Ban on wet-blue exports1 July 2001
Shoe and leathergoods companies have faced a shortage of finished leather over the past few months, resulting from the uncontrolled export of semi-processed leather. This is partly a side effect from the proliferation of small scale butcheries and hide merchants. Many such traders place third party orders for processing to wet-blue and subsequently either export via the processing plant or arrange export themselves. Furthermore, one or two tanneries, short of foreign exchange for imports of chemicals, have stopped finished leather production and switched to wet-blue only for export. This reached a point where finished goods manufacturers could not source sufficient finished leather locally to meet their production needs and approached the government. Government seldom does things by halves and responded with a blanket ban on exports of wet-blue. This, in turn, created serious problems for tanneries producing to finished since all must export a proportion of output as semi-processed in order to earn sufficient foreign exchange for the import of essential finishing materials and chemicals. The Leather Institute of Zimbabwe (LIZ) was asked to prepare a case for easing the ban. Members resolved that hide merchants should offer an agreed, and periodically reviewed, percentage of raw materials to local tanneries; that tanneries should limit wet-blue exports to an agreed percentage of overall semi-processed production, with the balance taken to finished for domestic consumption; that regulations governing the export and import of raw stock and wet-blue should be drawn up by government in liaison with the LIZ; that power to recommend and/or deny issuance of related export/import permits by government should be vested in LIZ, the latter working in conjunction with tanneries. There was no real consensus, rather a majority in favour and a vocal minority in dissent. It will be interesting to observe in the months ahead whether or not the verbal understandings reached are honoured. Certainly, the proposal to invite governmental regulation seems illogical coming from a private sector body. The issues at stake are sectorial rather than national and, one would think, could have been settled without recourse to government. At the annual meeting of LIZ, chairman Olivier Guibert (Bata Shoe Co) categorised the economic situation in Zimbabwe as 'tough'. Nevertheless, the LIZ had entered the new century in a promising manner, he said. Unido had made new laboratory equipment for wastewater analysis and pollution control available. This would not only help in raising environmental and pollution control standards in the leather sector, but would also enable the Institute to provide a wastewater control service to the mining industry, thereby earning additional income. Municipality wastewater services would also benefit from the Unido $5 million project by the provision of state of the art spectrophotometers. Although the World Bank had funded preparation of a US$10,000 strategic development plan for the leather industry in 1999 and the proposals made were approved, including the costings for implementation, there had been no action since.