The textile industry in Bangladesh has been a great engine for boosting economic growth in the country. However, with great success came environmental deterioration. Untreated effluents containing heavy metals are being released into rivers from nearby factories, affecting the health of people who live along the polluted rivers. The existing law in Bangladesh, requiring such factories to install an effluent treatment plant (ETP), has not been effective in reducing environmental noncompliance. This paper aims to investigate the reality of the situation that the textile industry faces regarding environmental compliance. It is based on primary data collected from textile factories in Dhaka through a questionnaire survey with complementary interviews. This study especially highlights the barriers and difficulties faced by factories in the installation and operation of ETPs. The results confirm previous findings: Low willingness of companies to meet environmental compliance requirements and inadequate monitoring and enforcement by government authorities. In addition, we reveal that the dominant barriers to ETP installation are at the purchase stage, rather than the construction stage: ETPs are unavailable in local markets and the import tax is high. Institutional arrangements are required to improve this situation; this could include establishing a subsidy scheme that would encourage voluntary construction of central ETPs. We suggest that external pressure is essential for Bangladesh to change and the external bodies exerting such pressure should have objective measures by which to judge compliance; the quality of river water might be the only reliable measure of environmental compliance in this situation.
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