This blog explains the findings of our latest worker accident prevention report for the auto sector - SafetyNit2024 - including which of the top 10 automobile brands have improved (or not) their worker safety policies for their own workers and their supply chain workers. This issue has a significant linkages with Indian Labour Productivity.
Introduction
With 7% contribution to GDP & one-third of India’s manufacturing GDP, Indian automobile sector directly employs about one crore people.
This gives the power (and therefore the responsibility) to the automobile brands over their supply chain - commercial, technical and managerial - and huge influence over government policy and implementation, to make a real difference to the situation.
Of the 10,000 injury cases that Safe in India Foundation (SII) has assisted with the last 8 years, cases from the factories of the Automobile brands are few; almost all accidents are in their deeper supply chains.
A summary view of the existence, and adequacy of automobile brands’ OSH policies and procedures in decreasing order from SafetyNiti 2024
"Can Indian manufacturing professionalize and Indian Labour Productivity, especially in the large Indian auto sector supply chain, improve, with such disregard for workers?":
Click here for opening speech by Mr. Sandeep Sachdeva, Co-Founder & CEO
Release of SafetyNiti2024:
On August 9th, 4th SafetyNiti 2024, the fourth report in the series was launched in presence of workers, supporters and other partners. The report updates the presence of and elements in the OSH related policies available in the public domain, of the top ten automobile brands in India viz. Ashok Leyland, Bajaj, Eicher, Hero, Honda, Hyundai, Mahindra, Maruti Suzuki, Tata and TVS.
New areas covered in SafetyNiti 2024:
Quality of submissions under the new Business Responsibility and Sustainability Report (BRSR) to SEBI
Robustness of the Supplier Code of Conduct, where present
Responsibility of the non-fiduciary auditors of these brands to report better on the worker safety especially in supply chain.
A panel discussion with three injured workers:
Click here for the Panel Discussion with three injured workers from auto component factories
These workers held poor working conditions including poor preventative maintenance, high production pressure and overwork as key factors leading to their injuries. They were clear that the automobile brands that they manufacture parts for, needed to pay heed to their plight and implement policies that provide a much safer work environment.
11-year-old Tamanna is bound with the responsibility to assist/support her mother Basanti for all activities as basic as eating. Ms. Basanti lost both her hands when they got stuck in a malfunctioned power press machine she was pushed to operate. Basanti’s story highlights the need of indispensable adherence to safety protocols and shadow it can otherwise cast on basic living norms of workers and their families.
Expert Panel on BRSR reports and their quality/effectiveness:
Another expert panel discussion including Dr Garima Dadhich, Associate Professor, IICA, Ministry of Corporate Affairs, Ms. Deepika Rao, Executive Director, CIVIDEP India and Ms., Sonvi Khanna, Associate Director, Social Compact, Dasra and Ms. Saroja, Senior Advisor, SII was also held.
The panel discussed the implications of more disclosures of non-fiduciary information required from both Indian and global businesses and how these disclosures have helped improve work environments in different sectors and countries. They were clear that the entire ecosystem has to ensure transparency in disclosures and monitor that required steps to improve the status are indeed taken.
A few SafetyNiti 2024 findings for FY23-24:
Disabling injuries in the automobile brands’ supplier factories is a multi-brand and pan-India problem
Data collected for previous reports indicates that this issue is widespread in the other auto sector hubs, i.e., in Tamil Nadu, Karnataka, Uttarakhand and Rajasthan
2. Two-thirds (67%) of these injuries result in a loss of body parts for the workers
1,073/1,593 workers assisted by SII in FY23-24 (67%) lost body parts
3. Most of these injured workers are/were on contract, earning less than Rs. 15,000 per month, for mostly 12-hour shifts, 6 days a week, for these high-risk jobs
68% of 1,591 workers injured in the automobile brands’ supplier factories in Haryana and Pune, Maharashtra were contract workers
86% of 1,591 workers injured in the automobile brands’ supplier factories in Haryana and Maharashtra earned less than Rs. 15,000 per month, worked six days a week, 12 hours a day for their high-risk jobs. Most report not being paid overtime at twice the rate per law
4. Thankfully, a continuing trend of improvements in OSH policy with:
Upgraded policy adoption by 3 brands - Ashok Leyland, Hero, and TVS), which were bottom three among the top 10 brands as per SafetyNiti23 report
Six automobile brands – Bajaj, Honda, Hero, Hyundai, Tata and Maruti Suzuki now treat their non-permanent workers at par with their permanent workers with respect to OSH policies, but only three for their Human Rights policies
Bajaj is now relatively the most and TVS the least complete of all the 10 automobile brands, though TVS has now informed SII of their starting the process in earnest
Eight automobile brands – Bajaj, Ashok Leyland, Eicher, Hero, Honda, Hyundai, Mahindra, Tata have their SCoCs in the public domain, one (TVS) shared separately with SII while Maruti-Suzuki does not have one
Five automobile brands - Bajaj, Hyundai, Mahindra, Maruti-Suzuki, and Tata – now claim to monitor their Tier 1 (direct) suppliers for OSH and human rights
Five automobile brands - Ashok Leyland, Bajaj, Hero, Honda, and TVS have now defined corrective actions (including the delisting of repeat offenders) for suppliers
5. However, gaps continue to exist in the implementation of OSH in the supply chain:
None of the automobile brands appears to have an SOP or a comprehensive OSH implementation plan for their deeper supply chain
Only four automobile brands – Bajaj, Hero, Honda, and Maruti Suzuki have mapped Tier 2 suppliers
Only three automobile brands – Bajaj, Hero, and Maruti Suzuki have conducted OSH and human rights training covering even 40% of their tier 1 suppliers, no brand as yet extends this to Tier 2 suppliers.
Only three automobile brands – Bajaj, Hero, and Tata have audited/assessed their Tier 1 suppliers with around 40% coverage
Only two automobile brands – TVS and Hyundai have grievance redressal mechanisms for workers (including non-permanent workers) across the supply chain
Only one automobile brand – Bajaj has taken proactive actions to prevent serious worker accidents with the involvement of a significant number of Tier 1 and Tier 2 suppliers
6. On average, the top 8 automobile brands listed in India have reported adequately on less than 40% of OSH indicators in SEBI’s BRSR.
Among the automobile brands for their BRSR report analysis, Bajaj ranks the best. All the brands have been graded as Green, Amber & Red based on status of an indicator.
7. Honda and Hyundai do not appear to report on OSH data in India as BRSR reporting is not mandated for unlisted companies. Though it will be mandated for Hyundai after listing, extending BRSR reporting requirements of huge unlisted privately held companies is needed for a level playing field for listed companies and ensuring accountability for improving working conditions in their Indian supply chain.
8. Audits and assurances by non-financial auditors appear not to adequately address the worker safety issues. Only four auto brands – Eicher, Hero, Mahindra, and Maruti Suzuki have categorically reported evaluation conduction of their policies as part of BRSR by external agency
Recommendations/Way Ahead:
SII has consistently made recommendations on two fronts, i.e., Policy Improvements & Operational implementation and the Top 5 recommendations under each are as below:
Top 5 Policy Recommendations
Boards to take responsibility for worker safety in their deeper supply chain.
Create a joint industry level task force with SIAM/ACMA (with any agreed participation from SII).
Advocate to the government to make BRSR mandatory for all auto sector brands irrespective of ownership structure, for a level playing field and better transparency.
Strategic international compliance and reporting annually on Indicator 8.8 of SDG8 (the only SDG indicator about worker safety)
Set up mechanisms to ensure that workers' voices and feedback in the entire deeper supply chain are heard
Top 5 Operational Recommendation
Map the deeper supply chain to be able to take effective action.
Create, publish, and implement a Supplier Code of Conduct (SCoC) that ensures compliance with NGRBC, ESIC and other rules and regulations.
Include all non-permanent workers in their own factories, in the OSH Policy statement, at par with their own permanent workers.
Improve transparency and accountability of accident reporting in the supply chain, start weeding out habitual offenders and commercially reward the safest factories.
Initiate/strengthen effective ground-level actions, e.g., honest surprise worker safety audits and worker training in regional languages.
Clearly, the government has a huge role to play in terms of laws, reporting systems and overall supervision. Our recommendations to Government stakeholders Ministry of Labour & Employment, Niti Ayog etc. are noted in the report/ Chapter 10 of report.
Conclusion
We are encouraged with the progress - painfully slow though it is. We hope that the automobile brands accelerate their actions and come together to find a joint solution, with the government and indeed the workers, soon to help improve professionalism in their supply chain for faster and more sustainable growth and thereby the Indian labour Productivity (133rd). But the way ahead must focus on sustainable labour productivity not merely on labour productivity.
Stay safe and spread the word to your automobile sector contacts and please send us any feedback you have to help us do our job better at team@safeinindia.org.
SII will continue to works for better occupational safety & health policies in the sector through evidence-based research & advocacy and assisting injured workers (in accident) towards ESIC access. It publishes annual reports CRUSHED & SafetyNiti annually. You can access previous reports here. Investors in the automobile industry have started acknowledging the issue based on previous reports. ICICI Lombard has highlighted SafetyNiti 2023's findings and identified OSH as a risk in their 2023 industry report on Indian manufacturing (p.31).
Media houses have reported on the report. Please read the best coverage yet, from Money Control here.
We welcome any thoughts and suggestions. Stay safe
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