The Bangladesh government has proposed a new law - the Textile Industries Establishment Act-2015 to crack down on illegal units and streamline the readymade garment (RMG) sector, according to a newspaper report in the country.
The law aims to make the Directorate of Textile an effective ‘sponsoring authority’ for the RMG sector. Stakeholders, however, termed some provisions of the proposed law detrimental to the industry.
According to the draft proposal, none would establish and run textiles and garments factories without registration under the textile industries establishment act. If anyone violates the law there is a provision for one year imprisonment or Taka 1 lakh ($1290 approx) penalty in the draft law. After enactment of the law, all the new establishments (textile and garments) would have to register under the Act and all the existing factories would have to come under the registration of the textile directorate within six months as per the new law.
Officers designated from the directorate could inspect factories at any time and the factories would be bound to provide documents as per requirements of the directorate. The textile directorate will establish a database of the industries based on the information provided by the factories, the draft said.
Earlier, the government had taken the initiative to formulate two separate laws for registration and control of the garments and textile industries and later prepared a draft namely ‘Bangladesh Private Textile Industries (Registration and Coordination) Act-2015’. The draft was sent to the stakeholders for their comments in December last year but most of the stakeholders were yet to respond to the jute and textile ministry.
The name of the act later was changed to Textile Industries Establishment Act-2015. Following several reminders, Bangladesh Knitwear Manufacturers and Exports Association sent its comments putting reservations on some issues. The BKMEA has expressed its reservation over the registration clause of the draft law and said the clause should be applicable for the new establishments and the license for the existing factories should be renewed based on the previous license of the Board of Investment.
The BKMEA has demanded scrapping the provision of recommendation to the customs authorities regarding release of imported capital machineries and indemnity bond.
The trade body said that it would not be pragmatic to renew the license of factories every three years as the industry does not comprise trading companies. The period for renewal of license for the factories should be 10 years instead of three years, the BKMEA said. (SH)
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