RMG factories may get 6 months to renew licences without fine

Sohel Hossain Patwary

7 August, 2020 12:00 AM printer

The government is likely to allow the garment factories to renew their licences without any additional fees for six months as many factories missed the deadline for licence renewal.

In response to a demand from Bangladesh Garment Manufacturing and Exporters Association (BGMEA), the government would waive the fine for delay in licence renewal till December considering the disruption caused by the coronavirus pandemic, sources at Ministry of Labour and Employment said.

In a recent letter, BGMEA has sought a six-month extension to the deadline as many factories had not renewed their licences by July.

According to the Labour Law and Labour Regulation, every factory has to renew its licence by July every year from the Department of Factories and Establishment by paying a fixed fee.

If any factory fails to renew its licence within the stipulated timeline, it has to pay an additional fee as fine.

Drawing attention to the crisis created by the corona pandemic during the last six months, BGMEA said many apparel factories failed to renew their licences before the deadline.

 “Considering the corona situation and the overall trade and business scenario, we are urging the government for a six-month extension to the licence renewal facility without any fine,” BGEMA said in a letter to Ministry of Labour and Employment.

On receipt of the letter, the Labour and Employment ministry sought opinions from the Finance Ministry to see whether it is feasible to allow the extension.  Sources at Finance Ministry said the government is supportive of the notion to allow six months extension for renewing licences without any additional fee.

The apparel sector is the biggest export-earning sector which contributes around 85 per cent of the country’s total exports.

RMG exports fetched $34.13 billion in 2018-19 fiscal and $27.9 billion in 2019-20 fiscal.

Apparel exports saw a sharp decline due to a massive jolt on international trade caused by the pandemic in the second half of last fiscal.

However, RMG sector’s income has bounced back in the first of month current fiscal with orders being returned by the buyers.

In July, the sector earned $3.2 billion, which is the highest in the last six months and 14 per cent higher than the target set by the government.