Primark says it has spent $1m on helping Dhaka factory fire victims

The Penneys winter collections launched today prompted questions about the aftermath of the Bangladesh disaster in May, in which more than 1,100 factory workers, mostly women, died in a building collapse.

The tragedy at Rana Plaza, a badly constructed eight-storey building near the capital Dhaka, where Primark/Penneys, among others, sourced products, raised issues of the real cost of cheap clothes.

It emerged that it was not just mass-market retailers who sourced clothing from Bangladesh's $20 million garment industry, but also designer brands like Armani, Ralph Lauren and Hugo Boss.

Bangladesh is now the third-biggest clothing exporter in the world and one of Asia’s fastest-growing economies as the garment industry expands.

The disaster has not affected the economy – with total exports rising to $2.7 billion in June, four-fifths of which is clothing – but prime minister Sheikh Hasina has not fulfilled her promise to distribute cash and saving certificates to families of those who died.

The money was to come from government and from donations from factory owners and others. Families have been left destitute and many survivors who lost limbs and can no longer work have been abandoned by their families.

The only western clothing company that has provided compensation is Primark, as the New York Times reported this week. After the May 13th disaster, three top executives – Breege O'Donoghue, head of human resources, chief executive Paul Marchant and chief operations officer John Little – spent a week in Dhaka working with local NGOs and trade unions distributing food and registering more than 3,000 workers for short-term financial assistance.

To date the company says it has spent $1 million and that further work is under way to provide long-term compensation and support services.

Primark is also one of 70 apparel brands and retailers which have signed a contract with international and local trade unions and NGOs to ensure sustainable improvements to working conditions.

Some mark-ups are considerable: in London, a Bangladesh- made T-shirt from G Star Raw denim has a price tag of £60, 15 times that of Asda's £4 for a man's basic T-shirt, according to a report in the Wall Street Journal. It has been estimated that a £6 (€7) Primark shirt costs $1.60 to produce.

According to Paul O’Brien, overseas director of Concern who lived in Bangladesh for four years, the wider issues are now the other 4,500 factories and four million garment workers who continue to work in substandard conditions.