Employment injury insurance to benefit workers and employers alike in the RMG sector

DHAKA – Bangladesh’s workforce and industry alike would benefit from the establishment of an employment injury insurance (EII) scheme according to specialists of the International Labour Organization (ILO)

Press release | Dhaka, Bangladesh | 24 January 2015
Speaking at a Stakeholders Workshop on Employment Injury Insurance Programmes held in Dhaka today, Anne Drouin, chief of the ILO Social Protection department said, “An employment injury system for the RMG sector is the most cost effective and socially responsible way to enhance Bangladesh’s reputation and competitive advantage in the RMG sector while allowing workers to be free of worry should they face an accident at work.”
“An employment injury insurance scheme would spread the risks arising from accidents across all RMG enterprises. Everyone could be protected for less than 3 BDT (0.04 USD) per work-day per worker at the minimum wage. This is a sound investment for the RMG sector that will help attract further buyers,” she added.
The workshop was organized by ILO to help create dialogue for a better understanding of what employment injury insurance can do for the RMG sector and the Bangladesh economy as a whole and to explore various designs tailored to the Bangladesh context. Taking part in the event were representatives of the government, workers and employers organizations as well as civil society.
An employment injury scheme is established with contributions from employers and managed by an autonomous body attached to the Ministry of Labour comprising government, worker and employer representatives. Benefits of such schemes are decided by these partners. In other countries, benefits include medical care, rehabilitation services for workers as well as income maintenance for injured workers and their dependants during periods when workers are temporarily or permanently disabled or in case of death.
The workshop heard that setting up an EII scheme would modernize the Bangladesh social protection system and to bring it more closely to the level of those in neighbouring countries where such insurance exists.
“As a first step it makes sense to develop an EII scheme for the ready-made garment sector. This would send a strong signal to brands and buyers that workers are being taken care of and that labour rights in Bangladesh are being taken seriously. Once the scheme is established and operational it could be scaled up to cover workers in all industries in the formal sector,” said Srinivas Reddy, ILO Country Director for Bangladesh.
Participants also heard how lessons from the Rana Plaza disaster have highlighted the importance of establishing an EII scheme and how this experience could serve to rapidly kick-start the new public administration for the scheme once the legal framework is defined and approved.
“Following Rana Plaza an unprecedented effort took place to provide compensation to survivors and families of the dead. However it is not realistic or beneficial to repeat such an exercise whenever accidents occur. Bangladesh needs a national EII scheme to provide reliable, low-cost and no-fault accident compensation insurance for workers. This will be less costly to employers than private insurance and will deliver better protection to ensure that no worker is left behind,” Mr Reddy added.
The workshop heard that development of a national EII scheme for Bangladesh would require active participation of the government, employers and workers. In the first instance, ILO and various development partners are planning to work in collaboration with the Government of Bangladesh and social partners to complete a feasibility study that could serve to develop the autonomous institution to operate the scheme under government supervision.
Participating in the event were Mr. Mikail Shipar, Secretary, Ministry of Labour and Employment (MOLE); Mr Faizur Rahman, Joint Secretary MOLE; Mr Syed Ahmed, Inspector General, Department of Inspection for Factories & Establishments; Mr. Md. Nurul Islam, Member of the Committee, BEF; Mr Shaidullah Azim, Vice President BGMEA; Mr. Abdul Mukit Khan, Chairman, NCCWE; Mr Mojibur Rahman Bhuiyan, Member Secretary NCCWE; Mr.Roy Ramesh Chandra, Secretary General, IBC; Mrs Anne Drouin, Chief, Public Finance, Actuarial Services and Statistics Branch, ILO Geneva and Mr Srinivas Reddy, ILO Country Director for Bangladesh. 

For more information contact please contact:

Steve Needham, email: needham@ilo.org
Abdullah Al Muyid, email:muyid@ilo.org mob: +88 01713 068384