New Employment Injury Scheme Launched for Bangladesh’s Ship Recycling Workers
On March 25, 2026, the International Labour Organization (ILO) and Bimco unveiled a pilot Employment Injury Scheme (EIS) aimed at enhancing safety and compensation for workers in Bangladesh’s ship recycling industry. This initiative is designed to provide financial and medical support to injured workers, addressing the critical safety gaps that have long plagued this hazardous sector. The announcement was made by ILO Senior Adviser Anne Maria La Rosa, highlighting the urgent need for improved worker protection in an industry vital to the global maritime supply chain.
Ship recycling in Bangladesh is essential for the maritime economy, yet it is fraught with dangers, including exposure to toxic substances and frequent accidents. The existing employer-liability system has failed to deliver consistent compensation and social protection for workers, leaving many without adequate support in times of need. The new EIS seeks to rectify this by introducing a pooled insurance model funded by shipowners, allowing for shared risk and timely compensation that aligns with international standards.
How the Employment Injury Scheme Operates
The EIS will function as a voluntary interim arrangement, inviting shipowners who send vessels for recycling in Bangladesh to contribute $0.50 per light displacement tonnage. This contribution can be made by signing a Letter of Intent facilitated by Bimco. The funds collected will be managed by the ILO under a structured governance system, ensuring transparency and accountability. The money will be specifically allocated for worker compensation and administrative expenses, overseen by a national tripartite board comprising representatives from the government, employers, and workers.
This pilot scheme is expected to lay the groundwork for a permanent, wage-based employment injury insurance system. According to the ILO, the initiative could transition into a mandatory national program by July 2027, potentially extending coverage to other sectors beyond ship recycling. The framework draws inspiration from a similar employment injury scheme in Bangladesh’s ready-made garment sector, which has successfully improved compensation mechanisms and expanded worker coverage over time.
Industry Accountability and Future Prospects
The introduction of the EIS represents a significant shift in accountability within the ship recycling industry. Stakeholders believe that replicating this model could address longstanding criticisms regarding worker safety and welfare. However, the success of the scheme will largely depend on the participation of shipowners and global stakeholders.
Zahirul Islam Rinku, former vice president of the Bangladesh Ship Breakers and Recyclers Association, emphasized the importance of this initiative, stating that it would enhance the country’s image and provide long-term support for workers. In the event of an injury or death, affected workers and their families would receive necessary benefits.
Fazlul Kabir, a leader in the Shipbreaking Trader Union, echoed the sentiment, highlighting the need for a reliable compensation system in this high-risk industry. He stressed the importance of worker representation to ensure transparency and fairness, while also calling for stricter compliance with the Hong Kong Convention to reduce accident rates.
Experts view the EIS as a step towards shared responsibility in the industry. Muhammad Ali Shahin, head of advocacy at YPSA, noted that even modest contributions could significantly enhance financial security for workers, marking progress towards aligning economic growth with human dignity. As the pilot scheme unfolds, its impact on worker safety and compensation will be closely monitored, with hopes for a broader implementation in the future.
