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ILO, BIMCO Launch Pilot Insurance Program

[ March 13, 2026   //   ]

The International Labour Organization and shipping association BIMCO have launched a pilot insurance program aimed at improving compensation and protections for workers in Bangladesh’s ship recycling industry.

The Employment Injury Scheme will provide financial compensation for workers and their families in cases of permanent injury or death at shipbreaking yards, where dismantling vessels is considered one of the most hazardous industrial jobs.

Bangladesh is the world’s largest ship recycling nation, handling a significant share of the global fleet at the end of vessels’ operating lives.

Under the voluntary program, sellers of end-of-life ships can contribute to the insurance pool when vessels are sent for dismantling at approved recycling facilities in the country. The scheme allows risks to be shared across the industry so that workers receive timely compensation consistent with international labor standards.

The pilot program is intended as a temporary measure while Bangladesh transitions from its current employer-liability system to a national employment injury insurance system. Authorities in the country have committed to establishing a wage-based national insurance program administered by a government institution, with the new system expected to become mandatory in July 2027.

Under the pilot, ship sellers can contribute US50 cents per light displacement ton of a vessel’s weight by signing a letter of intent developed with support from BIMCO. The contribution applies when ships are recycled at facilities that meet standards set by the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.

The ILO said the program will be administered through a dedicated fund managed under international transparency standards and overseen by a national governance board representing government, employers and workers.

“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.

The initiative builds on a similar employment injury insurance program already operating in Bangladesh’s ready-made garment sector that covers about four million workers.

David Loosley said the shipping industry supports the program to strengthen protections for workers in ship recycling yards while the national insurance framework is being developed.

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