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The Financial Express
Swasti Lankabangla Swasti Lankabangla

Registration hiatus: Buying houses in tiff with BGMEA

| Updated: August 13, 2020 20:37:15


- FE file photo used for representational purpose - FE file photo used for representational purpose

Two trade associations involved in garment business are wrangling over the authority of buying houses, sources said.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is pressing the government to register 1,500 buying houses with the Department of Textile.

But the Bangladesh Garment Buying House Association (BGBHA) opposed the apparel lobby's push.

To continue buying houses' operation in the country, the government on April 01 last year made it mandatory to get registration of such trading houses with the DoT and a relevant trade body's certification to apply for the registration.

In a revised circular on May 28, the government asked all the buying houses operating in the country to get registered with DoT within the next two months, officials said.

But the Textile Act 2018 has not made it clear about which trade body is authorised to issue such certificates, people involved with the process said.

The Ministry of Textile and Jute on August 04, however, clarified that the BGBHA would be the trade body concerned with regard to buying houses.

Some 700 buying houses are in operation that are registered with the BGBHA while an additional 1,500 buying houses are running their business as associate members of the BGMEA, they added.

On August 28, 2019, the BGMEA, in a letter to the director general of DoT, requested it to register the buying houses who are associate members of the BGMEA.

But the department did not give registration in favour of those buying houses. Even it did not receive any application from the BGMEA associated buying houses. In addition, these buying houses were asked to gain membership from their respective associations.

And, the department has referred the BGBHA as trade organisation in this connection, they added.

In November 2019, the BGMEA president Dr Rubana Huq, in a separate letter to the ministry, called for measures so that its associate members can get registered with the DoT.

In response to BGMEA's plea, the BGBHA president Kazi Iftekhar Hossain on February 22 in a letter to the ministry requested to disregard the BGMEA's representation.

In the letter, Mr Hossain said the BGBHA is a licenced trade organisation for buying houses by the Director of Trade Organisation (DTO) under the Ministry of Commerce.

He also informed that some 450 out of 700 BGBHA member buying houses have already registered with DoT and the submissions and consideration of the applications of the remaining members are under process.

The nature of business of garment manufacturer and exporter, a member of BGMEA, and on the other hand, the business of buying house, a BGBHA member, is completely different, he said.

Since the BGBHA has been licenced by the government as the sole trade organisation of buying houses in Bangladesh, it is inappropriate for BGMEA "to have any role or say" in determining the eligibility of an applicant for registration as a buying house under Section 14 of the 2018 Act.

The BGBHA president, in another letter on July 12 last, again urged the ministry not to consider the BGMEA's demand.

When asked, BGMEA director Shahidul Haque Mukul said their running business would be hampered and work orders might be shifted to other countries if the BGMEA's associate members are not DoT registered or their operations are suspended.

Industry people said recently a Canadian buyer has asked a Bangladeshi supplier to refund the money it has paid against a work order worth US$10 million for surgical masks alleging that the local buying house and the manufacturing factory supplied 'substandard' masks.

Since the alleged buying house is not a member of the BGBHA, it is difficult to resolve any trade-related dispute, said the BGBHA.

Expressing concern over the involvement of local garment companies in supplying low-quality surgical masks, it said such unethical activities are tarnishing the image of the local textile and readymade garment industry.

Munni_fe@yahoo.com

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