The local apparel sector trade bodies have warned of blacklisting the brands and service providers of Edinburgh Woollen Mills (EWM) which were not paying the outstanding bills of local suppliers or not responding to the requests for the bills.
If they (EWM affiliates) fail to pay the outstanding bills by May 29 next, the trade bodies would blacklist the default ones.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) in a joint letter to the billionaire owner of EWM Philip Day recently called for settling all the dues by May 29 and, at the same time, warned of the measure.
The British group of companies, EWM, is the parent company of a number of brands including Peacock, Jaeger, Austin Reed, Jacque Vert, Country Casuals, Windsmoor, Baumler of Germany, Bonmarche and Ponden Home.
BGMEA and BKMEA warned of blacklisting the errant companies under EWM group and its various agents, importers, full service vendors and other third parties, approved and working indirectly and/or directly with each of these companies and brands.
The affiliates of EWM have so far cancelled orders worth US$ 8.2 million during the coronavirus pandemic.
The trade bodies in the letter said that certain buyers are taking undue advantage of the COVID-19 situation and demanding unreasonable discounts despite concluded contracts pre-COVID-19 and despite continued business activity.
These are not only impossible to grant by their members, but also in violation of local laws, international acceptable standards and moreover defy all the principles of ethical sourcing and governance that international brands and organisations expect of the industry and all its stakeholders, they said.
Demand for the discounts will not only be financially catastrophic, but will also expose their members to various claims and liabilities from regulations, banks and other third parties, which will eventually legally implicate the buyers themselves, they added.
"Unfortunately, you, the notice recipients, are amongst those who are claiming such discounts from the members, which has been brought to our notice," the letter said.
In light of the given circumstances, BGMEA and BKMEA, upon fully taking into consideration the predicaments of both the exporters, the buyers and the local laws and regulations of Bangladesh have taken certain decisions with regard to EWM-owned companies' alleged claim for discounts.
Payment should be made as per the original agreed terms of payment like concluded agreement by May 29 for goods already shipped and handed over to the company's nominated freight forwarders prior to March 25 last, according to the letter.
For orders already placed, negotiation between the exporter and the buyer should be concluded by June 05 next. All negotiations must be mutual and not unilateral by the buyer, the letter reads.
"In the event that the instructions provided herein above are not followed, we will have no option but take the decision to place an embargo and black-list the buyers and their agents who do not comply with our instructions, which will prevent them from conducting business with our members in the future either directly and indirectly," the joint letter reads.
The trade bodies have to take a strong stance on this matter for the purpose of preserving the interest and survival of their members, its stakeholders, the international image of the industry and more importantly compliance with local laws and foreign exchange restrictions, they added.
Deferred shipment, deferred payment and permitted discounts may be allowed provided that the exporters and the buyers have come to an agreement in this regard and such agreement is in compliance with local laws and regulations.
Any discount beyond permissible limits may lead to adverse and legal consequences on EWM including all its affiliates and associates.
Two trade bodies and BEPZA will not issue any new untilisation declarations to their members for any order of EWM, including all its affiliates and associates, until the issues are settled and agreed.