen garment factory killed 117 people and injured more than 200.

Many survivors of Rana Plaza are, like Khanam, traumatized by the events of one year ago and unable to go back to work. Seventy-four percent of survivors have not gone back to work, according to a recent survey by the antipoverty group ActionAid. The troubles are compounded because Bangladesh has few employment opportunities for women in other sectors. Eighty percent of the Rana Plaza disaster's survivors are female.

Plans for victims' compensation first began months after the collapse but details weren't finalized until January 2014. A committee of actuaries established how much the fund required and how compensation would be distributed based on things like loss of income and medical needs. The committee found that $40 million would be needed to provide adequate compensation to the victims. The ILO is overseeing the fund.

"It's a scheme that is observant of the law, that's equitable in terms of treating all beneficiaries fairly and is sensitive to local needs," says Dan Rees, an ILO official who is working with the fund.

And while anyone can donate to the fund (even individuals), advocacy groups are asking brands to contribute to it based on corporate profits. Some firms that were not implicated in having ties to the Rana Plaza factory have also been asked to contribute.

But contributions are entirely voluntary. And the response from corporations hasn't been as monumental as the disaster. Only half of the 28 companies have paid up at all. Advocates say the donations haven't been at the level they hoped.

"We urge all the brands that have been working in Bangladesh to contribute to the fund with a considerable sum. They share a collective responsibility for this profoundly unsustainable production model and its hazards," says Jyrki Raina, the general secretary of IndustriALL Global Union, an international labor group.

J.C. Penney was sourcing garments from Rana Plaza but has not donated anything to the fund. (J.C. Penney did not respond to requests for comment.) The Children's Place has been directly tied to sourcing from the Rana Plaza factory and put forward $450,000 into the fund. Mango, a Spanish brand, has contributed to the fund but advocates say its contributions, too, are inadequate.

Walmart, the world's largest retailer, along with a British subsidiary and its corporate foundation contributed $3 million to BRAC USA, the U.S. branch of a Bangladeshi development organization. Last year, Walmart's profits reached $118 billion, $2 billion more than Bangladesh's gross domestic product.

"At Walmart, the safety of workers in our supply chain is very important to us," Kevin Gardiner, a senior director of international corporate affairs, wrote to Newsweek in an email.

Not all companies are equally stingy, though. The British retailer Primark has been more forthcoming with support for the victims of the Rana Plaza disaster, despite the fact that the company wasn't directly tied to the factory. Last month Primark announced plans to put $8 million into the Rana Plaza Donors Trust with an additional $4 million going to direct payments.

Labor activists are planning an international day of protests to pressure brands to fork over more money for the victims. There will be protests at company headquarters and retail outlets around the world and in Bangladesh.

Nonetheless, there may be a silver lining to the Rana Plaza disaster, some say.

"It has shifted the story and shifted the debate. A few years ago reporters might have said sweatshops are few and far between or said it's a few bad apples or blamed it on factory managers," says Liana Foxvog, the director of organizing for the International Labor Rights Forum. "I would say in the last year there has been a lot more making direct connections to the role of the corporations, around both health and safety and wages and freedom of association."

And even if brands have been reluctant to distribute funds to victims, they are taking other positive steps to prevent a repeat of the Rana Plaza disaster. More than 150 brands have signed on to the Bangladesh Accord on Fire and Building Safety. The accord mandates thorough inspection of factories for fire dangers and structural instability. Unlike donations to the compensation fund, which is entirely voluntary, the accord is legally binding. The signatories from now on be responsible for ensuring that the factories they are sourcing from won't collapse like Rana Plaza did.

That is cold comfort for survivors like Khanam, who supported her ill father and younger sister when she worked in the factory and has been afraid to go back since. While Bangladesh's garment workers will be glad to see higher safety standards in the future, they also want redress for the past.

"I want to tell [the brands] to pay us the compensation. They have a responsibility to us," she says. "We were making the clothes for them, and they were exporting it to the cities of the United States, and they have to repay us for our loss."