Businessmen count on “Cheap Labour” To Drive $5b In Exports Revenue Through The Bangladeshi Leather Sector

When businessmen count on “cheap labor” for economic growth, exploitation becomes inevitable. However, this is the most significant factory for the leather and leather goods exporters and manufacturers of Bangladesh in an event named as “Global Social Responsibility Conference (3rd)” organized by Bangladesh German Chamber of Commerce and Industry (BGCCI) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) extravagantly at the most premium luxury hotel in the country, the Radisson Hotel.

Homes of Leather Workers - Hazaribagh Slum

Homes of Leather Workers – Hazaribagh Slum

Hazaribagh dwellers

Hazaribagh dwellers

Although the organizers did spare a passing thought over the mammoth problem of toxic waste by simply exclaiming that the relocation process was moving slowly but surely, and that the government’s promises on a more environmentally friendly leather zone was to be realized. Even through the toxic spilled from the Hazaribagh Tannery area kept flowing over the Buriganga river of Dhaka, apart from causing health related problems for its workers and residents around this area. In 2015, this promise of relocating will have successfully completed a decade.

According to Bangladesh Small and Cottage Industries Corporation (BSCIC)’s official statement: “The project is being implemented on 200 acres of land. There are 205 of plots and 155 Tannery units will be set up there. About 100,000 people will get employment opportunities there. After implementation of the project, Dhaka Metropolitan City and the river Buriganga will be free from environment pollution by shifting of tannery industrial units of Hazaribagh. All infrastructural works like internal roads, drains & culverts, street light, electricity & water supply etc. have already been completed. Administrative building, police fari, fire service unite, pump driver quarter has also been set up in the project site. A Common Effluent Treatment Plant (CETP) and waste Dumping Yard is under construction.” However, in reality, the sluggish pace of relocation and construction of the CETP for design issues [1] has made industry stake holders skeptical of anything happening sooner. Out of the 155 tanners promising to shift, only around 100 have submitted their factories lay out plans to the BSCIC which the body has approved, while only 19 tanneries having initiated some construction steps. The Chinese Joint Venture JLEPCL and DCL which was supposed to complete the CETP withing 18 months back in 2005 attained yet another extension for the construction of a Central Effluent Treatment Plant earlier this year, which unfortunately expired yet again last October 2014.

The industry is however receiving considerable support from the government on relocation, which is termed a “risky business” considering the traditional image of Hazaribagh as a leather hub and its proximity to the raw hide market of Posta. The central bank announced an incentive package for tanners to help them move the hazardous factories to Savar’s Leather Zone. According to the Bangladesh Bank (BB)’s notice, tanneries which have already moved to Savar from the toxic tannery hub of Hazaribagh or are under process to do so, will get an opportunity to transfer their irregular loans into block accounts and will have eight years for repayment, with a one-year grace period. Tanners will be charged 10% interest on the loans in the block accounts or banks cost of fund or whichever is lower. The BB also allowed the banks to consider relaxation of the existing down payment while rescheduling old loans or awarding new loans for tanneries involved in exports. However, fresh collateral has to be ensured in getting new loans if there is any deficit in security money. Tanners will be able to free their property earlier used as collateral in previous loans if they can show equal collateral. To take the incentives, tanners will have to begin the process of relocation within the next six months. Apart from this incentive package, the government has promised to distribute a “compensation” package of BDT2.5billion for tanneries moving to the Leather Zone in Horindhora, Hemayatpur, Savar from Hazaribagh.

Apart from these incentives, 80% of the total cost of the Central Effluent Treatment Plant (CETP) will be borne by the government while only 20% of the cost will be collected from the factories in 15 years at an interest of 5% annually. The rest will be considered as equity.

According the Bangladesh Tanner’s Association (BTA) The tanners will have to invest around BDT60 billion to relocate the factories, set up new plants and begin commercial production. For this, factory owners are lobbying the government to provide long-term loans at single digit interest to expedite relocation, while they also agree that whatever the central bank directed is alright if loan is disbursed accordingly.

Although any discussion usually about the benefits to the Tannery owners, the priceless question put forward by environment and labor rights activists is about the damage that these tanneries have had over the ecosystem of the Buriganga river (a historic river whose banks were the birthplace of Dhaka, today’s capital of Bangladesh), its economy, and the communities surrounding this river and the Hazaribagh area. The massive exploitation of workers which has occurred and persists in Hazaribagh has no sign of ceasing and there are no assurances, promises or analysis of this human damage and how it may be improved in the future.

A young boy, apparently a worker in Hazaribagh - immersed in a pool of tanning chemicals.

A young boy, apparently a worker in Hazaribagh – immersed in a pool of tanning chemicals.

While the tanners boast of employment, the World Health Organization (WHO) says, those who work in tanneries suffer from gastrointestinal, dermatological, respiratory and cacogenic diseases. According to a survey (SEHD, 2005) at least 90 percent of the Hazaribagh tannery workers die before they reach the age of 50 due to unhygienic working-environment. While fetching millions of dollars through exports, the tanners have never been known to be involved in any Corporate Social Responsibility (CSR) to either help workers or to partly restore the environment. Probably this is the picture of the “Cheap labor” that the elites are Radisson are boasting gloriously.

Till now there has been no substantial estimate of the cost of damages done to public money, the environment and people by the rigid tannery owner’s of Hazaribagh who caused the delay in shifting the tanneries previously by acquiring a High Court order in 2010 saying that they needed time. The delay hiked the CETP construction cost by 80 percent to BDT8.29bn from BDT1.75bn.

According to the Department of Environment, the Tanneries in Hazaribagh emit 300 different kinds of chemicals including chromium, ammonium and sulphur, which has had detrimental effects to the oxygen level in the water of the Buriganga to an extent that there are no fishes left. For the last few decades, no fish or other aquatic animals can be sustained in the Buriganga as the water lacks oxygen for the most part of the year. Watersheds around the Hazaribagh area, including canals and wetlands are also polluted, making the community environment stinky. The soil and water of Hazaribagh area is so polluted with around toxic chemicals like chromium, lead, arsenic would remain in the atmosphere for next 100 years. A study Institute of Water Modeling (IWM) and World Bank in 2007, revealed even a more dangerous findings that the groundwater aquifer has been contaminated.

While Bangladeshi Green Activists and Poribesh Bachao Andolon (Poba) claim BDT25bn compensation from the Hazarigabh Tanneries for the damages, although insignificant an amount – it is only a sign of protest as nothing suggests that the tannery owners have any regard to the harm they have caused. The labor activists and researchers have continued to raise awareness and voiced their anger to a sector which barely adheres to any ethical treatment of its labor, or pay regard to the nation’s labor law to protect the right of its workforce.

The sector recorded $1.3 billion of exports in fiscal 2013-14 and set a target of $1.5 billion for this fiscal year; leather exports accounted for 4.29 percent of the country’s total exports worth $30.17 billion last fiscal year. According to Nabhash Chandra Mandal, executive member of Board of Investment, the sector registered 28 percent growth last year in 2013 [Export Promotion Bureau, Bangladesh].


RISE Society




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Posted in Leather Worker Issues

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