Bangladesh garment makers urge government to end cabotage rules

Source: The Loadstar 
Date: 20th November 2023

Apparel manufacturers in Bangladesh have called on the government to immediately resolve complications over the flag vessels act, which has been causing disruption in the import of raw materials and garment exports.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says strict enforcement of the Bangladesh Flag Vessels (Protection of Interest) Act 2019 has hit manufacturers at the same time as export demand has fallen.

And the garment sector, the main foreign currency earner for Bangladesh, is also reeling from labour unrest, which has seen workers killed and beaten in protests over a minimum wage declared by the government.

At least four garment factory workers have died in recent weeks as they set fire to factories, blocked roads, damaged vehicles and clashed with police to press home their demands.

Now the enforcement of the flag vessels act has added pressure onto the export market.

The chairman of the MGMEA’s standing committee on ports and shipping, wrote to the department of shipping, noting his dismay over the “procedural rigmarole” required for foreign carriers to get a waiver certificate on a “piecemeal” basis.

“This is apt to cause massive disruption and affect exports of ready-made garments and imports of related raw materials all the more, in view of the severe downtrend in global markets,” MGMEA wrote.

Under the flag vessels act, and subsequent rules, foreign feeder vessels must get a ‘no objection certificate’ from the Mercantile Marine Department (MMD) before they can load any cargo destined for Bangladesh in any port in the world, if a Bangladeshi flag vessel has a presence there.

But foreign feeder vessels to and from Chittagong port claim to be facing delays in getting a waiver certificate from the MMD, impacting their schedules.

When a Bangladesh-flagged vessel is available in the port, foreign ships must give it priority. This has created severe disruption for foreign feeder vessels, and some have quit Chittagong services.

“Shipping thrives on trade and [there is] no scope for vice versa situation in Bangladesh,” said the BGMEA, the main user of Bangladesh’s port facility. “Creating any bottleneck/impediments to the garment industry, directly or indirectly, will affect the country’s major foreign exchange earnings,” wrote MGMEA.

MGMEA warned that the blame for this eventuality would be laid at the door of the government.

The MMD has recently fined two foreign feeder vessels for allegedly “violating” flag rules – which has also irked the Bangladesh Shipping Agents Association, which claimed the vessels did not violate the rules and demanded withdrawal of the penalty.

It called on the MMD to “simplify the issuance of waiver to foreign flagged vessels in the greater interest of ease of doing business by both Bangladesh flagged and foreign flagged vessels,” BSAA chairman told the MMD last week.

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