Most clients of collapsed factory still need to commit to long-term compensation fund

Former Spectrum-Shahriyar workers and family members, Dec. 2005

Spectrum-Shahriyar Update #9
December 15, 2005

Workers and families of workers killed in the April 11th collapse of the Spectrum -Shahriyar factory in Savar, Bangladesh are still seeking overtime wages and severance payments owed to them. Some workers injured in the collapse are still in need of follow-up medical treatment (for persistant pain in the head, chest and kidneys).

Currently production is going on at Shahriyar, mainly on the third flour. But sadly the facility seems to fall short of safety standards. When a CCC delegation visited the factory the first week in December they found no fire extinguishers, only a few buckets full of sand, and the facility lacked an emergency exit.

Spectrum-Shahriyar facility, Savar, Bangladesh, Dec. 2005

While Spectrum-Shahryiar was employing approximately 4,000 workers before the collapse, 400 workers are working at the Shahriyar factory today. Many workers seem to have found another job but about 100 of the Spectrum-Shahriyar workers remain jobless and without income.

A proposal for a trust fund to compensate workers injured and the families of those killed in the garment factory collapse has been put forth by Inditex, a Spanish company sourcing at Spectrum. The proposal is based on the following principles, which the CCC endorses:

For the families of those killed - full salary from April 11, 2005 till the date of payment of compensation; a lump-sum payment reflecting the wages and family composition of the victim; and a life-time pension based on the wages and family composition of the victim and adjusted annually for inflation.

For those injured - full salary from April 11, 2005 till the date of payment of compensation; a lump-sum payment based on the age, injuries and wages of the victim; and a pension based on the level and duration of disability of the victim, his wages and family composition and adjusted annually for inflation.

From the CCC's viewpoint, the proposal, developed by international consultants KPMG at the request of Inditex, represents the minimum of what the families of the dead and those workers who were injured or have lost their health are due. Representatives of Inditex and the ITGLWF will be in Bangladesh the week of Dec. 19th to follow-up on the development of the trust fund with local stakeholders. The BGMEA and the Bangladesh government will also be expected to play a role in developing credible long-term solutions to address the follow-up to the Spectrum-Shahriyar tragedy and working conditions in the sector throughout Bangladesh.

Former Spectrum-Shahriyar workers and family members, Dec. 2005

Some companies that were sourcing at Spectrum-Shahriyar, including KarstadtQuelle (KQ), Scapino and Cotton Group, have indicated to the CCC that instead of supporting the development of a trust fund they would prefer to set up separate mechanisms to follow-up on their responsibility to the Spectrum workers. The CCC has expressed its disappointment with this new development. In a message to KQ dated November 11, and forwarded to Scapino and Cotton Group, the CCC wrote:

"…We are greatly concerned about the decision of KQ, Cotton Group and Scapino to no longer participate in the establishment of the Spectrum compensation trust fund.

The reason you give is that the current process will take more time then foreseen given the research needed on the ground, and into the legal implications. From our point of view, any credible 'alternative way' (your term) will also need to include good research on the ground, and a fair consideration of the legal implications. It is far more likely that more time will be lost then gained, and resources will be wasted by now abandoning the process at this late stage."

In mid-December (eight months after the collapse) KQ informed the CCC that they, along with Cotton Group, Scapino and Steilmann, will seek to set up a relief fund to meet workers' immediate needs instead of pursuing the trust fund solution. The CCC however does not accept this as a substitute for committing to participate in the trust fund, which will address the long-term needs of the workers and families of the dead. The National Garment Workers Federation (NGWF) and the Bangladesh National Coordinating committee of ITGLWF affliates (BNC) have informed the CCC that they were not consulted by KQ on this relief fund proposal and they still call upon the companies to participate in the trust fund.

The CCC continues to call upon all companies that sourced at Spectrum-Shahriyar to support the trust fund proposal and to pledge sufficient funds to ensure the total sum proposed. If companies are truly committed to providing the support necessary to adequately compensate those effected by this terrible tragedy they must work together and participate in the trust fund process.

To send letters of concern to Spectrum-Shahriyar clients, urging them to take action on this serious matter, please see the following links:

COTTON GROUP
In French >> | In Dutch >>

CARREFOUR
In French >>

NEW YORKER, KARSTADTQUELLE, KIRSTEN MODE, STEILMANN
In German >>