Lax compliance leads to 30%-40% lower earnings from leather goods export: Analysts

Leather industries in Bangladesh are compelled to sell their products abroad at prices 30%-40% lower than their international value in the absence of compliance, speakers at a seminar said today (16 May).

Exporting leather and leather goods to large global brands requires certification from the Leather Working Group (LWG), an international organisation to oversee compliance in the leather industry. 

"The global brands do not buy products from factories that are not environment-friendly or workers-friendly," Arif Hossain, auditor of the LWG, told a seminar on "National High-Level Dialogue for Greening the Tannery and Leather Sector in Bangladesh" jointly organised by Solidar Suisse, Prokriti o Jibon Foundation, OSHE Foundation and the European Union in the capital.

While presenting a paper at the seminar held at the Bangabandhu International Convention Centre in the capital, he said there are about 350 LWG certified leather factories in India, whereas the number is less than 10 in Bangladesh. 

"Savar Tannery Industrial Estate still lacks a proper waste management system. Solid waste is being dumped in open spaces," he pointed out.  

"The leather industry in Bangladesh should be made pollution-free and environment-friendly. This requires proper planning and investment," he added. 

He expected that the Bangladesh government is working on this issue, which may increase LWG certified factories here. 

The European Union Ambassador to Bangladesh Charles Whiteley said, "The sector employs 10 lakh people, but its contribution to the economy is still relatively modest as 3.8% of the country's exports come from the leather industry and it contributes around 0.6% to GDP.

He said Bangladesh's share in the global leather and leather goods market is about 3%. The sector is likely to grow,and it is important that this happens in a sustainable way.

Addressing the seminar as the chief guest, Environment, Forest, and Climate Change Minister Saber Hossain Chowdhury said solid waste is dumped in the open air in Savar - a practice which is absent in the whole world. 

"In fact, we all made mistakes. Even after all these years, the leather industry is polluting the Dhaleswari River. Now, we should not blame anyone. Everyone has to work together," the minister said.

As the current central effluent treatment plant (CETP) remains incomplete at Savar, the minister called upon the private sector to set up a new CETP to address the pollution issues. 

In FY23, Bangladesh earned $1,223.62 million from exporting leather and leather goods.

The government has set a target to earn $12-13 billion by 2030 from leather and leather products exports, Saber said.