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Dhaka Tribune

More co-operation needed to ensure financing for RMG upgrades

Update : 26 Feb 2016, 07:31 PM

It is reported that no funds have been disbursed from a $200 million fund set up by the EU, IFC, and JICA to offer low-interest loans to RMG factories for carrying out remediation works.

The BGMEA, BKMEA, and major buying brands should talk with factory owners to assess the reasons why take-up is lagging.

Efforts by the government, ILO, and the buyer-based multi-stakeholder initiatives, Accord and Alliance, have been making welcome progress on factory inspections.

A majority of factories have either demonstrated full compliance or have successfully been able to progress financing for required remediation efforts.

However, there is still a significant cohort of 522 RMG factories identified by Accord as having made less than 40% progress on remediation works to improve their workplace safety.

The BGMEA is meeting this week with 80 factory owners in this group to get to know the reasons behind the slow progress of their remediation works.

As there is demonstrably still a clear need for more remediation works to be carried out, all stakeholders in the garments sector need to work together better to maximise the financing available for remediation works and upgrades.

Better conditions and factories will not only help workers but benefit consumers and buyers by helping  to raise productivity and quality

The best way that buyers can help is by investing more in long-term orders and building relationships with producers to enhance the sector’s cash flow and enable factory owners to secure funds to keep upgrading standards.

For its part, the government should do more to help factory owners develop new, modern, fully compliant factories. It should free up underused, state-owned land for the development of new SEZs and industrial parks with access to reliable gas and power access, to encourage investors to develop new factories where productivity and standards can be cost-effectively improved.

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