The International Labour Organization (ILO), in partnership with BIMCO, has introduced a pilot Employment Injury Scheme (EIS) aimed at enhancing the protection and rights of workers in Bangladesh’s ship recycling yards—the largest in the world.
This initiative functions as a form of social insurance, pooling risks across the industry. By contributing to the EIS, sellers of end-of-life ships can ensure that workers and their families receive fair and timely compensation in cases of permanent injury or death, adhering to international labor standards. To support this effort, BIMCO has developed a letter of intent to facilitate participation.
Under the pilot program, ship sellers can contribute $0.5 per light displacement tonnage by signing the BIMCO letter of intent. This commitment ensures the EIS contribution is made while recycling ships at facilities in Bangladesh that comply with the Hong Kong International Convention for safe and environmentally sound ship recycling.
The EIS operates on a voluntary basis as a temporary protection mechanism, bridging the gap as Bangladesh transitions from its current employer-liability system to a national, wage-based employment injury insurance scheme. This future system, embedded in national law and managed by a national institution, is set to become mandatory by July 2027, with Bangladeshi authorities fully committed to the transition.
“Protecting workers in high-risk industries like ship recycling is a testament to our shared commitment to fundamental labor rights. This pilot scheme is about more than compensation—it’s about dignity, security, and ensuring a safe and healthy work environment,” said Gilbert F. Houngbo, ILO’s director general.
The EIS pilot has already seen success in Bangladesh’s Ready-Made Garment sector, covering approximately four million workers and expanding into other industries.
“The ILO scheme provides the shipping industry with a practical tool to enhance the safety, rights, and protection of workers who recycle our ships,” added David Loosley, secretary general and CEO of BIMCO.