Matalan’s statement and expert rebuttal from Labour Behind the Label

Read below for a rebuttal of Matalan’s response to our campaign for them to pay into the official compensation fund for victims of the Rana Plaza disaster, by Labour Behind the Label who support garment workers worldwide.

When Matalan said …

We continue to be deeply shocked by the tragedy at Rana Plaza and its effects on the families of those killed or injured. From the beginning, we, at Matalan, realised that urgent and continued support was needed to get help to the families as soon as possible. Matalan attended meetings and took part in conference calls with two organisations that are committed to obtaining such support – ILO and BRAC. We have always sought to establish the best way of getting funds to the families.

Labour Behind the Label say …

Matalan were involved in meetings to set up the process for compensation at the beginning of the process. That is why Labour Behind the Label and other organisations were shocked when Matalan chose to walk away from the process.

When Matalan said …

Many months ago we contributed to BRAC so that the people that need the help received it as soon as possible.

Geoffrey Salkeld, Trustee and Acting CEO, BRAC UK, said: “Matalan’s support has enabled BRAC to deliver the help that is urgently needed to the survivors of the Rana Plaza tragedy. BRAC’s 40 years experience of emergency response and poverty alleviation in Bangladesh meant that it was uniquely placed to deliver immediate relief to the survivors of the Rana Plaza tragedy in April 2013″.

Labour Behind the Label say …

Labour Behind the Label has no quarrel with organisations like BRAC delivering emergency relief, and they were well placed to do this work. But this is a separate issue. We are calling for funding to provide long term compensation, which will provide devastated families with an ongoing income for life. Not through loans, or support for retraining, although these are helpful services, but through income payments that they are free to use in whichever way they deem best for their families.

In recognition that setting up a formal system for compensation would not be an overnight job other brands including Primark, Loblaw and Bon Marche also contributed for short term/emergency relief, as did many other organisations. This however does not excuse brands from also paying into the fund for long term compensation. Brands like Primark have contributed into the long term compensation fund as well.

When Matalan said …

We should emphasise that our relationship with the New Wave Organisation (the factory in Rana Plaza) never went beyond an initial test period. This period was between February and March 2013 and ended before the tragedy occurred.  The reason for not pursuing future orders was commercial and the supplier was formally notified that their quality standards did not match Matalan’s requirements.

Labour Behind the Label say …

The garment industry is run on short term orders. The existence of long term, continuous production is rare and in fact it is this constant switching from one supplier to another that has helped to undermine efforts to improve conditions in the industry. Few of the brands associated with RP had long term orders with the factory. Regardless of the size or length of order and relationship basic due diligence requires brands using these facilities to do the basic check required to ensure at least that the factory is safe.

Matalan, along with every other brand failed to carry out these checks. Had they done so, and informed the authorities of their concerns then they could have prevented this disaster. The fact they failed to do this is at the heart of why they must now take responsibility.

When Matalan said …

The ILO’s donation fund has received numerous donations from the Industry and other organisations. Matalan has made donations to ILO and BRAC.

Labour Behind the Label say …

We are unaware of any donation made by Matalan to the ILO, although we understand they now claim to have contributed in the past 24 hours. The way the Fund is set up allows for anonymous donations – but for the public to confirm the truth of this statement Matalan must request from the Arrangement that their donation be publicly declared. Until they do this we cannot in anyway reassure their customers that Matalan have donated. If such a donation exists they must request that it is made public so their consumers can have confidence in their statement.

When Matalan said …

We would like to make it clear that we have never been ordered by any organisation to pay compensation or been found culpable for the tragedy. However, our company is happy to continue to make substantial contributions to help the people who need it most. The ILO has confirmed that it has made no orders for payments nor made deadlines for such payments from any organisation in the Industry.

Labour Behind the Label say …

It is not a question of being “ordered” to do so. The Fund is set up as a voluntary fund – this was set up in such a way as to remove any barriers to donations that having a requirement would create. However the Coordination Committee of the Arrangement, representing government, workers, and industry has requested a donation from matalan. The UK government has also called on them to do so and now, so have tens of thousands of their customers.  Whether Matalan (or any other brand) could be held legally responsible is as yet untested.

The priority of all involved was to get payments as quickly as possible to victims, and it is believed that the legal process could take years to complete. Given the shock professed by all the clients of Rana Plaza in the aftermath, we genuinely believed that those brands linked to the tragedy would match these words with action and be more than willing to contribute their share to the Fund. Over six months later the fact that this has not happened in a number of cases in an ongoing source of frustration and disappointment from all involved.

When Matalan said …

The ILO has said: “ILO encourages brands and other donors to given generously to the Rana Plaza Donor’s Trust Fund as we see the needs of the victims as an important issue for the industry to settle. However, It is not ILOs role to campaign or to make any specific demands of any donor and ILO has not done this”.

Labour Behind the Label say …

The ILO is not a campaigning organisation and its role in the process is as a neutral facilitator. It would be therefore inappropriate for them to comment or make demands on particular companies. It is clear from a number of statements issued by the organisation and from its central role in developing the process that it does however consider the Arrangement the best way to deliver long term compensation in line with ILO convention 121.

When Matalan said …

Matalan take their ethical responsibility seriously and like all other retailers, it is evident that audits require the input of structural engineers. This is one of the reasons that Matalan has also joined the Bangladesh Accord whose key principle is that no one should go to their place of work in fear of injury.

Labour Behind the Label say …

We reiterate that this is misleading – the Accord’s role is prevent future disasters like Rana Rlaza, not to deal with the aftermath of the disaster itself. That said the Accord has called on all its members to contribute to the Fund, this call includes Matalan as an Accord member.

When Matalan said …

We are extremely proud of our connections with the people of Bangladesh, and our work with the garment industry in the country as a whole, and as such wanted to offer our support.

As well as our donation to ILO we hope to provide further support to BRAC. The function of this scheme is to enhance the long term financial security of families who are currently vulnerable in terms of their financial status by providing, for example, Medical Insurance Cover to prevent families from going into further debt and to ensure that medical services will be taken care of for the next five years. This is crucially important. There is a Monthly Reserve Fund that provides a monthly income for the living needs of families which will be carried out in coordination with BRAC Bank or BKash. There is also the Livelihood Assistance, which arranges integrated options so that families can ensure a sustainable future.

Labour Behind the Label say …

In order to be in line with international standards monthly payments must be available to every single person affected by the disaster and must be calculated using a specific formula. The reason that payments are being given out only now is because each claimant has been supported to make claims that will ensure they get the full compensation they are entitled under international standards. These payments are based on what was lost by that family in the disaster. Again, whilst BRAC does good work, it neither provides income based on international standards nor does it provide such payments to every single dependant and worker affected by the disaster.

When Matalan said …

From Matalan’s experience in Bangladesh, we believe that BRAC have a superb team of people who can help victims and communities, it is pleasing to see that the ILO have the same goal.

Labour Behind the Label say …

BRAC, as a privately funded NGO, which is increasingly gaining much of its funding from the private sector, is not accountable to the people using its service who have no input or influence over the process. The ILO is an entirely different body, that brings together all those on the ground that have a genuine stake in the garment industry and includes legitimate representatives of workers, the industry and the government of Bangladesh. Its role and objective is develop a long term, nationally based system for compensation, and the Rana Plaza Arrangement has been designed in such a way as to provide a model for such a system to be developed. Again, the ILO is about the promotion of workers’ rights in the industry, which includes the right to compensation. Should the respect of workers’ rights become the norm in Bangladesh workers would no longer have to rely on charity to make ends meet.

When Matalan said …

If members of your organisation would like to speak with us directly we would welcome the opportunity to arrange for those conversations to take place. It is very important that everybody works together and that sustainable funding from responsible sources is maintained, whilst ensuring that there is continued awareness in the Retail Industry of the long term effects of such a tragedy.

Labour Behind the Label say …

Sustainable funding is important, but much more important is the willingness of brands and retailers to accept the responsibility they have to those workers making their clothes. This includes respect for those workers organisations which represent the interests of garment workers, all of which are supportive of and directly involved in the Rana Plaza Arrangement. This is why we are requested that Matalan take that responsibility now and pay into the Fund.