MAC: Mines and Communities

Bangla Nagar: the backlash

Published by MAC on 2006-09-08

Bangla Nagar: the backlash

8th September 2006

Last week's decision by the Bangladesh government to place a moratorium on the Phulbari coal mine, following its setting aside of an even larger projected deal with Tata, has created a backlash of criticism from G-7 states. They (perhaps wilfully) conflate undoubted bad practices (bribery and failure to observe basic labour rights) in the country with genuine attempts by many sectors in the society to protect Bangladesh from foreign exploitation.

G-7 inquires about graft, Tata deal, labour rights

WTO to review Bangladesh’s trade policy Sept 13-15

Nazmul Ahsan, NewAge

8th September 2006

Most of the countries of the ‘group-seven’ and some powerful members of the World Trade Organisation, have enquired about Bangladesh government’s position on tackling corruption, cost of hartals, tools for protecting the rights of workers and investors and opening of service sector for investment.

They also wanted to know the reasons for the government’s reservation about the proposed investment by Indian conglomerate Tata.

The queries have recently been made to the government through its Geneva mission ahead of the country’s trade policy review by the WTO from September 13-15, sources in the foreign ministry told New Age.

The countries are—the US, Japan, Korea, China, Hong Kong, European Commission, Canada, Switzerland and Turkey.

Other major issues raised by the countries included transit issue, measures for retrenched workers of state-owned enterprises to ensure their safety, discrimination in maritime transport fees, port congestion, enforcement of copyright law, matters relating to procurement regulations, reasons for delay in functioning of the foreign trade institute and criteria for issuing licences for private and foreign telephone companies.

The foreign ministry with the cooperation of the commerce ministry is now busy preparing the country’s position paper based on the queries to be tabled at the review meeting in Geneva, sources said.

A four-member delegation, led by the commerce secretary, Firoz Ahmed, will lead the delegation at the Bangladesh trade policy review meeting taking place after 2000, the sources confirmed.

Canada, a member of G-7 and the WTO asked the government to clarify its efforts on eliminating corruption as the country had been rated as the most corrupt nation by the Transparency International for five consecutive years.

‘Transparency International corruption perception index has rated Bangladesh 158 of 158 in the country rank for the fourth year in a row. What efforts have been undertaken in Bangladesh to tackle the problem of corruption and how has the government procurement reform been useful in this process?,’ reads the enquiry.

The Canadian government also wanted to know the reason for indecision over Tata’s proposed $3 billion investment.

‘What factors does Bangladesh use to decide whether to allow foreign direct investment? For example the recent decision not to allow investment by Tata?’

Canada also made queries about the extent of economic growth hindered by hartals and strikes.

Switzerland wanted to know the objectives and reasons for imposing infrastructure development surcharge and regulatory duty on imported items.

The EC in its questionnaires wanted to know the policy decision of the government on transit, port operations and restructuring of SOEs.

‘What plans do the Bangladesh authorities have for carrying reforms forward, including with regard to its customs regulations, transit and the operation of ports?’ enquired the EC.

The commission also wanted to know about labour standards in the export processing zones and discrimination in fixing licence fees for foreign-owned freight forwarding companies.

Recently, the National Board of Revenue made it mandatory for all foreign freight forwarding companies to deposit $1 million as bank guarantee and $1 million as security in favour of the licensing authority to run their operation in the country.

The fees fixed for the local companies under the similar heads are much less, sources said.

China wanted to know about the government’s reservation about opening the banking, insurance and financial institutions for foreign investors.

Officials in the WTO cell of the commerce ministry feared that the local industry would be hit hard once the government notified the WTO headquarters on the opening of all service sectors, including financial institutions, for foreign investment.

At present, foreign investment is allowed in tourism industry including investment in five star hotels, sources said.

Korea, one of the major investors in the country’s EPZs, enquired about the government’s preparation for addressing ‘recurrence of vandalism’ in export processing zones and protecting foreign investment in the country.

Japan wanted to know why the country did not intend to open its entire service sector and also about the government’s action to prevent malpractice in the customs department.

The US in its queries wanted to know about progress in enforcing the intellectual property right law and enhancing penalty fee for infringement of registered patent.

‘US copyright industries have expressed concerns with book, cable, and optical disc piracy,’ reads the US enquiry.

It asked the government whether it had any plan to increase the penalty for infringement of registered patents and industrial designs.

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