Bangladesh Government Renders New Laws for The RMG Sector

Industry news

Bangladesh Government Renders New Laws for The RMG Sector

The Bangladesh government has proposed a new law – the Textile Industries Establishment Act-2015 to piece out on illegal units and streamline the readymade garment (RMG) sector. The law is projected to empower the Directorate of Textile and make it an effective sponsoring authority for the RMG sector.

Elaborating the law, the government has affirmed that no one will be allowed to 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.

The directorate will specially look into creating a consolidated database handpicked by officials after thorough inspection of the factories. The government had previously taken the initiative to formulate two separate laws through a draft named Bangladesh Private Textile Industries (Registration and Coordination) Act-2015 for the registration and control of the garments and textile industries. This act has been later changed to Textile Industries Establishment Act-2015.

Following several reminders, Bangladesh Knitwear Manufacturers and Exports Associationsent 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. Further they have demanded that the period for renewal of license for the factories should be 10 years instead of 3 years.