Non-compliant tanners fear losing Eid business

Infographic: TBS

With Eid-ul-Azha around the corner, tanners fear they may lose potential business during the biggest season for the industry due to failing compliances, including getting the No Objection Certificates (NOCs) from the Environment Department.

Tanners say the Environment Department is not issuing the NOCs as the Central Effluent Treatment Plant at the Savar Leather Industrial City does not have the capacity to deal with the waste being generated.

"Even renewal of NOCs has been stuck. As a result, tanners cannot import chemicals that are necessary to process leathers," Md Sakawat Ullah, general secretary of the Bangladesh Tanners Association (BTA), told The Business Standard.

Sakawat Ullah, also the managing director of Salma Tannery, said, "Eid is almost here but the issues are still far from being resolved. Without chemicals, processing of rawhides will be hindered and without the NOC many tanneries will be forced to shut operations."

Besides, tanners, who are yet to settle payments for lease deeds for lands at the industrial city, are unable to take bank loans and fear facing a working capital shortfall during the Eid-ul-Azha season.  

The issues came up recently when the BTA briefed the industry stakeholders at a meeting of the taskforce on the "leather industry's development and action plan preparation".    

Md Shahin Ahmed, president of the association, said there are about 40 tanneries that are operating adhering to all compliances but they are yet to settle their lease deeds.

These tanners with good compliances were directed to execute the lease deeds at the meeting.

Following a rule issued by the High Court in 2017, tanneries were shifted from the capital's Hazaribagh to the Savar Leather Industrial City to save the Buriganga River from pollution.

However, the relocation and issues regarding compliance led to a decline in leather exports.

Besides, there is dissatisfaction over the delayed implementation of the solid and liquid waste management system at the Savar Tannery Industrial Park.

The Parliamentary Standing Committee on the Ministry of Environment, Forests and Climate Change has also recommended the closure of the industrial park due to environmental pollution concerns.

Lease Deeds

Following the 2017 High Court rule, the tanneries in Hazaribagh were shifted to the leather industrial city in Savar amid reluctance of the owners.

However, the government gave them the opportunity to set up a factory without a lease deed of land.

The owners did not complete the lease deed due to the complexity of fixing the land price during the ongoing project and the cost of the project also increased over time.

As the cost increased with the extension of the Savar Tannery project, the price of land per square foot increased to Tk1,700, from Tk499 according to project sources.

Due to the forced relocation, the government gave an 80% discount on the land price at the request of the entrepreneurs.

The Bangladesh Small and Cottage Industries Corporation (BSCIC) announced the completion of the project on 30 June last year.

BSCIC gave the opportunity to complete the lease deed by making a one-time payment at the end of the project period.

However, during the pandemic phase, only 10-15 companies out of some 250 have completed the lease deed so far.

Md Sakawat Ullah said it was very important to execute the lease deed of the land.

"Although the plots have been allotted and the factories set up, the deeds have not been completed yet and because of this, entrepreneurs are not able to take any loan against this land," he said.

"Tannery owners are troubled with securing environmental clearances and incomplete lease deeds," said BTA President Shahin Ahmed.

"During the Eid-ul-Azha season, tanners will need large sums of money. Pending lease deeds eliminates the option of bank loans. These issues must be resolved," he added.

Director General of the Department of Environment Abdul Hamid said at the meeting, "Chromium water is being dumped in the river through surface drain. Solid waste is also going out without permission."

He also requested the CETP and tanneries to be sincere in achieving compliance according to the environmental laws and regulations in place.

Regarding the lease deed, BSCIC Chairman Muhammad Mahbubur Rahman said, "It will not be legal to give lease deed to tanneries unless they are fully compliant."

The status of the CETP

A latest DoE report found that the CETP discharge of waste water went above accepted parameters.

While BSCIC claims the CETP can handle 25,000 cubic metres per day, experts say its actual capacity is 14,000 cubic metres.

According to Professor Mohammed Mizanur Rahman, director at the Institute of Leather Engineering and Technology of Dhaka University, the CETP was not set up with modern technology.

Besides, the plant lacks a chromium recovery unit and there is no separate facility for solid waste management.

Tanners say the quality of the discharged water from the CETP is gradually improving.

Shakawat Ullah said a company has been running the CEPT since last July and the situation has improved to a great extent.

"It will further improve in the next two months," he added. 

BSCIC Chairman Mahbubor Rahman pointed out that there is now no possibility of pollution crossing given parameters as chemicals are being used in the CETP on a regular basis.