Import duties are deterring factories from make safety investments post Rana Plaza

Import duties are deterring factories from make safety investments post Rana Plaza

Efforts to improve safety in Bangladeshi garment factories are being hampered by high tariffs of up to 61% on imports of essential building and fire safety equipment - which apparel retailers and importers fear is discouraging critical investment into these products.

So concerned are groups representing North American apparel retailers and importers that they are now urging the Bangladesh government to immediately remove the duties.

The groups, which between them represent firms responsible for over 90% of purchases of ready-made garments (RMG) in the US and Canada, point out that: "Regrettably, the current high duties on Bangladeshi imports of key safety equipment can make what is already a costly but very necessary investment in remediation next to impossible."

Duties and other taxes on fire doors are as high as 61.09%, while those on sprinkler systems reach 31.07%.

"Not only do these import duties act as a significant deterrent for factories to make necessary investments, but these significant duties also drain away much needed capital from our common goal - improving worker safety," says a letter signed by the leaders of the associations.

It goes on to add: "The elimination of these duties would greatly accelerate the current efforts to improve worker safety in Bangladesh."

Ongoing efforts to improve worker safety in Bangladesh include the Tri-Partite National Action Plan, the Alliance for Bangladesh Worker Safety, and the Accord on Fire and Building Safety in Bangladesh.

The US and Canadian groups point out that the resulting remediation efforts at thousands of Bangladeshi RMG factories "could cost tens, if not hundreds, of thousands of dollars per factory - to improve exits, install fire safe doors, install sprinkler systems, restructure the factory - to improve the safety of workers."

Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told just-style that the group also supports the elimination of duties on safety equipment and has spoken with both the finance and commerce ministers to put forward the case for an immediate duty waiver.

He explains that the problem stems from the fact that in the case of safety doors, the customs code is the same for all doors, whether they are fire safe or not - and that the issue now facing the government is to create a different code for these specific items.

Associations that have signed the letter include the American Apparel & Footwear Association (AAFA), Canadian Apparel Federation (CAF), the National Retail Federation (NRF), Retail Council of Canada (RCC), Retail Industry Leaders Association (RILA), and the US Fashion Industry Association (USFIA).