BIMCO and the International Labour Organization have launched a pilot Employment Injury Scheme (EIS) giving shipowners a straightforward and effective way support safer, more responsible ship recycling in Bangladesh, the world’s leading ship recycling nation.
For shipowners selling end‑of‑life vessels, the EIS provides a simple, transparent mechanism to ensure workers and their families are protected in case of permanent injury or death. By contributing 0.5 USD per Light Displacement Tonne (LDT) through a BIMCO Letter of Intent, sellers can help guarantee that compensation reaches workers quickly and in line with international labour standards. As a result, stakeholders involved in the process will have the certainty that the workers recycling those ships have better protection.
This contribution offers shipowners a concrete way to demonstrate leadership, improve their corporate responsibility and ESG performance, and support improved safety conditions at the ship recycling yards.
Gilbert F. Houngbo, Director‑General of the ILO, underscored the importance of the scheme: “Social insurance is more than a mechanism for compensation—it is a cornerstone of social justice. This pilot scheme is not just about payments; it is about dignity, security, and the right to a safe and healthy working environment.”
The EIS pilot builds on a highly successful model already operating in Bangladesh’s Ready‑Made Garment sector, where it covers around four million workers and continues to expand.
BIMCO Secretary General & CEO David Loosley highlighted the opportunity for the shipping industry to play a proactive role: “Ship recycling is the most environmentally sound way of disposing of a ship at the end of its operational life. But it is a high‑risk industry, so we strongly support closing the gap until the national employment injury insurance scheme is operational in Bangladesh. The ILO scheme offers the shipping industry a tool to strengthen the protection, safety and rights of the workers that recycle our ships.”
A clear commitment to high standards
By signing the BIMCO Letter of Intent and making the EIS contribution, ship sellers automatically also commit to recycling at a facility in Bangladesh that meets the requirements of the Hong Kong International Convention for the safe and environmentally sound recycling of ships. This provides further assurance that recycling is carried out to recognised international standards, set out by the other UN body, the IMO.
The ILO oversees the pilot, with contributions transferred through a pass‑through account and managed by a national tripartite Governance Board. Funds are fully ring‑fenced and used exclusively for employment injury benefits and administering the pilot—ensuring maximum transparency and good governance.
BIMCO has supported the initiative by advising on contribution levels, helping shape the pilot project and assisting in drafting the Letter of Intent.
I am a shipowner, how do I get involved?
Whether your ship is sold directly to an authorised yard in Bangladesh or through intermediaries, the ILO EIS ensures complete transparency.
By formally acknowledging receipt of EIS contributions, the ILO guarantees that seller contributions to the scheme for a given ship, will be allocated effectively to the ship recycling pilot.
Please visit the EIS hub to download the Letter of Intent and find out more about the scheme
