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Home › Automobile

Auto industry lacks policies to ensure worker safety throughout the supply chain: Report

Emma WillsonJul 09, 2021Automobile
Auto industry lacks policies to ensure worker safety throughout the supply chain: Report
Leading automakers in India do not have adequate policies in place to ensure the safety of workers engaged in manufacturing further down their supply chains, suggests a new report.

Over the past four years, at least 2,600 workers have been injured and 70% of them lost their hands or fingers in the Gurugram-Manesar-Faridabad industrial belt alone, the report stated. A majority of these accidents involved a machine called power press which is quite prevalent for making automotive parts.

The report called Safety Niti 2021 was put together by Safe in India Foundation (SII).

Seven out of the 10 automakers considered for the study did not have any policies to ensure occupational safety and health (OSH) of workers in their supply chain, especially at tier-2 level and beyond. A tier-2 supplier manufactures components for a direct supplier of an automaker.

The automakers analysed include the top eight automakers by market capitalisation listed on the NSE, including

, Tata Motors and Hero MotoCorp. Unlisted companies Hyundai Motor and Honda Motorcycle and Scooter India were also analysed.

For the purpose of the report, SII collated data from publicly available documents of these companies like the business responsibility report, sustainability report, financial reports and codes of conduct, among other things.

“We found that on a number of points, their policies and procedures for their deeper supply chain are very inadequate,” Sandeep Sachdeva, the chief executive of SII told ET.

“The supply chain cannot improve without the auto sector brands pushing for it. They are the buyers, they have the commercial power on these suppliers and they have the expertise,” he argued. “It is not their legal responsibility to take care of workers at tier-2, tier-3 suppliers and beyond, but it is their business responsibility now.”

This comes at a time when environmental, social, and governance (ESG) principles are fast becoming a prerequisite for global investors. In fact, SII stated that the top five investors in the automotive sector in India, including BlackRock, are ESG-oriented.

The number of accidents go up significantly further down the supply chain of the automotive industry as smaller suppliers get involved. As many as 75% of the injured workers that SII helped over the past four years were working at a tier-2 supplier or lower.

Moreover, between 50% and 72% of the workers during these years were working on a contractual basis rather than being full-time employees, which further reduces the liability of the employer in cases of accidents.

“Permanent workers have all sorts of benefits which contractual workers do not have,” Sachdeva said.

The recommendations for automakers made in the report to reduce the number of accidents include having OSH policies for their entire supply chain and explicitly including contractual or temporary workers in these policies.

Further, these companies must demand of their suppliers that all the workers be given a letter of employment and that workers get paid double for overtime. Further all above 45 years of age undergo a health examination and all workers should be registered with the Employees’ State Insurance Corporation (ESIC).

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CategoryAutomobile

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