Foreign buyer's LC should not be misinterpreted as economic sanction on Bangladesh: BGMEA
Bangladesh Garment Manufacturers and Exporters Association (BGMEA President Faruque said the LC came from a particular buyer, and this is not a statutory order or notice by any country
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said today the letter of credit (LC) from a foreign buyer to one of the members of the garment manufacturer's association should be not be misinterpreted as an economic sanction on the country.
"The global trade landscape is changing fast; human rights and environmental due are getting increased priorities, while geo-political issues are also influencing trade. Since Bangladesh's economy and its growth is heavily reliant on trade, any development around trade policy concerns us," BGMEA President Faruque Hasan said in a statement on Wednesday (6 December).
"A copy of a letter of credit (LC) from a foreign buyer to one of the Members of BGMEA has come to our attention. The LC contains the following text - 'We will not process transactions involving any country, region or party sanctioned by the UN, US, EU, UK. We are not liable for any delay, non-performance or/ disclosure of information for Sanctions Reasons'. There is a concern and confusion caused by the interpretation of this clause that a sanction might have been imposed against Bangladesh, which is not correct," he added.
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He also said the LC came from a particular buyer, and this is not a statutory order or notice by any country.
"So this should not be misinterpreted as a measure of trade enforcement or economic sanction on Bangladesh," Faruque Hasan said.
He also said that individual buyers or entities may have their own internal policies and protocols, but an LC copy or a private commercial instrument is not an official declaration.
Moreover, BGMEA did not receive any information from our diplomatic mission or from any official source to support any sanction or trade measure, he added.
"We understand that the human rights and environmental due diligence is getting increased importance for many of our export markets. The Government of Bangladesh is engaged with our trade partners. Recently, the US Presidential Memorandum signed on 16 November 2023 to 'advance worker empowerment, rights, and high labour standards globally' adds significant weight to the ongoing global labor campaign, as it appears to be quite unique in terms of engagement and enforcement. We respect the spirit of it and find an alignment with its core principles," the BGMEA chief further said.
"Though the Memorandum stipulates a number of measures including 'deploying the full range of diplomatic and assistance tools and, as appropriate, financial sanctions, trade penalties, visa restrictions, and other actions', however, this is not adopted for Bangladesh, rather it is a unilateral stance of the United States of America on worker rights issue," he added.
"We have seen similar instances in the past of quoting a LC clause from a buyer to generalise it as a sanction on Bangladesh, and made our position clear against such misrepresentation of fact. However, we don't support the inclusion of such clause in commercial instrument if it is practices for trading with Bangladesh only. BGMEA urges its Members, receiving LCs having such clause as mentioned above, to communicate with the respective brand(s) and solicit a clarification if such clause is mentioned for Bangladeshi suppliers only," Faruque Hasan said.
If the clause appears only in the LCs issued in favour of Bangladeshi suppliers, then this violates ethics, he added.
"In such scenario, we would urge our member factories to take the matter with utmost importance, and, if necessary, to review / reconsider continuing business with such buyer(s)," Faruque Hasan also said.
The BGMEA president said Workers' rights and wellbeing is a supreme consideration for them.
"As far as the financial benefit of the workers is concerned, minimum wages increased by more than six times since 2010; 5% annual increment of wage and 2 festival bonuses (each equivalent to one month's basic wage) is mandatory, the medical leave of workers are now paid for 14 days at full wages instead of half wage, provision for annual leave has been revised making it 1 day for every 18 days of work from 1 day for every 22 days, workers can en-cash 50% of their total annual leave by law which was not in the law before," he said.
Faruque Hasan said BGMEA is also leading in the area of green transformation.
"Bangladesh is now the home of 204 LEED certified green factories, of which 74 earning the prestigious Platinum rating and 116 achieving Gold status. 500 more factories are in the pipeline for certification. 54 out of globally top 100 highest-rated LEED green factories are in Bangladesh," he added.
