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Retail: Primark to start paying £5.4m in compensation after Rana Plaza collapse in Bangladesh

PUBLISHED: 12:29 17 March 2014 | UPDATED: 13:34 17 March 2014

Primark is to start paying compensation following the Rana Plaza building  collapse in Bangladesh last year.

Primark is to start paying compensation following the Rana Plaza building collapse in Bangladesh last year.

Primark is to begin paying nine million US dollars (£5.4mn) in long-term compensation to victims of the Rana Plaza factory collapse that killed more than 1,100 people in Bangladesh last April.

The high street clothing chain will make the payments to 580 workers or their families from the Primark supplier New Wave Bottoms who died or were injured as a result of the Rana Plaza building collapse. The firm occupied the second floor of the eight-storey building.

The retail chain, part of Associated British Foods, is also making a further payment of 1m US dollars (£602,000) to workers in its competitors’ supply chain. This money will be paid to the Rana Plaza Donors Trust Fund and is in addition to the 2m US dollars (£1.2m) which Primark has already distributed to these workers or their families.

Primark is one of the few brands to officially announce it has paid into the communal funding pot, which is being coordinated by UN agency the International Labour Organisation.

However, 11 months on from the building’s collapse this pot is believed to still be a long way short of its 40m US dollars (£24.1m) target.

A Primark spokesman said: “Within a week of the collapse, Primark committed to paying long-term compensation to the workers of Primark supplier, New Wave Bottoms, as quickly as possible. Since then, we have been working to enable the payments to be made.

“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.”

The Rana Plaza disaster has shone a spotlight on the need to improve safety standards in developing countries, and a number of international companies have since made pledges to improve operations and inspections at their supply chains.

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