Economic zones to come under eco-friendly performance rating

Highlights

• EZs will be classified based on environmental performance
• Performance categories: management, environmental, social, and economic
• Draft guideline has already been presented to parties concerned
• Pilot activities will commence in three economic zones
• Zones that meet all criteria will achieve platinum recognition

The Bangladesh Economic Zone Authority (Beza) is set to classify the country's economic zones into bronze, silver, gold, and platinum tiers, aligning with international standards to enhance the environmental sustainability of the production process.

The initiative has been undertaken with a focus on meeting the demand for environmentally friendly production in the global market and attracting future investments.

The government is in the process of developing a guideline called the Green and Resilient Economic Zone (GREZ) for this purpose.

On Monday, an event was held at a hotel in the capital to introduce the draft guideline to government stakeholders and representatives from the economic zones.

As per the draft guidelines, economic zones will be categorised into bronze, silver, gold, and platinum tiers, evaluating their environmental, social, economic, and management performance.

This marks the first initiative aimed at categorising the country's economic zones as environmentally friendly on a local level.

Currently, companies engaged in exports in Bangladesh, particularly those in the garment and textile sector, receive LEED (Leadership in Energy and Environmental Design) certificates from the United States Green Building Council (USGBC) in recognition of their environmentally friendly practices. There are over 200 LEED-certified factories in the country.

According to Beza data, the government has launched 100 economic zones, with 92 of them receiving approval. Industrial production has commenced in 12 of these economic zones, while infrastructure development is underway in 32 others.

Beza sources said pilot activities for environmental categorisation will commence in three economic zones, with Bangabandhu Sheikh Mujib Shilpa Nagar in Mirsarai, Chattogram, and Meghna Industrial Economic Zone in Sonargaon, Narayanganj, among the selected locations.

Abdullah Al Mahmud Faruk, project director of Bangabandhu Sheikh Mujib Shilpa Nagar, told The Business Standard, "The draft guideline will be sent to the Prime Minister's Office soon. We hope to finalise it and start operations within the next two to three months if we get approval from there."

He said, "Presently, there are 450 environmentally rated economic zones worldwide. If we can designate our economic zones as environmentally friendly through this rating system, it will have a positive impact on global exports and open up opportunities for increased investment in our country."

Shams Mahmud, managing director of Shasha Denims, one of the largest exporting companies in the country, told TBS, "This initiative comes at a crucial time because the global focus is increasingly on the production of environmentally friendly products. In the future, investors will likely prioritise zones in countries with such ratings."

He further added, "Economic zones that gain recognition for their environmental friendliness will not only foster opportunities for export growth but also attract increased investments. Consequently, there will be healthy competition among zones to uphold their environmentally friendly status."

Md Tofazzel Hossain Miah, principal secretary to the Prime Minister and the chief guest at the seminar on Monday, said, "The EU is implementing various initiatives, such as the Carbon Border Adjustment Mechanism (CBAM) and Due Diligence Act. To maintain competitiveness in our exports to these countries, it is imperative that we adhere to international obligations."

How performance rating will be done

As per the GREZ guideline, economic zones will undergo assessment based on four key performance indicators: management performance, environmental performance, social performance, and economic performance. A total of 21 criteria must be met across these four indicators.

Abdullah Al Mahmud Faruk explained, "For each criterion that is satisfactorily met, five points will be awarded. Consequently, if all the criteria are met in full, a zone will achieve recognition as platinum, signifying the highest level of environmental friendliness."

Suman Chandra Bhowmik, general manager of Meghna Group, said, "At present, we are adhering to nearly 100% of the environmentally friendly conditions, including the operation of a Central Effluent Treatment Plant (CETP). As a result, we anticipate that our zone will attain a platinum rating upon its launch."

International acceptance

At the seminar, Nafiul Hasan, director-general of the Prime Minister's Office, brought up the question of whether the local environmentally friendly rating would receive international recognition.

He emphasised, "Currently, we have factories complying with LEED and ISO standards. Without international acceptance, investors may face challenges in realising profits from the global market."

Furthermore, he noted, "It is essential that we can convincingly demonstrate to investors the profitability of these initiatives."

Shams Mahmud also believes that the performance criteria should align with international standards.

However, Abdullah Al Mahmud Faruk assured TBS that they have indeed prioritised this aspect.