The recent ‘SafetyNiti 2021’ report by the Safe in India (SII) Foundation, which studied the gaps, opportunities, and best practices in India's top 10 OEMs and their occupational safety and health (OSH) policies for their supply chain, found gross inadequacies.
The bigger picture, as the report states, is that the auto brands’ OSH policies and practices are currently inadequate to promote and ensure worker safety in their deeper supply chain.
For a sector that contributes nearly half of the Indian manufacturing GDP, the Indian labour productivity stands 115th in the world – one of the lowest. Every year, thousands of workers are either injured or disabled due to accidents in the auto-sector supply chain, maiming many for life.
Without urgent improvements in the OSH policies and their adequate implementation, the report cautions that any reduction in these accidents can’t be expected.
The Safe in India Foundation (SII) operates in just the Gurgaon/ Manesar/ Faridabad auto-sector hub, and in just four years, it has found and assisted 2,700+ such injured workers – 70 % of whom had lost their hands or fingers, disabling them for life with devastating impact on their and their families’ financial and psychological well-being.
Nearly 90% of the injured workers that SII assisted are migrants from vulnerable background from UP, Bihar or Odisha, and 65% of them are contract workers. The outbreak of the pandemic further impacted their lives disproportionately.
Key findings
The SafetyNiti 2021 report – done for the first time - analysed publicly available OSH policy and procedural framework of the top 10 Indian auto OEMs for the deeper supply chain. Of these 10, the top eight are NSE-listed OEMs based on market capitalisation as on March 31, 2020, and the two largest unlisted MNC OEMs.
The surveyed OEMs include Ashok Leyland, Bajaj Auto, Eicher Motors, Hero MotoCorp, Honda Motorcycle and Scooter India, Hyundai Motor Company, Mahindra and Mahindra, Maruti Suzuki India, Tata Motors, and TVS Motor Company.
SII maintains that the OEMs should take the lead to improve worker safety in their supply chain due to their leverage over their own supply chains, their expertise, their influence on creation and implementation of government policies and because they are the direct beneficiaries of improvements to labour productivity.
- Although all 10 OEMs mention they have an OSH policy for their own factories, only six have it in the public domain, including Bajaj, Mahindra, Maruti Suzuki, Hero, Tata and TVS.
- OSH policies of most OEMs do not explicitly state that they cover contract/ casual/ temporary workers even in their own factories. Only Bajaj has an explicit documented charter of workplace guidelines for contract workers, which includes health and safety. Only Mahindra and Tata have mentioned compulsory safety induction of contract workers in their reports. Ashok Leyland and Eicher appear to not include contract workers in any way in their policy.
- Seven out of 10 OEMs do not appear to have policies and processes to ensure OSH in the deeper supply chain (especially Tiers 2/3/4). Even though the remaining three – Bajaj, Eicher and Maruti Suzuki – mention safety engagements with Tier 2 suppliers, even they have no examples of deeper supply chain mentioned.
- Only three of the 10 OEMs appear to have a Supplier Code of Conduct needed to align with NGRBC and as recommended in BSE’s guidelines. Of these three, Mahindra and Tata have a SCoC but they do not explicitly mention the deeper supply chain. Maruti, on the other hand, has now committed to create a SCoC.
- None of the OEMs appears to have a stated human rights policy in the public domain, although they mention “respect human rights” or similar language in some of their other documents.
- Mahindra has specifically mentioned internationally proclaimed human rights in SCoC and BR policy. Hyundai stated that its parent company has a human rights policy, which also mentions OSH, working hours, and grievance redressal, and which they verbally advise is applicable to the Indian company. Maruti has now confirmed that their human rights policy will be defined and rolled out. The remaining seven OEMs – Ashok Leyland, Bajaj, Eicher, Hero, Honda, Tata and TVS – have covered human rights only partially (child labour and/or forced labour, etc.) as there are legislations in India for these: non-discrimination, equality, diversity, and freedom of association.
- None of the OEMs appears to have an SOP or an OSH implementation plan for their deeper supply chain. Only Bajaj has reported ISO 18001 certification for its vendors in its Annual Report.
- Although many OEMs report against SDGs, their documents show inadequate reporting of SDG 8 and specifically Indicator 8.8 (labour rights/safety) of SDG 8 and GRI 403.
- Tata, Maruti Suzuki, Mahindra, Eicher, Honda, Hyundai, Hero, Honda and Hyundai map their relevant activities to SDG in group sustainability reports, while Bajaj and TVS do not appear to have sustainability reports in the public domain, which is expected of all OEMs.
Replicable best practices across many of the 10 OEMs
- Maruti Suzuki acknowledged the presence of the deeper supply chain in its Annual Report 2019-20. The report also has examples of Tier 2 audits and machine modifications to improve safety.
- Mahindra has a stated policy to enhance sustainability in its supply chain. Its Business Responsibility Policy includes all nine NGRBC principles.
- Bajaj has a Charter of Fair and Responsible Workplace Practices for Contract Workers. It states: “135 of [Bajaj’s key vendor] members are ISO 14001/OHSAS 18001 certified and the company plans to make such certifications a prerequisite for all BAVA members in the future, except for assembly and 3PL logistics vendors”.
- Hyundai India claims to follow the human rights policy and supplier sustainability guidelines of its parent company in Korea, which states: “Supplier shall disseminate these guidelines fully to sub-tier suppliers throughout the supply chain.”
- Tata Motors and Mahindra each have a SCoC covering OSH.
- Eicher’s Sustainability Report (SR) identifies supply chain as a risk. It states that Eicher conducts supplier audits, which include safety amongst other parameters.
- Hyundai’s policies state: “Specific danger to health and safety is included in unethical practices in Hyundai India’s whistle blower policy.”
- TVS in its Business Responsibility Reports (BRR) states that 100% of the contract workforce is provided with health and safety orientation periodically and 100% suppliers and service providers are assessed for adherence to health and safety practices.
- Ashok Leyland's supplier onboarding ratings include labour practices and review of OSH and legal compliances.
- SII could not find any relevant best practices in the available policies of Hero.
Of the ten OEMs, SII found the publicly available OSH-relevant policies of Maruti Suzuki, Tata Motors, and Mahindra to be relatively better in their coverage of OSH, though they too have considerable ground to cover, particularly with regard to their deeper supply chain. SII expects that the sequel to this report will have more data from OEMs to rank them better.
Key recommendations
The SafetyNiti 2021 report also makes key recommendations not just to the auto OEMs, but the Indian government and its agencies, ILO and trade unions, as well as customers.
For the auto sector, SII recommends making the most of economies of scale, by having all/large OEMs work together to ensure labour welfare in their often common supply chains, protect workers from accidents, and provide remedy to those sick and/or injured by creating common high-level policies and procedures as recommended for individual OEMs.
In addition, OEMs should use their influence with the government policymakers and implementors in the Centre and in states to improve OSH for workers, rather than aiming to cynically and myopically maximise profits at the cost of Indian workers and productivity.
Industry bodies SIAM and ACMA are well-positioned to play an important part by coordinating the implementation of recommendations and enabling the transfer of best practices across the industry.
While the above industry-level action is coordinated, SII recommends each auto-sector OEM to have their OSH policies for the deeper supply chain and implementation plans in the public domain and on their board agenda. Additionally, OEMs must ensure that these OSH policies specifically and explicitly include contract/casual/temporary workers in their own factories to begin with.
The report recommends that OEMs publish clear SCoC and SOP for the deeper supply chain (as also stated in BSE ESG guidelines). Moreover, they should report against SDG 8.8 (and GRI 403, which includes supply chain workers). This recommendation applies to auto-sector OEMs and large Tier-1s. OEMs must also demand from their supply chain that all workers have a letter of employment; all workers above 45 years undergo a health examination; all workers get paid double for overtime; and all workers in establishments that have over 10 staff be ESIC registered and their ESIC Cards be made available on the day of joining.
Conclusion
In the Foreword he wrote for the report, Arun Maira, former member, Planning Commission of India was scathing in his remarks. The SII report holds a mirror to India’s industry leaders. It reveals their values and their business practices, Maira said.
While the auto brands influence business practices and also helps to shape the values of many thousands of enterprises around the country, this report shines a spotlight on the OSH policies of the auto-sector OEMs for their suppliers. “It reveals a disrespect for the lives of workers and the conditions in which they work. The companies may publicly espouse respect for human beings and their rights. The reality, as the report reveals, is different. Safety of workers is not cared for, with tragic and life-long consequences for workers and their families,” Maira wrote.
Clearly, the report would act as an eye opener for many in the sector, government and the overall ecosystem. The safety and health of workers should always be of paramount importance to employers.