Home ›› 19 Apr 2023 ›› News
Negligence and lack of interest from tannery companies has drastically slowed down the implementation of a crucial two-year work plan prepared by the government to ensure compliance in the leather industry.
According to economists and industry insiders, implementation of the work plan is a must to obtain the Leather Working Group (LWG) certificate, and make Bangladesh one of the top leather goods exporters by 2025.
They recommended timely implementation of the work plan saying the tannery companies would be more benefited if they ensure compliance in the sector. They also suggested creating awareness among company owners to ensure compliance, forming safety committees at every factory, and monitoring compliance issues to develop the sector.
The plan
The two-year plan was approved by the Ministry of Labour and Employment on April 21, 2021. The ministry directed the Department of Inspection for Factories and Establishments to implement the plan.
Talking to The Business Post, economists said ensuring social compliance in the leather industry will open the door to achieve the LWG certificate, create scope of product diversification and attract buyers from developed countries like the US and EU.
Bangladesh Labour Foundation (BLF) Chairman Abdus Salam Khan said, “The leather industry was once one of the estab-lished industries in the country. But the sector has crumbled due to lack of proper planning.
“There are a large number of local raw materials for the leather industry but we cannot utilise them properly due to lack of proper planning. Now, the government has taken a two-year action plan to flourish the sector which is good but owners have to come forward to implement it,” he also said.
“Tanneries were shifted to Hemayetpur in Savar from Hazaribagh to protect the environment, ensure compliance, and de-velop the sector. But so far that initiative produced zero results,” he pointed out.
BLF Secretary General AZM Kamrul Anam said the industry’s image needs to be improved in both the local and international markets.
He said, “Bangladesh cannot export leather and its goods to Europe due to not being LWG certified. Company owners should ensure compliance to boost their business.
“However, the implementation of the work plan in this regard is around only 20-30 per cent. Authorities concerned should gear up to finish it on time.”
Export opportunity
Chairman of Research and Policy Integration for Development (RAPID) Dr Mohammad Abdur Razzaque said, “Bangladesh’s leather goods and footwear export potential is underutilised. Without getting its certificates from the LWG, no country can export leather to Europe, the US and some other countries.
“Bangladesh has to diversify its export markets to boost its economy. The country’s apparel export to the United Kingdom is expected to reach $11 billion by 2030 from $4.5 billion in FY22, while non-RMG product export is estimated to touch $1.3 billion from $0.7 billion.”
He added that some non-readymade garments products including leather and leather goods are in high demand in the UK market. Bangladesh needs to make necessary policy, and maintain the demand and supply issues to utilise that opportunity.
There are some challenges including lack of integration with the UK’s supply chain, lack of certification and standard re-quirements.
“We have to remove anti-export bias and rationalise tariffs, strengthen incentives for the export sectors, tackle infrastruc-tural bottlenecks, and ensure access to low-cost finances,” he added.
Implementation progress around 40%
Bangladesh leather industry is currently valued at $2 billion. The South Asian country accounts for 3 per cent share of the global leather and products market, according to Bangladesh Investment Development Authority (BIDA) data.
Talking to The Business Post, Deputy Inspector General of Inspection for Factories and Establishments Department AKM Salauddin said, “We are doing everything to ensure social compliance in the leather sector.
“We hope that the work plan will be implemented within the estimated time. So far, the implementation progress stands around 40 per cent. We have already formed a working committee, and are calling meetings every month for updates.”
Salauddin added that they sent the plan details signed by him to every factory at Savar Tannery Industrial Estate prioritising on making database of workers, identity card, appointment letter, register daily attendance and overtime, work hour and leave, accident data, medical equipment, formation safety committee at every factory, drink water, sanitation facilities, fire extinguishing rehearsal, and collecting wage register.
“The government is very enthusiastic to ensure compliance in the industry to boost exports. The industries ministry and Bangladesh Small & Cottage Industries Corporation (BSCIC) are working to complete setting up the Central treatment plant (CTP) soon,” he also said.
