ILO and BIMCO Launch Injury Protection for Ship Recycling

The International Labour Organization (ILO), working together with BIMCO, has introduced a pilot employment injury scheme (EIS) aimed at improving protection and rights for workers in Bangladesh’s ship recycling sector. Bangladesh is currently the largest ship recycling nation in the world.

The initiative functions as a type of social insurance system where risks are shared across the industry. Shipowners selling vessels for recycling can contribute to the EIS, helping ensure that workers and their families receive prompt and adequate compensation if a worker suffers permanent injury or death, in accordance with international labour standards. BIMCO has supported the initiative by helping create a letter of intent connected to the scheme.

As part of the pilot program, ship sellers can contribute $0.5 per light displacement tonnage by signing the BIMCO letter of intent. This commitment applies when a vessel is recycled at a Bangladeshi facility that complies with the Hong Kong International Convention for the safe and environmentally sound recycling of ships.

The EIS operates on a voluntary basis and is intended as a temporary system while Bangladesh moves away from its current employer-liability framework. The plan is to replace it with a national employment injury insurance program based on wages, established in law and managed by a national authority.

Authorities in Bangladesh have pledged to make this transition, with the new mandatory system expected to be introduced in July 2027.

“By ensuring that workers in high-risk sectors such as ship recycling are protected against injury and loss, we affirm our collective commitment to fundamental principles and rights at work. This pilot scheme is not just about payments; it is about dignity, security, and the right to a safe and healthy working environment,” said Gilbert F. Houngbo, director general of the ILO.

The employment injury scheme model has already been successfully applied in Bangladesh’s ready-made garment industry, where it currently covers about four million workers and is continuing to expand into additional sectors.

“The ILO scheme offers the shipping industry a tool to strengthen the protection, safety and rights of the workers who recycle our ships,” added David Loosley, secretary general and CEO of BIMCO.