H&M Compensation for Fire Victims

Trade unions and labour groups in Bangladesh continue their call upon international buyers to ensure the compensation meets the needs of  the families of the workers who died in a fire in the Garib & Garib factory in February this year.

Almost four months after the tragic fire that cost the lives of 21 and hospitalized 6 workers, no compensation has been provided for the loss of income to the families concerned.  Similarly the family of a worker who died in a fire at the same factory in August 2009 is still waiting for appropriate compensation.

In response to the fire, H&M has commissioned the NGO Save the Children Sweden Denmark (SCSD) to assess the needs of the nearest family members of the deceased workers, and the injured workers.  The company decided to focus on the needs of the children and elderly parents, but not to provide general compensation based on the lack of income the family members would have expected until retirement.

H&M has also reported that it has requested all its Bangladesh suppliers to review their safety measures.  They also state they have set aside 1 million Swedish Krona (approx. 105.000 euro) for fire prevention measures, in particular hiring experts on electricity safety and promoting fire drills and trainings for workers.

Other international buyers, which includes the Italian company Teddy (brand Terranova),  the Turkish company Taha Group (brand LC Waikiki), the Spanish company El Corte Ingles, the French company Provera, and the Canadian company Marks Work Wearhouse, have not taken any concrete steps with regard to compensation thus far.

The moment H&M announced its intention to commission an assessment into the needs of the injured workers and relatives of the deceased workers, the Clean Clothes Campaign urged the company to consult with the unions and workers’ representatives about the minimal requirements of a compensation model.

Although H&M local representatives visited some NGOs and unions to inform them about the planned assessment by Save the Children Sweden Denmark (SCDS), there was no inclusive process to negotiate the compensation model with unions and worker representatives.

The main criticisms of H&M’s proposed compensation model include the following:

    * H&M’s proposal does not compensate for the loss of future income of the deceased worker. This would include a calculation on the basis of the most recent salary up to the age of retirement (government employees  retire at the age of 60  years)
    * H&M’s proposal actually undermines the standard for compensation of the Spectrum workers who were killed in a factory collapse in 2005.

In this case companies agreed to pay pensions to relatives until they die.  In addition, recently compensation was paid to the family of a worker at the Matrix Sweater factory who died in the panic following a false fire alarm.  This factory was producing for international companies Inditex, Gap and HBC, and the compensation paid was based on loss of income.

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