Sherpa Hossainy's Blog

Environment certificates in quagmire

Posted in Bangladesh, Business, Dhaka, Economy, Environment by Sherpa Hossainy on June 25, 2011

Published in The Independent on June 23, 2011

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Industry owners on Wednesday blamed deep-rooted corruption and bureaucratic bottlenecks as serious hindrances toward establishing sustainable and eco-friendly industries.

Corrupt practices while issuing environment clearance certificate (ECC) coupled with regulatory impediments and lack of inter-ministerial co-operation are affecting the country’s industrial growth, they said.

The industry leaders were speaking at a workshop on complexities in environment clearance certificate for industrial ventures and reducing corruption at Hotel Pan Pacific Sonargaon in Dhaka. The workshop was organised by the International Business Forum of Bangladesh (IBFB). Mahmudul Islam Chowdhury, president of IBFB, presided over the workshop.

Under section 12 of the Bangladesh Environment Conservation Act 1995, no industrial unit or project can be undertaken without obtaining an ECC from the Department of Environment (DoE).

ECC ensures that the industrial unit meets all the prescribed standards set by the Bangladesh government in terms of air, water, noise and other environmental components.

The DoE classifies all industrial projects in four categories: Green, which do not have any negative impact on the environment, Orange A, which produce such wastes that can produce moderate or significant impacts on environment but the impacts can be mitigated easily; Orange-B, which produce some adverse environmental impacts but not considered overly significant and impacts can be mitigated with no residual adverse impacts, and Red, which can have a significant impact on the surrounding environment and the adverse impacts must be properly managed or controlled.

A survey carried out by the research wing of IBFB among industry owners and service providers showed that submitting an application for ECC required 10 documents on an average for Red and Orange B category, which can get to a maximum of 14.

Another survey reported in Bangladesh administrative barriers review (2006) showed the average time taken to process an ECC application by service providers takes 105 days for Red category, which may even take a maximum of 420 days.

The survey also cited the total reported cost to obtain an ECC can shoot up to Tk 6,300,000.

The DoE did not perform any further inspection after taking unofficial money from industry owners, and only 20 per cent of the time they regularly visited the industry, the survey revealed.

The IBFB survey also revealed that 70 per cent of the respondents are not satisfied with the DoE services on ECC, while 20 per cent were satisfied and 10 per cent did not answer.

Besides unearthing the dominance of unofficial money the IBFB survey also showed that after getting the ECC, 40 per cent of the industry owners did not operate ETP (Effluent Treatment Plant).

Monowarul Islam, director general of the ministry of environment and forest, rebuffed the claim of not issuing ECC to the industry owners by saying that 2,245 new ECC was issued last year while 3,408 ECC was renewed.

However Islam admitted that attitude of relevant officials in DoE is sometimes unfavourable and there are some corrupt officials who are taking bribes.

“Performance based salary should be introduced to reduce corruption like Singapore, and policy conflict within the government has to addressed for the sake of national interest,” Islam said.

AK Azad, president of Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), claimed that the country’s administration is completely corrupt.

Azad, speaking as the chief guest, said, “I had to pay bribe in the name of duty drawback system in the customs. If the FBCCI president has to give bribe, it is obvious what happens to the small business owners.”

ABM Mafizur Rahman, research director of IBFB, proposed some recommendations to get rid of corruption in the ECC issuance process: categorisation of industrial ventures, incorporating local administration, increasing manpower in DoE and the environment clearance committee, uniform validity period for ECC, changing the mindset of the people in the DoE, and publishing the news of issuance of ECC in the media.


High interest rate and energy crisis hampering jute and textile industries

Posted in Bangladesh, Business, Dhaka, Economy, Export and Import, RMG and textile by Sherpa Hossainy on June 4, 2011

Published in The Independent on 3 June, 2011

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The apex trade body of the country on Thursday pointed out high interest rates and energy crisis among others as major bottlenecks for the growth of jute and textile industries.

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President AK Azad said, “18 per cent interest rate is a major hurdle for the growth of textile industries.”

He was speaking at a seminar on ‘Problems and prospects of jute and textile sector: Bangladesh perspective’ at the FBCCI conference room in Dhaka.

Abdul Latif Siddiqui, minister for textiles and jute, was present as the chief guest, while Md Ashraful Moqbul, secretary of the textiles and jute ministry, TD Mitra, chairman of Bangladesh Jute Mills Corporation (BJMC), Jahangir Alamin, president of Bangladesh Textile Mills Association (BTMA), were also present.

“Many spinning mills are closing down because of energy crisis and high interest rates. If the rate can’t be brought down to at least 13 per cent, this industry will not survive,” Azad said.

In the fiscal year 2009-10 the textiles sector earned $12.5 billion through export earnings, which is $15.07 billion in the first ten months of the current fiscal.

The FBCCI president said that despite posting an impressive growth the local textiles industry is under threat as EU has adopted the single-stage generalised system of preferences (GSP).

However Azad said jute sector is currently in a favourable position after long being in a state of despair. Jute and jute-goods export earnings were $925 million in the first 10 months 2009-10 fiscal, which is 42 per cent higher than the previous one.

Raw jute saw a 70 per cent growth in export earnings and jute-made goods marked a 45 per cent rise.

“Bangladeshi jute mills export 90 per cent of their products, whereas Indian jute mills only cater to the domestic market,” the FBCCI president said.

Azad said the jute sector will be in peril if the local market does not expand. He commended the efforts of the government in making the use of jute-made goods mandatory in the fertiliser, cement, textiles and construction sector.

Bangladesh is now the second largest exporter of jute and jute-made goods in the world.

Citing the 41 per cent rise in exports this fiscal, Azad said it is an encouraging figure but the import costs are rising and our economy is becoming dependent on RMG exports and remittance.

“We have to focus on other sectors and attract foreign investments,” Azad said.

The minister asked the FBCCI president to list all their demands and provide it to him so that he can submit it to the finance minister before the next budget.

Bangladesh proposes zero-tariff market zone

Posted in Bangladesh, Business, Dhaka, Economy, Export and Import by Sherpa Hossainy on May 24, 2011

Published in The Daily Independent on May 24, 2011

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Bangladesh has yesterday reiterated its proposal for setting up a free market zone for the SAARC member countries with zero tariffs under the South Asian Free Trade Area (SAFTA) agreement.

“This proposal is essential for creating duty free access to our industrial goods and services without any technical barriers to trade,” said Minister for Industries Dilip Barua.

Barua was speaking at the ending ceremony of “India INVESTRADE 2011” exposition at Ruposhi Bangla Hotel in Dhaka. The show was organised by the Indian Chamber of Commerce (ICC) with assistance from the Indian government.

Industry representatives of Bangladesh with interest in energy products have interacted with Indian producers for possible tie-ups throughout the show held from 21 May.

Rajeev Singh, director general of ICC, in his summary speech about the fair, said: “We have received proposals worth Tk 1,273 crore in the fair, including both imports and exports.”

Earlier the minister proposed the special non-tariff zone on May 5 at the 2nd India-Bangladesh trade fair.

He also stressed the need to resolve bilateral and multilateral trade disputes through negotiations. “For settlement of issues, a proper co-ordination between the governments and industrial players is required,” he said.

Matlub Ahmed, president of India Bangladesh Chamber of Commerce and Industry (IBCCI), urged the government to help set up a special economic zone (SEZ) for the Indian investors at Chattak, Sunamganj.

“ICC has promised to bring in Indian Industrial houses to invest in the SEZ,” he added.

Farooq Sobhan, president of Bangladesh Enterprise Institute and former ambassador to India, said: “Bangladesh is strategically located in one of the fastest growing region in the world, where India is growing at 8-9 per cent, ASEAN countries at 6-7 per cent and China at almost 10 per cent.”

Sobhan said, “Any country, as well positioned today as Bangladesh, should take full advantage of its geographic location.”

He also added that all businessperson authorised by their respective chambers should qualify for SAARC visa exemption certificate. “This will make business much easier,” he said.

Sanjay Bhattacharyya, deputy high commissioner of India to Bangladesh, and Francois Carpentier, head of power of Alstom India, also spoke in the occasion.

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