Govt extends factory licence renewal to five years

The government has approved a proposal to extend the renewal period for factory, shop, and establishment licences issued by the Department of Inspection for Factories and Establishments (DIFE) from one year to five years.

The change, introduced in the draft amendment to the labour law and recently cleared by the advisory council, is intended to ease regulatory pressure on businesses and inspectors alike.

While factory owners have welcomed the move as a step towards cutting red tape and saving both time and money, a section of DIFE inspectors has reportedly opposed the change, citing concerns over compliance and job implications.

According to the draft amendment, all factory, shop, and establishment licences will now be renewed every five years, whereas contractor organisations will continue to hold one-year licences.

Renewal will follow existing procedures and require payment of government-set fees.

Officials said the DIFE licence remains a key regulatory tool under the Bangladesh Labour Act, 2006, ensuring that workplaces meet safety, health, and labour standards.

Operating without a valid licence is a punishable offence. Under the current Bangladesh Labour Rules 2015, such licences are valid for only one year.

A labour ministry official, requesting anonymity, said some DIFE inspectors have been lobbying to review the amendment before it is finalised as an ordinance following vetting by the law ministry.

"A group of inspectors is pressing top officials to keep the one-year renewal clause," the official said.

Another DIFE source noted that both inspectors and employers acknowledge that timely annual renewals help maintain compliance.

"If licences are renewed every five years, there is concern that some owners may neglect safety or social standards in the interim," the source explained.

There are also allegations that some inspectors prefer annual renewals to continue receiving "illegal benefits" from frequent interactions with business owners.

Officials said DIFE initially proposed the extension last year, arguing that inspectors were spending much of their time on licensing paperwork rather than on-site inspections and enforcement.

More than 220,000 factories, shops, and establishments are currently registered under DIFE. Between August 2024 and August 2025, the department issued 9,302 new licences and renewed over 35,000.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Mohammad Hatem welcomed the proposal, saying it would significantly reduce operational costs and time.

Some grey areas in the labour law give inspectors excessive power, even when compliance issues are minor, he said. For example, railings on both sides of a staircase are mandatory, but if one side is a wall, why should a railing be required? Hatem questioned, adding that factories continue to comply with essential safety measures such as rooftop railings and the removal of collapsible gates.

The factories also follow many additional compliance standards set by international buyers, he added.

Munni_fe@yahoo.com