How are the payments made?

The brands’ financial contributions are paid into a separate ILO account and from there, they are regularly transferred to a separate account within the Central Fund. Please find more information on the process of transfer of contributions in the Draft Voluntary Pledge, which can be accessed here.

How will compliance and transparency in the use of the brands’ financial contributions be ensured?

The financial contributions from brands will be made to a separate account of the ILO. From there, they will be transferred to a separate account within the Central Fund on a regular basis. The separate account at the Central Fund is managed by a tripartite Governance Board comprised of representatives from government, employers and workers. The committee’s members are known for their knowledge and expertise in the relevant domains. The contributing brands will be invited to the board’s meetings and relevant documents will be shared to ensure their full understanding and knowledge of the funds’ use and management (financial and institutional governance). The ILO and GIZ are sitting as expert-observers on the Governance Board.

How is public transparency ensured and what kind of financial reports are being provided?

The tripartite Governance Board will respect the International Social Security Association (ISSA) guidelines on good governance which are listed in Annex 2 of the Draft Voluntary Pledge. Internal regulations will be adopted in this regard by the Governance Board. The management of the funds should ensure, amongst others, accountability, transparency, predictability and participation as well as the following requirements: The board will issue a complete annual financial and operational statement and financial statements, accompanied with necessary external/ internal audits. These statements follow a tight predetermined disclosure schedule.

What kind of non-financial contribution is expected from participating brands?

Brands are expected to communicate with their Bangladeshi suppliers to distribute information relevant to the EIS Pilot (e.g. necessity for digital accident reporting, distribution of information materials for workers in factories).
Additionally, brands can engage in a monthly exchange on progress of the EIS Pilot via a brands representative meeting as well as develop complementary initiatives aiming at covering fields not addressed by the Pilot (such as death not related to work, commuting accidents and the costs of their insurance coverage, insurance coverage for temporary incapacity, etc.).

On which basis have the 150 factories for the capacity building and data collection component been selected?

To ensure a representative sample of the RMG sector of Bangladesh, the sample of factories was selected to be around 150 factories covering at least 150,000 workers. The authorities in Bangladesh and social partners have agreed that the selection criteria for factories should be: size of factory: 15% large (more than 1501 workers), 50% medium (701 -1500 workers) and 35% small (less than 700 workers), geographical representativity of factories, and membership of Association: BGMEA (60%) and BKMEA (40%) members.
The selection of factories is almost finalised, but it is an evolving process and the list of factories and workers covered can be adjusted and will surely evolve in time to reflect a representative sample of the industry.

What kind of data do the selected factories have to provide?

The authorities in Bangladesh and social partners have agreed that the basic information required from participating factories will include: number of workers, age and wage of the individual workers, incident rate, time of absence and medical costs related to short term benefits. This data is important to fine-tune the understanding of the costs of a full-fledges employment injury protection in the RMG sector of Bangladesh.
Participating factories are expected to collaborate and share the information mentioned above. A management information system will be used for the data’s proper protection, management and analysis.

Who is covered?

For compensation, all workers of all factories in Bangladesh involved in the production of ready-made garments sold to international buyers (estimated at 4 million workers) are eligible.

Who is eligible for compensation payments under the EIS Pilot?

Two groups are covered under the EIS Pilot. Firstly, workers who are permanently (totally or partially) disabled due to a workplace injury. Secondly, dependants of workers who die because of a workplace injury. Dependants are defined as per the Bangladesh Labour Act.

What benefits are provided?

Top-up pensions payable for life to the permanently disabled workers or to the eligible dependants of a deceased worker. The top-up pension is paid on top of the lump sum payable by the Central Fund (300,000 taka in case of permanent total disability or death and up to 100,000 taka in case of permanent partial disability). It covers the lump sum normally payable by employers according to the Bangladesh Labour Act and should allow the total amount of compensation to amount at least to the compensation level required by ILO Convention 121, Employment Injury Benefits Convention, 1964.
As an example of what beneficiaries receive in payments: Currently, in case of death of a worker, the entitled dependants will receive payments of ca. USD 4000 – 5000 regardless of age or wage, financed half by the Central Fund and half by claims from Employers’ Liability. With the EIS Pilot in place, and if the widow*er is 30 years old and has two kids and the deceased workers’ monthly wage was equal to USD 80, the widow*er would be entitled to receive total benefits (lump sum from the Central Fund plus top-up pension) having a value equivalent of 3x the current compensation.

How are the benefits calculated?

The benefits under the EIS Pilot are monthly pensions payable for the lifetime of the disabled worker in case of permanent disability, and for as long as there are eligible dependants in case of death. Pensions are first calculated in accordance with ILO Convention 121 and as if no lump sum was payable from the Central Fund (or other similar entity) (total pension). Thereafter, the total pension is reduced to consider the lump sum payable by the Central Fund (or other similar entity) (top-up pension).

How will it be ensured that all accidents are being monitored?

Firstly, a digital accident reporting module has been set up by the Department of Inspections for Factories and Establishment (DIFE), which will be linked to the Central Fund claims management. In addition, public sources (e.g. local and national newspapers, social media) are being utilised to monitor accidents in the sector. Thirdly, the ILO – as implementing partner – will liaise directly with concerned factories.

How will it be ensured that all workers in the ready-made garments sector will be informed about the EIS Pilot?

A communication campaign for workers will be rolled out, including a workers’ hotline for grievances.

How do the EIS Special Unit and the Central Fund work together?

A dedicated EIS Special Unit is established under the administrative control of the Director General of the Central Fund. The unit will process all claims related to the EIS Pilot for endorsement by the tripartite Governance Board. The Special Unit enjoys the support of a Senior Adviser expert in claims’ processing.

How is the transition to a comprehensive employer financed Employment Injury Insurance envisaged?

The purpose of the EIS Pilot is to transform the current employment injury protection system and bring the national stakeholders (government, employers, and workers) to a full understanding on how an employment injury insurance scheme works. The successful implementation of the EIS Pilot will help the government and employers to develop a nationally owned employment injury insurance scheme that is fully embedded in the national legal framework.
The EIS Pilot will enable the government to fulfil its role to protect and enforce workers’ rights on health and safety protection in case of work-related injuries. For this to be ensured, a transition period for capacitating the government and social partners is needed.
The EIS Pilot will allow the gathering of data that is necessary to build a fully functioning employment injury insurance scheme. Currently, this data is not available in Bangladesh. The missing data includes commuting accidents, occupational diseases, the risks associated to other sectors of activities beyond RMG, etc.

How will the phasing out of the EIS Pilot take place?

The EIS Pilot is a transformative process based on the following framework: building capacities to implement and govern in the long term while establishing the finances to protect all workers and employers now. During the pilot-period, trust should be increasing amongst social partners and government, administrative processes will become more effective, tripartite governance will be strengthened, data will be improved, and benefits will be paid in line with ILO principles and relevant standards.
After complete operationalising the EIS Pilot and streamlining its operations, efforts will be put in institutionalising a full-fledged nationally owned Employment Injury Insurance in Bangladesh. A legal and institutional framework will be discussed and designed. The voluntary contributions can then be phased out without compromising the compensation to be paid to injured workers and the dependants of deceased workers.

Is there an exit strategy in case the transition to the employer-financed EIS is not taking place?

Suppose there is no normative framework put in place after the 3 – 5 years period. In that case, there is no obligation for the government, the brands or other entities financing the gap to pursue their support. The scheme would stop top-up payments and return to employers’ liability as provided in the current legal framework. In such a scenario, beneficiaries will be paid at least what is provided for in the Labour Code. However, on a positive note, the activities strengthening the institution’s capacities and staff concerned that will have been carried out by then will produce a positive effect anyway.