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BQSP Newsletter No. 2
January 2007


“A BUSY FIRST YEAR FOR BQSP”

The first twelve months of BQSP (six months inception phase, and the first six months of planned implementation) was completed in December 2006.  Inception activities were completed rapidly and implementation begn in parallel, early in the year.

The inception phase included the launching ceremony, preparation of the programme work plan, identifying and recruiting staff, fact-finding and evaluation.  Coordination, cooperation and sharing of information between the UNIDO sub-components, between UNIDO and ITC, and between BQSP and stakeholders, donors and projects, was given particular emphasis, e.g. UNIDO signed an MOU with GTZ to cooperate in the development of the BGMEA Institute of Fashion and Technology (BIFT).

BQSP, in its first year, has proved to be the catalyst for some important  developments in the field of quality assurance in Bangladesh, with the establishment of the long awaited, and much needed, Bangladesh Accreditation Board (BAB), and the creation of a new private/public governing body for the National Institute for Textiles Training and Research (NITTRAD).

The accreditation act was passed in July 2006 .  A provisional secretariat was established, through cooperation between MoI, BSTI and UNIDO, a development plan approved, and development and promotional activities begun.  These included awareness raising; training; development of international links; drafting regulations and preparing operational manuals; and the establishment of associations of laboratories and certification bodies which will play an active role in the development of the board.  Financial provision for the long term development of BAB is expected to be included in the 2007/2008 budget.  Preparatory work, to be followed up in 2007, on the review of the legal framework has been done by the international consultants on accreditation, standards, certification and consumer affairs.

A review and development plan for the standards setting and certification wings of BSTI was completed.  Retraining of BSTI staff and technical committee members, and development of new procedural manuals and documentation has begun.  New product standards have been submitted to BSTI for adoption and harmonization.  A fast internet link and local area network to all departments was installed.  The Director General BSTI attended the 29th ISO General Assembly in Ottawa in September 2006.  A review and development plan for CAB was prepared by Consumer International.  UNIDO, together with MoI, is exploring ways of providing the necessary sustainable support for CAB to be able to implement the plan.

NITTRAD is the leading institute for training in the primary textiles industry. The agreement to transfer control of NITTRAD from the Bangladesh Textiles Mills Corporation (BTMC) to a newly formed governing body with strong representation from the private sector, an agreement which was reached with assistance from BQSP, was signed in October 2006.  The privatisation of the management of NITTRAD has long been considered by the private sector textile mills (which make a major contribution to the success of Bangladesh garment exports) to be a pre-condition for the institute to achieve its full potential as a world class training and research institution making a major contribution to the development and growth of the sector.  Evaluation and specifications for re-equipping one department of NITTRAD has so far been completed to be followed by plans for all departments in 2007.

BQSP is also supporting the development of the leading institution for the clothing industry, the Institute of Fashion Technology of the Bangladesh Garment Manufacturers and Exporters Association.  Through BQSP, the London College of Fashion, University of the Arts, London, is developing a cooperation agreement with BIFT to upgrade and expand its training programmes.  LCF is the only college in the UK specialising in training and research for the fashion industry, and attracts students from throughout the world.  Plans for upgrading BIFT facilities will be finalised once the programme with (LCF) has been agreed early in 2007.

If BAB is the apex of the national quality management system which is being developed with the support of BQSP, the foundation is the new metrology laboratory of the Bangladesh Standards and Testing Institute (BSTI) which is being created under BQSP.  Design and specification of the new laboratory premises and equipment has been completed.  Upgrading of the premises and installation of new equipment is scheduled to be completed during 2007.

Design and specifications have also been prepared for construction and commissioning of three new laboratories for the Inspection and Quality Control department of the Department of Fisheries, to be completed by June 2007.  The upgrading of the physical facilities is supported by retraining of laboratory staff and upgrading laboratory practices and standards, and by the introduction of a comprehensive quality assurance and traceability system in the export seafood industry.  Surveys on the current state of QAP, HACCP and traceability systems and practice were done, development plans prepared, and initial re-training given to DOF and private sector personnel.

To sum up the first year of BQSP - inception tasks were completed quickly, the programme has begun well, and there have been some major achievements in each sub-component; UNIDO is cooperating closely with ITC; and the basis for a successful achievement of the programme's objectives has been established.




"ACCREDITATION IN DEVELOPING COUNTRIES"

During the first year of BQSP, the act creating the Bangladesh Accreditation Board (BAB) was passed.  With assistance from UNIDO, the provisions of the act are being implemented, and BAB has commenced operations.  The following article on the importance of, and the functioning of an accreditation system is adapted from the UNIDO publication “Trade Capacity Building - Laboratory Accreditation in Developing Economies'.  The author, Mr John Gilmour, is UNIDO’s international consultant on accreditation for BQSP. (The complete publication can be downloaded from www.bqsp.org/downloads.)

Today the world has become a global village and domestic and export trade is vital to the development of any country's economy.  A developing country's economy may be dependent on the export of foodstuffs and minerals and while such trade has existed for centuries there is enhanced awareness today in regard to the safety of the former and the quality of the latter.  In the developed world the large fully integrated companies of the past (the automotive sector being a good example) have moved away from self dependence to focus on their core activities, outsourcing many components, devices and systems.  In the automotive industry this includes wheels, jacks, exhausts, electronic devices and even dashboard assemblies, and many developing countries with lower labour costs have taken the opportunity of entering this expanding market.  Export is critical to the growth of any country's economy, be it fresh fruit, minerals or manufactured goods.  Adjacent countries can also be involved in the export of infrastructural goods or services that include electricity, water and telecommunications services.

The key to lowering the barriers to international trade is accreditation, the basis of which is to create confidence in the work carried out by certification and inspection bodies,  as well as testing and calibration laboratories, located anywhere in the world.  In the absence of internationally recognised accredited facilities, tests carried out in the exporting country would have to be repeated by a recognised laboratory in the importing country and an adverse test report could result in the rejection of an entire shipment of food or manufactured goods.  As these may have already been transported halfway around the world this could be a very costly exercise for the exporter.  In the field of accreditation this is often summarised by the saying "Tested Once - Accepted Everywhere".  While international trade is fundamentally linked to supply capacity and cost, laboratory accreditation and the recognition of test results is a final determinant as to whether the goods produced by the exporter are acceptable in other countries.  In terms of manufactured products, particularly components that must be built into value-added devices, the customer will usually insist that the factory supplying them has a quality system based on ISO9000:2000 and here again accreditation is key to providing assurance that certification bodies operating in one country follow the same strict procedures as those in others.

While accreditation is often thought to be mainly required for export purposes it has an even larger role to play in a country's domestic economy.  Accreditation or conformity assessment provides confidence to the buyer or user of services.  In the internal economy, accredited laboratories are used to test food and water, concrete, and other building materials, electrical and telecommunication test equipment and the basic measuring instruments used in the manufacturing industry.  When you have a blood, urine or other medical test you need to have confidence that the outcome is correct and that you are not incorrectly diagnosed as having HIV/Aids, malaria or a host of other diseases.  Veterinary practices must be able to correctly diagnose rabies and the many bovine diseases that affect both domestic and export sales, e.g. foot and mouth, anthrax, and mad cow disease.  Another core value of accreditation is that it provides confidence for consumers that everything, from food and water, to electrical appliances and children's toys, and even motor vehicles, are safe and meet the conditions and standards imposed by the country's regulatory authorities.  Protection of consumers has become increasingly necessary with the opening up of global trade, which has resulted in a vast increase in the number of products and services available.  Once again reliable results are essential and the role of accreditation is to ensure that within certain acceptable (and quantifiable) limits, tests of any type made on a product in one country can be repeated with confidence in any other country in the world.

Conformity assessment is a term used to describe the whole process of accreditation and certification and is the process of determining whether products, processes, systems and people, meet specified requirements.  The ISO 9000 quality management system is well known throughout the world. Certification bodies that grant registration have to be accredited by recognised national accreditation bodies.  These same accreditation bodies directly accredit inspection bodies as well as testing and calibration (metrology) laboratories, where the requirements go far beyond a formal quality management system and require evaluation of the technical and infrastructural ability of the organisation to perform specific tests or measurements, or to be proficient in declaring that, for example, pressure vessels are indeed safe.

The details of the intricacies of such accreditation are covered in the relevant ISO/IEC Guides and Standards.  Accreditation is not the only recognised route for conformity assessment but it is the one that offers the least duplication of effort, is the most transparent, most widely accepted and is the least discriminatory option.

The core inherent value of accreditation for laboratories is that a test or measurement carried out on a sample or physical artefact in one county should produce the same result (within the limits of uncertainty of measurement) when carried out by another accredited laboratory elsewhere in the world.  This means that all accredited laboratories throughout the world are subject to the same strict requirements, thus creating the confidence in the whole accreditation process and ensuring that results produced by an accredited laboratory in one country will be accepted by authorities in any other country that is a signatory to the International Laboratory Accreditation Corporation (ILAC) Arrangement or where a specific Mutual Recognition Agreement (MRA) exists. 

The question for a developing country is whether there is a real need for a national body (in terms of cost effectiveness and viability) or whether the needs of the economy could be better served by using another recognised national accreditation body.  Assistance required to establish a national accreditation body starts with basic training and goes right through to the process of Pre-Peer evaluation which allows corrective action to be taken before formal application for approval.  It should be noted that competition between accreditation bodies is rare or non-existent.  ILAC encourages accreditation of laboratories by a local body where it exists.  It is only in exceptional cases, such as lack of the required technical expertise in a specific area, where accreditation by another nation's accreditation body would be condoned.

The task for the emerging economies has been further alleviated by the establishment in 2000 of a Pre-Peer Evaluation Procedure (PEPEP) through cooperation between UNIDO, ILAC and the International Standards organisation (ISO).  The scheme was based on one in operation since 1997 under the auspices of UNIDO, the International Accreditation Forum (IAF) and ISO and which was aimed at countries wishing to establish an accreditation system for certification bodies.   The PEPEP, managed by UNIDO with the support of a Steering Committee including ILAC and ISO, is fully operational and Pre-Peer Evaluations have already been provided to several emerging economies.  Those addressed since 2000 include Argentina, Colombia, Cuba, Egypt, Jordan and Tunisia.

While the requirements for accreditation are onerous, many developing economies have committed themselves to the process and several are already full members of the ILAC Arrangement.  Many others are associate members with operating accreditation bodies, and are striving for full membership and recognition.  Another category of ILAC membership is found in the affiliates. Affiliate members are mostly developing countries that are establishing or have declared their intention to establish an accreditation body in line with the requirements of ILAC.  The board of ILAC is fully aware of the fact that the creation of the ILAC Arrangement was driven by the needs and foresight of the developed countries.  The organisation actively promotes the participation of people from developing countries in their various forums so that their specific problems can be better understood.  A joint IAF/ILAC committee to address the needs of developing countries has been established.  This activity, which forms part of the business plans of both bodies, has its own funding allocation.

Regional accreditation organisations are also important.  For developing countries the most relevant of these is probably the SADC Cooperation in Accreditation (SADCA). SADCA has fourteen member states all of which are classified as developing economies and all of these countries support the concepts and application of accreditation.  Only one country (South Africa) has an established and recognised accreditation body and only one other country in the region (Mauritius) has declared its attention (at this point in time) to establish one.  The other member countries have decided that the most effective way for them to benefit from accreditation is to use one of the other bodies in the region to accredit their in-country laboratories.  Although governmental issues may still have to be resolved this model could possibly be extended into other developing regions of the world, most notably perhaps the rest of the African continent.

In summary, conformity assessment covers a number of complementary activities related to demonstrating to end users that products and services satisfy certain requirements, or meet user specifications.  As indicated above, conformity assessment covers activities such as testing, calibration, inspection and certification.  Services in terms of conformity assessment do not have to be provided nationally but all countries should have access to them, either through international or regional organisations or through cooperative arrangements with neighbouring countries.  Where a country establishes its own infrastructure it should ensure that all elements are addressed at a level sufficient for its requirements. It should not be more elaborate than necessary.



"THE CONSUMERS ASSOCIATION OF BANGLADESH"

Consumer International (CI), the worldwide alliance of national consumer representative organizations   was invited by UNIDO to visit  Bangladesh to assist the Consumer Association of Bangladesh and BQSP to plan and organize the development of the association to be more effective in protecting consumers’ rights in Bangladesh.  The following article is an extract from their report. 

The Consumers Association of Bangladesh was established in 1978  - very early in the worldwide history of consumer organisations in developing countries. It has a substantial record of action across a range of consumer issues and has worked closely with Consumers International throughout its life. For example, it campaigned and promoted public awareness about pesticides and infant feeding from its early years (issues which both became prominent in the region at this time) while most recently addressing the safety of street food, counterfeit and fake foods (labelling) and traditional and complementary medicines.

The CAB is a not-for-profit organisation registered under the Societies Act but does not at present qualify under ‘Section 28’, which would confer limited liability. It is in the process of altering its constitution and structure to enable it to obtain Section 28 registration. 

The CAB is a membership-based organisation, with currently 250 ‘general’ (voting) members and about 500 associates. In addition it has formed a network of local committees, now in place in 47 of the 64 districts of Bangladesh. To be operational a district committee has to have at least 100 members; these are not individually members of the CAB, but are represented in its governance through the district committees, each of which is an institutional member of the national body, with its own voting rights. Direct and indirect membership thus totals several thousand consumers. This level is typical of community-based consumer groups in many developing countries and the framework of local committees is more extensive than many others have achieved.
 
The CAB has a democratic governance structure under which the board (Executive Committee) of nine is elected by the voting members. The Committee serves for two years and members can be re-elected.

The resources available to the CAB have always been severely limited and although they have gradually grown they remain modest. Income comes from membership payments, occasional donations, and programme grants, of which the last remain essential to support anything beyond what volunteer activists might achieve. General Members pay 300 taka (about US$4) a year, associates less. The CAB estimate their average total annual income in recent years at about 5,400,000 taka (US$75,000), of which more than 90% is from grants. Currently, most support comes through a grant under the ‘For People’ programme managed by a consortium of donors  - the Bangladesh Legal Aid Services Trust (BLAST), CARE Bangladesh and the UK Department for International Development (DFID). Previously, Oxfam supported the CAB for several years.    

Costs in Bangladesh are low, and the CAB is able to maintain an office space of about 1000 sq. ft (100 sq. m) and a paid staff of nine. Two further people, including the Executive Director, work full time for much less than a full-time salary. The office itself is under-equipped for the number of staff; there are just three computers, only one telephone line and no photocopier.

The staff are organised into a small project team, one of whom concentrates on price surveys, with others providing accounts and office and information support. Board members and other volunteers contribute substantial time, especially on communications and advocacy. 

The focus of the organisation has been, through deliberate choice, on raising public awareness, through consumer education initiatives and issue-based advocacy/ campaigning. This reflects the professional backgrounds of some of the leading figures, which is strong on communications (the Chairman is a newspaper editor, the Executive Director a journalist, for example) but weaker on research. Some projects have included laboratory testing, though experience of this is limited.

As well as using newspapers and broadcast media for publicity, the CAB publishes its own bi-monthly newsletter, sent to its own members and also distributed widely to government officials and other opinion-formers.   
 
From the stakeholders met during the review visit, the CAB has a high level of recognition with government, standards and business communities and is acknowledged as the principal ‘voice’ of consumer interests. Formal consultation requirements however are limited in the absence of a Consumer Protection Act (below). It was not possible to assess wider public awareness.  

The CAB is directly engaged in standardisation. It is represented on the Board of the BSTI, and there are consumer representatives on a range of technical committees. In addition they are aware of international standards developments through their membership of Consumers International and its standards network which operates through an e-mail list-serve to distribute information and promote and facilitate policy debate..

"ACCREDITATION & NATIONAL SYSTEMS FOR CONFORMITY ASSESSMENT: A VISION FOR BANGLADESH"

Artile submitted by Mr. K M Mostafa Anwar, National Project Coordinator, QMS Component of BQSP.

“If you cannot measure, you cannot improve” is a well-known adage in engineering. Measurements are done in laboratories. Laboratories provide test and measurement results for many purposes - calibration, determining product quality, quality control of manufacturing, compliance with, laws and regulations etc. The reliability, validity and acceptance of those tests and measurements are essential if decisions are to be made on their applications. Accreditation provides a mechanism to provide confidence in the technical competence of the laboratories. Similarly, accreditation can be applied to the other activities broadly referred to as, “conformity assessment” such as certification and inspection to give increased confidence in those activities.

In Bangladesh there are a significant number of existing institutions and organizations engaged in conformity assessment, mainly laboratories owned by government bodies and universities, and in the private sector.  Bangladesh Standards and Testing Institution (BSTI) is indeed a government product certification body responsible for the mandatory certification mark for a range of products for compliance with national standards (BDS).  Calibration services and traceability in measurements through, a national metrology institute is not yet developed to meet the country as well as international technical requirements. There is a small amount of activity in system certification (ISO 9001, EMS14000, HACCP and the like) provided by foreign certification bodies based mainly in India and other Asian countries.  Inspection is at the official level only (largely for import/export inspection) and should ultimately be operable to meet international standards. These are the bodies which would be under a national accreditation programme to facilitate domestic as well as international trade.

Although there are a number of bodies involved in the conformity assessment business in the country, Bangladesh does not have a well-developed technical infrastructure for conformity assessment to meet the international norms and requirements. Here comes the question of selecting and developing a suitable model for national conformity assessment system. Bangladesh is now on the road to develop its system and the creation of the Bangladesh Accreditation Board (BAB) under the Accreditation Act enacted on 16 July 2006 has opened a lot of opportunities to establish a national system in this the area having technical and trade implications. BAB will definitely play an import role in enhancing existing facilities and would ultimately be a catalyst for a much broader development of national technical capacity in the area of metrology, measurement, and quality and conformity assessment. With recruitment of an acting Director -General on 3 September 2006 the Government of the People’s Republic of Bangladesh has officially launched the board. With technical/financial assistance from UNIDO/EU this Board started functioning in the meantime from its secretariat in the Ministry of Industries. In the last couple of decades plenty of discussions have taken place throughout the globe and a number of reliable models have been operating in many countries. A large number of International standards from ISO/IEC and others have already been developed, and accepted for conformity assessment services. To secure smooth access to the developed markets for Bangladeshi products with safety and efficacy under the WTO regime Bangladesh is now looking forward to have its national conformity assessment systems acceptable to the international communities and markets.

 

"A CLOSE LOOK AT RMG INDUSTRY'S MARKETING TOOLS AND THREATS"

Article submitted by Dr Luigi Bertorelli, International Coordinator, Textile/RMG Component of BQSP, published in "The Daily Star" on 4 November 2006.

The readymade garment industry is a key sector in the Bangladeshi economy, With its population totaled 453.7 million and an aver­age GDP per capita amounted to approximately 25,000 euros the EU Members States are among others the higher buyers and bigger con­sumers of the garments produced in Bangladesh, It is worth to have a close look at the marketing tools and threats the manufactures and exporters have to face to increase their volumes and turn-over

Although the European Union is already a fact, the most important aspect of the process of full unifica­tion is the harmonization of rules. In the EU contracts not all the regulations have yet been harmo­nised. Work is still in progress in the fields of environmental pollution, health, safety and quality.

Distribution channels differ greatly across the EU member states. The UK has a high concen­tration of distribution, which is reflected in the relatively low market share of independent retailers. The southern member states, Portugal, Italy and Spain, however, have high market shares for inde­pendent retailer. These retailers buy mainly from manufacturers and wholesalers/importers, con­trary to Germany and The Netherlands for instance, where many independent retailers are members of buying co- operations.

Specialists (Independents and multiples) accounted for 57 percent of clothing sates, but a growing role is played by non-specialised distrib­utors. Other important develops are the increasing integration in the value chain, increasing con­centration and growing interna­tionalization. This also means increasing competition between branded labels, private labels and even non-branded products.

For that reason most of the major retail organisations have set up their own buying organisations in low-labour-cost countries. Bangladesh is one of those. Germany is the greatest market for outerwear in the EU. The highest growth rates are In the UK and Spain, while France and Italy showed a moderate growth. For the other  major EU markets including Norway, a moderate 2-3 annual growth is forecasted for the coming years. In recent years, a shift from dresses to trousers/jeans and skirts has occurred regarding women's clothing consumption. The focus on casual and leisurewear will be continued for the coming years, but to a much smaller degree. importer from developing countries are important and still rising in almost all product groups, in par­ticular for casual and leisure prod­uct groups, but also for woven shirts, habits' garments and acces­sories like scarves.

Demand for outerwear in the EU will continue to increase and the number of garments purchased per head of population will con­tinue to rise, but prices will not follow this growth rate.

To satisfy the requirements of European importing companies, the exporters in developing coun­tries will be faced with increased demands for higher quality and environmentally friendly product.

In the EU, the role of wholesal­ers/importers will slightly decline, while the role of clothing and spe­cialised outerwear multiples and, to a lesser degree, buying groups or franchise formula will increase in the coming years. In many European countries, the distribu­tion of outerwear is dominated by a small number of retail organisa­tions. On one hand there are spe­cially multiple stores [like Etam Lingerie, Hunkemjoller) and on the other hand there are more gener­ally oriented department (Debenham, Karstadt Quelle) and variety stores (Marks & Spencer, Hima), clothing multiples (Hennes & Mauritz, Zara, Etam, C& A), textile discounters (Zeeman), value retail­ers (Matalan, Peacock), hypermarkets (Hypermarches) and supermarkets (Aldi, Lidl, Tesco) just to give some example.

Depending on its position in the market, the functions if a particular distribution organisation will be linked with up-or-downstream organisaiions with the same kind of specialisation.  It is also possible for a given organisation to take over [some of) the functions of the latter, in older to improve competitiveness (vertical integration). For Instance, manufac­turers, agents and retailers may also function as importers, while whole­salers may also be manufacturers (vertical integration).

Each of these groups has a different approach to business and the market, with its own specific interpretation of the marketing mix.

 


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