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Dhaka Tribune

‘Fair prices key to overcoming challenges to eco-friendly RMG export’

Bangladesh emits very little carbon, yet it is the most vulnerable to climate change, industry insiders said at a dialogue organized by the CPD

Update : 31 Jan 2022, 03:35 PM

A supportive government policy and ensuring fair prices will help the ready-made garment (RMG) sector overcome the challenges of transitioning into an eco-friendly and green industry, experts said on Sunday.

They made the remarks at a dialogue and launching event of the Programme on Securing Green Transition of the Textile and Readymade Garments Sector in Bangladesh, organized by the Centre for Policy Dialogue (CPD).

Dr Fahmida Khatun, executive director of the CPD, presented the keynote paper.

“Bangladesh is vulnerable to the impact of climate change and is also beset with problems of environmental degradation. However, the textile and RMG sector, being one of the resource-intensive sectors, has high potential to reduce environmental degradation and to contribute towards achieving Bangladesh’s commitments on GHG emissions,” she said.

Khatun also identified the major challenges, including policies, regulatory measures and economic instruments, and financial investments needed for “greening” the economy.

The CPD executive director also said that despite having LEED certified factories, RMG factory owners are unable to earn additional revenues since the prices continue to stay the same. 

“Mobilization and access to finance will be the determining factors for promoting green and sustainable growth in the sector,” she noted.

Fazlul Hoque, managing director of Plummy Fashions and former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that Bangladesh is one of the pioneers in the field of green factories.

“Earlier, many changes had taken place in our apparel industry in response to the demand of buyers. But the transition toward green factories was an entirely voluntary move undertaken by our entrepreneurs,” he said. 

Setting up a green factory costs a lot more than a conventional factory, but factory owners are not getting the necessary policy support, Hoque added.

“Green factory owners are given a 2% rebate on income tax, which is negligible compared to the cost of building a green factory,” he also said.

“Bangladesh Bank has a green fund with enough allocation, but the fund has remained untouchable due to so many conditions; these conditions need to be relaxed,” he said.

Foreign buyers also have a responsibility to ensure fair prices as entrepreneurs are doing everything from their end, Hoque further said.

Mohammad Hatem, executive president of the BKMEA, said there is no alternative to setting up green and sustainable factories to mitigate global warming and climate change.

However, there are challenges in setting up a green factory in Bangladesh, including access to finance, as banks prefer the client-bank relationship — a hindrance to securing loans for many.

He also urged for a longer payback period as green factories cost 15-20% more than conventional factories and the entrepreneurs have to wait a while to reap the benefits.

“We have to pay higher duties to import chemicals for ETPs; these chemicals have to be imported duty-free,” Hatem added.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that climate change, global warming, and the greenhouse effect — all are burning issues now and although Bangladesh emits very little carbon, it is the most vulnerable country.

However, BGMEA has taken initiatives to reduce carbon emissions and establish a sustainable RMG industry by taking sustainability and environmental protection as their agenda, he added.

Currently, Bangladesh has 157 LEED certified green factories and BGMEA has received the 2021 USGBC Leadership Award, he added.

“We have an agreement with SREDA [Sustainable and Renewable Energy Development Authority] and we are also working with global brands to reduce carbon emissions,” he added.

The BGMEA is also working on circular economy implementation, through which it is possible to emit 10% less carbon, Hassan said.

He also urged governmental policy support and fair prices from the buyers.

“There can't be so many positive changes without higher costs, so fair prices are important,” he added.

Parliamentarian Saber Hossain Chowdhury said that green industrialization should not be limited to the apparel sector, but should be implemented in other industries as well.

He also said that the garment sector needs to be freed from middle man coverage to ensure fair prices.

“We get only 15% of one unit of clothing, if it can be increased to 30-40% then it is good for all parties. For this, we need to pursue this matter actively,” he added.

He also said that they must implement a circular economy and need to diversify the industry.

Chowdhury suggested that the apparel sector collectively present their demands regarding the establishment of green industry in the next budget.

However, Nazma Akter, founder of Awaj Foundation, said that green factories need to be turned into “fully-fledged green factories”.

“The work environment needs to be improved by improving the quality of life of the workers and ensuring their health, education, nutrition, and recreation,” she added.

She also said that RMG factory owners have to take initiative to protect women, establishing day care centers.

“Sustainable development is not possible just by improving the external environment,” she added.

Christine Johansson, deputy head of mission of the Embassy of Sweden, Khondaker Golam Moazzem, research director of CPD, Shams Mahmud, managing director of Shasha Denim, and Mohammad Zahidullah of DBL Group also spoke at the event.

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