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ILO, BIMCO launch Bangladesh ship recycling injury pilot scheme
New pilot scheme in Bangladesh aims to provide compensation for ship recycling workers suffering permanent injury or death
The International Labour Organization (ILO) and BIMCO have launched a pilot employment injury scheme for workers at ship recycling yards in Bangladesh, with the scheme intended to provide compensation in cases of permanent injury or death.
The two organisations said the initiative was launched on 12 March and is designed as a temporary mechanism ahead of a planned national system.
The voluntary scheme operates as a form of social insurance in which risk is pooled across the industry.
Sellers of end-of-life ships can contribute to the scheme so that workers and their families receive what the ILO described as “adequate and timely compensation, in line with international labour standards, in case of permanent injury or death.”
BIMCO said it helped to deliver a letter of intent to support the arrangement.
ILO director-general Gilbert Houngbo said, “I welcome the replication of the Employment Injury Scheme pilot in the ship recycling sector in Bangladesh.”
He added, “Social insurance is more than a mechanism for compensation – it is a cornerstone of social justice.”
Mr Houngbo also said the pilot is “about dignity, security, and the right to a safe and healthy working environment.”
The employment injury scheme is being introduced while Bangladesh moves away from its current employer-liability system.
It said a new wage-based national employment injury insurance scheme, administered by a national institution and anchored in law, is expected to become mandatory in July 2027.
The ILO said Bangladeshi authorities have committed to that transition.
BIMCO secretary general and chief executive officer David Loosley said ship recycling is “the most environmentally sound way of disposing of a ship when it reaches the end of its operational life” but added it remains “a high-risk industry”.
He said, “We strongly support closing the gap until the national employment injury insurance scheme is operational in Bangladesh.”
Mr Loosley added that the ILO scheme offers the shipping industry “a tool to strengthen the protection, safety and rights of the workers that recycle our ships.”
Under the Ship Recycling pilot, the seller of a ship can pay US$0.50 per light displacement tonne into the scheme by signing the BIMCO letter of intent.
This applies when a ship is recycled at a facility in Bangladesh that meets the standards of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
Contributions will be transferred through a pass-through account and the pilot will be governed by a national tripartite governance board under ILO oversight.
The funds will be ring-fenced and used only for employment injury benefits and administration linked to the pilot, with management aligned to international standards of transparency and good governance.
BIMCO said it advised on the contribution price per tonne, supported development of the pilot project and helped draft the letter of intent.
ILO added that a similar employment injury scheme has already been implemented in Bangladesh’s ready-made garment sector, where it covers about 4M workers and is continuing to expand into other sectors.
Sign up for Riviera’s 13 May 2026 Responsible Ship Recycling Forum:
- Register to attend here: The Responsible Ship Recycling Forum, London.
- View the latest issue of Tanker Shipping & Trade here: Tanker Shipping & Trade.
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