ILO-Bimco launch injury protection scheme for shipbreaking workers in Bangladesh
Jointly developed by the International Labour Organization (ILO) and Bimco, the pilot scheme will provide financial and medical support to injured workers.
Highlights
- Pilot scheme to provide financial and medical support to injured workers
- Model inspired by RMG sector's employment injury scheme
- Contribution voluntary for shipowners, $0.50 per light displacement tonnage
- Pooled insurance model allows shared risk and timely compensation
- Aiming for permanent, wage-based insurance; national rollout by 2027
A new Employment Injury Scheme (EIS), backed by global maritime stakeholders, has been launched to improve safety and compensation for workers in Bangladesh's hazardous ship recycling industry.
Jointly developed by the International Labour Organization (ILO) and Bimco, the pilot scheme will provide financial and medical support to injured workers. ILO Senior Adviser Anne Maria La Rosa announced the initiative on March 25.
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Ship recycling is vital to the global maritime supply chain, but yard conditions remain hazardous, with exposure to toxic substances and frequent accidents. Despite its economic importance, Bangladesh's employer-liability system has failed to ensure consistent compensation and social protection, leaving a persistent safety gap.
The new scheme seeks to address this by introducing a pooled insurance mechanism funded by shipowners. Under the model, risks are shared across the industry, allowing injured workers – or families in case of death – to receive timely compensation aligned with international standards.
How the scheme will work
The EIS will operate as a voluntary, interim arrangement. Shipowners sending vessels for recycling in Bangladesh can contribute $0.50 per light displacement tonnage by signing a Letter of Intent facilitated by Bimco.
Funds will be channelled through the ILO under a structured governance system, ensuring transparency. The money will be ring-fenced and used solely for worker compensation and administrative expenses, with a national tripartite board – comprising government, employers and worker representatives – overseeing implementation.
The pilot is expected to lay the groundwork for a permanent, wage-based employment injury insurance system. According to the ILO, the scheme could transition into a mandatory national programme by July 2027, extending coverage beyond ship recycling to other sectors.
The framework draws from a similar employment injury scheme in Bangladesh's ready-made garment sector, which has improved compensation mechanisms and expanded worker coverage over time.
A shift in industry accountability
Stakeholders say replicating the model in ship recycling could address long-standing criticism over worker safety and welfare, though its success will depend on participation from shipowners and global stakeholders.
Zahirul Islam Rinku, former vice president of the Bangladesh Ship Breakers and Recyclers Association, said the initiative has been under discussion for some time. "It would improve the country's image and ensure long-term support for workers. If injured, they would be covered, and in case of death, their families would receive benefits," he said.
Fazlul Kabir, Shipbreaking Trader Union leader and coordinator of the Bangladesh Institute of Labour Studies, said, "In this high-risk industry, workers risk their lives every day. A reliable compensation system is essential for them and their families."
He stressed that worker representation must be ensured to maintain transparency and fairness, and called for stricter compliance with the Hong Kong Convention to reduce accident rates.
Experts say the scheme reflects a shift towards shared responsibility. Muhammad Ali Shahin, head of advocacy at YPSA, said even modest contributions can ensure financial security for workers, calling it a step towards aligning economic progress with human dignity.
