CETP saga of Savar leather estate

It is quite intriguing that discussion is still on how to make the central effluent-treatment plant (CETP) at Savar tannery industrial estate functional after so many years. There is no point discussing how after much tug-and-pull between a previous government and tanners, the leather sector finally moved from Hazaribagh area to the Savar leather estate in 2018. The CETP issue was never resolved and the export-oriented leather industry continued to suffer because it could not meet requirements demanded by importers. Many of the larger tannery companies had gone ahead and installed their own effluent-treatment-plants (ETPs), but for the majority of leather factories that was never an option.

Today, there is a new government in power. The interim government appears to be serious about making changes at policy level on issues like climate and adoption of environmentally-friendly processes. Hence, it is understandable that leaders of the Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA) has approached the finance advisor for measures to fix the CETP. This is understandable because the CETP issue has been festering for years on end under the previous governments. While all other infrastructure has been made ready, the CETP problem remains. But why? The factories located at the Savar tannery industrial estate are 100 per cent export-oriented.

The finance adviser has given assurance that CETP-related problems will be solved soon. Precisely how long "soon" is, of course, matters. As pointed out by BFLLFEA, the absence of a functioning CETP means that factories are forced to sell goods to China at much lower prices than the international market rates. But the government should understand something. It is more imperative than ever to try and diversify the export basket. Being dependent on just one industry, i.e. readymade apparels, exposes the country to undue external pressure, business or otherwise. Again, export diversification must happen to increase foreign exchange earnings, something that is in dire need today.

It is good that there is talk of forming a sub-committee that will look into solving the industry's problems expeditiously. As stated before, a non-operational CETP translates into Bangladeshi tannery companies selling their products at significantly lower rates in the global market and that is not helping either the industry or export earnings. A CETP would also allow for industry to move in to value-added product category, which would increase earnings manifold.

There has till now been a tug of war between past policymakers and industry on the question of cost of setting up a workable CETP. It could be argued that since the existence of CETP is mandatory to make dangerous effluents safe before discharge, it is the industry's responsibility to set it up. Many of tannery companies have set up individual ETPs to take advantage of the obvious export opportunities, but they are a very few in number. Most of the tanneries are small in size with limited financial capacity, which brought forth the question of a CETP in the first place.

If cost sharing becomes inevitable, then the government should go ahead and set it up on its own. At the same time, tannery companies may pay a certain percentage of the cost depending entirely on their export earnings. Since without a CETP, the leather industry as a whole, can never reach its full potential, the ministry concerned needs to come to a decision fast. Enough time has been wasted on the issue and it can only be hoped that the seemingly never-ending saga of a non-functional CETP can come to an end within an acceptable timeframe.

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