All Annexes of 9th 4-Monthly Prog Rep

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Bangladesh Trade Support Programme

BTSP 9th Four-monthly Progress Report: Mar-Jun/2008,Annexes Page 22/165

Annex- I

Subject: Minutes of the seventh Programme Steering Committee meeting ofBangladesh Trade Support Programme (BTSP).

The seventh Programme Steering Committee meeting of Bangladesh Trade Support Programme was

held on 25 May 2008 in the conference room of the Ministry of Commerce. The meeting was presided

over by Mr. Feroz Ahmed, Secretary, Ministry of Commerce and Chairman, PS Committee. It was

attended by the PS Committee members, officials of MOC, PTF, Component Directors of BTSP,

representatives from ERD, different trade bodies and Delegation of EC to Bangladesh. A list of the

attendance of the meeting is attached in Annex-I.

1. The agenda of the meeting was as follows:2. Project update3. Discussion on the Revised Overall Work Plan of BTSP4. Discussion on and approval of the AWP-3 of BTSP5. Updates on the Components of BTSP

6. Any other business.

Welcoming the attendance the Chairman opened the meeting and raised the issue of approval of the

decisions taken as per the minutes of the last and sixth steering committee meeting of BTSP held on

1st August 2007. As there was no comment or objection, the meeting unanimously approved the

minutes of the sixth steering committee meeting. He then requested the Programme Director to

proceed discussion as per agenda of the meeting.

Agenda item 1 : Project update

Mr. Shawkat Ali Waresi, Programme Director briefly stated the progress of BTSP with power point

slides and highlighted the progress of components activities since holding of the last PSC meeting.

With regard to the biggest component of the Programme he informed the meeting that the suspension

of EC fund for BFTI has been withdrawn. The recruitment of the CEO, PD, Fellows and Research

Associates has been complete. The supply of furniture, computer and other equipments has almost

been complete. He further stated that the twinning, training and other promotional activities by the EU

experts are going on. Like all other components BFTI is now fully operational.

As regards the progress of different ongoing studies of the components he gave a detailed description

of the present status of these studies being carried out by local experts. Towards capacity building of

the components he also gave brief description of the study tours taken by each component and the

presentation of the tour reports for sharing experiences with the component officials.

As to the financial progress of BTSP, the Accounts Director (AD) made a brief presentation of the

updated component-wise expenditure. He stated the till date expenditure of the Programme for the

current financial year and head-wise expenditure since the inception of the Programme in July 2005.


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While mentioning about financial progress he stated that only 35% of the total Programme budget has

been spent during the last thirty four months. Regarding the slow financial progress he explained that

this was due to the late start of Programme activities and almost insignificant expenditure in year one.

Also non-disclosure of component-wise Direct Project Aid (DPA) expenditure of the Services by ECD

in time is liable for this, he added.

At this point Chair asked the representative from the EC Delegation why component-wise DPA

expenditure could not be provided to the PTF by the ECD. The queries were raised by the ERD

representative and Deputy Chief, Planning of MoC. The Programme Officer from ECD replied that

there was no mechanism in the Delegation to provide such detailed component-wise figures. It was

decided by the Committee that PTF would request ECD to provide detailed DPA expenditure monthly.

The representative of the Delegation of EC assured that the ECD would look into the matter to report

the component-wise DPA expenditure.

Agenda item 2 : Discussion on the Revised Overall Work Plan of BTSPThe AD, BTSP stated that the Revised Overall Work Plan (OWP) and Annual Work Plan, Year-2

(AWP2) were discussed and approved in the sixth PSC meeting of 1 August 2007. The approval of

ECD on them was conveyed on 21st

May 2008. A considerable time was taken for effecting some

modifications and improvements on the Revised OWP and formulating of AWP-3 in line with the

revised OWP, he explained. He also stated that the revision of OWP was necessitated due to the late

start of BFTI and squeezing of the unfinished activities of the components.

The CEO of raised the issue of impracticalities of spending the BFTI budget in the remaining eight

months of the Programme. He also mentioned about the meetings with ECD representatives for

continuance of EC support for BFTI. He suggested for a planned expenditure budget in the bridging

project of 2009 and in the proposed MoC Project of TPSP of 2010-2013. In response, EC Programme

Officer stated that it would require necessary changes in the Financing Agreement and perusal of the

matter by Delegations internal management.

Agenda item 3 and 4 : Discussion on and approval of the AWP-3 of BTSP AND Updates onthe Components of BTSP

The Annual Work Plan for Year 3 covers Programme activities from September 2007 till end of the

project in December 2008. With this respect the PD, BTSP mentioned that this seventh PSC meeting

has mainly been called for discussion and approval of AWP-3. The AD gave brief highlight of the

activities of the components as mentioned in the Plan. He stated about the actual programme

expenditure in Years 1 and 2 and the proposed expenditure for Year 3. In response to a query by the

Chair as to how this surplus will be dealt with, the PD opined that the surplus can be utilized in the

implementation of the important recommendations of the concluded studies of Component 2 of MoC


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and Component 4 of DoS. This justif ies the extension of the Programme beyond December 2008. The

Component Director of Department of Shipping (DoS) also expressed concern about timely

completion of the Do

S studies by the EU and local consultants. It was suggested that DoS should explicitly raise the matter

with PTF, MoC and ECD for taking necessary measures.

In reply to observations from the representatives of a Chamber of Commerce about involving the

private sector in the programme activities, the PD informed the meeting that the relevant stakeholders

of the private sectors are always invited to the workshops and seminars held in connection with the

studies of different components.

Agenda item 5- Any other business.

The President of Institute of Fashion Technology (BIFT) drew the attention of the Chair of the long

gap between holding of the sixth and seventh PSC meeting and asked for more visibility of the

Programme studies and study tours. He also requested for copies of the OWP and AWPs to get

comprehensive ideas of the Programme activities. The EC representatives referred to the report of EU

Review Mission on BTSP and formulation of the Trade Policy Support Programme under MoC and

stated that the extension of Programme funding will be based on the successful outcome of the study

reports of the Components. The Chair assured the meeting that the matter will be discussed in detail

in the next meeting which he instructed to hold before the holy month of Ramadan.

Decisions:a. The minutes of the Sixth Steering Committee meeting of the BTSP is approved.

b. The Annual Work Plan for Year 3 (AWP-3) of BTSP is approved and copies of the samewill be distributed amongst all concerned.

c. CEO of BFTI shall send a letter of request to the MoC with adequate justification forextension of BFTI component after 31 December 2008. ECD is requested to takenecessary steps to amend the Financing Agreement.

d. The Department of Shipping, Component-4 of BTSP shall clarify the state of its studies tothe PTF, Ministry of Shipping and Ministry of Commerce.

e. The Delegation of EC is requested to report component-wise DPA expenditure to thePTF on monthly basis.

f. The next PSC meeting will be held before the holy month of Ramadan to discuss thefurther extension of the activities of the BTSP components.

As there was no further point of discussion, the meeting ended with a vote of thanks to and from the

Chair.

Sd/-(Feroz Ahmed)SecretaryMinistry of Commerce. Dated: Dhaka, 3 July 2008.


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Attendance of the Seventh Program Steering Committee meeting of BTSP held on 25thMay 2008

Sl. Name Designation & Office Telephone

1. Golam Mostakim Additional Secretary, MOC 7169648

2. Md. Abdul Wahab Mian Joint Secretary, MOC 7169508

3. Mahmud Reza Khan Deputy Secretary, ERD 8116236

4. Md. Zakaria Bhuiyan Deputy Chief, Planning MOC 7165017

5. Rama Dewan Deputy Chief, Bangladesh TariffCommission

9336447

6. S. Humayun Kabir Director, Bangladesh Frozen FoodsExporters Association

01712584626,8354857

7. Dr. KhairuzzamanMozumder

Fellow (Policy Advocacy & Training),BFTI

01711566958

8. Cdr. AKM Alauddin Chief Engineer/Department of Shipping,01713332040

9. Md. Alamgir Khan Director, Department of Shipping 9551158

10. Benazir Ahmed President BGMEA Institute of FashionTechnology

8919987

11. Jenni Christensen Trade Programme Officer, Delegation ofEC to Bangladesh (ECD)

8823940

12. Rozana Wahab Trade Programme Officer, ECD --

13. Faheem Khan Programe Officer-2, BTSP 9333636

14. Md. Moniruzzaman Programme Officer-1, BTSP 9333636

15. Natalia Costa Tur Junior Expert, BTSP 017120048815

16. Rafiqul Bari Khan Financial Management Expert, BTSP 9333638

17. M.A. Taslim Chief Executive Officer, BFTI 8152477

18. Ziauddin Ahmed Accounts Director, BTSP 9333636,01713046637

19. Md. Shawkat Ali Waresi Programme Director, BTSP 9333636,01713046638


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Annex- II

Component 1 : Executive Summary of Approved Inception Report of Compliance study

Executive Summary of Approved Inception Report

Tentative Schedules of Activities / Delivery of Reports:

Serial no. Activity Date1 Preparatory work, collection of documents / literature March2 Data collection by interviewing stakeholders Partly

completed;remainingones will becompleted by14

thApril,

20083 Preparation of Inception Report March4 Approval of Inception Report Received 1st April

5 Organization of 1

st

Workshop 8 April6 Visit to Chittagong by Team Leader and EU expert Iotherconsultants draft Interim Report

10-12 April

7 Drafting the Interim Report 1326 April8 Submission of Draft Interim Report 27 April9 Comments of EC and MoC received 10 May10 Preparation of the Draft Final Report and submission 15 May11 Final Workshop 29 May12 Both the foreign consultants leave Bangladesh 31 May13 Comments MoC and EC received on Draft Final Report 18 June14 Revision of the Report incorporating comments of MoC, EC and

inputs of Workshop1926 June

15 Submission of Final Report 30 June

Delay in getting clearance / comments would shift other dates.

Time period and Gantt chart:

The consultants would conduct the study in 13.5 weeks from the date of Kick-off Meeting in thefollowing broad phases. The Gantt chart below illustrates the implementation schedule by activitiesand time periods:


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Gantt chart: Implementation (work) schedule by activities and time periods ( activities overlap )

Phases and Activities Time Period: 17 Weeks (4 months)Phase I: 4 weeks1. Kick-off meeting2. Collection ofdocuments / reports3. Meet relevant

stakeholders4. Preparation and

Submission ofthe Inception

Report

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Phase II: 4 weeks1. Approval of

Inception Report2. Collection of

documentscontinues

3. 1st Workshop4. Visit to BGMEA

(Chittagong),factories inChittagong,Narayanganj,Dhaka, BEPZA,and EPZ at Dhakaand Chittagong

5. Preparation andsubmission ofInterim Report

Phase III: 5 weeks1. Comments on the

Interim Reportincorporated in the

draft final report2. Draft final report

submitted to ECand BTSP

3. Final workshopPhase IV: 2 weeks1. Comments of

workshop;EC andbeneficiaryincorporated in thedraft and the finalreport submitted toEC and BTSP


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Annex - III

Component 2 ( MoC): Workshop 1 Background Paper on Compliance

Background Paper :

The European Union (EU) is the biggest market of Bangladesh for the exports of Ready MadeGarment (RMG), both woven and knitwear, generating about 58 percent of Bangladeshs globalexport. RMG export is the lifeline of Bangladesh and constitutes about 75 percent of total exports.Starting with only nine export-oriented RMG units in 1979 and revenue earning of less than 1 millionUS Dollar, the RMG industry achieved a phenomenal growth, with more than 4,300 units and totalexports exceeding US $8 billion in the financial year 2005-2006. The growth is continuing and thepresent figure of exports is around US $10 billion. The industry employs over 2.2 million workers,about 80 percent of whom are women from socially disadvantaged groups, with about 10 million director indirect beneficiaries.

The forty years old MFA quota system has allowed Bangladesh and some countries to develop theirapparel and textile industries rapidly as they received preferential market access and protection from

global competition. With the MFA phase out from January, 2005 and expiry of the safeguardmeasures in 2008, Bangladesh will face greater competition in the importing countries. In order toretain the market share of Bangladesh Textiles and Clothing exports to the EU and exploit theopportunities of enhancing exports following the quota phase out from January 2005, various socialand other compliances, particularly pertaining to environment on the part of the manufacturers /exporters has become a key factor in outsourcing the decisions of the buyers in the major importingcountries. This issue has drawn more attention of these stakeholders and led to concerns amongsome buyers. In the context of such a situation, a study to formulate short and long term strategiesand action plans to achieve the required standards and compliance in the textile and garment sectorsof Bangladesh has been undertaken under the BTSP. It is expected that this study would help removethe concerns of the buyers and would make Bangladeshi products more competitive in the globalmarket. This study is one of the several studies undertaken under this project.

Various agencies are working on compliance issues. The exporters have to meet compliance

standards as per buyers requirements. Both BGMEA and BKMEA are supervising factories undertheir respective areas. Ministry of Labor and Employment, Department of Fire and Civil Defense andother agencies are inspecting and monitoring the factories to comply with the laws of the land.

Compliance means implementation of certain approved standards relating to working conditions infactories, occupational safety measures and environmental concerns specifically in the textile sector.Minimum labor standards cover wages, working hours, overtime payment, safety, job security,medical care, maternity leave, right to form trade unions / associations, social security, etc. It alsoincludes abolition of child labor and non-violation of human rights.

There are many initiatives under way. Many buyers have developed their own codes of conduct whichare to be implemented in their suppliers companies. Besides the SCF, there are Bangladesh LaborLaw 2006, Bangladesh Labor Welfare Foundation Act, 2006, Environmental Conservation Act 1995,Environmental Conservation Rules 1997, Environmental Court Act 2000 and the tripartite MOU to

ensure compliance. The Bangladesh Building codes are ratified.


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Objective of the Study according to Terms of Reference:

(i) Global objective: To retain or enhance as far as possible the market share of Bangladeshtextile and clothing exports to the EU.

(ii) Specific objective: To remove the concerns of European and other textile Buyersregarding the social and environmental conditions under which the Bangladesh textileindustry manufactures and exports product.

Additionally, the following subjects will be discussed:

- Buyers requirement related to compliance- Status of standard implementation- Situational analysis of social and environmental compliance- Other related competitiveness issues related to compliance


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Annex - IV

Component 2 ( MoC) : Workshop 2 Presentation of Draft Final Paper on ComplianceFindings and Recommendations

Findings

Findings: Social Compliance

a) Social compliance in exporting RMG companies is a basic precondition for doing any export withlarge buyers from Europe and other main importing countries.

b) There is no unified code of conduct and definition of compliance varies from buyer to buyer oramong groups of buyers. There are approximately one thousand buyers in Bangladesh withdifferent sets of codes or membership to different standard initiatives.

c) Shortage of skilled man-power, particularly in production and middle management, increasingly isa constraint for the growing RMG sector. For the skill development of the workers andtechnicians, BGMEA has already taken over four government-owned Technical Training Centres(TTCs) at Gaibandha, Kurigram, Bogra and Lalmonirhat, all in the northern part of the country.However, the total capacity of all these TTCs is very much limited. BGMEA Institute for Fashionand Technology (BIFT) trains mid-management people in apparel merchandising and fashiondesign.

d) BGMEA/BKMEA factories have achieved about 80% social compliance in recent years, followingthe Tripartite Agreement in 2006 among the government, the employers and the workers. TheRMG workers in the compliant factories are now having appointment letters, overtime allowances,medical facilities, group insurance, gratuity, maternity leave, day care facilities etc. as agreed inthe Tripartite Agreement. However many B-grade medium and small factories still could notimplement the wages agreed in 2006.

e) In view of the recent price increases of rice and other essential food items, there have beensporadic disturbances by the workers of some factories, and it is still continuing. The minimumwages fixed in 2006 can hardly provide the daily needs of the workers, and as such graduallytheir discontentment with the present salary structure is also increasing. If the present price spiraldoes not come down, there may be more disturbances and instability in the sector unless thesalary structure is revised upward. Being hard hit by the price increases, many workers are nolonger satisfied with the agreed wages of 2006. However, the whole issue has to be evaluated

pragmatically, particularly keeping in consideration the falling CM rates dictated to the exportersby the buyers. After all, RMG owners cannot incur losses by increasing wages of the workersbeyond their means.

f) Buyers are very much monitoring the compliance issues of the exporters. They audit not only thecompliance in the exporting factories but also in the sub-contracted medium and small factories.Unless the exporters fulfill the compliance, the buyers do not accept their products.

g) GOB, through its various ministries and agencies, is monitoring the compliance issue regularly.SCF, through the two Task Forces, is trying necessary steps to improve compliance in the RMGsector. DoE, office of the Chief Inspector of Factories, Department of Fire and Civil Defence andEPB are monitoring the compliance issues in a loosely coordinated manner.

h) Both BGMEA and BKMEA have their own monitoring cells for supervising the compliance infactories under their jurisdictions and they are regularly reporting to the SCF through the CMC inthe EPB. Many big factories established their own compliance units.

i) Media is playing an important role in the implementation of compliance in the RMG sector. Veryfrequently, reports on the compliance by certain factories or disturbances for non-fulfillment ofworkers demands, etc are flashed in the national dailies/weeklies and various TV channels. Thismobilizes public opinion in favour of the workers.


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j) About forty trade unions of RMG workers have grown up in recent years. These trade unions arevery much aware of their rights and obligations and they take industrial actions when the factoryowners fail to fulfill their commitment.

k) The NGOs and the Civil Societies are also pressure groups on the RMG factory owners, andinduce them to improve the welfare of the workers.

l) Compliance means additional costs for the industry. Experiences reveal that compliance

initiatives are hardly remunerated by the buyers, rather the fall in CM price continues, while costsare increasing. Thus initiatives of the exporters are not rewarded in the form of ethical buying.

m) According to BGMEA and BKMEA, full compliance of member companies is expected in 2 yearstime, however, the advisor in charge of MoC, while talking with the stakeholders with the RMGsector, admitted that rate of fully social compliant factories declined to 51% in January from 56%in December 2007. This trend is alarming in view of the fact that the tripartite agreement wassigned in 2006.

n) Medical Centers for the emergency and routine treatment of workers are available in manyfactories.

o) Child labour has been totally abolished from the exporting RMG factories.

Findings: Environmental Compliance

a) New generation composite mills (dyeing/washing, printing, finishing departments) have set upETP as an integral component of their factories. The problem lies with old units. Many of whichwere established in the early days and are also housed in residential buildings. Some of thesefactories do not have enough space for setting up the ETPs while others do not have sufficientresources to meet the cost. The high interest rate (about 14%) of bank loan discourages them toinvest borrowed money on ETP. Both BKMEA and BTMA are monitoring their mills to achievecompliance in this sector. New composite mills must have ETP otherwise they would not receiveapproval from DoE. If an entrepreneur sets up a factory without ETP, gas and electric connectionmay not be available. All recently set up mills have ETP. The consultants have the impressionthat not all ETPs are operating properly, specifically those in smaller and B-grade companies.

b) The problem of pollution is more in the B-grade dye houses which are scattered in different partsof the city and other areas. Many of the dyeing units do not cater for the export industries theyprovide services for the mills which produce for local consumption. Many dye houses, especially

those working for the export industries, have already set up ETP plants and some others are inthe process.

c) According to EPZ management, environmental compliance in EPZ is high and all dyeing unitshave either independent ETPs, or are linked to central ETPs. The compliance is monitored byBEPZA and not by DoE. No statistics related to current compliance status are available to theconsultants. Indicators of compliance are now available.

d) Disposal of the sludge that remains after the ETP treatment does not seem to be fully screenedand consequently monitored. It is not clear from monitoring results whether sludge disposal is putinto the usual sanitary land filling process, burned or processed for burning material (e.g. byadding soda and pressing sludge to cakes) or if it is disposed in any other non-controlled way.

e) The figures of what percentages of all dye houses have ETP are conflicting. According to DoE,about 35% of them have ETPs. This figure is considered higher by BKMEA. The fact is that it isdifficult to have the accurate information on this. The consultants do not have clear information

about the base line data.f) The investment on ETP is quite substantial, about 10% of the total investment of a new dye

house. If bank loans at a reduced rate of interest as in Pakistan and India are made available tothem, more of the non compliant dye houses would come forward to set up ETPs. Many industryleaders demanded exemption of duties and VAT on the imported machinery.


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g) To improve the pollution situation, GOB has decided to set up a RMG cluster (Garment Pallis) inMunshiganj district near Dhaka with about 300 units. The Palli will have a central ETP for all typesof industries. No specific deadline of establishment of the cluster could be ascertained by theconsultants. More such clusters in other locations would be necessary to improve theenvironmental compliance. However, the problems associated with the migration of the workers(accommodation, livelihood of other members of families, infrastructure, etc.) would have to beconsidered.

h) When introducing an ETP or micro filtration waste water treatment in a company, new specialprofessional knowledge is required for proper operation of the plant. Such experienced people arenot much available in Bangladesh and most are already employed by larger companies with ETPin place.

Findings: Eco-Efficiency and Environmental/Occupational Health and Safety

a) Some large European buyers provide own training on proper handling of chemicals and dyestuffto companies (Eco-efficiency and EHS). Each buyer develops its own training material. Nostandardized curricula and training material are available.

b) Old spinning mills have sub-standard machinery without effective dust removal ducts. Fine dustand noise in the factory premises is risking the health of the workers. Noise cannot be avoided inspinning and weaving mills, it even increases with modern high production machinery. Theworkers need to use aprons, masks and adopting other precautions. Up-to-date factories supplyall protective gear to the workers.

c) Eco-efficient production in dye houses is a concept that is not much yet introduced in theexporting textile industry and composite RMG factories. Eco-efficient processes contribute toimproving OHS/EHS, reduce production costs, increase competitiveness, have positive effect tocompany image, and have positive influence to product quality and consistence of standards.Better and more efficient use of energy and water contributes to the saving of natural resources.

d) Increased introduction of Oeko-tex 100 or even 100+(1000), European ECO-label and others inexporting RMG companies increases their international competitiveness, Oeko-tex 100+(1000)being much linked to eco-efficiency and environmental compliance.

e) In order to ensure safety of the workers, specially after the collapse of the Spectrum SweaterFactory in Savar in 2005 and several incidents of fire, killing many workers, the government hasdeveloped a building code, with assistance from Bangladesh University of Engineering andTechnology. This code has to be followed by all factory owners when constructing new factorybuildings.

f) Reportedly all exporting RMG factories have emergency fire exits, and their man gates remainopen so that the workers can come out of the factories in the event of fire accidents.

g) All commercial buildings must have clearance certificates from the Department of Fire and CivilDefence. Fire Department can declare some building unsafe for workers.

h) Bangladesh has export opportunities in the home textile sector. The market share is insignificant,but rapid growth in the last years was noticed.

Findings: Crosscutting Issues, Coordination and Image building

a) Monitoring organizations like the Office of the Chief Inspector of Factories, DoE and the Task

Force on Labour Welfare do not have adequate staff and logistics to ensure compliance. TheOffice of the Chief Inspector of Factories has currently only 46 inspectors for covering a total of23,000 industries all over the country. They visit per month a maximum of 160-170 RMGfactories. They need more inspectors and transport facilities (motor-cycle for inspectors). Theconsultants had the impression that visits to factories are not made in a planned way; rather in arandom way.


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b) Compliance costs money. Many companies suffer from reduced margins and profits due toincreasing costs, while prices paid by buyers are under constant pressure.

c) As larger the order and smaller the exporting RMG company (non-composite), supply chainmanagement becomes an important cost, quality and planning issue. There are many usefulmethods and tools that can improve supply chain management in the RMG reality. Not muchmanagement training related to the subject has been yet offered.

d) Besides compliance, other most important purchasing criteria are lead time, productionspecialization, quality consistency and price.

e) Cost of compliance (environment) is high for smaller companies with little profit margin. Sociallycompliant RMG companies can increase their productivity by up to 10% (workers motivation,health, less staff turnover, etc.). Environmental compliance does not have much effect onproductivity, except improved EHS and more efficient and better manual handling of dyes andchemicals in the process.

f) Bangladesh suffers from an image problem in the west, partly because of single sided reportingby some journalists who often focus on negative aspects rather than also reporting about positiveaspects, but also due to the insufficient image building communication activities by Bangladeshsplayers. Good communication needs to be focused and convincing, including positivedevelopments and existing weaknesses. Bangladesh, as an LDC, has by now achievedcommendable success in various fields like RMG production, micro finance, women

empowerment, and population control, access to pure drinking water, literacy and povertyalleviation. These could be focused for the image building of the country.

g) Current PR and export market promotion programs are not much focused to specific exportmarket requirements. Image promotion is not up to the same level as product promotion. Imagepromotion is often still considered rather wasting resources. The opposite is true; imagepromotion in Western countries is strongly growing in importance combining a good image withgood service and products. To-date no suitable international annual communication plan exists inthe EPB. Any success in international image promotion will depend on how well activities arecombined, focused and professionally introduced in the different target markets. Any budget willhave to take into consideration that it is not primarily important what Bangladesh PR specialiststhink what should be done, but what European PR specialists recommend is most suitable in thespecific country and sector situation.

h) The CMC in EPB is not properly organized. The number of officials involved is too small for the

challenges ahead. It is learnt that UNDP provided initial support for a year and after that theconsultants had to leave as financial support for their continuance was not available either fromthe donors or the GOB. This has made the CMC almost non-functional as EPB has no budgetaryprovision to maintain a cell with required number of staff and logistic support. Though at themoment, a Deputy Director of EPB is in charge of the CMC, it is impossible for him to monitorabout 4,500 RMG factories. If funds are not available from the donors.

i) Associations mention that buyers pay 5% higher prices for the same products in competitorscountries, such as Cambodia or Vietnam. In order to determine current and future competitiveedges of compliant export companies, benchmarks of the main competing countries/companiesshould be known to the local authorities and entrepreneurs in order to enable increasing ormaintaining competitiveness, based on facts.

j) Requirements in teaching and curricula are changing rapidly according to new technologies,automation, ETP and micro filtration, management methodologies, reporting, quality systems, etc.

k) In spite of the fact that RMG is a vital sector for Bangladesh economy, there is no separateministry or attached government department to plan the strategies, rules and regulations, createexport conducive conditions oversee and monitor the activities of this sector. EPB is mainly anexport promotional body that oversees market development for all Bangladeshi products.


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l) Even though about 40 trade unions grew up, effectiveness is yet to be proved. Some of themdeviate from their jurisdiction, having relapsed to destructive activities. Apparently there is nocoordination among this large number of unions. In some cases, it appeared that they do not havecontrol over destructive activities of the workers who become violent on very small issues, notrelated to compliance. Too many trade unions with diverse leadership and policies cannotfunction properly for realizing compliance for the workers. The mushroom growth of the tradeunions is mainly because of personality clashes of the leaders. Recent newspaper reports revealthat violence is taking place quite frequently in the RMG sector on various allegations and theworkers are causing serious damage to property, making the owners financially fragile. For novalid reasons, sometimes tension between owners and workers is increasing.

m) Statistics from different governmental organizations and associations source are readingdifferently and achievements are not always congruent.

n) Compliance is one important factor of export competitiveness of the Bangladesh RMG producers.Other competitiveness factors are becoming increasingly important to the compliant companies inorder to safeguard their export business in future. Associations are not getting always positiveresponse from the government when it comes to favourable sector framework conditions (energy,soft loans, infrastructure, exemptions of duties and VAT on imported equipment for ETP, etc.).

o) 80% of the RMG exports from Chittagong based companies are going to the US, and only 20% tothe EU and other markets. About 40% of the Chittagong factories (20% of total Chittagongproduction) need to be relocated in order to become compliant. 200 out of 700 RMG companies inChittagong are sick and some stopped production, also because of non-compliance.

Findings: Legal Base

a) The Bangladesh Labour Law, 2006, is the base line for minimum compliance.

b) The Garment workers have resentment against Bangladesh Labour Law, 2006. According tothem, this law does not fully guarantee the functioning of the trade unions freely.

c) DoE feels that the Bangladesh Environment Conservation Act 1995 does not give them authority

to organise mobile courts against violators of the environmental regulations and impose penaltyon them on the spot.

d) The office of the Chief Inspector of Factories filed many cases in the Labour Courts againstdefaulters of compliance but disposal of cases are pending for years. Previously, they got quickerresults in Magistrates Courts but Labour Law 2006 does not permit that. If a factory is found guiltyof non-compliance, the Labour Courts can realise a fine of only Taka 1,000, which the factoryowners do not take seriously.

e) Currently, sweater and garment production as well as textile washing is classified ORANGE-B.Dye houses (of which washing is a part) are categorized RED. Considering that fabric washing(e.g. bleaching process) includes highly toxic elements and is part of the dyeing and finishingprocess, the current situation should be re-considered and reviewed. Washing should beclassified RED as well. It is not practical to have two classifications for one process.

f) Overlooked areas in the Bangladesh Labour Law, 2006 are related to: part time employment,

position of contractor, weekly holiday and closure of establishment, maintenance and retention ofprescribed books and register and termination without any stigma.


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RecommendationsRecommendations: Social Compliance

a) GOB may appoint on an urgent basis a wage board to look into the matter of adjustment of wagesof RMG workers in view of the rising inflation and increased costs of food and energy. Suchwages revision should take place every three years.

b) There are conflicting reports on compliance. All the organizations involved in compliance shouldhave better coordination among themselves in order to avoid such conflicting reports. Astrengthened CMC in EPB can do that.

c) BGMEA and BKMEA may consider further incentives for their workers. BKMEA alreadyintroduced subsidized rationing system for their workers who are hard hit by price increase of fooditems. BGMEA may also follow similar steps.

d) The associations should introduce means of increased communication about stage of complianceand related problems, with workers, NGOs, civil society and other stakeholder. These wouldimprove relationship between the workers and the factory owners.

e) To undertake more welfare activities for the workers, BGMEA and BKMEA may realise a smallpercentage (to be worked out under a separate study) of export bills and create welfare funds.The workers may also be motivated to contribute a very small sum (say Taka 1 per worker perweek) to this fund. This fund may be used to help the workers in times of dire crisis/disaster,prolonged illness, costly treatment, etc. A Management Board, consisting of representatives ofGOB, the owners and the workers would run the proposed Welfare Fund.

f) Full social compliance must be achieved in all exporting factories in a maximum of 2 years time.

g) Proper costing and reporting systems in the compliant companies need to be introduced (wherealready not existing), in order to enable justified price decisions to buyers.

Recommendations: Environmental Compliance

a) Conducting of a mapping analysis with indication of existing grouping of dye houses in theindustrial areas in Dhaka and Chittagong with the objective of finding out feasible central ETPinstallations and best cluster development sites will have to be done on priority basis.

b) A study needs to be undertaken to determine whether development of big clusters (like the one

planned in Munshiganj) would be feasible and viable (issues are: migration of workers anddevelopment of infrastructure, central ETP). GOB may think of mini clusters on experimentalbasis. A separate study on this is recommended.

c) A study should find out how sludge can be disposed by commercial recycling companies forusage as burning material by adding soda, etc. and converting the material into compressedblocks. It should also be found out whether or not the burning of sludge can have toxic sideeffects that would not allow the material to be used as burning material. Better control of sludgedisposal practices by companies is required.

d) DoE should monitor ETP installations and their performance more closely and come up withaccurate statistics.

e) DoE should introduce training seminars for ETP operators. ETP operations should be included incurricula, run by the current textile training institutes and courses.


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Recommendations: Eco-Efficiency and Occupational/Environmental Health and Safety

a) DoE in cooperation with international buyers should design and execute training programs onhandling of chemicals and dyestuff in dyeing house operators.

b) DoE and associations should introduce and publicise the concepts of eco-efficiency in dyeing

houses, connected to OHS/EHS and efficient use of energy and water.c) DoE and associations should check on applicability of the software based analysis of eco-efficient

production in textile plants. The software has been developed in a PPP project between BASF,UN, UNEP. (More details are in paragraph 3.4.6. of this report).

d) Initiatives to qualify and sign up for Eco labels by exporting companies (EU and US labels) are tobe promoted.

e) Safety of the workers in the factory buildings will have to be ensured by observing the approvedbuilding code by factory owners.

f) EPZ factories should be brought under the same monitoring authority and reporting system as allother exporting RMG companies.

Recommendations: Crosscutting Issues, Coordination and Image building

a) The government departments involved directly in monitoring should have appropriate staff, andfacilities for training them and appropriate budget allocations. The performance of these staffneeds to be monitored and good workers need to be rewarded. Government should look into thison priority basis and conduct a separate study to strengthen these institutions so that they canperform their task efficiently and speedily.

b) It is necessary to develop a better knowledge base of the competitive edges of the Bangladeshexporting RMG companies in order to decrease the dependency on price issues, which seem tobe prominent. A benchmark study in main competing countries would be necessary, studying:compliance level, price levels, specific benefits, cost levels, sector scenarios, supply lines andsupply chain management, framework conditions and legal system and country brand.

c) Awareness building among the factory owners, management staff as well as workers needs to befurther intensified. In recent days, there has been frequent violence by the RMG workers in

different parts of the country, causing considerable loss to a number of factories, uncertain ordelayed delivery, stock-lot, cancellation of orders, and a bad image for the country. The majorreasons are non-compliance of increased wage structure, delay in payments and demand forfurther increase in salaries, agreed in 2006. The problems need to be discussed with all thestakeholders and attempts be made to overcome the crisis. Whenever such a crisis is confronted,immediate settlement of the same has to be made through tripartite consensus. This is essentialto keep the factory running otherwise financial basis incurred by the owners would affectcompliance.

d) Bangladesh should also continue dialogues with the buyers for ethical buying of its RMGproducts. Many of the buyers demand improvements for the workers on the one hand butcontinue lowering their prices. It is to be understood that RMG produced in Bangladesh with thesweat of the poor people find places in the shelves of western supermarkets, seldom realize thatpoor Bangladeshi workers even cannot get subsistence wages for their hard work. GOB may

include these issues in publicity and communication campaigns in this regard at home andabroad.

e) In order to build image of Bangladesh in the west, GOB needs to run focused communication andPR campaigns (some activities are listed in paragraph 4.4 of this report). Media analysis in somemajor countries, press reports and Bangladesh RMG sector image building is importantmeasures. The international communication work plan and budget has to be based on


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international communication, PR and promotion specialists of the export countries concerned. Byexperience from other countries, opportunities and resources are often wasted due to theplanning and executing of non-focused and wrong messages, without much considerations of thetarget countries reality in opinion making, press and media, as well as minimum standards interms of information materials, language, layout, pictures and messages promoted.

f) In order to survive in the global market as a major exporter, Bangladesh will have to increase

productivity and quality of its workers. There should be more textile institutes, both in Dhaka andChittagong. The existing capacity of the Textile College in Dhaka cannot cope with the growingneed of the RMG sector. This college may be upgraded as a Textile University. For themanagement staff and workers, separate institutions should continue.

g) To make Bangladesh products more competitive, apart from quality and price, lead time is also animportant factor. As Bangladesh gets only 40% of its required fabrics locally for the oven factories,it has to depend on countries like China, Korea, India and Pakistan for fabrics. This cuts thecompetitiveness of Bangladesh vis--vis other major exporters as the buyers prefer short deliveryschedules. To enhance the local production of fabrics, Bangladesh shall have to expand theproduction of woven fabrics on priority basis. In the case of knitwear, the local supply is almost tothe extent of 90% and consequently, the value addition is 50-60%, whereas in the case of ovengarments, it is about 25-30%.

h) ETP investments need availability of soft loans. Specifically B-grade and smaller companies willbe better enabled to invest into environmental compliance.

i) The RMG sector needs to adopt new requirements of qualifications of workers, technicians andmanagement. Curricula need to be adapted to new developments.

j) In order to look into the affairs of the RMG sector, the creation of an Apparel Board under aseparate Ministry would be a timely and appropriate step. EPBs work starts with marketing ofmanufactured products. The proposed Apparel Board would deal with matters relating to theproduction processes, RMG workers, backward linkages, future sector visions and scenarios andother related issues.

k) GoB should conduct a market study in European and US markets for finding out best fit productsin the home textile sub sector for compliant home textile producers.

l) CNC in the EPB must be strengthened with required staff, logistic support and funds.

m) The number of trade unions should be limited to a reasonable level (3-4) by merging the existingunions. Amendment, if necessary, in the Labour Law, 2006 should be made. The issue can alsobe discussed with the Union leaders and they could be convinced that a healthy trade unionismwould be beneficial, both for the owners and workers.

n) Department of Labour, BGMEA and BKMEA and other relevant agencies may organize trainingprograms for the trade union leaders and educate them about the constructive role that they haveto play for realizing their legitimate demands. It should be brought to their notice that violencewould only create financial loss, bad relationship with the buyers, bad image for the country andloss to the national economy. They should also be motivated that the best way of solvingproblems is through discussions and not by violence and that would be a win-win situation for allparties.

o) Implementation of a `Competitiveness Forum` for fully compliant companies, where associationsand exporting RMG companies, government and other entities should discuss on howcompetitiveness of the RMG sector can be maintained and improved.

p) To encourage the companies to import ETP equipment, import should be exempted from dutiesand VAT.

The current interest rate on bank loans to the RMG is currently about 14% and this must be broughtdown (soft loan) to a competitive and tolerable limit, like in India and Pakistan.


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Annex - V

Notes: Workshop on Carriage of Goods By Sea

Date : 7th April 2008

Venue : Purbani Hotel, Dhaka.Count : 30 participants

Background

This Workshop is an initiative of the Maritime Component under the auspicious EU-BTSP. Theconstant changes in international carriage of goods by sea have prompted this workshop to look intothe existing regime in Bangladesh. The workshop has also sought to identify number of elements ofexisting international conventions (principally the Hague-Visby Rules and the Hamburg Rules) andother jurisdictions. The aim is to enable stakeholders to contribute and discuss vital issues in order toimprove Bangladeshs carriage of goods by sea.

Workshop on Carriage of Goods by Sea

This workshop was officiated by Chief Guest Mr. Sheikh Enayetullah (Secretary for Ministryof Shipping, Bangladesh), Special Guest Mr. Shawkat Ali Waresi (Project Director of EU-BTSP) whodelivered a welcome note. Chairman Mr. Rene Kist (Team leader of the Maritime Component).

Mr. Vikneshwaran Shunmugam (ISTE- Maritime Legal Expert, GFA) and Mr. KhandakerZaman (LSTE Maritime Business Expert, Unneyan Onneshan) made presentations at the workshop.Mr. Hans-Martin note taker.

Deliberations of the workshop:

1) Presentation on COGSA

a) Bills of lading:- the participants of the workshop was in the opinion that given the constant changes

international shipping, there is a need for Bangladesh to recognize negotiable and nonnegotiable bill of lading to facilitate movement of goods in Bangladesh.

Mr. Vik highlighted various regimes of other jurisdictions (India, Pakistan, Norway, SouthAfrica, France, Singapore, UK and Australia) and explained Bangladeshs current position, tounderline the need for new legal framework.

It is the opinion of the participants that the use of two bills lading for the same cargo to thesame consignee by two different operators deviates from standard practices and therefore,need to harmonize with international best practice.

b) Foreign Exchange Regulations:- it is the opinion of the participants that the Foreign Exchange regulation has significant effect

against their daily operations. The workshop took note that the provision under the Foreign Exchange Regulation only

applies to maritime transport but not to air transport, therefore, the discriminatory nature of the

provisions needs amendment. the representative from the central bank informed the workshop that he will take note of the

deliberations and will discuss the matter with his organization. the Chairman of the meeting suggested that the Maritime Component would appreciate any

response/suggestions in writing from the central bank of Bangladesh about this matter.


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c) Which approach should Govt. of Bangladesh consider, cargo or carrier interest?

There was some differing views amongst the participants whether Bangladesh should purseas cargo and carrier nation. Mr. Vikneshwaran stated that the Government of Bangladeshshould consider both interest by pointing out the benefits of these interests. In other words,the new legislation should promote both carrier and cargo interest.

d) It was the opinion of the participants that on the basis of the consultants report that Bangladeshsneed to look forward to improve their current regime, learn from foreign experience andimplement what most countries have.

e) Options for Bangladesh:-

Mr. Vikneshwaran based on his assessment report highlighted the four possible options,which Government of Bangladesh needs to consider. He also explained the significance ofeach options (advantages & disadvantages) and considerations that Bangladesh may need toconsider before choosing a suitable framework for their maritime sector.

At this stage, although the participants did not confirm any of the options but deliberationsindicates that there were unanimous preference concerning option (B) to design newCOGSA and give effect to Hague Visby Rules and option (D) Design a hybrid regime.

The participants informed the workshop that once the proposed framework circulated to thestakeholders, they would take this opportunity to provide their inputs via email.

2) Presentation on UNCITRAL draft Convention.

Mr. Zaman presented the paper that highlighted the latest development in international carriage ofgoods by sea.

This presentation identified some of the key additional provisions (terminologies), which wasabsent in the Hague-Visby and Hamburg Rules.

Mr. Zaman also explained the enhanced provisions of carriers liability stated in the UNCITRALdraft and its significance to Bangladesh shipping community.

The workshop discussed on some of the key principals envisaged in this draft convention.

3) Presentation on proposed legal framework

The participants were informed that a proposed legal framework prepared by the consultant would beforwarded to all participants via email. The aim is to involve the stakeholders in the drafting process.

4) Summary

The outcome of the workshop offers some guidance that may be necessary to maximize theformulation of a more comprehensive and generally acceptable proposed legal framework. It alsooffers guidance on certain provisions in order to arrive at compromise solutions.

The workshops presentation papers will be made available to GFA team, government agencies,industry players and other business organization that have an interest in maritime affairs in orderto receive inputs, which would allow improvement for the current regime and be broadlyacceptable to all sections of maritime community of Bangladesh.

Both the public and the private sector complimented the workshop and supported the workundertaken by the maritime component, who is working in conjunction of MSO, MARPOL, STCWand Multimodal Transport to prepare and form a new regime as part of the broader work on themaritime transport documentation.


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Annex - VI

Marine Pollution Legislation (MARPOL) WorkshopBANGLADESH TRADE SUPPORT PROGRAMME (BTSP)Component 4 Maritime TransportHotel Peninsula, Chittagong

16th June 2008Programme09:00 -09:15

Registration

09:15 09:20

Welcome to the WorkshopMr. Abdul Malek - Moderator, Local Consultant, Former Director General Departmentof Shipping

09:20 -09:30

Introduction to the Bangladesh Trade Support ProgrammeMd. Shawkat Ali Waresi BTSP Project Director

09:30 -09:40

Introduction to Component 4 and the MARPOL WorkshopCdr. Alauddin - Chief Engineer & Ship Surveyor, Department of Shipping

09:40 10:00

Issues of ConcernMd. Shafiqul Islam - Principal officer, Mercantile Marine Department

10:00 -

11:00

Key notes

Mr. Frsund - Legal Expert Marine Pollution, GFA Consultants11:00 -11:15

Tea/coffee Break

11:15 13:00

Work in groups1: Survey and certification2: Monitoring and surveillance (enforcement)3: Waste reception facilities4: National Oil Spill Response System

13:00 -14:00

Lunch

14:00 -15:00

Work in groups, continues

15:00 -17:00

Plenary Presentations, discussions and conclusions

17:00 Workshop Closing

Excerpts from Draft Merchant Ship Ordinance, April 2008

Questionsfor

Work GroupsPeninsula Hotel,

Chittagong 16th

June 2008 Contents

QUESTIONS FOR ALL GROUPS.......................................................................................................41Draft 1 of the Marine Pollution Protection Act............................................................... 41

GROUP 1 ............................................................................................................................................43Survey and certification of ships.................................................................................... 43

GROUP 2 ............................................................................................................................................45Enforcement (incl. monitoring and surveillance).......................................................... 45GROUP 3 ............................................................................................................................................47

Waste reception facilities................................................................................................ 47GROUP 4 ............................................................................................................................................48

Oil Spill Preparedness and Response............................................................................ 48


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QUESTIONS FOR ALL GROUPSDraft 1 of the Marine Pollution Protection ActAssessments and recommendationsLegal and institutional setup for implementing the conventions

Assessments: The marine pollution area is not adequately covered by any existing legislation DoS and MMD suffers because of serious lack of resources and money, in spite of having

activities creating revenues The present legal setup and way of making laws and regulations will not be appropriate for

implementing MARPOLo MARPOL has extensive provisions in the annexes, referring to even more extensive

provisions in appenendices and codes (IMDG and IBC)o Frequent IMO amendments

Recommendations: Primary and secondary legislation covering all relevant marine pollution conventions should

be developed Measures should be introduced that can ensure that revenues created will be transferred

back to (or retained by) the maritime authorities Extensive use of annexes and references to appendices and codes should be allowed in the

legislation. Only basic requirements (static elements) should be adopted aslegislation/regulation

Compliance with the ConventionsAssessments:The conventions have not been implemented legally, but to some extent implemented in practice:

MARPOLo Ships: Only ocean going ships seem to comply with MARPOL requirements (coastal

and inland ships do not)o Enforcement: Limited detection of violations, no reporting requirements, limited

investigation) and accumulation of evidence (Coastguard, fines for pollution in theport area are issued by Port Authority (according to the Environmental Conservation

Act)o Waste reception facilities: No official waste reception facilities in ports, but facilities

are planned for 2010. Unofficially, companies buy oily wastes directly from ships

INTERVENTIONo Not implemented legally or in practice

OPRCo No national system for preparedness and responseo a draft national contingency plan is said to exist in DoS and has been requestedo No co-operation with other states within the South Asians Seas Action Plan (SASAP),

which covers regional co-operation with regard to oil spills

Recommendations: MARPOL

o Ships: Coastal and inland ships should also be required to comply with therequirements of the convention


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o Enforcement: Co-operation with civilian airlines on surveillance should be initiated,based on the Bonn Agreement reporting procedures

o Waste reception facilities: An all inclusive fee system should be established by legalmeans

INTERVENTION

o The convention should be implemented in conjunction with the OPRC convention OPRC

o A (new) National Oil Spill Contingency Plan (NOSCP) should be initiatedo An initiative should be taken in SASAP to establish a regional mutual agreement (a

Draft Regional Contingency Plan has been developed)

Questions

In your opinion;

Question 1: Should IMO marine pollution conventions be covered by new legislation, or should

existing legislation be amended?

Question 2: Should the legislation include measures to ensure that revenues created will be

transferred back to (or retained by) the maritime authorities, or should the activities of DoS and MMD

to follow-up the conventions be ensured in other ways. Which?

Question 3: Should the legislation include only basic requirements and refer to e.g. MARPOL and its

annexes, appendices and codes as amended, or should the legislation be developed more

comprehensively?

Question 4: Should inland ships also be required to comply with the requirements of MARPOL?

Question 5: How should the detection of illegal discharges be improved in the waters of Bangladesh?

Question 6: What should be the first initiative from Bangladesh to develop regional co-operation in

connection with oil spill preparedness?


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GROUP 1

Survey and certification of shipsRequirements of the conventionMARPOL Article 2 & 3

The Convention applies to ships; including vessels of any type whatsoever operating in the marineenvironment and includes hydrofoil boats, air-cushion vehicles, submersibles, floating craft and fixedor floating platforms. It does not apply to warships, naval auxiliary or other ship owned or operated bya State and used, for the time being, only on government non-commercial service. The Conventionapplies to (a) ships entitled to fly the flag of a Party to the Convention; and (b) ships not entitled to flythe flag of a Party but which operate under the authority of a Party.

Surveys (Annex, Regulation 6, I)

Every oil tanker of 150 gross tonnages and above and every other ship of 400 gross tonnages andabove shall be subject to surveys: An initial survey before the ship is put in service, and a renewalsurvey at intervals specified by the Administration, but not exceeding 5 years. In addition:Intermediate, annual and additional surveys. Surveys of ships as regards the enforcement of theprovisions of this Annex shall be carried out by officers of the Administration. The Administration may,

however, entrust the surveys either to surveyors nominated for the purpose or to organizationsrecognized by it. When a nominated surveyor or recognized organization determines that thecondition of the ship or its equipment does not correspond substantially with the particulars of theCertificate or is such that the ship is not fit to proceed to sea without presenting an unreasonablethreat of harm to the marine environment, he shall ensure that corrective actions are taken, and if not,the certification shall be withdrawn. If the ship is in a port of another Party, the Port state, if applicable,shall ensure that the ship shall not sail until it can proceed to sea or leave the port for the purpose ofproceeding to the nearest appropriate repair yard available without presenting an unreasonable threat(Port State Control). In every case, the Administration concerned shall fully guarantee thecompleteness and efficiency of the survey and shall undertake to ensure the necessary arrangementsto satisfy this obligation.Requirements for surveys are also included in other annexes of the convention (Annexes II, IV andVI).

Certificate (Annex I, Regulation 7, 10)

An International Oil Pollution Prevention (IOPP) Certificate shall be issued for a period specified bythe Administration, which shall not exceed five years, after an initial or renewal survey in accordancewith the provisions of regulation 6 of this Annex, to any oil tanker of 150 gross tonnage and above andany other ships of 400 gross tonnage and above which are engaged in voyages to ports or offshoreterminals under the jurisdiction of other Parties to the present Convention. Such certificate shall beissued or endorsed as appropriate either by the Administration or by any persons or organization dulyauthorized by it. In every case the Administration assumes full responsibility for the certificate.Requirements for certificate are also included in other annexes of the convention.

Special requirements for fixed or floating platforms (Regulation 39)

Fixed or floating platforms when engaged in the exploration, exploitation and associated offshore

processing of sea-bed mineral resources and other platforms shall basically comply with therequirements of this Annex applicable to ships of 400 gross tonnage and above other than oil tankers.Requirements for platforms are also included in Annex V.


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Current Bangladesh position Common international practice

Currently in Bangladesh, only ocean going ships (classified ships) are said to comply with theMARPOL requirements. However, marine environment includes also coastal shipping, and inlandships on coastal voyages. Many countries also make the requirements apply to all ships (even thosein non-commercial service), not only in the marine environment.

With regard to MARPOL, surveys are only carried out for ships on international voyages (classifiedships), and the surveys and certification are carried out by the class. In most countries, surveys andcertification are delegated to classification societies for ships that are classified, while the maritimeadministration carries out survey and certification on non-classed vessels. Port State Control isusually not delegated to classification societies.

Classification societies are generally financed by the users/ships that receive certificates. However,many maritime administrations are also, at least partly, financed by users/ships (e.g. Norway). Theway it is arranged varies. In some countries, the payments are made to the State Treasury, while inothers; payments are made to the maritime administration directly. The latter solution requires a trust,which may not always be there. In such cases, an independent fund (trust fund) could be a solution.

Questions

In your opinion;

Question 1: Should MARPOL also be applied to

a) All inland shipping?b) Ships in non-commercial service?

Question 2: Who (which gov. agency) should have the responsibility (and why) for

a) the above (if yes)?b) Fixed and floating platforms?c) Other vessels?

Question 3: Who should have the responsibility of ensuring that:

a) all Bangladesh ships covered are inspected and certified (de-certified)?b) Port State Control (control of foreign ships) is carried out?c) What should be the short and medium term steps to achieve the above?

Question 4: How should the governmental activities in this field be financed?

a) By the State treasury and governmental budgets?b) Partly by the State treasury and partly by users/potential polluters?c) By a trust fund managed independently, and financed by users/potential polluters?d) By budgets managed by DoS, and financed by users/potential polluters?


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GROUP 2Enforcement (incl. monitoring and surveillance)

Requirements of the Convention

Violation of the requirements of the Convention (Article 4)

Any violation of the requirements of the Convention shall be prohibited and sanctions shall beestablished therefore under the law of the Administration of the ship concerned wherever the violationoccurs.Whenever a violation occurs, that Party shall either:(a) cause proceedings to be taken in accordance with its law; or(b) furnish to the Administration of the ship such information and evidence as may be in itspossession that a violation has occurred.The penalties specified under the law of a Party shall be adequate in severity to discourage violationsof the convention and shall be equally severe irrespective of where the violations occur.

Detection of Violations and Enforcement of the Convention (Article 6)Parties to the Convention shall co-operate in the detection of violations and the enforcement of theprovisions of the present Convention, using all appropriate and practicable measures of detection andenvironmental monitoring, adequate procedures for reporting and accumulation of evidence.

Reports on Incidents Involving Harmful Substances (Article 8)A report of an incident shall be made without delay to the fullest extent possible in accordance withthe provisions of Protocol I to the present Convention.Each Party shall make all arrangements necessary to receive and process all reports on incidents.Each Party undertakes to issue instructions to its maritime inspection vessels and aircraft and to otherappropriate services, to report to its authorities any incident referred to in Protocol I.


Currently, Port of Chittagong issues fines (fines of up to 100,000 T, and up to 5 years imprisonment)for pollution in the port area according to Environmental conservation act. Visible detection usedtoday, apparently no procedures for accumulation of evidence and no reporting procedures.In many countries, the coastguard or a special branch of the prosecuting authority of the country isresponsible for investigations, while furnishing of evidence to other parties is carried out by the flagadministration. It should be noted that the investigation of such offences would require knowledge ofships, ship equipment, oily waste, record books, finger printing etc. Detection of illegal discharges isusually covered by regional agreements for the protection of the marine environment, e.g. IndianOcean MoU and the Bonn Agreement (http://www.bonnagreement.org/eng/html/welcome.html). TheBonn agreements include e.g. a common strategy for combating oil pollution, agreed approaches onsurveillance (from airplanes and satellites), and standards for reporting incidents. It is also common tohave agreements with civilian airliners on reporting incidents.

Many maritime administrations are, at least partly, financed by users/potential polluters, and even thetime spent on contravention of the rules is counted. Work carried out by the police, prosecutingauthority or the courts, however, is not counted in that connection. In several countries, e.g. USA,fines for pollution have been channeled to a fund for combating pollution. I have not heard of any

country where fines are transferred to different governmental body (not a fund). An independent fundcould therefore make it easier with contribution from different sources.


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Questions

Question 1: Which authority should be responsible (and why) for:

a) investigations?b) for issuing fines?c) for furnishing evidence to other Parties?d) for maintaining a system for detection and reporting?e) processing reports on incidents?

Question 2: How and where should the size of penalties be decided?

a) Administrative penalties imposed by the DoS and empowered, but not specified, by theAct? Similar to the system proposed in the Draft MSO (see attached)b) by and in the courtsc) Other solution

Question 3: What should be the short and medium term steps to achieve the above?




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GROUP 3

Waste reception facilities

Requirements of the Convention

Reception facilities (Annex I, Regulation 38)

The Government of each Party to the present Convention undertakes to ensure the provision at oilloading terminals, repair ports, and in other ports in which ships have oily residues to discharge, offacilities for the reception of such residues and oily mixtures adequate to meet the needs of the shipsusing them without causing undue delay to ships. Each Party shall notify the Organization fortransmission to the Parties concerned of all cases where the facilities provided under this regulationare alleged to be inadequate.Requirements for reception facilities are also included in Annex II (noxious liquid substances carried inbulk), Annex IV (sewage), Annex V (garbage) and Annex VI (air pollution).


No official waste reception facilities exist today in any port. However, companies buy oily waste(sludge

1?) from ships directly. Chittagong port plans to establish waste reception facilities by 2010.

The provision of waste reception facilities has been a world-wide challenge for many years. A mainreason is that the normal system of user pay (pay for discharge of waste) encourages ships to avoiddischarging to waste reception facilities. The consequences of that system are illegal discharges intothe sea and lack of waste reception facilities in ports.To deal with this in the region, the EU adopted an inclusive fee system, whereby ships must pay awaste fee to the port authority irrespective of whether they deliver waste or not to the waste receptionfacility. The intention of that system is to remove disincentives for ships to discharge before they callports, and to make an incentive for ports to establish waste reception facilities. The system has beenimplemented via Directive 2000/59/EC of the European Parliament and of the Council of 27November 2000 on port reception facilities for ship-generated waste and cargo residues (seeattached).

The system, which probably represents best practice today, implies normally that the portadministration will be in charge of arranging waste reception facilities, storage/treatment in port andtransportation to a treatment facility. The port adm will also be empowered to charge the ships acorrespondent waste fee, irrespective of whether the ships deliver wastes. The overall responsibilityand co-ordination for ensuring adequacy of the reception facilities in a country should normally be withthe maritime administration, while the environmental sound treatment of the wastes taken ashoreshould normally be the responsibility of the environmental authorities.

Questions

In your opinion;

Question 1: What are the advantages and disadvantages of adopting an inclusive fee system inBangladesh on the basis of the EU directive?

Question 2: If the EU directive should be used as a basis, who should have the responsibility (andwhy?) for the system in Bangladesh;

a) at the port level?b) at the national level?

1 Sludg e includes unhea lthy ingred ients, and should b e trea ted in a refinery.


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c) for the environmental sound treatment of wastes taken ashore?

Question 3: If the EU directive should be used as a basis, on what criteria should the waste fee bedifferentiated, if at all?

Question 4: What should be the short and medium term steps to achieve waste reception facilit ies inthe ports of Bangladesh?

GROUP 4

Oil Spill Preparedness and Response

Requirements of the ConventionOil pollution emergency plans (Article 3)Each Party shall require the following to have oil pollution emergency plan:

a) shipsb) offshore unitsc) Sea portsd) oil handling facilities

Oil pollution reporting procedures (Article 4)Each Party shall basically require reporting of oil from:

a) Shipsb) Offshore unitc) Sea portsd) Oil handling facilitiese) Maritime inspection vessels or aircraft and other appropriate services or officials

Pilots of civil aircrafts shall be requested to report any observed oil.Reports shall be made in accordance with principles adopted by IMO.

Action on receiving an oil pollution report (Article 5)Reports shall be assessed, and affected States and IMO (also regional organizations) shall beinformed.

National and regional systems for preparedness and Response (Article 6)

Each Party shall establish a national system for responding promptly and effectively to oil pollutionincidents. It shall designate:

a) The competent national authority with responsibility for oil pollution preparedness andresponse

b) the national operational contact point or pointsc) an authority which is entitled to act on behalf of

the State to request assistance or to decide to render the assistance requestedd) a national contingency plan for preparedness and response

It shall also establish (alone or in co-operation with other states):a) a minimum level of pre-positioned oil spill combating equipmentb) a programme of exercises for oil pollution response organizations and training of relevant

personnelc) detailed plans and communication capabilities for responding to an oil pollution incident.

d) An arrangement to co-ordinate the response and mobilize the resourcesIt shall also ensure that current information is provided to IMO/Regional organizations regarding:

a) Point of contacts and responsibilityb) Pollution response equipment and expertisec) Its national contingency plan


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International co-operation in pollution response (Article 7)The Parties will co-operate and provide advisory services, technical support and equipment for thepurpose of responding to an oil pollution incident, when the severity of such incident so justifies.

Each Party shall take necessary legal or administrative measures to facilitate the arrival and utilizationin and departure from its territory of ships, aircraft and other modes of transport, as well as personnel,cargoes, materials and equipment, engaged in responding to an oil pollution incident. It shall alsoensure the expeditions movement into, through, and out of its territory of such.

Promotion of bilateral and multilateral co-operation in preparedness and response (Article10)

Parties shall endeavour to conclude bilateral or multilateral agreements for oil pollution preparednessand response.


Eastern Refinery has an emergency plan, and apparently also foreign going ships and Chittagongport. Foreign going ships appear also to have reporting procedures.No national system for preparedness and response exists. Bangladesh is part of the South AsianCooperative Environmental Programme (SACEP) and the South Asian Seas Action Plan (SASAP),see attached, which focus on e.g. oil-spill contingency planning. No regional convention yet.However, a draft regional oil spill contingency plan exists (see attached).No pre-positioned oil spill combat equipment exists, and no training or exercises are carried out.No particular measures taken with regard to customs and immigration. Visa is therefore necessary,and a guarantee for bringing equipment into the country.International practice with regard to financing of national oil spill preparedness systems is diverse,varying from exclusively financed by the state via govt budgets to the case where the system is mainlyprivately financed. Apparently, a majority of states build their systems on the polluter pays principle,where potential polluters are required to contribute in one way or another (e.g. USA, Canada,Australia and Norway). The public response is in many cases secondary in many countries (e.g. thementioned), and it is common maintain private response organizations to take care of the practicalaspects of having the primary responsibility. Some countries involve not only the industry in theirsystem, but also ships, via a levy. The mentioned countries, except Norway, also maintain nationalfunds for oil spills. However, it should be noted that some of those funds are only for claimingcompensation in case of oil spills, not funding the preparedness system.

Questions

In your opinion;Question 1: Which institution should the have the role of being the national authority for oil spillpollution preparedness and response in Bangladesh, and why?

Question 2: Which institution should have the role of being the national operation contact point, andwhy?

Question 3: What should be the main items in focus of a national contingency plan for oil spillpreparedness and response for Bangladesh?

Question 4: What should be the short and medium term steps to achieve a national oil spill pollutionpreparedness and response system in Bangladesh?



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Part

Administrative Penalties

Warnings and Contravention Notices

(1) If the Director-General has reasonable grounds for believing that a person or vessel hascontravened any provision of this Act or any rule, he may:

(a) serve such person or the master of the vessel with a written warning;

(b) serve a compliance notice on such person or the master of vessel that:

(i) identifies the contravention and specifies the period within which, and theconditions under which, such person or master must comply with a provision or

request a review in terms of section 0;

(ii) sets out the amount and form of any security that, pending compliance,must be deposited with the Director-General; and

(iii) sets out the penalty payable in the event that the person or master fails tocomply with (i) or (ii); or

(c) serve a penalty notice on such person or the master of the vessel that:

(i) identifies the contravention and specifies the period within which, andthe conditions under which, such person or master must comply with aprovision;

(ii) specifies the period, being not less than thirty days within which thepenalty is payable at the place specified in the notice, or notice must be given of a

request for review in terms of section 0.

(2) If the Director-General is satisfied that the provisions of subsection (1) (b)(i) and (ii) or (c) (i) and(ii) have been complied with, he shall withdraw the compliance notice or penalty notice and:

(a) no further proceedings shall be instituted against the person or master in relation tothe contravention specified in the notice; and

(b) the amount of the security shall be refunded within a period of 15 days after compliance,if applicable.

(3) If a person or master on whom a compliance notice has been served in terms of subsection (1)(b),fails:


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(a) to comply with subsection (1)(b)(i) within the period stipulated in the notice, heshall:

(i) be liable to pay the penalty specified in such notice; and

(ii) forfeit the security deposited with the Director-General to theGovernment.

(b) to deposit the security referred to in subsection (1)(b)(ii) within the period specified,he shall be liable to a penalty equal to double the amount of the security.

(4) If a person or master on whom a penalty notice has been served in terms of subsection (1)(c) fails:

(i) to comply with subsection (1)(c)(i) within the period specified in suchnotice, or

(ii) to pay the penalty in full within the period specified in such notice,

he shall be liable to double the amount of such penalty.

(5) Any penalty imposed in terms of this section is recoverable by the Director-General as if it were acivil debt.

Review

(1) A person served with a notice referred to in section 0, may on or before the date specified in thenotice, or within such period of grace as the Director-General may, upon application, authorize, file awritten application for a review.

(2) A review shall be conducted by a person or persons appointed from time to time by theGovernment by notice in the Official Gazette. Such person or persons shall be neutral individuals ofhigh integrity with appropriate experience in matters related to maritime safety, security and crewingmatters.

(3) A person presiding at a review shall provide the Director-General and the person who filed theapplication for a review with an opportunity consistent with procedural fairness and natural justice topresent evidence and make representations.

(4) The burden of proof shall be on the Director-General to establish that the person or mastercommitted the contravention specified in the notice.

(5) If the holder of

Documents

All Annexes of 9th 4-Monthly Prog Rep