How Dialogue is Shifting Bangladesh’s Textile Industry from Pollution Problem to Pollution Solution

WASHINGTON, February 14, 2017—There is no doubt that the apparel industry is critical to Bangladesh. In 2012 when PaCT began, the apparel industry accounted for 83% of the country’s exports, and it is poised to be a key creator of jobs in the years ahead. Already the ready-made garment industry accounts for 45% of all industrial employment in the country and contributes 5% of total national income.

Across almost every category in the textile industry, the prices of Bangladesh’s goods are the lowest on global markets. This should in theory be a boon to competitiveness. However, a variety of problems plague the apparel industry related to compliance, quality, reliability, and worker safety. All of these are obstacles to increased foreign investment. Another, sometimes overlooked, problem facing the industry is textile production’s role in water pollution. Industrial pollution accounts for 60% of pollution in the Dhaka watershed area, and the textile industry is the second largest contributor after tanneries. There are 719 washing, dyeing and finishing factories discharging wastewater to rivers in Dhaka and according to IFC’s best estimates this is generating as much as 200 metric tonnes of wastewater per tonne of fabric. Despite being surrounded by four rivers, Dhaka’s water supply to its 18 million residents is being threatened by the extremely high levels of pollution.

It’s evident that the textile factories have to date been part of the pollution problem. But could they also be part of the solution?

“It really is in the interest of textile producers to contribute to water sustainability,” notes Alexios Pantelias, Green Competitiveness Global Solutions Lead for the World Bank Group’s Trade & Competitiveness Global Practice. “Gradually reducing factories’ water consumption and reducing the levels of pollution not only benefit the environmental outlook for Bangladesh, but would also contribute to the competitiveness and economic health of the entire textile sector.”

With this mindset, the IFC, a member of the World Bank Group, in partnership with the Embassy of the Kingdom of the Netherlands and other international partners, introduced an initiative called the Water PaCT: Partnership for Cleaner Textile in 2013. PaCT engages with textile buyers, factories, communities, government, and civil society to leverage dialogue as a key ingredient to more eco-friendly textile production. From 2013 to September 2016, PaCT has catalyzed several actionable solutions related to water sustainability:

• Saved 18.4 billion liters of fresh water per year;
• Developed environmentally safe sourcing guidelines for global brands;
• Provided guidance to 215 textile factories in Bangladesh on how to implement cleaner production;
• Conducted the first ever feasibility study for a central effluent treatment plant in the Konabari cluster
• Avoided wastewater to the tune of 15.9 liters per year
• Generated investments of $31 million
• Generated $12.4 million/year in factory savings resulting from resource efficiency

The World Bank Group’s Trade and Competitiveness Global practice now manages one of PaCT’s key pillars – creating dialogue between all of the major stakeholders in Bangladesh’s textile industry.  Mohammed Zahidullah, head of sustainability at DBL Group, one of Bangladesh’s largest apparels manufacturers and exports explained the benefits of organized dialogue: “Dialogue has helped us understand water sustainability, and its implications for the Bangladesh textiles sector, in a comprehensive fashion. It has helped less prominent factories realize how water management can be done in a cost effective fashion.”

Transformational impact can come through a combination of knowledge, coordination, change in behaviors, private sector actions and legal/regulatory reforms. The work being done by PaCT in the area of water sustainability demonstrates that public-private dialogue approaches can make a lasting and meaningful difference in climate-change related interventions – and beyond. Water sustainability has shared benefits, but requires collaborative efforts and major changes in behavior that are often prevented by gaps in knowledge, trust, or connection to other stakeholders. Dialogue helps bridge these gaps and brings stakeholders with opposing agendas together for a common goal.

By building alignment and creating buy-in between all of the major stakeholders, PaCT aims to drive meaningful reforms and inclusive solutions in water sustainability. Facilitating dialogue through thematic working groups has specifically led to three significant results:

• The allocation of $200 million by Bangladesh Bank for a Green Transformation Fund. This gives industries attempting to implement environmentally-friendly processes and technologies - including water sustainability measures – prioritized access to financing.
  
  
• Restrictions on the discharge of hazardous chemicals. The PaCT working group agreed on penal measures related to the use of chemical pollutants and made recommendations to the Ministry of Environment & Forest (MoEF) for official approval and ratification.
  
  
• Incentivizing environmentally friendly technologies. Deliberations were carried out around the development of incentive structures for promotion of technologies that have beneficial impact on the environment when compared to baseline practices. The PaCT working group presented recommendations to the MoEF for official approval and ratification.

Samima Akhter, CR Supply Chain Manager at G-Star Raw, notes, “PaCT has been able to bring together all relevant stakeholders…and adequate research has brought out the key issues relating to especially Government policy.”

The ongoing dialogue created by PaCT, combined with an understanding that environmental concerns could erode Bangladesh’s market share in the global textile market, has helped build a growing consciousness around the importance of and the business case for water efficiency in the textile industry. More and more, consumers are becoming more environmentally conscious in what they buy, and this can affect corporate bottom lines.

Perhaps the most recent victory for PaCT was a partnership with Levi’s announced in September 2016. Levi’s is helping roll out PaCT’s environmental guidance at six facilities across Bangladesh, India, Sri Lanka and Vietnam to start, with plans to expand the program moving forward.

“We are pleased to be the first IFC partner to pilot its PaCT program in additional countries,” Levi’s vice president of sustainability Michael Kobori said in the announcement. “Our goal is to scale the practices globally to achieve greater reductions in water, energy and chemical use across our supply chain.”