Benetton stumps up for Rana Plaza fund
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Italy’s Benetton Group has announced a US$1.1 million commitment to the Rana Plaza Trust Fund.
But it wasn’t enough to end the criticism from the Clean Clothes Campaign which has for months singled Benetton out for failing to contribute to the fund.
To end off the predictable salvo from CCC, Benetton engaged PwC to independently assess what contribution it should make to the fund relative to its share of the clothing sourced from the Plaza. That assessment was then checked by WRAP, an NGO focused on special compliance through global supply chains, which endorsed PwC’s recommendation. Benetton doubled the recommended payment.
Rana Plaza, in the Bangladesh town of Savar, was the scene of the 2013 disaster where 1129 workers were crushed to death in the collapse of sweatshops producing clothing for western fashion brands.
Benetton’s contribution follows an earlier $500,000 payment made through the BRAC organisation prior to the trust fund being established.
“We welcome the PwC report and WRAP’s contribution. We have decided to go further to demonstrate very clearly how deeply we care,” said Marco Airoldi, CEO of Benetton Group. “Whilst there is no real redress for the tragic loss of life we hope that this robust and clear mechanism for calculating compensation could be used more widely. For this reason, we decided to make the PwC report publicly available to all stakeholders”.
“Benetton has a proud history of social commitment. We believe that by working closely with the right suppliers we can help to improve factory conditions for workers in Bangladesh and in many other parts of the world,” he added.
But Clean Clothes Campaign was unimpressed.
“Benetton’s contribution follows an earlier $500,000 payment made through the BRAC organisation prior to the trust fund being established.”
“Benetton had a real opportunity to emerge as a leader and prove that their pledges of empathy, understanding, and care for the welfare of the victims were not just some PR spin. Unfortunately, the true colours of Benetton are now revealed” said CCC spokeswoman Ineke Zeldenrust.
“In February Benetton announced they would pay ‘within a few weeks’ and that they engaged an independent credible third party to determine how much they should pay. Today, Benetton finally revealed this to be global accounting firm PricewaterhouseCoopers (PwC). The US based World Wide Responsible Apparel Program (WRAP), which Benetton described as an ‘NGO working on social compliance endorsed the PwC assessment. WRAP is in fact an industry sponsored social auditing and certification organisation with one of the worst track records in the industry. The Garib and Garib factory for example, that went up in flames, killing people, in Dhaka in 2010, was WRAP certified at the time,” the CCC statement continued..
“Benetton again wasted time, spending money on a process in order to try to legitimise their insufficient payment. It’s deeply troubling that Benetton engaged a firm with no track record on human rights issues to lead their process.
“Red flags need to go off when the PwC assessment is only endorsed by one of the least reputable auditing firms in a very flawed sector. Let’s be clear, Benetton’s process was not transparent. The process excluded all trade unions and labour rights organisation directly involved in compensation efforts in Bangladesh,” says Zeldenrust.
Benetton was one of 29 brands connected to companies operating in the Rana Plaza building.
The Italian company said PwC based its report on an assessment from the International Labour Organisation that in total $$30 million compensation should be paid into the Rana Plaza Trust Fund. “PwC calculates Benetton Group’s contribution to be $550,000 based on the level of its commercial association with the Rana Plaza.
“However PwC has not factored in contributions from other third parties, such as the Bangladesh government and the Bangladesh Garment Manufacturers Exporters Association, unions and others. This means that, if its mechanism were followed by all brands operating at the Rana Plaza, after payments from other third parties the total fund could significantly exceed $30 million.
“Based on Benetton’s commercial association with Rana Plaza, we believe this is a fair basis to calculate payments to the Rana Plaza Trust Fund as quantified by ILO,” said Sudhir Singh Dungarpur, Partner PwC India.
“With a tragedy of this scale, no financial compensation can ever really be enough, but we welcome Benetton’s decision to pay more than its calculated share of the fund based on the report published by PwC,” said Avedis Seferian, president and CEO of WRAP. “If everyone took the same approach as Benetton, the overall fund could more than exceed its stated goals”.
Questions & Answers
Q.Why did Benetton engage PwC to assess its contribution to the Rana Plaza fund?
Why did Benetton engage PwC to assess its contribution to the Rana Plaza fund?
Benetton engaged PwC to independently assess its contribution to the fund, relative to its share of clothing sourced from the Plaza, to address criticism from the Clean Clothes Campaign.
Q.What was the total amount Benetton has now committed to the Rana Plaza fund?
What was the total amount Benetton has now committed to the Rana Plaza fund?
Benetton announced a US$1.1 million commitment to the fund. This follows an earlier $500,000 payment made through BRAC before the trust fund was established.
Q.What is the Clean Clothes Campaign's main criticism of Benetton's compensation process?
What is the Clean Clothes Campaign's main criticism of Benetton's compensation process?
The Clean Clothes Campaign criticises Benetton for wasting time and money on a process to legitimise an insufficient payment. They also question the transparency and credibility of the firms involved.
Q.What is PwC's calculated contribution for Benetton and why did Benetton pay more?
What is PwC's calculated contribution for Benetton and why did Benetton pay more?
PwC calculated Benetton's contribution to be $550,000 based on its commercial association with Rana Plaza. Benetton doubled the recommended payment to demonstrate its care and went further than the calculated share.