As the dreaded day appears, Rana Plaza Aftermath

24 April 2014 will see exactly one year since the dreaded Rana Plaza building collapse which saw more than a thousand dead and several thousands injured among whom hundreds were crippled for life. Since the tragedy came to pass there have been a global uproar for justice being served to those responsible and negligent for this catastrophic industrial disaster, stronger fire and building safety measures for garment factories, and urgent dissemination of compensation to the wrecked victims and their destitute families for their irreparable losses that Rana Plaza Tragedy forced upon them.

RISE Rana Plaza

Justice Awaits

Mr. Sohel Rana, the owner of the 9-storied building named Rana Plaza which collapsed on 24 April 2013, was quickly brought behind bars after the collapse. Savar municipality authorities and police respectively filed two cases with Savar Model Police Station on April 24 and 25 last year for constructing the building without a Rajuk-approved plan and in violation of the rules and provisions of the Bangladesh National Building Code, and for negligence of the owners of the building and its garments factories which caused death of the people. A verdict is yet to be given and the criminals keep trying to get bails. Recently, Sohel Rana was able to get a bail from the High Court on March 23 this year where it granted him six months’ bail after hearing a bail petition in the case filed for violating building construction rules, however at the same time refusing to hear another petition submitted by Sohel seeking bail in another case filed for the negligence to save the people from the collapse. Recently through, the government submitted a petition to the Supreme Court seeking stay on the High Court order of bail to Sohel on the grounds of the scale of the disaster and its sensitive nature, to which the Supreme Court agreed and enforced a stay on the bail.

Safe and Sustainable Work-places?

The demand for measures strengthening fire and building safety, humane working conditions along with freedom to associate and form trade unions for Bangladeshi Garment factories have been voiced since many years prior to Rana Plaza. As factory disasters kept occurring and recurring with a cold consistency in Bangladesh, the voices kept gaining strength until the dreaded day of the Rana Plaza Tragedy came upon us. Rana Plaza is a massive shake to those who have argued against the reality of crumbling sweatshops thriving in our country under the blessing of blood sucking business ideals which bone-dry every moral space for ethical conduct of business.

As per the factory owners, buyers are yet to increase the unit prices of products even after increased minimum wages and going after Bangladeshi manufacturers with the Accord and Alliance[1], whereas popular feeling among buyers have been that the factory owners need to take some risks as well and invest into improvement themselves[2]. At first thought it may seem obvious that the risk factory need to be shared, but when we look deeper, the formula of selecting factories by big brands unravel the scenario where factories need to give the lowest price possible to have business and thus become ready to compromise on safety and normal or legal working standards.

While ideally Rana Plaza should’ve been a wakeup call for a united action of every stakeholder towards improvement of factory safety standards which could have been the predecessor for a greater success in better social condition and worker rights in Bangladesh, we saw strong steps coming but with an unfortunate division between the American Alliance and the European Accord[3]. Both the Accord and the Alliance looks forward to work in coordination with the government and the National Tripartite Plan of Action on Fire Safety and Structural Integrity (NTPA), and their basic framework is to make sure that workers are working in a safe building and don’t have to worry about risking their lives everytime they arrive at work. Although both have common objectives, and are operating on a 5 year plan in Bangladesh, their stakes are very different. While the Accord is initiated by Global Trade Unions like Industriall and UNI, the Alliance is a counter product by brands to avoid the legal enforceability of the Accord. While creating their own financial packages based on the revenues of their signatories, the Accord and the Alliance have also put forward their perspectives on worker empowerment which is union centric for the Accord along with a provision for special health and safety committees trained by the accord with its union representatives, while the Alliance focus on empowering worker participation committees in their factories.

In these differences, a matter of concern for factory owners had been the inspection standards of both these pacts which also share hundreds of factories between them (approximately 20% of all of Accord’s factories[4]). The problem was however solved after Accord and the Alliance agreed to accept each other’s certification to avoid duplication in factory inspection in Bangladesh. That is to say, if the European Accord inspects any factory then the American Alliance will not inspect that unit, and vice versa[5]. However, critical questions still remain as to how funds would be managed for the factory in need of it for their remediation process where both the Alliance Brands as well as Accord Brands are manufacturing. Moreover, the training of Health and Safety Committee by the Accord and Workers Participation Committee by the Alliance must also be carried out in these factories, perhaps in a new outline, however difficult it might be to make such committees worthwhile in deed and not just as ink on white paper.

Workplace safety is set to take the center stage in every discussion regarding the Bangladeshi Garment Industry in the coming months or years, and a key point in this argument is its contribution to the sustainable growth of the Bangladeshi Garment Sector alongside keeping it safe and fair. Recent factory inspections have uncovered expected structural flaws in most of the factories that has been inspected, and closed down at least 5 factories in Dhaka and 4 in Chittagong for repairs. These closed factories may remain close for as long as a year, and will have to spend hundreds of thousands of dollar on repairs while tens of thousands of workers have already lost their jobs. At least 11500 workers are reported to have lost their jobs due to inspections and resulting factory shutdowns[6], although they have been paid according to the law on losing their job, to search for a new job is not always easy and might mean relocating and restarting work life sometimes with a lower pay. Apart from the jobs being lost, the cost of repairs and the process of funds being loaned to factory owners by retailers is still being discussed by the Accord and the government.

Rights inside the Factory

The Rana Plaza Tragedy did not only uncover the catastrophic condition of factory buildings and their lack of the most obvious safety measures or any adherence to proper building laws, but it also unraveled the sad scenario of working conditions inside these factories. Pregnant women gave birth inside the rubbles displaying a vivid example of lack of maternity leaves, while child workers as young as 11 were amputated to be taken out of the carnage. Workers who came out alive gave vivid descriptions of being punished for the smallest mistakes and working in cramped factory floors. Workers were pushed inside the unsafe factory with the help of extra legal forces, threatened of being fired or losing an entire month’s salary.

Worker rights far extends the scope of either the Accord or the Alliance, however both initiatives have a long term strategy to contribute in its development, with the Accord going that extra mile in ensuring the right of workers to refuse work in an unsafe building, an important area where the Alliance remains silent. Both the initiatives address structural and fire safety issues, but does not directly deal with other common health hazards in factories like chemical exposures, mechanical accidents, and repetitive stress injuries. There are also long-term health issues associated with poverty and sheer physical exhaustion that come with the long hours and backbreaking drudgery of garment production. Other workplace risks overlap with structural social problems, like crowded factory floors, the presence of child labor and sexual or physical abuse at the hands of the management staff.

Other projects run in Bangladesh by Multi-Stakeholder Organizations and International Bodies focus on issues inside the factory contributing to worker rights and women worker rights in the garment industry where almost 85% of the workforce is women. While such steps are expected to be pressurizing agents towards a positive change, often the need for organizational image and the image of the cooperating business class become weightier than the actual objective of fair conditions which these projects are supposed to press forward. A critical analysis[7] of academic initiatives of some organizations introducing women garment workers to women club, or introducing role playing educational activities and creating various committees and cell phone hotlines would uncover myths of their effectiveness. While on paper they may look impressive, the fact that women garment workers are often found working as long as 16 hours a day for 7 days a week, while also taking care of their families, cannot be overlooked. It is simply impractical that these impoverished workers would participate in such academic drives for their empowerment, a fact that has been inspected by sources which RISE employed to take snapshots of these women café’s and their empty rooms, and interviews of their attendants who testify that ordinary workers rarely attend these café’s and mostly the former workers now associated with the NGO or the organizer of these café’s enter such spaces for a nice evening chat.

Hotlines, while an impressive academic idea, have not been very effective due to the lack of confidence or knowledge of these options for workers. After two years of creating hotline, only 45 calls were received by a “Preventing Workplace Violence” project[8] for mostly trivial matters, a negligible number of calls if compared to the mobile phone culture among women workers in Bangladeshi garment factories. The same project has initiated the idea of an Anti-Harassment Committee in factories, similar to the already present Worker Participation Committee which previously have been seen as a management friendly institution by various labor rights groups and labor organizations. It needs to be seen how successful such a drive is in factories where anything that is facilitated by the owner if owned by him, moreover, the fluidity of employment in the garment factories also may pose a challenge to the operational possibility of such committees while the practicability of impoverished and overworked workers giving their precious time to manage worker harassment complaint also seem farfetched, as informed by some workers themselves where they point to these practical challenges as important reasons for their lack of confidence.

Along with new amendments to the labor law and a new minimum wage, over the past one year there have been registration of 134 new trade unions which show a glimmer of hope towards having greater freedom of association for Bangladeshi garment workers, although to ensure that these unions are not just limited to paper is the task of federations which need to be strengthened and empowered by the government and labor organizers and organizations.

Worker empowerment must come through actions taken by the industry stakeholders for their sake and the sake of the business, as empowered workers are more manageable than vulnerable ones with no direction to express their emotions about their conditions as has been repeatedly been seen and experienced by factory owners as well the our governments. The need for every stake holder to be sincere in the effort, beginning with the brand to the factory owner and the government is a key way to achieve greater success. While initiatives and projects which aim towards empowerment and learning the possibilities and options through trial and error towards empowerment and positive change are always a strong addition to any progress in any sector – including the ready-made garment sector of Bangladesh.

With the pressure that has come from Rana Plaza, now is the best opportunity for serious initiatives to improve the workplace situation in Bangladesh in an exemplary way, but the journey is quite a long one while achievements have been quite dismal.

The GSP Update

The effectiveness of holding back the US GSP has been phenomenal in Bangladesh and the country saw considerable progress in the administrations attitude towards workplace safety and worker rights in Bangladesh in an effort to save its western market and regain the lost GSP so that to prevent losing the more lucrative European GSP as a domino effect.

The Government is set to submit the Bangladesh Action Plan over the progress of the fulfillment of the 16 point set forth by the United States Trade Representatives by 15 April 2014 in order to get back the Generalized System of Preferences (GSP) for Bangladeshi products by the US Administration. On receipt of the progress report, the US government will conduct its next review of the GSP Action Plan in May 2014. Dhaka failed to qualify in the first round of review conducted in January 2014.

The US government asked Bangladesh to fulfill 16 conditions for regaining the GSP facility. The conditions include improvement of working environment, creation of a worker database, safety for worker rights organizations, fire safety, allowing trade unions in Export Processing Zones (EPZ) and recruitment of inspectors. Conditions which the government is expected to claim as fulfilled include the worker database, labor law amendment, new minimum wage and labor safety measures; however implementation of the Bangladeshi Labor Law in the Export Processing Zones of Bangladesh is yet to be materialized due to government claims of bureaucratic barriers[9] which is also thought to be a reluctance on part of the Bangladesh Export Processing Zone Association in favor of the foreign investors.

Although the government has claimed that the database on workers have been created[10] with minor mistakes, it is clear that this database is not very useful at this point of time, and has information which does not fulfill the purpose for which it claims to exist.

While condition of human right activists and worker rights activist can be argued, there is no progress made yet in the case of labor organizer Aminul Islam’s murder. However, bans are repealed on two worker rights NGOs, while some labor organizers and activists have been relieved of charges against them as per the requirements of the USTR.

Appointing 200 factory inspectors is a key condition for getting back the GSP facility, however according to the Labor and Employment Ministry, till now 67 inspectors out of 200 inspectors have been appointed.

Although slow, there is still recognizable progress and the government is expected to try and display its willingness towards fulfilling all the 16 points put forward by the USTR on 15 April 2014.

Immediate Responsibility – The Rana Plaza Compensation

The most urgent of all tasks that need to be done after Rana Plaza is to pay its victims a compensation, however inadequate for their losses, but enough to sustain their lives and prevent a greater moral and psychological damage to the confidence of garment workers and their families in Bangladesh. The importance of a proper compensation is indispensable, apart from the greater humanitarian responsibility of brands for its workers at the bottom of the supply chain.

Rana Plaza victims have received aides from different organizations, which include NGOs and labor organizations, as well as brands manufacturing in its factories, apart from the government.

The massive numbers mean a huge effort and a big fund, and this certainly calls for a united effort on part of the brands and right bodies. For this purpose, the Rana Plaza Donor Trust Fund was created under the Rana Plaza Arrangement[11] with its donors[12] pledging support for victims of this massive tragedy. The Arrangement calls for a $ 40 million trust fund, out of which only around 1/3 have been generated till now with Primark spearheading the compensation process.

As the first anniversary of The Rana Plaza Tragedy started to approach, with only $ 5 million without the Primark compensation funds[13], possibility of disseminating of the compensation amount before the anniversary was dismal. Thus, the British retailer Primark has directly started to pay $ 9 million to the 581 workers or their families from its supplier New Wave Bottoms which was based on the second floor of Rana Plaza. A further $ 1 million will go into a common compensation pot to be shared among all the approximately 3,600 victims of the Rana Plaza Tragedy. Both payments are made under the auspices of a compensation scheme backed by UN agency the International Labor Organization (ILO). This is in addition to the some $ 2 million which Primark has already distributed to these workers or their families, making a total contribution of $ 3 million to all the Rana Plaza Victims, and an overall compensation amount of $ 12 million.

Primark has decided to pay out now to ensure that the New Wave Bottom workers, and their dependents, are paid in full within 12 months. No further payments should be required for the workers at New Wave Bottoms. Primark’s payments are in addition to the short-term financial assistance provided by Primark for all other workers at Rana Plaza[14].

With mounting pressure for immediate compensation for the remaining victims, the ILO Country Director for Bangladesh Mr. Srinivasa Reddy gives a vague note about it being handed over around during the Rana Plaza tragedy, but refrained to give any specific dates. He said that a total of 3,080 victims will be compensated with each victim receiving BDT 50000 from the trust fund created by international retailers, excluded the 581 New Wave Bottoms workers who have already been taken care of by Primark. When asked if the Prime Ministers fund would also be merged into the relief package, Mr. Srinivasa Reddy said that it will be decided upon by the Committee later.

In our interview with Mr. Sultan Uddin Ahmed, the Asst. Executive Director of Bangladesh Institute of Labor Studies (BILS) which is also a member of the Coordination Committee of the Rana Plaza Arrangement, we were told that the German Development Agency GIZ has been offered the responsibility to administer the compensation process by the ILO, which would be carried our by a claims process which have already been initiated, as is structured as per the illustration below:

The Rana Plaza Compensation Scheme

The Rana Plaza Compensation Claim Process


The Cash that would be paid as per the claims are outlined as follows,

Method of calculating claims awards under the Arrangement

The method of calculating claimsawards under the multi-stakeholder Arrangement for the Rana Plaza victims and their families and dependents is designed in accordance with ILO Employment Injury Benefits Convention No. 121. Its objective is to provide life-time benefits to Rana Plaza workers who are disabled as a result of the accident as well as to surviving dependents and family members of deceased workers. The design ensures monetary payments in a transparent and equitable manner according to the victims’ losses and needs respectively, as well as access to medical and related care for injured workers in need.

Parameters for payments:

The parameters that guide the calculation of monetary payments have been determined by the Coordination Committee and are guided by the general framework of Convention No. 121.

Wage basis:The amount of the payments made in respect of the losses suffered will be calculated on the basis of the earnings of the victims. Wages that will be used to calculate the payments will be based on the 2013 Workers Classification Wage Structure. For example, for a worker at minimum wage of BDT 3000 per month at the date of accident, the wage that will be used to calculate the amount of the payment will be BDT 5300, the current wage level.

Amount of the payment: The total amount of the award will be calculated and paid in several installments. The total amount will represent the present value of the following benefits, as if they were paid on a monthly basis across the lifetime of the recipients.

  • Totally disabled worker: receives 60% of the current wage payable for his or her lifetime
  • Partially disabled worker:  receives a percentage of the amount above calculated for a totally disabled worker, the percentage being equal to the degree of disability of the worker.
  • Surviving dependent(s) of a deceased or missing worker:   for as long as they are dependent, receive 60% of the current wage payable in the case of 3 eligible dependents or more; 55% of the current wage in the case of 2 eligible dependents, and 50% in the case of only 1 eligible dependent.

Definition of eligible dependent:“Dependent” is defined in accordance with the Bangladesh Labor Act 2006 as:

(a) a widow, minor child, unmarried daughter, or a widowed mother; and

(b) if wholly or partly dependent on the earnings of the worker at the time of his death, a widower, father or widowed mother, a daughter if unmarried or minor or widowed, a minor brother, an unmarried or widowed sister, a widowed daughter-in-law, a minor child of a deceased son, a minor child of a deceased daughter where no father of the child is alive or, where no parent of the worker is alive, a paternal grandparent and illegitimate son or illegitimate unmarried daughter.

A minor is defined as a child below age 18.

Economic assumptions:

Economic assumptions used to calculate the present value of monthly benefits are:

Discount rate: 8.1% per year

Indexation of the monthly benefits: 6.0% per year

A dynamic mortality rate is applied that projects mortality rates according to UN general patterns and uses patterns of life expectancies for males and females in Bangladesh that assume a slow improvement in mortality over time.

Health care and related benefits:

The awards also address health care needs of victims injured in the accident. A medical assessment by qualified doctors exercising independent professional judgment will project the necessary care that such victims need to attain pre-injury health condition or maximum recovery. The scheme will ensure that those with injuries have access to needed treatment and related benefits, such as hospital care, doctors, drugs, physiotherapy, prosthetic appliances, and services to permanently disabled needing help for daily activities. Follow up is organized through local and international service providers active in Bangladesh.

What Next?

The best highlight during the initial relief for the Rana Plaza victims was the bKash cash transfer method followed by Primark. A method which was very timely and appropriate considering the pain, hassle and harassment which was prevented for the workers which was previously suffered by workers of the Tazreen Tragedy.

A compensation process of this size would greatly benefit for efficient use of available resources. It will be important to manage such a large scale compensation plan in a transparent and organized manner so that none of the suffering victims are left behind. Thus for the implementation of the compensation scheme, it is important that it remains transparent and above questions. A suggestion may be setting up bank to bank transfer system. The compensating body could remit the amount to a “Mother Account” of those who would implement the compensation scheme. A separate fund should be provided for temporary camps set up in locations from which clusters of victims/families are easily accessible. Teams made up of trade unionists and representatives of the implementing body should help victims/families open bank accounts with their documents, submitting information about the dead relative or their own injuries from the Rana Plaza Tragedy. The implementing body would then transfer money from their “Mother Account” to the account of the victim/family. This action will not only bring greater transparency in the form of a third party witness in the bank, but also empower workers in determining their own finances and taking charge of its accountability, and also help prevent victims from having to travel from their distant homes for verification/documentation. Further, these temporary camps may also accept grievances for any irregularity or inconsistency, and a call center may be set up with a hotline for victims to give their feedback.

Although the above mentioned plan is broad, still it is the best option compared to the mobile banking (bKash) option which already has been used by Primark in its effort to disseminate 45000BDT in three equal installments to the Rana Plaza victims. Although mostly successful, on a survey conducted by RISE on relatives of the dead and injured victims of Rana Plaza found that there were at least some incidents of bKash fraud by agents and/or relatives who went to pick up the amount which needs no real documentation other than mentioning the cell number or reference number from which the bKash amount would come, which eventually resulted in the actual victim receiving less than what she was normally supposed to receive. Handing over the right amount to the right person in mobile banking is not yet as secure as the strong method of bank to bank money transfer.

While the call of the Arrangement are heard slowly, the effect of Rana Plaza is quickly spreading and ideas for effectiveness measures towards creating a safer and more accountable supply chain continuous to grow and strengthen. It will only be justice if the Brands take more direct responsibility readily for their workers in countries such as Bangladesh as these workers are directly responsible for the growth of their businesses. It will not be surprising to see more movements, even stronger, gather momentum and achieve more towards the common objective of fair working rights for workers world wide, where for now, Bangladesh might as well remain the center stage for a long time.


Authored by: Kasheful Hoda and Tunazzina Iqbal

RISE Society
















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Posted in Garment Worker Issues

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