Bangladesh’s sharp decline

Redwood Comment
Published:  30 October, 2019
Dr Mike Redwood

It is worth having a brief look at Bangladesh. With over ten years of steadily rising costs in China and now a trade war ongoing between China and the U.S., Bangladesh should be reaping the benefit with a world leading leather industry. 

It has a big supply of good quality raw material, a long history in the industry and some excellent people. What is more, the leather industry is a perfect fit to be a major provider towards the 2 million new jobs a year it needs to meet the requirements of its growing population.

Yet, growth in leather has not merely stalled, but this year has actually gone backwards. The two reasons for this are linked by a dysfunctional relationship between industry and government, lack of law enforcement and corruption. First, the ease of doing business ranking now puts Bangladesh down at 176th out of 190. Perhaps even more concerning, not all the tanneries have moved to the new Savar Tannery Industrial Estate, and for those that have, it appears to be neither complete nor adequate. Certainly, many tanneries are bypassing it and putting untreated waste directly into the local river. The planned move to a site in Savar, some 20km west of the old site at Hazaribagh, was first announced by then Prime Minister Khaleda Zia as far back as July 2002. Year by year this decade the move was supposed to be complete; right now it looks a fair bet that we will enter the next decade with a wide range of issues not dealt with.

At long last, customers are reacting against the failure to comply with the basic requirements of any business, whatever it is producing. Cheaper prices no longer compensate for non-compliance. We were astonished in 2017 when Prime Minister Sheikh Hasina inaugurated the Dhaka International Trade Fair by declaring leather as ‘Product of the Year‘. Exports were always in jeopardy while so many abuses of basic rules were so apparent, and the industry under such close scrutiny internationally. I have great sympathy with the leather workers of Bangladesh and know they need the employment, which in proper conditions, as found elsewhere in the world, should be good employment, but if no clear intention to move strongly towards and into a compliant state is apparent, then we cannot remain neutral.

The status of the brand in the eye of the consumer decides the future
I got into trouble recently when I said that situations like Dhaka and some parts of Kanpur do great harm to the brand “leather”. Leather is not a brand, I was told, it is an industry. Yet, it is the status of the brand in the eye of the consumer that decides the prosperity and the future of that industry. The image of leather in Bangladesh damages not only Bangladesh, but the whole Indian subcontinent and even leather from countries like France and Italy. A brand that gains a bad reputation, for whatever reason, will take a long time to recover; and how the product is made is integral to that reputation. Countries that are aware of issues of their industry not conforming to international standards are wasting money on any promotion.

The Bangladesh Daily Star reported recently that the construction of the central effluent treatment plant at the Savar leather estate will be completed by December and quoted MD Mostaque Hassan, Chairman of the Bangladesh Small and Cottage Industries Corporation (BSCIC) that “then a certification from Leather Working Group can be obtained and Bangladesh can export leather and leather goods to countries around the world and at better prices.”

Based on industry reports, this sounds over optimistic. If only it were that simple. I have never heard of such an arrangement with the Leather Working Group (LWG), but it needs to be clear that not only must the central effluent plant be comprehensive, functioning, with nothing bypassing it, but it must work this way three hundred and sixty five days a year. And each and every one of the tanneries involved will require individual examination. The ills of Hazaribagh involved improper handling of solid and liquid wastes, but also all manner of factory issues from child labour through failure to supply proper protective workwear and establish safe handling of chemicals.

The recent agreement between the LWG and Tannery of the Future (TOTF) to support the use of the TOTF questionnaire in preparation for an audit is indicative that this is a complex process likely to take some time to bring everything in line, and get employees trained and equipped. It is an excellent arrangement and offers a route map for locations like Dhaka, but not a quick fix.

Two other elements are important. While the LWG audits have been transformative for the leather industry, they are only as good as the auditor and are essentially spot tests. They are certainly not an excuse for brands or retailers to deskill their organisation by removing staff with the skill to inspect a tannery, get to know the personnel and facilities, and see for themselves that everything supports the audited level as something continuously maintained. The huge support the world leather industry gave to the building of the brand new tannery, testing and teaching facilities at the ICLT in Northampton University means that we retain the global capacity to train such staff; be it with short courses or longer in-depth studies.

Secondly, while around the world the leather industry is looking at promotion and education programmes, they must prioritise efforts to deal with Savar, Kanpur and elsewhere where there are clear breaches of minimal standards. We need to drive the “ship of leather” much faster, in a positive spirit of sustainability and creativity. It will not work if it is fatally holed underwater.

Michael Redwood

October 30, 2019

mike@internationalleathermaker.com
Follow Dr Mike Redwood on twitter: @michaelredwood

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