BGMEA to provide protection to LPP employees

Amid a dispute with Bangladeshi apparel suppliers regarding unpaid dues, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has assured its support in protecting the officials and employees of the Polish fashion brand LPP. At the same time, the organization has backed LPP's stance regarding the overdue payments, stating that demands for recovering dues should be raised against the entities that bear legal liability.

According to a joint statement issued by BGMEA and LPP, it is crucial to ensure that apparel manufacturers and workers not involved in this dispute, as well as the long-standing business relationship between Bangladesh and LPP, are not harmed on Tuesday. Therefore, both parties have urged restraint from sweeping propaganda.

The statement further noted that to manage the situation smoothly and orderly, BGMEA will communicate with relevant ministries, government authorities, and stakeholders in the industrial sector. This will include ensuring that LPP's officers and workers do not become victims of unwarranted harassment, pressure, or baseless legal actions.

However, the joint statement also clarified that this position does not limit any party's right to raise valid claims against legally accountable organizations.

LPP purchases roughly $700 million worth of apparel annually from Bangladesh. Following the onset of the Russia-Ukraine war, the company sold its Russian operations to the country's FES Retail. At the outbreak of the war, LPP had 557 stores in Russia.

Roughly $40 million owed to Bangladeshi garment suppliers remains stuck with FES Retail. LPP's Dhaka office had previously connected Bangladeshi suppliers with that Russian entity. Consequently, suppliers have been contacting LPP to recover their dues.

With payments remaining unsettled for a long time, two Bangladeshi garment-supplying companies filed lawsuits against LPP last month. Following this, police reportedly visited the residences of LPP's Dhaka officials. Amid these circumstances, LPP decided to review its procurement activities from Bangladesh, raising concerns about a potential decline in purchase orders within Bangladesh's garment sector.

In Tuesday's joint statement, LPP clarified that the decision to review procurement activities in Bangladesh was driven by the need to ensure the protection of local employees, legal security, and a stable business environment. This review was not targeted at any specific garment manufacturer. Furthermore, this decision will not impact the commitment to pay dues to entities directly contracted with LPP.

LPP also claimed in the statement that it is not legally liable or a debtor for the invoices and overdue payments currently under discussion. LPP stated that all payments to its direct suppliers and business partners in Bangladesh are regularly settled in accordance with contracts.

Expressing agreement with LPP's perspective, BGMEA stated that any claims for recovering dues should be directed solely at the legally responsible institutions.

The statement also mentioned that over 350 garment factories work with LPP in Bangladesh. To prevent the entire garment sector from being harmed by the disputes of a few third parties, BGMEA and LPP have called for an end to misleading or blanket propaganda.