There has been a continuous increase in the number of people who are being hired as contract workers in India. The Annual Survey of Industries (ASI) data on employment in organized manufacturing highlights that in 1997-98, directly employed workers were five times the number of those employed through contractors. By 2014-15, the latest year for which data is available, regular workers in manufacturing were only 1.8 times those employed through contractors.
A recent Oxfam - Workforce Disclosure Initiative (WDI) report 'India: Impacts of Poor Health and Safety Conditions on Vulnerable Workers' highlights that with no legal requirements and stipulations, companies are hiring a large number of contract workers and paying them significantly lower wages, with unregulated working hours, as compared to permanent workers. These workers are also not offered any of the benefits that it would have to give their full-time employees as stipulated by various laws. The report showcases the growing invisibility of contract workers, especially in the supply chain and companies’ apathy towards health and safety concerns towards such workers.
The drive to increase productivity whilst reducing cost is one of the main reasons for workplace accidents, and the Oxfam – WDI report states that a most cursory internet search shows the extent of serious accidents that regularly occur in Indian workplaces, resulting in serious injuries or death of workers; many of which especially for contract workers do not get reported. While interviewing workers for the study, it was realized that many contract workers have to run from pillar to post between the contractor and the employers for years to receive their insurance in case of an accident, and most of them are not able to work anymore due to their injuries.
The India Responsible Business Index, which is an index developed by Oxfam India, along with its partners Praxis, Partners in Change and Corporate Responsibility Watch, analyzes the policies of the top 100 BSE listed companies on social inclusion. The index points out that only half of the top 100 BSE listed companies provide safety training for informal workers, implying that a principal reason for workplace accidents is the lack of safety training given to the workers.
This index analyzes the policies and disclosures of Indian companies based on their Annual Report and the Business Responsibility Report (BRR). The BRR is a framework within the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVG), which was launched by the Government in 2011. The BRR encourages companies to adopt sustainability reporting and disclose data on their ESG (Environment, Social and Governance) metrics. The Securities and Exchange Board of India (SEBI) made it mandatory for the top 500 BSE listed and National Stock Exchange (NSE) companies to report on the same. The Ministry of Corporate Affairs’ recent moved to revise the National Voluntary Guidelines (NVGs) on Social, Environmental and Economic, Responsibilities of Businesses is encouraging. To strengthen India’s business responsibility framework, the revised draft NVGs document included a corresponding Business Responsibility Framework (BRR 2.0). comprehensive framework that asks for both qualitative and quantitative data from companies on their ESG (Environmental, Social and Governance) related disclosures.
These disclosures and analysis based on the findings are extremely important especially in light of the rising dialogue on Sustainable and Responsible Investing in India. In 2017, cKinetics and Oxfam India published the report- ‘Drops before the rain?’, which presented the landscape of Sustainable and Responsible Investing (SRI) in India. This report highlighted that the biggest challenge in India, among others, is the absence of complete and accurate ESG information, and standardization for reviewing the data. Investors will now be able to use the BRR, which is much more detailed and aligns with other international framework as can be be seen in the Ocfam – cKinetics 2019 report ‘Transformational shift or Incremental Change’, to understand how companies are faring viz a viz the health and safety of contract workers in India, among other environmental, social and governance concerns.
This is crucial as in this globalized world investors need to step up and maximize their roles to improve the quality of jobs in companies’ operations and supply chains. As we move towards the fulfilling Sustainable Development Goals (SDGs) 2020 agenda, investors are and should continue amplifying the pursuit of a triple bottom line of “people, planet, profit.
Towards this goal, recently Oxfam and cKinetics has done a sectoral materiality analysis, which provides a Guidebook to using BRR 2.0 for Investing in Indian Corporates.
Health and safety concerns of contract workers can be one of the avenues that investors prioritize while investing in companies. If the workforce is not happy and safe, and if the rights of all workers (including and especially contract workers in the supply chain) are not respected, the growth of Indian companies will not be sustainable and long-term.