About the Coalition

Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association (BFLLFEA)  and Bangladesh Tanners Association (BTA) are the tow apex bodies of leather sector entrepreneurs. With the direct support of these two associations, The Asia Foundation in partnership with South Asian Network on Economic Modeling (SANEM), formed a unique, and first-ever of this kind, coalition for leather sector development with the BSCIC, Ministry of Industry, Bangladesh Bank, parliament members, and with relevant policy makers in December 2012. The aim of the coalition was to facilitate an acceptable agreement between all parties that would allow the relocation project to begin as soon as possible. The coalition has been instrumental in generating agreement regarding the necessities of relocation and the importance of environmental compliance for sustainable development of the leather industry in near future.

 Background of the coalition formation:

To support the leather sector and to promote environmentally undamaging practices in leather processing, the Government of Bangladesh, and Bangladesh Small and Cottage Industries Corporation (BSCIC) took the initiative in 2003 to relocate the tanning industry from its current location at Hazaribagh to a purpose-built industrial estate in Savar, on the outskirts of Dhaka. An important component of the new estate is a central effluent treatment plant (CETP), which will ensure compliance with environmental waste management regulations and minimize negative health consequences on workers and Dhaka residents.

However, two issues of particular importance arose that impeded the progress of the project. Firstly, BTA and BFLLFEA, the main trade bodies representing the leather sector, raised concerns about the production losses that would occur during the relocation project, and stressed the need for the Government to provide compensation to the factories. Secondly, due to design re-specifications after a study tour by BSCIC in India and China, the cost of the CETP rose from the initial estimate of BDT 81.75 crore to BDT 396.7 crore. This five-fold increase in cost caused many bilateral and multilateral donors to pull out of the project in 2007, and left the financing of the CETP in an uncertain state. That same year, during the administration of the caretaker government, it was announced that the cost of the CETP would be borne entirely by the leather enterprises, without the support of the government. This decision prevailed for the first few years of the current government, and was the main obstacle preventing the leather associations’ from supporting the relocation project. Thus, even though a Chinese company was awarded the contract to the construct the CETP in 2012, work could not start due to the absence of an agreement on how it would be funded.

On this backdrop, the coalition was formed to facilitate an acceptable agreement between all parties that would allow the relocation project to begin as soon as possible.