|Volume 5 Issue 06 | June 2011|
Covering the Cost of Environmental Compliance
QUAZI ZULQUARNAIN ISLAM assesses the costs and benefits
of an environmentally friendly textile industry.
The textile and apparel industry in Bangladesh is vital for the economy and employment, accounting for 80% of exports and employing 3 million workers. A key point in this is that, practically all garments exported require some sort of wet processing (washing, dyeing and/or finishing). About 1,700 firms are now active in the subsector of wet processing, employing 170,000 workers approximately. But there is a dark side to this.
Textile wet processing is one of the main sources of pollution in many developing countries with a strong textiles industry. Typical to the process are high energy and water consumption and emissions of polluted waste water. Bangladesh is no different.
If you are weighing positives, not much really remains to be said about the textile industry of Bangladesh. It is not only the biggest contributor to foreign exchange earnings of the country, but also a key driver for social change and women empowerment.
This automatically means that the sustainability of this sector is crucial for both economic and social purposes, more so since the Bangladesh export landscape is not very diverse.
But to ensure sustainability, especially in prevailing market conditions, it is critical to be compliant -- both socially and environmentally.
Social compliance has been a very important issue over the years and the factories, the buyers and associations have worked successfully to ensure greater adherence to social compliance in Bangladesh over the last decade.
However, environmental compliance is increasingly emerging as an important issue, especially in the textiles and apparels sector given the high rates of pollution from specifically the washing-dyeing and finishing units.
But the trouble with environmental compliance is that it is still viewed with circumspection by a large part of the industry. While social compliance was a visible problem, inside the industry, environmental compliance is seen, in layperson's terms, as taking care of your garbage, and not many industries are prepared to do that. Also worrying, is that while the cost of social compliance has been internalised by most factories, environmental compliance is still generally perceived as a sunk cost by the industry. Yet it is absolutely vital for the long term sustainability of the sector and to ensure that Bangladesh gains a competitive edge in the apparel market, via greater market access.
Most of the industries that are based in and around Dhaka city usually appear in Savar, Gazipur, and Narayanganj and most of them are situated near rivers and canals. The reason is simple; being located so close to a water body most of these industries did not bother with what they perceived as the sunk cost of a treatment plant, instead choosing to dispose their wastewater and other contaminants into the nearby rivers, canals, ponds and even open grounds or farming land. It should be said that this attitude was aided by lax monitoring by the authorities concerned, in this case the Department of Environment (DoE) which failed completely to cope with the rapidly growing industry. Thus rivers like Buriganga, Shitalakkhya, Turag, Bongshai, etc., are affected by old and new textile industries due to the disposal of highly toxic and hazardous effluents.
To understand the gravity of the situation one needs to understand that most of these industries generate and discharge a lot of wastewater without any form of treatment. From the investigations of NGOs, different organisations and monitoring authority, it has been found that these wastewaters or partially treated wastewater contains contaminants, toxicants and chemicals which are well over the acceptable limit, and may be, there is no other word for it, disastrous to the environment.
On the other hand some textile industries drain their wastewater onto the open ground or farm land, which leads to the reduction of soil fertility in the long run. And all that aside, the chemical odour of the water and other properties negatively affect the people who live in and around these factories.
Over the last couple of years there have been significant pressure points which have forced the industry to adapt or face the consequences. The media has been one of the chief drivers of this change (The Daily Star and Channel i joint effort) and this has understandably led to increased pressure from the government. The DoE, the authority for monitoring and penalising factories have as mentioned, for far too long, been a behemoth who has failed to act properly. But even they have adjusted and have recently inflicted a number of factories with heavy fines.
However, the biggest change agent, or at least the most influential, have been the buyers. Because while the entrepreneurs are possibly strong enough to hold off even a combined media, government drive, the buyers' demands increasingly determine their business practices.
And from the buyers, the message is loud and clear: we want more environmentally compliant sourcing.
Since several years now, buyers are paying more and more attention to sustainability issues in the production chain of garments. Contrary to the trend seen in the 1990s, it is expected that the current trend towards fair and sustainable garments will last.
The main difference is that the companies and organisations currently involved in sustainable fashion all recognise that in order to be successful, there should be no concessions as to the fashion component of garments, what with a more aware consumer and more and more stringent regulations from their home countries.
So, this is a critical time for the industry. With the tri-partite pressure points of the buyers, the government and the media, the time is rife for some change and many entrepreneurs are starting to see that in order to make their business sustainable, these are measures that need to come sooner rather than later.
The first step to greater compliance from the perspective of a factory is possessing a functioning effluent treatment plant (ETP). But unfortunately most of the industries in and around Dhaka city do not possess effluent treatment plants. Latest figures state that the 1,700 washing-dyeing finishing units alone discharge 98,000 cubic metres of waste water into surrounding water bodies and land. This is because a large percentage of those factories do not possess ETPs or do not properly use them.
The reason for such reluctance to change is easy to see. From a business perspective it is easy to misunderstand environmental compliance as a sunk cost or one which will provide no return on investment. From the standpoint of an entrepreneur he sees no monetary gain from it whatsoever and instead derides it as an additional cost that is cutting into profit. To which most will say that this is a necessary sacrifice to ensure the long term health of the environment. But forget even that for a minute, because recent innovations provide that environmental compliance per se, does not even have to be a cost.
Recently, the concept of cleaner production has rapidly emerged across other significant markets in the region and with excellent results. As it stands, if proper “cleaner production” methods are implemented across the industry then it leads to cost savings which can not only cover the cost of compliance but at the same time also create a better working environment and increase profitability.
Which then leads to the obvious question; what is Cleaner Production?
Cleaner Production is an integrated approach which focuses on making the most efficient use of inputs such as energy, water, gas and other raw materials thus minimising waste and pollution at the source. There is a large scope of implementing Cleaner Production in a country like Bangladesh, because there is huge inefficiency in the use of raw materials at the input phase in the factories, i.e., due to improper pricing of products, gas, water and other inputs are not used as efficiently as they could be. And as with every such failure, therein lies an opportunity.
If a factory can properly implement Cleaner Production measures, they can reduce their cost of inputs, increase profitability and most importantly, increase energy efficiency and decrease emissions, thereby reducing their individual carbon footprint and lessening some of the intense pressure on themselves from the community, media and government.
From the standpoint of the factories, this means that they have also managed to reduce operating cost, improve productivity and will be able to gain an improved image which will help them facilitate better market access in the future.
Currently in Bangladesh, a number of factories are piloting Cleaner Production programmes at the behest of some of the large brands in the region and in association with some development organisations. The initial results from one specific such program has been extremely encouraging.
Not only have all the factories showcased an open-mindedness towards change, but more importantly they have embraced the implementation of a number of important Cleaner Production measures. The good thing with this is that even the implementation of some simple, easy to do, quick win measures can see factories realise considerable cost savings.
Most factories showcase significant savings capabilities in electricity and gas usage and considering the resource crunch in these pricey but absolutely necessary raw materials, any change that sees a shift to a more efficient way of using raw materials benefits not just the factories but also the country. In one such specific programme, one factory alone achieved savings of Tk. 25 lakh in a year through the installations of things such as steam traps or condensate piping. Without going into details, it can be said that the potential for savings was huge, and more than enough to cover the cost of say, installing an ETP. In business terms, this would mean, that the factory would no longer view the money put into installing environmental compliance measures as a 'cost'.
The textile industry has just recently suffered through the recession and at this moment still faces a number of key challenges including a resource crunch. However, time and again it has showed its resilience to bounce back. Taking an important step towards a cleaner and greener supply chain is the next big challenge and provided the industry can make informed decisions and examine all possible options, it is one that can also be overcome with flying colours.
Quazi Zulquarnain Islam is a development professional and a reporter with The Daily Star.
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