Apparel Online Bangladesh Magazine November Issue 2018 | Page 28

BANGLADESH INSIGHT
Government regulator DIFE
starts non-compliance action
as Accord & Alliance exit
B
angladesh Government has begun
taking actions against non-
compliant garment factories in the
country against the backdrop of the
exit of third-party agencies – Accord
and Alliance – which were overseeing
and compelling factory remediation
work for the last five years.
In the primary phase, the Government’s
factory inspection regulator –
Department of Inspection for Factories
and Establishments (DIFE), has
written to the trade bodies to scrap
Utilisation Declaration (UD) of 219
readymade garment factories – which
will be curbing those factories from
reaping trade advantages or incentives.
Notably, in the process of
manufacturing and exporting apparel
items, the manufacturing factories
have to seek Utilisation Certificate
from trade bodies like Bangladesh
Garment Manufacturers and Exporters
Association (BGMEA) and Bangladesh
Knitwear Manufacturers and Exporters
Association (BKMEA). Without this
certificate, the factories will not be able
to enjoy duty-free advantages.
Trade associations have swiftly jumped
to action after receiving the letter. They
have had several rounds of meetings
with the factories on the list – trying
to evaluate if they can be saved from a
closure. But, it is affirmative that they
will not be compromising with factory
compliance – quite frankly because it is
something they cannot afford now.
Md. Shamsuzzaman Bhuiyan,
Inspector General at DIFE told
Apparel Online that his institution
has already scrapped those operating
licenses of over 1,500 garment
factories, including those 219 factories,
for non-compliance in structural
remediation. “In the last week of
September, we wrote to BGMEA and
BKMEA to stop their UD certificates.
This action has been taken because
they remained non-compliant despite
repeated warnings,” Bhuiyan averred.
Among the names obtained in the
list are knit manufacturers Trasco
...in the process
of manufacturing
and exporting
apparel items, the
manufacturing
factories have to
seek Utilisation
Certificate from
trade bodies
like Bangladesh
Garment
Manufacturers
and Exporters
Association
(BGMEA) and
Bangladesh
Knitwear
Manufacturers
and Exporters
Association
(BKMEA).
Without this
certificate, the
factories will
not be able to
enjoy duty-free
advantages.
Apparels Ltd. of Narayanganj and May
Fashion of Gazipur, both of which are
registered with the BKMEA. From
what could be known, among the 219
factories, 134 are registered with
BGMEA, and 74 with BKMEA. The
remaining 11 are registered with both.
According to the DIFE Inspector
General, the institution carried out
32 view-exchange meetings with the
factory owners and trade bodies,
where they issued repeated warnings
against non-compliant factories. “Even
then, there hasn’t been a progress.
We have been therefore forced to take
such a harsh initiative.”
Mohammed Nasir, Vice President
(Finance) of BGMEA informed
Apparel Online that they have
received the letter from DIFE and have
taken actions accordingly. He added,
“We have sat with the factory owners
and learned if there is any chance that
they can complete the remediation
work in time. We have learnt that there
is scope for some of the factories. We
will again sit with the DIFE and inform
them of the developments and see if
we can seek time for these factories.”
He further stated, “Scrapping the UD
of any factory is like killing it right
off. We have to try and save these
factories first. If they cannot complete
their remediation, we will be forced
to take harsh steps. It is necessary
for building compliance within our
apparel industry.”
BKMEA Second Vice President
Fazlee Shamim Ehsan also echoed
a similar statement while talking to
Apparel Online. He said, “We haven’t
yet received the list of factories from
DIFE. When we get it, we will call
an emergency board meeting and
formulate our next course of action.
Also, we will be sitting with the
defaulting factory owners individually
to evaluate if it is possible for them to
remediate within the stipulated time.
If they can, we will try to buy them
some time if necessary. But, we are not
willing to compromise on structural
28 Apparel Online Bangladesh | November 2018 | www.apparelresources.com
safety and compliance issues. We will
shut down non-compliant factories.”
Insiders within the apparel industry
have confided in Apparel Online that
the owners and trade bodies are
fundamentally against the closure of
these factories, but they will do it if
they have to. The main reason behind
such a stand is the falling state of
business, rising global competition,
and falling prices, coupled with costly
remediation work for the past five
years. Additionally, over 1,00,000
workers are engaged with these
factories and the trade bodies will
not be tolerating any worker unrest in
this scenario.
Following the Rana Plaza building
collapse in April 2013 that killed more
than 1,100 – mostly garment workers,
a total of 3,780 garment factories were
assessed for structural compliance
under the three separate initiatives –
European retailers’ platform Accord,
North American buyers’ platform
Alliance, and the Government-led and
ILO-supported national initiative.
Out of the 3,780 garment factories,
1,549 were inspected under the
national initiative. Of them, 531 were
shut down, 69 relocated, and 193
transferred to the lists of Accord and
Alliance. The factories that fall under
the national initiative have completed
32 per cent remediation work; among
them, 11 factories have completed 100
per cent remediation.
The two third-party compliance
regulators Accord and Alliance
assessed 809 factories. Over the
course of five years, the two watchdogs
cut ties with over 200 factories for
failing to meet compliance factors.
The remainder of the factories
have completed about 85 per cent
remediation work, on an average.
Now, at the end of the five-year
contract, Accord and Alliance will
be leaving Bangladesh and the
Government has made it clear that
licenses of the two will not be
renewed. A significant factor behind
this is also the discontent of the
manufacturers who say they have been
forced to make costly remediation
work under pressure.
After the departure of Accord and
Alliance, a Remediation Coordination
Cell (RCC), overseen by the state, will
be carrying on the work. Accord and
Alliance will be handing over their due
and ongoing work to the RCC.