The move comes after harsh criticism of the fashion retailer after data from the Bangladesh and Garment Exporters Association (BGMEA) revealed that it had canceled all orders already placed with suppliers.
Collectively, brands such as Primark, Matalan and Edinburgh Woolen Company have canceled £ 1.4 billion and suspended an additional 1 billion orders in Bangladesh alone as they jostle to minimize losses from the Covid epidemic- 19. The move has already seen more than a million Bangladeshi garment workers lose their jobs or be sent home without pay.
Primark has announced that it will create a fund to help pay workers’ wages for orders that were due to be dispatched within a month of being canceled in Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and In Vietnam.
However, the brand also stipulated that salary compensation would be adjusted to take into account government support programs, a warning that has caused confusion among suppliers and industry organizations.
“While we welcome Primark’s announcement that they will compensate workers for the wages they will lose as a result of these canceled orders, what that means is not clear enough,” said Rubana Huq, president of BGMEA. “Salary compensation should not take into account public loans. These brands have existing commercial commitments with their suppliers which are their responsibility to honor. “
Plant owners in Bangladesh also asked for clarification on whether Primark would agree to pay invoices for one of the completed orders it canceled or for one of the raw materials already purchased by suppliers.
As a result of the Covid-19 epidemic, all Primark retail stores have closed, with estimated monthly losses of £ 650 million. Primark CEO Paul Marchant said the company already has £ 1.6 billion worth of paid stock in stores it couldn’t currently sell.
“Each of our stores around the world is closed. With a backlog of inventory in stores, depots and in transit, we had to make the very difficult decision to cancel orders for future inventory, “he said.
“Finding a way to ensure that workers in our supply chain in these countries are paid has been a priority in the past two weeks and we are pleased that this fund will relieve these workers.”