84 RMG units lose right to duty-free import of fabrics | The Daily Star
12:00 AM, January 09, 2020 / LAST MODIFIED: 12:19 AM, January 09, 2020

84 RMG units lose right to duty-free import of fabrics

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday cut the right of 84 garment factories to duty-free import of fabrics due to poor compliance and safety standards.

The BGMEA suspended the units’ Utilisation Declaration (UD), which is a certification determining how much inputs and packaging materials will be used by a factory in manufacturing exportable products. 

The garment makers’ platform issues the certification, which is vital for duty-free import of fabrics.

Another 54 member factories have been given time to show progress so that they can continue availing their certification as their business record is better than that of the 84, said Rubana Huq, president of BGMEA. 

The managements of the 54 were asked to attend a BGMEA meeting this month to inform of their current compliance and safety standards before taking any upgradation measures, Huq said.

There are another 35 factories which closed on failing to generate business, for which they need not face the suspension, she said.

The BGMEA took the decisions on the 173 as per a January 5 recommendation of the Department of Inspection for Factories and Establishments (DIFE).

“Factories, which haven’t been able to comply with the basic requirements even after six years of Rana Plaza tragedy, don’t qualify to be reconsidered. Suspension of the UD is the first step,” Huq told The Daily Star.

The DIFE had recommended cancelling the UD of the factories as their conditions were very vulnerable, said Shibnath Roy, inspector general of the department.

“Although we have asked those units several times to remediate their safety measures, they did not pay heed to our concerns.”

Now, if any accident takes place in those factories, the DIFE will not be held responsible, said Roy.

The DIFE also recommended cancelling UD of over 40 garment factories which were members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), he also said.

Financial problems were not barring the factories from upgrading the compliance and safety standards, he said.

“Rather, I noticed that they lack interest. They like to operate their factories without upgrading the compliance and safety standards.”

Only when the BGMEA, BKMEA and the DIFE are satisfied with improvements in compliance and safety standards will the UD certification be issued anew, he said.

The suspended factories are not members of the Accord and Alliance, two foreign factory inspection agencies. 

This is why the DIFE engineers under a national initiative monitored and inspected those factories to ensure electrical, fire and structural safety at workplaces.

Talking to The Daily Star, owner of one of the 35 factories said he had closed down his unit one year ago for being unable to make profits. 

He used to export $2 million-worth sweaters employing 350 workers in the city’s Demra.

“So, I do not have any problem whether the UD of my factory has been suspended or not,” the owner said asking not to be named.

The cost of production increased a lot over the years for different reasons, but at the same time the prices of the garment items have been squeezing every year, he said.

“However, I have a plan to set up a new factory in future if the prices of garment items rebound again.”

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