Published in Dhaka Tribune on Tuesday, 20 May 2014.
Apparel Sector
Duty-free import of safety equipment logical, say economists
Ibrahim Hossain Ovi
The facility could be given for a certain period like 1-2 years only to those factories closed or to be closed under safety concerns
While the factory owners have recently demanded duty-free import of fire safety equipment and pre-fabricated building materials, policy analysts think the demand is logical given the current safety situation.
When contacted, former caretaker government adviser and economist Dr Mirza Azizul Islam said the facility could be given for a certain period like 1-2 years only to those factories closed or to be closed under safety concerns.
The materials will be used to reconstruct or relocate factory buildings. The duty-free import is believed to largely facilitate the safety improvement works in the country’s apparel sector.
“Some flawed factories have already been closed. Some may face closures. In these circumstances, the duty-free import of necessary safety materials could be allowed, but for a certain period like 1-2 years,” said Dr Aziz.
He, however, suggested ensuring an effective monitoring so that the facility cannot be used for other purposes such as importing the materials for other sector or selling them in the market.
Dr Aziz said if locally made materials maintain required standards, the firms should also be given tax rebate so that they can supply quality products at less prices.
Prof Mustafizur Rahman, executive director of Centre for Policy Dialogue (CPD), also spoke the same about the issue.
According to him, as the country’s readymade garment sector is passing a difficult time over compliance issues, the government should exempt the safety materials import from duty. After a period, the facility can be withdrawn. About the locally made materials and fire safety equipment, the economist said they are not internationally certified and accepted by the global buyers.
“Demand for duty-free import of fire equipment is logical, as the sector is dependent on imported materials,” said executive director of CPD, a think-tank.
“To make the RMG sector compliant, relocation is a must for many factories. For immediate relocation, pre-fabricated building materials are mostly needed. So the government can help the entrepreneurs improve safety allowing duty-free import of materials,” Dr Mustafiz.
“To avert job cuts, it is necessary,” he stressed.
When the local producers are able to produce globally recognised materials, no import will be required, said Dr Mustafiz.
Fire Service and Civil Defence Director General Brig Gen Ali Ahmed also thinks, in this current situation, about the need for suspending duty over import of safety equipment.
He said as the entrepreneurs have showed their interest to make the sector compliant and safe, the facility can help them maintain the standards.
“From fire department, we have recommended it to the government to include in the next budget,” he said.
According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), a good number of factories need to be relocated as the Accord and Alliance found those faulty.
Besides, there are still more factories, doing business in shared buildings also have to relocated within a stipulated time frame. A total of 174 factories closed since the Rana Plaza building collapse due to safety, order shortage and political unrest.
An rough estimate of BGMEA said, around 1,200 RMG factories need to install sprinklers, while 3,000 other factories have to install fire doors as per the requirement of the Accord and Alliance, which would cost over Tk2,500 crore.