Lack of ETPs may prompt rawhide smuggling

The Bangladesh Tanners Association is apprehending smuggling out of rawhide to India because of inadequate compliance measures in Bangladesh.

“If compliance measures are not enforced effectively, local leather may be illegally exported to India, where better prices can be obtained for their Leather Working Group (LWG) Certification,” said the association president Shaheen Ahmed at a seminar in Dhaka on Monday.

He said two Indian states bordering Bangladesh have set up at least seven Central Effluent Treatment Plants (CETPs) to ensure compliance in the leather industry, but in Bangladesh, only one CETP in the BSCIC Tannery Industrial Estate at Savar is yet to be fully operational.

Stakeholders in the leather sector came up with their concerns at a seminar titled ‘Action for Sustainable Development of the Leather Industry,’ organised jointly by the BTA, Asia Foundation, and the Economic Reporters’ Forum (ERF) at the ERF’s office in Dhaka.

The seminar aimed to disseminate knowledge about the rawhide, leather, and leather goods industries ahead of Eid-ul-Azha, which will be celebrated on June 29.

Shaheen and other speakers criticised the Bangladesh Small and Cottage Industries Corporation (BSCIC) for its failure to establish CETP and ensure solid waste management, even six years after the relocation of the tanneries from Hazaribagh to Savar.

Shaheen highlighted that due to the failure to maintain compliance and acquire LWG certification, they lost several buyers after the relocation of tanneries. As a result, they are currently exporting leather to non-compliant brands at low prices.

“While we have received approval to set up individual Effluent Treatment Plants (ETP), only one of them, Bay Tannery, is under construction, and Apex is planning to establish one. If we want to brand Bangladesh’s leather sector, we need at least 30 LWG-certified tanneries, which will enable us to obtain better prices,” Shaheen emphasised.

Responding to questions on the financial challenges faced by factories in securing bank loans, Shaheen said, “We are conducting business at a loss to survive because we have invested crores of taka.”

He explained that they purchase a 20-square-foot rawhide at Tk 700, but it costs Tk 2,800 to process it into finished leather. Once they receive the LWG certificate, brands will pay a fair price, enabling them to offer better prices for rawhide.

Abul Kalam Azad, president of the Tannery Workers Union, emphasised the need for social compliance, environmental measures, and quality assurance to obtain LWG certification. Referring to his visit to Chennai, Azad said that the leather quality there is not better than in Bangladesh, but they possess certain compliance certifications.

Azad questioned the recommendation of a parliamentary watchdog to shut down tanneries in Bangladesh while thousands of workers are employed in the industry. He highlighted how workers suffered for the BSCIC’s forceful relocation of the tanneries. “Workers are a big loser in this action. They did not get any compensation,” he said.

Tariqul Islam, managing director of Merchant Tannery and an adviser to BTA, identified one of the key barriers to obtaining LWG certification is the consumption of water as it calls for reduced consumption. He said that this issue has been widely discussed but tanners have failed to address it. “The RMG sector has received significant policy support from the government, which has yet to be seen in the leather sector,” he added.

He suggested that the government should set a cap on water usage in tanneries, and those exceeding the limit should be penalised. Implementing such measures would not only promote environmental friendliness but also relieve the burden on CETPs.

Ferdaus Ara Begum, the chief executive officer of Business Initiative Leading Development (BUILD), pointed out that tanners have neglected the pre-treatment of waste, which has led to the failure of CETPs. She emphasised that both parties should be concerned about this issue.

She also suggested the BTA have a roadmap to adopt the Fourth Industrial Revolution (4IR) and setting up a task force for the sector could help tackle the crisis.

She also highlighted the need for foreign direct investment (FDI), as the government has set a target of $12.5 billion in exports by 2030. A roadmap-based branding strategy and FDI could play a significant role in achieving this goal.

ERF President Mohammad Refayet Ullah Mridha stated that the European Union is making Due Diligence and Human Rights mandatory for doing business. This means that Bangladesh must ensure labour rights and address environmental issues to gain market access to the region.