transformative approach, leading to the introduction of a permanent statuatory
EIS. In March 2022, the Government of Bangladesh notified that the Central Fund will
administer the Pilot and open a separate fund account as well as establish a governance system.
The EIS Pilot was officially launched on 21 June 2022.
The Pilot has two components:
1.data gathering and capacity-building component on occupational accidents, diseases and
rehabilitation, based on a sample of representative factories
Research is carried out on the average medical care costs for workers in case an injury occurs. This
will help identify the resources necessary to ensure that the obligation to provide medical care
enshrined in the Bangladesh Labour Act (BLA) is effectively met.
The research extends to the process adhered to and the benefits provided in case of temporary
incapacity. This will allow to demonstrate, based on reliable evidence, the viability, feasibility
and cost efficiency of a comprehensive EIS in Bangladesh and ensure the affordability of employers’
contributions by testing the impact of a sharing-of-responsibility approach. Approximately 150
factories will be participating in this component, covering at least 150,000 workers
2.risk-sharing component for long-term benefits: payment of ILO-compliant compensations in case
of permanent disability / death for the entire export-oriented RMG sector
Under component 2, the Pilot provides income replacements for the permanently disabled and the
dependents of deceased workers, covering all factories contributing to the export-oriented RMG
sector. This takes the form of periodical payments / pensions as top-ups to the
lump-sum payments of
the Central Fund, rendering the level of benefits compatible with ILO Convention No.
121. These
payments are financed by international brands.
Sustainable Development Goal 1.3
Implement nationally appropriate social protection systems and measures for
all, including
floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
The Pilot thus contributes to a better understanding of how the future system should work to ensure
that workers are compensated adequately and expeditiously regardless of an accident’s magnitude.
The Pilot’s tripartite governance mechanism strengthens national governance structures and ownership
and provides a clear exit strategy after 3–5 years.
The social insurance approach effectively mitigates individual risks, ensuring the long-term
sustainability of the achievement.
By implementing the EIS Pilot, the Ministry of Labour and Employment ensures amounts of
benefits in line with international standards. Thereby, decent living conditions for workplace
accident victims and their families are safeguarded. This directly contributes to the
achievement of SDG 1.3.
Background on EIS
In many countries, a scheme for the protection and compensation of
work-related injuries
constitutes the oldest branch of social security. Most countries adopted the modality of an
employment injury insurance (EII) for the compensation of work-related injuries and diseases. In
the last hundred years, EII has proven to be the most effective and efficient form of employment
injury protection.
No-fault Principle
The concept of EII implies that employers and workers agree to a trade-off:
workers are
compensated for damages resulting from employment injuries without having to prove the
employer’s negligence in court; in return, workers waive their right to sue the employer in the
event of an accident at work; the employers’ liability is thereby limited to the premium they
pay to the insurance scheme, thus eliminating any risk of excessive financial burden resulting
from lawsuits. This leads to adequate and speedy compensation without court cases. An efficient
no-fault and risk-sharing EIS based on the principles and standards of relevant international
labour standards (particularly C. 121 and R. 202) lowers production costs and enables harmonious
work relations. It is a win-win that makes both employers and workers better off.
Collective Sharing / Risk Pooling of Costs by Employers
The total cost of the compensation system is shared by all employers. Every
employer of the
scheme contributes to a common fund in advance. Compensations are guaranteed regardless of
employers’ behavior or financial solvency, even for cases of work-related diseases
Neutral Governance
The right to benefits is established outside the contractual relationship
between worker and
employer and through a public or private carrier. There are no direct disputes or complaints,
leading to systematic, objective, professional and speedy decisions.
