4-5. India's Labor Safety and Health Law Reforms and How Foreign Companies Should Respond

In recent years, India has been undergoing a major reform of its labor safety and health laws, making it a critical compliance issue for foreign companies. Historically, India's labor laws were complex and varied by state, creating a significant burden for companies to understand and comply with. However, a comprehensive framework called the Labour Codes was enacted in 2020, which introduced the Occupational Safety, Health and Working Conditions Code (OSH Code). This is leading to a push for improved working conditions and enhanced worker protection.

1. Overview of the OSH Code

The OSH Code consolidates 13 existing labor safety and health laws into a single framework that applies uniformly across the country. It covers a wide range of workplaces, including factories, mines, construction sites, and warehouses, with the goal of ensuring worker safety and health, improving working conditions, and enhancing welfare. Specifically, it requires the appointment of safety officers and the establishment of health committees based on the size of the establishment, as well as mandatory periodic health check-ups for workers, workplace environment measurements, and the provision of protective equipment.

2. Impact on Foreign Companies

For foreign companies, India's labor law reform necessitates a review of their compliance systems. In manufacturing, in particular, standards for preventing occupational accidents and managing chemical substances are becoming stricter, requiring EHS (Environment, Health, and Safety) management that is aligned with international standards. Audits and stricter penalties by authorities are also increasing. As violations can result in operational shutdowns and large fines, prompt action is essential.

3. Key Practical Responses

• Establish a Legal Monitoring System: A system is needed to continuously track differences between states and upcoming amendments.

• Develop an EHS Management System: Building an internal system based on international standards like ISO 45001 and ISO 14001 is effective for ensuring consistency with local regulations.

• Enhance Worker Education: Regularly conducting safety and health education and training is crucial to embedding a culture of safety at the factory floor level.

• Manage Suppliers: It's important to audit local subcontractors and partner factories to ensure they maintain working conditions compliant with the OSH Code.

4. Challenges and Opportunities for Japanese Companies

While the Indian market holds great potential for growth for Japanese companies, it requires flexible EHS management that adapts to workforce diversity and local culture. Strengthening risk management is not just about legal compliance; it is directly linked to enhancing the corporate brand and securing top talent. Furthermore, from the perspective of ESG investment and sustainable management, a proactive approach to occupational safety and health in India can bolster a company's international competitiveness.

Summary

India's labor safety and health law reform is both a risk and an opportunity for foreign companies. By quickly establishing a system based on the OSH Code and promoting improved working conditions, companies can ensure sustainable business operations and enhance their corporate value.