Mensch & Verantwortung

Launch of first employment injury insurance

Hard to believe, but true: Bangladesh is the only country in the top 20 garments exporters that does not have any form of social insurance scheme, including for employment injury. On 21st July the Government of Bangladesh finally launched the first employment injury insurance (EIS) pilot along with ILO, GIZ, employers’ representatives, workers representatives, German and Dutch Embassy and international brands (like Tchibo). I spoke to my colleague from our human rights team in Dhaka, Fatima Chowdhury, about the background. 

Fatima Chowdhury, Tchibo Manager Bangladesh

Fatima, how come your country did not even have accident insurance for employees in the textile industry? 

True, among the top 20 apparel exporting countries in the world, the social protection level for the Bangladesh garments workers is the lowest. There is no simple answer to ‘why Bangladesh didn’t have any employment injury insurance’ until now. Few of the reasons behind it are lower wages, minimum social security and cheap labour cost that helped Bangladesh to stay competitive with other garment exporting countries. This is not only about workers, nor it is specific to garments sector. In general, the people of Bangladesh do not have access to much social security. However, this is not fair. The right to loss of income payments and medical care following a workplace injury is an internationally recognised labour right which all workers must have.

Rana Plaza wasn't a wake-up call?

When the Rana Plaza accident happened, the focus went into making the factories safe, which was certainly the priority at that moment. That’s why Tchibo was instrumental in negotiating the Accord on Fire and Building Safety in Bangladesh and also in 2021 when Tchibo supported extension and expansion of International Accord. It has contributed immensely to improving the working condition in textile factories in Bangladesh. Now that we can say, factories are safer than before, it’s time we also focus on what happens to the workers if an accident happens. While workers have the right to have in a safe working place, it’s equally important to get compensated for workplace accident.

This situation is now changing with the pilot project of the "employment injury scheme". Tchibo is one of the companies supporting this project?

The employment injury scheme (EIS) is a social protection scheme including compensation for medical treatment and rehabilitation services, as well as income loss caused by occupational injuries and disease. The current compensation mechanism that exists in Bangladesh is woefully inadequate and not up to the international labour standard. When an accident happens in a factory which results in permanent disability or death of a worker, the existing system in Bangladesh provides a one-time payment of a minimal lump sum amount for the worker or workers’ family. However, the international labour standard requires to calculate the compensation based on last wage and age of the worker, number of dependents, etc. and make periodical payment.

For example: under existing system, if a worker is permanently disabled from a workplace accident, s/he will get a one-time payment of approximately 200,000 Bangladeshi Taka (2064 €); whereas, as per international standard, if the disabled worker’s last wage was 10000 Taka/month, s/he should receive 6000 Taka/month (61 €) for the rest of his/her life.

The pilot project aims setup a permanent employment injury insurance structure to transition from the current system to the international labour standard. It also has data gathering and capacity building components which would help the national parties to set up a fully-fledged employment injury scheme in a sustainable manner. Tchibo has pledged its support for the pilot employment injury scheme that will be implemented for next five years.

What does this employment injury scheme cover? How many workers benefit from it?

This injury scheme covers periodical compensation for any kind of workplace accident in garment factories in Bangladesh. It will compensate injured workers and dependents of deceased in case of accidents which lead to permanent disability or death. The unique aspect of this project is that the benefit of it is not limited to workers of Tchibo supplier factories or factories of other brands who are supporting this project only. This project will cover all ready-made garment workers in Bangladesh i.e. approximately 4 million workers.

Who pays in the event of an accident at work, for example at a sewing machine? The government?

If today an accident happens at one of the garments factories in Bangladesh, the existing government fund would pay a lump sum compensation as per existing legal framework while a top-up lifetime pension would then be payable from the monetary contribution from brands towards the pilot project to the beneficiaries to meet the international standards.

Which companies are on board?

Along with Tchibo, five other brands are supporting this pilot project. They are: Bestseller, Fast Retailing, the H&M Group, KiK and Primark. Few other brands are currently in conversation with ILO and if all goes well, we might see more companies on board. This pilot is also funded by German Federal Ministry for Economic Cooperation and Development and Dutch Government and ILO and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH are the implementation partners.

What happens after the 5 year pilot phase?

The aim of the pilot project is to show the pathway of establishing a permanent employment injury insurance mechanism which meets international standard, so that, once the pilot ends the local stakeholders can carry it forward. For this, a tripartite committee with representatives from the government, employers’ associations and unions, has been set up. ​​​​​​​

Thank you, Fatima, for the talk!