Is it responsible business?

NDTV Profit has published a news under the heading  'In India's cheap car boom, poor labourers pay a big price'. The news reports that every year, more than 1,000 workers in the auto hub (in Manesar, which is near Gurgaon in Haryana, India), most below 23 years of age, are injured seriously and lose t heir livelihoods. Workers in factories, which are at th e bottom of the value chain and manufacture auto parts, work for twelve hours a day and earn Rs 200 (approximately US $3) per day. Most of them are contract workers who often have little or no access to safety equipment or health benefits. Workers are asked to operate machines without proper training. Main reason for accidents is violation of safety rules.

The parts are manufactured for leading automobile manufacturers in India. The principle of responsible business requires that a responsible company should ensure that good governance practices, including safety norms and ethical standards, have been adopted by each member in the value chain. Leading automobile companies have failed in this respect. They should be hold responsible for accidents in entities, which are at the bottom of the value chain. Unfortunately, Indian law does not hold them accountable for such accidents. Adoption of Responsible Business Guidelines (National Voluntary Guidelines on Social, environmental and Economic Responsibilities of Business) issued by the Ministry of Corporate Affairs, Government of India, is voluntary.

Auto sector is highly competitive. Therefore, the focus is on targets and cost cutting. Compliance of the principles of responsible business requires allocation of additional resources and allowing sub-contractors to earn reasonable profit to enable them to adopt good practices. Therefore, compliance to of soft laws is not a priority.

This is an example that even reputed companies do not follow the principles of responsible business.  It is necessary to remedy the situation.