The government has decided to take to a hard-line course for ensuring compliance issues by readymade garment units as it is mulling temporary ban on issuance of generalised system of preference (GSP) to non-complying factories.
Though such a decision might hamper the performance of the country's readymade garment (RMG) sector, the authorities are desperate to ensure compliance in the backdrop of frequent workplace tragedies, sources said.
The Ministry of Commerce (MoC) has come under fire from high-ups of the present four-party alliance following the recent fire incident at a RMG factory in Chittagong.
At least 55 workers were roasted alive in the garment-cum- composite textile unit in the port city due to absence of adequate fire safety measures though four government bodies including two under the MoC were there to ensure the compliances, they added.
"The MoC is now weighing various options including slapping temporary ban on issuance of GSP certificates to RMG factories, which have long been defying directives on compliances," said a senior official of the ministry.
"Taking such decision is a serious matter as far as the business of the country's RMG sector is concerned," Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) President Fazlul Hoque told the FE Monday.
Imposing temporary ban on issuance of GSP certificates amounts to declaring a factory close, he said, adding that it will hurt the performance of country's main foreign currency grosser.
Together knit and woven garments export fetched US$ 6.4 billion during the last fiscal. The earning from the sectors may reach up to $8 billion due to an average of 11 per cent growth in the first six months of the current fiscal.
Available official statistics show that some 4,000 local knit and woven garment factories collect GSP certificates from the Export Promotion Bureau (EPB) to export their products to European Union (EU) and the US markets.
During the last couple of moths, EPB issued over 9,000 certificates in favour of export-oriented knit and woven factories. Without the GSP certificates, the exporters will not be eligible to enjoy tax exemptions in 25 EU countries.
Experts said it is high time for the government to tighten the screws on non-complying garments units as the RMG sector is enjoying a galaday in the first year of the post Multi-Fibre Arrangement (MFA) proving the doomsayers wrong.
But it will be sad for Bangladesh if it loses its share of apparels export in the international markets due to failure to address compliance issues in the RMG factories.
Leading international buyers have been pressing the government hard to ensure compliance since the collapse of Spectrum garment in Savar last year that killed at least 100 workers and employees.
They have been threatening that they might stop outsourcing garments from Bangladesh on the ground of gross non-compliance in majority of factories.