Get ready for tougher German laws to boost exports

Bangladesh needs to maintain higher human rights and environmental standards in production to keep trading with Germany as the European nation is going to adopt a new due diligent laws from 2023, said business leaders yesterday.

The new law will be applicable to any country that does business with Germany, they said at a webinar on "German Due Diligence Act – Implications for Manufacturers and Exporters in Bangladesh".

The Bangladesh-German Chamber of Commerce and Industry (BGCCI) organised the discussion, which was attended by diplomats, trade body leaders of both countries, and exporters.

The new due diligence law will come into effect from January 2023 for companies with more than 3,000 employees. It will be applicable to companies with 1,000 workers from January 2024.

Human rights and environmental protection measures related to the emission of noise and water consumption in production and in the whole supply chain would be assessed under the new law.

"Fines will be heavy if a company violates the new law," said Manfred Junkert, general manager of the Federal Association of the German Footwear and Leather Goods Industry.

"It will be very risky if a company can't comply with the new law."

A separate federal body on exports and imports will oversee the implementation of the law that will focus on human rights, green production facility and environmental protection in the supply chain, said Karl Borgschulze, managing director of Consulting Service International, a German social auditing and certification firm.

Speaking about Bangladesh's preparation for the law, Asif Ashraf, a director of the Bangladesh Garment Manufacturers and Exporters Association, said local garment factories were the safest workplace in the world after the implementation of the recommendations of the Accord and the Alliance, the two factory inspection bodies.

He said most of the Bangladeshi garment factories were certified by Sedex and Higgs Index, meaning they were maintaining compliance beyond standards.

Sedex is home to one of the world's largest collaborative platforms for sharing responsible sourcing data on supply chains, while the Higg Index is an apparel and footwear industry self-assessment standard for assessing environmental and social sustainability throughout the supply chain.

Germany is the second-largest export destination for Bangladesh after the US. Last fiscal year, the country shipped $5.6 billion worth of goods to the European country. Of the goods, more than 95 per cent are garment items.

At 148, Bangladesh has the highest number of green garment factories in the world. Another 500 are waiting to be certified by the US Green Building Council (USGBC).

Of the top 10 Leadership in Energy and Environmental Design green buildings certified by the USGBC, nine are in Bangladesh.

Currently, Bangladesh is the second-highest ethical sourcing country certified by the QIMA and has the second-highest number of global organic textile standard-certified garment factories, Ashraf said.

"We are hopeful that we can comply with the new German law. Still, we want a grace period from Germany to implement the law in our factories," he said.

Amrita Makin Islam, deputy managing director of Picard Bangladesh, a Bangladesh-German joint venture leather goods company, said there was a need to disseminate information about the new law among the business community.

Mosharraf Hossain Bhuiyan, Bangladesh's ambassador to Germany, also demanded the grace period for complying with the new law.

He urged the government to complete the construction of the central effluent treatment plant at the Savar Tannery Industrial Estate so that the leather and leather goods sector could comply with the law.

"The leather and leather goods exports may face trouble if the construction of the CETP is not completed on time."