Exporters of readymade garments (RMG) in Bangladesh have come under extra pressure, with buyers’ compliance requirements increasing by the day. A 2013 accord on safety and the Alliance for Bangladesh Worker Safety, founded by a group of apparel companies and retailers, have been, in particular, responsible for such a situation. Besides, production cost has also increased because expenditure on fire-safety, electrical and structural items have become extremely high owing to additional value-added tax (VAT). If the buyers’ demands continue to grow, RMG traders would not be able to meet the export target of $50 billion by 2021. Business leaders from all sectors came up with the observations during a view exchange meeting on “Current situation of RMG sector and the way forward” in the capital yesterday. Bangladesh Garment Manufactures and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and Bangladesh Textile Mills Association (BTMA) had jointly organised the event. The Accord on Fire and Building Safety in Bangladesh was signed on May 15, 2013. It is a five-year legally binding agreement between global brands and retailers and trade unions and the Alliance for Bangladesh Worker Safety to improve safety in RMG factories in the country. The accord was the handiwork of a group of North American apparel companies and retailers and brands who have joined together to develop and launch the Bangladesh Worker Safety Initiative. Anwar-Ul-Alam Chowdhury Parvez, former president of BGMEA, said “We might fail to reach our target to export $50 billion by 2021 as the buyers are not willing to listen to us on anything except the report of Accord and Alliance. Besides, welfare and participatory fund issues would be major obstacles to reach the goal.” Parvez added: “We have improved a lot with regard to working conditions, safety issues and enacting relevant laws as per the buyers’ requirements. But the demands of the buyers are increasing cumulatively and they are adding more in their requirement list.” Abdus Salam Murshedy, former president of BGMEA, said that no such accord and alliance existed in any other country though many incidents had taken place there at different times. “We agreed on the accord and are trying to fulfil all the requirements. But there is no end to their demands and it has been increasing and no coordination between accord and alliance” he alleged. Md Shafiul Islam Mohiuddin, former president of BGMEA, said, “We are under pressure from national and international bodies as we are facing political violence and buyer’s surplus demand which are the major obstacles in the RMG sector.” AH Aslam Sunny, acting president of BKMEA, said the economy and business was being severely affected because of political impasses. He said fire clocks and other equipment were expensive, making it tough for businessmen to fulfil the requirement of accord and alliance. He requested BGMEA president to talk with NBR to exempt these accessories from VAT. BGMEA president Md Atiqul Islam said, “Accord and Alliance, National Action Plan and double digit vat are the major challenges for exporters. Also, we need same plan for small, medium and large factories in case of bank loan.” Talking about the initiatives that have been taken by the garments owners of the country, he said, “All the database of 2,100 factories is available in the website. There is no other country with such a transparent database.” Mentioning the problem of the Accord and Alliance, the BGMEA chief said it was not a level playing field as the requirements were imposed only on Bangladesh. The buyers should implement the same law for other countries or else we will lag behind our competitors.
Source: https://www.theindependentbd.com/index.php?option=com_content&view=article&id=254691:rmg-exporters-rue-extra-pressure-from-buyers&catid=110:business-others&Itemid=156
