Unit 3

UNIT 3 LICENSING AND REGISTRATION
Structure
3.1 Introduction
Objectives
3.2 Approval, Licensing and Registration of Factories
3.3 Inspection
3.4 Process of Recognition
3.5 Procedure for Grant of License
3.5.1 Normal Procedure
3.5.2 Simplified Procedure
3.5.3 Hallmarking of Gold Jewellery in India
3.6 Standardization and Certification
3.6.1 Consumer Affairs
3.6.2 Customer Complaints
3.7 International Organization for Standardization (ISO)
3.7.1 Benefits of Certification
3.7.2 Six Core Principles of ISO Certification
3.8 ISO 45000
3.8.1 What is ISO 45001?
3.8.2 The benefits of using ISO 45001
3.8.3 Who are the Intended Users of the Standard?
3.9 Safety Audit
3.9.1 OSH Audit Information
3.9.2 OSH Audit Criteria and Standards around the Globe
3.9.3 Classification of Audits
3.9.4 OSH Auditors – Qualifications and Abilities
3.9.5 OSH Audit Programme
3.9.6 OSH MS Audit Activities
3.9.7 Audit Review – The Utilization of Audit Results (Benefits &
Weakness)
3.10 Case Study
3.11 Let US Sum UP
3.12 Key Words
3.13 Answers to SAQ’s
3.1 INTRODUCTION
It is necessary to obtain a license before a factory is started. Section 6 of the

Factory Act, 1948 provides that the State Government may make the rules
required for the purposes of this Act, the submission of plans or any class or
description of factories to the Chief Inspector or the State Government, and the
plans and specifications of a factory and its location.
The Amendment of 1976 provides that any replacement and addition to the
factory will not be allowed if it reduces the minimum clear space required for
safe working around the plant or machinery or adversely affects the
environmental conditions from the evolution or emission of steam, heat or dust
or fumes injurious to health.
Objectives
After studying this unit, you should be able to
 understand the procedure of licensing and registration process to start a
factory
 explain the standards for a factory and its premises
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Industrial Acts and Laws
 describe the process of certification for factory

 discuss the national (BIS) and international standards (ISO) of quality
and safety
 know the ISO 45000 for OH & S and its features, and
 understand and acquaint with safety audit, OHS-MS and its process.
3.2 APPROVAL, LICENSING AND REGISTRATION OF

FACTORIES
Under factories act 1948, the procedure for licensing and registration is given
under various sections. The procedures to be followed are given below,
detailing the necessary aspects of the Act:
Provisions under Section 6
Section 6 empowers the State Government to make rules with regard to
licensing and registration of factories under the Act on the following matters:
 Submission of plans of any class or description of factories to the Chief
Inspector or to the State Government;
 Obtaining permission of the State Government or the Chief Inspector
before hand, for the site on which the factory is to be situated and also
for construction or extension of any factory or class or description of
factories. However, replacement or addition of any plant or machinery
within prescribed limits, shall not amount to extension of the factory, if
it does not reduce the minimum safe working space or adversely affect
the environmental conditions which is injurious to health;
 Considering applications for permission for the submission of plans
and specifications;
 Nature of plans and specifications and the authority certifying them;
 Registration and licensing of factories;
 Fees payable for registration and licensing and for the renewal of
licences;
 Licence not to be granted or renewed unless notice specified under
Section 7 has been given.
AutomaticApproval
If an application is made for the approval of site for construction or extension
of the factory and required plans and specifications have been submitted by
registered post to the State Government or the Chief Inspector and if no reply
is received within three months from the date on which it is sent the
application stands automatically approved [Section 6(2)], where the rules
require the licensing authority to issue a licence on satisfaction of all
legal requirements / or record reasons for refusal. Licence could not be refused
only on a direction from Government.
Appeal against Refusal to Grant Permission
If the State Government or Chief Inspector does not grant permission to the
site, construction or extension of a factory, or to the registration and licensing
of a factory, the applicant may within 30 days of the date of such refusal appeal
to:
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Licensing and Registrations
 the State Government against the order of any other authority.

 the Central Government against the order of the State Government;
Notice by Occupier
Section 7 imposes an obligation on the occupier of a factory to send a written
notice, containing prescribed particulars, to the Chief Inspector at least 15 days
before an occupier begins to occupy or use a premises as a factory and at least
30 days before the date of resumption of work in case of seasonal factories. A
seasonal factory is defined as a factory that works for less than 180 days in a
year.
Contents of Notice
A notice must contain following particulars:
i) The name and situation of the factory.
ii) The name and address of the occupier.
iii) The name and address of the owner of the premises or building
(including the precincts, etc., thereof referred to in Section 93).
iv) The address at which communication relating to the factory should
be sent.
v) The nature of manufacturing process to be carried on in the factory
during next 12 months.
vi) The total rated horse power installed or to be installed in the factory
which shall not include the rated horse power of any separate
standby plant.
vii) The name of the Manager of the factory for the purpose of this Act.
viii) The number of workers likely to be employed in the factory.
ix) Such other particulars as may be prescribed.
x) Notice where new manager is appointed.
Whenever a new manager is appointed, the occupier shall send to the Inspector
a written notice and to the Chief Inspector a copy thereof, within seven days
from the date on which such person takes over charge.
When there is no manager – occupier deemed as manager
During a period for which no person has been designated as manager of a
factory or during which the person designated does not manage the factory any
person found acting as manager, will be the manager for the purposes of the
Act. Where no such person is found, the occupier should be deemed to be the
manager of the factory.
3.3 THE INSPECTION
The Factories Act empowers the State Government to appoint Inspectors,

Chief Inspectors of Factories, Additional Chief Inspectors, Joint Chief
Inspectors and Deputy Chief Inspectors. Every District Magistrate is an
Inspector for his/her district. No person can act as an Inspector if he / she is or
becomes directly or indirectly interested in a factory or in any process or
business carried on therein or in any patent or machinery connected therewith.
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Inspectors
Section 9 provides that subject to any rules made in this behalf, an Inspector
may exercise the following powers within the local limits for which he is
appointed:
 enter, with such assistants, being persons in the service of the
Government or any local or other public authority, as he thinks fit, and
place which is used, or which he has reason to believe is used, as a
factory ;
 make examination of the premises, plant and machinery;
 require the production of any prescribed register and any other
document relating to the factory, and take on the spot or otherwise
statements of any person which he may consider necessary for carrying
out the purposes of the Act; and
 exercise such other powers as may be prescribed for carrying out the
purposes of this Act.
 no person shall be compelled under this section to answer any question
or give any evidence tending to incriminate himself/herself.
Under Section 91, an Inspector may take a sample of any substance, used or
intended to be used in a factory, for the purpose of finding out whether the
substance is injurious and if the factory is violating any of the provisions of the
Act.
Obstructing an Inspector
Whoever willfully obstructs an Inspector in the exercise of any power
conferred on him/her by or under this Act, or fails to produce on demand by an
Inspector any registers of other documents in his/her custody kept in pursuance
of this Act or of any rules made there under, or conceals or prevents any
worker in a factory from appearing before, or being examined by, an Inspector,
shall be punishable with imprisonment for a term which may extend to three
months or with fine which may extend to Rs. 300 or with both. -Sec. 95.
The onus is on the prosecution to show that a person has obstructed an
inspector.
Duties of Inspector
It is the duty of factory inspectors to enforce the provisions of the Factories Act
and other industrial laws. For this purpose they inspect factories periodically. If
any rule is violated they take steps like prosecuting the guilty persons etc.
Certifying Surgeons
Under Section 10, the Act provides that the State Government may appoint
qualified medical practitioners to be certifying surgeons for the purposes of the
Act for specified local areas or for specified factories or class of factories.
No person can be a certifying surgeon for a factory or industry in which he is
interested directly or indirectly.-Sec. 10(3).
The State Government may by order in writing and subject to specified
conditions, exempt any person or class of persons from the provisions of this
sub-section in respect of any factory or class or description of factories.
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Duties of Certifying Surgeon

The certifying surgeon has the following duties under the Act and the rules
framed under it.
 The examination and certification of young persons.
 The examination of persons engaged in dangerous occupations or
processes in factories.
 Medical supervision of factories in cases where such supervision had
been prescribed owing to the dangerous nature of the work carried on
or for any other reason, viz.,
 cases of illness have occurred which it is reasonable to believe are due
to the nature of the manufacturing process carried on, or other
conditions of work prevailing therein;
 by reason of any change in the manufacturing process carried on or in
the substances used therein there is a likelihood of injury to the health
of workers employed in that manufacturing process ;
 young persons are, or about to be employed in any work which is likely
to cause injury to their health.
SAQ 1
a) Describe the provisions under section 6 of the Factories Act- 1948.
b) When does the occupier serve a notice? What are the particulars or
to be furnished (or contents) in the notice?
c) Discuss about the approval process for starting a factory.
d) Enumerate the powers and authorities of Factories Inspector.
e) What are consequences of obstructing factories inspector?
3.4 THE PROCESS OF RECOGNITION
To have a better understanding of the process of recognition, let us consider the

case of a laboratory.
At the outset, a laboratory interested in obtaining recognition and fulfilling the
criteria as laid down shall apply in the application form as prescribed.
Application for Recognition
The lab shall submit the application in duplicate along with application fees
and documents as described below:
 Two copies of current valid Laboratory Quality Manual as per
IS/ISO/IEC 17025 or ISO/IEC/17025.
 Duly filled in check list.
 An undertaking as prescribed.
 Documents authenticating the premises of laboratory in India:
Certificates/ documentary evidence from Registrar of Firms/Directorate
of Industries/ Industries Centre/ Municipal Corporation/ Local Body/
Central Insecticides Board or Drug Controller/ Pollution Control Board
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or any such Competent Authority indicating premises of the applicant

lab will be accepted for the purpose of authentication of premises.
 Documents establishing legal identity of laboratory in
India: Registration Certificate with Service Tax Authorities/ Registrar
of Societies / Certificate of Registration by Company Registrar/
Memorandum of Article in case Applicant lab is a Limited
Company/Partnership Deed in case the applicant lab is under
Partnership/ Certificate from a Chartered Accountant (CA) establishing
the proprietorship of the laboratory business entity in case of
proprietorship lab / Affidavit on Non-Judicial Stamp Paper of Rs.100/-
by Proprietor that he/she is the sole Proprietor duly attested by Notary
Public will be accepted for the purpose of establishing legal identity of
the lab.
 Documents authenticating the premises of overseas laboratory: Any
document from local authority/ Government, authenticating laboratory
premises as per law of the country.
 Documents authenticating legal identity of overseas laboratory: Any
document from local authority/ Government, establishing legal identity
of the laboratory as per law of the country.
 The application is to be signed by the Director(s), Proprietor, Partner(s)
or the Chief Executive Officer (CEO) or any other person so authorized
for the purpose by the management. The name and designation of the
person signing the application shall be recorded legibly in the space for
the purpose in the application form. In case of authorized signatory, a
certificate from the top management of the lab on its official letter head
bearing seal of the laboratory clearly attesting the signature of the
authorized signatory.
The application shall be addressed to Head, Corporate Quality Assurance &
Policy Department (CQAPD), Central Laboratory, Plot No.20/9, Site IV,
Sahibabad Industrial Area, Sahibabad-201010, India.
Scrutiny of Application
All applications shall be scrutinized with respect to criteria laid down and
requirements as per norms. BIS reserves the right to return an application
which is incomplete and found deficient in respect of following:
 Application form is incomplete.
 Application fee with requisite service tax or any other Government levy
as applicable not submitted.
 Proof of legal identity and authentication of premises not submitted.
 Application is unsigned or not signed by the authorized signatory.
 Scope of recognition applied for (product/ IS wise list) not submitted.
 Employees’ list with qualification/experience not submitted.
 List of equipment, IS wise and clause wise for each IS with calibration
status not submitted (as per the format given in application form).
 The scope applied for includes any product not covered under BIS
Product Certification Scheme or the product is not a related product/
raw material.
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 Testing facilities are partial as declared by the applicant and reasons for
the same with justification not provided.
 Latest Quality Manual not submitted.
 Proof of accreditation to ISO/IEC 17025 or IS/ISO/IEC 17025 not
submitted.
Processing of Application
 Recording: All applications found completed with listed documents
and other prerequisites shall be recorded. Every application shall be
assigned a serial number to be known as ‘Application Number’ and
same shall be recorded in a register maintained for the purpose. In all
future correspondence, reference must be made to the ‘Application
Number’.
 Application Fee & Refund: Once the application is recorded,
application fee is not refundable.
 Adequacy Audit: Adequacy audit of the application and quality
manual will be done. Deficiencies observed, if any, will be conveyed to
the applicant lab for clarification/ compliance within given time frame.
 Initial Audit: After satisfactory adequacy audit, a team for initial audit
shall be constituted and communicated to the applicant lab.
 Audit: On deposit of audit fee, the team from BIS will visit the lab for
onsite assessment of the lab’s compliance to the procedures and the
activities enumerated in the documented management system and
relevant management system standard. The audit will also cover the
lab’s requisite infrastructure and demonstration of its technical
competence in testing the products for which recognition is sought
from BIS
 Audit fee: Initial audit fee shall be payable in advance by the applicant
lab as per Clause 2, the details of which shall be provided by BIS. The
initial audit fees shall be payable within prescribed period. Traveling
and stay expenses of the auditor(s) shall be borne by the laboratory as
per their respective entitlements.
 Responsibilities of applicant lab: The lab shall provide the following
assistance to the Audit team during the assessment:
 Arrangements of travel, stay and local guidance etc.
 Ensure availability of all concerned personnel for the
purpose of assessment.
 Due co-operation to the auditor(s).
 Necessary infrastructure and logistics to facilitate smooth
conduct of assessment.
Rejection of Application
Application shall be liable for rejection, if
 Lab does not take corrective action(s) on deficiencies observed during
adequacy audit within 45 days.
 Lab does not confirm readiness for audit within 45 days of intimation
from BIS.
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 Non-payment of any prescribed fees.

 Lab does not take/inform corrective action within stipulated time as
agreed between lab and audit team leader/ CQAPD but not exceeding
45 days.
 Lab gives false declaration in the application with respect to
infrastructure, testing facilities, calibration / CRM / SRM and
competence of testing personnel.
 Lab violates provisions of BIS Act, Rules, Regulations or it does not
fulfill any of the conditions for grant of recognition.
 Any Conflict of Interest
 Any other (Past antecedents etc)
Procedure for rejection of application
 A notice for rejection stating the reason(s) thereof, with the provision of
personal hearing shall be served to the lab giving 15 days time to reply,
 If no reply is received within the stipulated time or if the reply is
unsatisfactory or if the plea(s) extended at the time of personal hearing
are not acceptable to the Competent Authority, the application shall be
liable for rejection.
Process for Recognition
Before considering grant of recognition to the lab, corrective actions taken by
the lab on the Non-conformities (NCs), if any, observed during the Audit shall
be physically verified by BIS, if needed, for its closure. Any nonconformity
/inadequacy observed in scrutiny of assessment report shall also be brought to
the notice of lab for necessary corrective actions/ clarifications within specified
time which shall also be verified by BIS. If necessary, follow-up audit may
also be arranged.
Based on the findings of the audit team and recommendations made after due
scrutiny the Competent Authority shall take a decision on the grant of
recognition to the lab or otherwise. The Recognition shall be granted for an
initial period of three years on payment of necessary recognition fee. The name
of the Lab so recognized will be hosted on BIS website.
Obligations of Laboratory
A laboratory recognized by BIS shall:
 Not use the recognition in any manner to which BIS may object.
 Inform BIS about any change made to the Management System which
formed the basis for the grant of the recognition.
 Upon de-recognition or expiry of the recognition, discontinue claiming
BIS recognition and withdraw all publicity material (both in print and
electronic media) which contain any reference thereto.
 Submit a monthly statement of samples received and test reports issued
for BIS samples in the prescribed format (Annexure-7) on every 5th
day of the month for the preceding month to CQAPD, Central
Laboratory, Plot No.20/9, Site IV, Sahibabad Industrial Area, Sahibabad,
Distt-Ghaziabad-201010, email: clpolicycell@bis.org.in
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 Inform BIS about shifting of premises and removal/relocation of any

test equipment/ test facility covered under the scope of recognition.
 Inform BIS if the accreditation as per IS/ISO/IEC 17025 or ISO/IEC
17025 is withdrawn/ expired.
 Apply for renewal six months before validity of recognition expires.
 Update their test facilities in view of issuance of amendment or
revision of any Indian Standard covered in the scope and confirm
availability of appropriate test facilities to BIS.
 Extend full cooperation to BIS in matters of investigation concerning
recognition and/or testing.
 Provide any information sought by BIS in relation to testing of samples.
 Keep BIS informed about changes with respect to testing personnel
clearly indicating the name, qualification, experience, nature of
engagement (i.e. full time, part time, consultant, on call etc.) and the
effective date.

SAQ 2
a) Discuss about the process of recognition and rejection of
applications.
b) Discuss about the process of scrutiny of application for
recognition of laboratory.
c) Describe step by step procedure of processing application for
recognition of a laboratory or a factory.
d) List out the obligations of a laboratory recognized by BIS.
e) When is an application for recognition (of certifying
laboratory) liable for rejection?
3.5 PROCEDURE FOR GRANT OF LICENSE
The Product Certification Scheme of BIS aims at providing Third Party

Guarantee for quality, safety and reliability of products to the ultimate
customer. Presence of ISI certification mark, known as Standard Mark on a
product is an assurance of conformity to the specifications of products /
processes. The importance of ISI certification mark can be well understood
from the fact that over the years, it has truly become synonymous to ultimate
customer satisfaction.
The conformity is ensured by regular surveillance of the licensee's
performance by surprise inspections and testing of samples, drawn from the
factory and also from market.
For getting BIS license, the applicant has the option to choose any of the two
procedures mentioned below i.e.
 Normal Procedure
 Simplified Procedure
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3.5.1 Normal Procedure

In the normal procedure, the applicant is required to submit the filled-in
application along with required documents and requisite fee to the
nearest BIS branch office. Subsequently, after receiving and necessary
recording of the application, a preliminary factory evaluation is carried
out by BIS officer to ascertain the capability of the
applicant/manufacturer to produce goods according to the relevant
Indian Standard and to verify the availability of complete testing
facility and competent technical personnel.
Samples are tested in the factory and also drawn for independent
testing. Grant of license is considered by
BIS provided,
 the samples pass during independent testing,
 preliminary evaluation is satisfactory and
 the applicant agrees to operate the defined Scheme of Testing &
Inspection and pay the prescribed marking fee.
3.5.2 Simplified Procedure
In the simplified procedure, applicant is required to submit the
application for BIS license along with the test report(s) of the sample(s)
tested in the BIS approved laboratories If the test report(s) and other
documents are found satisfactory, a verification visit is carried out by
BIS. The license is granted thereafter if the verification report is found
to be in strict adherence to the specified BIS norms. The applicant also
has the option to get the documents as well as other details as specified
in the application, certified by a Chartered Engineer and submit the
same to BIS. The license then shall be granted after scrutiny of the
documents and report submitted by Chartered Engineer. By this
procedure the license is expected to be granted within 30 days of
receipt of application by BIS, provided all required documents are
furnished and found satisfactory.
3.5.3 Hallmarking of Gold Jewellery in India
Culturally, the Indian people have a great fascination for gold. It should
be recognized that like many other Asian Countries, in India too, gold
has a very important role in our cultural heritage. In some areas gold
even reflects the prosperity and fortune of a family. Precisely for these
reasons, gold is considered as a commodity, and not a product. Any
form of gold is equal to any other form of gold. It is viewed to be
homogenous and indistinguishable, having no brand or expiry date. As
a result, gold demand is not price-elastic. Rather it is prosperity elastic -
that is, increments in household income are generally matched by
purchases of more gold.
Unless alloyed with a comparatively small proportion of some other
metal, both pure gold and pure silver are too soft to withstand wear as
an article for use or adornment. This necessity has always demanded
some system of control if frauds on the public are to be prevented,
because adulteration of articles manufactured from the precious metals
by the introduction of too much of the strengthening alloy is a type of
fraud to which the public is extremely vulnerable. It is easy to
perpetrate, because with both metals a considerable excess of alloy can
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be introduced without changing the color, and is difficult to detect

without technical tests
3.6 STANDARDIZATION AND CERTIFICATION
Bureau of Indian Standards (BIS) is the National Standard Body of India

working under the aegis of Ministry of Consumer Affairs, Government of India.
It has been established under the BIS Act 1986 for the harmonious
development of the activities of standardization, marking and quality
certification of goods and for matters connected therewith or incidental
thereto.
The organization was originally established as the Indian Standards
Institution (ISI) registered under the Societies Registration Act, 1860.
BIS has been providing traceable and tangible benefits to the national economy
in a number of ways
 providing safe reliable quality goods;
 minimizing health hazards to consumers;
 promoting exports and imports substitute;
 control over proliferation of varieties etc. through standardization,
certification and testing.
Keeping in view, the interest of consumers as well as the industry, BIS is
involved in various activities as given below:
 Product Certification Scheme
 Compulsory Registration Scheme
 Foreign Manufacturers Certification Scheme
 Hall Marking Scheme
 Laboratory Services
 Laboratory Recognition Scheme
 Sale of Indian Standards
 Consumer Affairs Activities
 Promotional Activities
 Training Services, National & International level
 Information Services
BIS has its Headquarters at New Delhi and its 05 Regional Offices (ROs) are
at:
 Kolkata (Eastern),
 Chennai (Southern),
 Mumbai (Western),
 Chandigarh (Northern) and
 Delhi (Central).
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Under the Regional Offices are the Branch Offices (BOs) located at
Ahmedabad, Bangalore, Bhubaneswar, Bhopal, Coimbatore, Dehradun,
Faridabad, Ghaziabad, Guwahati, Hyderabad, Jaipur, Kochi, Lucknow,
Nagpur, Parwanoo, Patna, Pune, Rajkot, Raipur, Durgapur, Jamshedpur
and Vishakhapatnam, which offer certification services to the industry
and serve as effective links between State Governments, industries,
technical institutions, consumer organization etc. of the respective
region.
3.6.1 Consumer Affairs
Consumer affairs department aims to achieve the following:
a. To establish, implement and review the mission and vision of the
organization through citizen charter
b. To redress the complaints within the stipulated time as specified in
the citizen charter
c. To organize consumer awareness, educational utilization and
industrial awareness programmes as per the targets set for the
department
d. To provide information on queries on various activities of the
Bureau
e. To provide consumer feedback to the concerned consumer policy
related committee at international level from time to time
All complaints against poor quality of ISI marked products or services
provided by BIS can be sent to Public Grievance Officers (PGOs)
appointed by BIS at all locations where BIS offices exist. The PGOs
after necessary verification of supporting documents forward the
complaint to Consumer Affairs Department (CAD) at Head Quarters
for recording of the complaint centrally.
3.6.2 Customer Complaints
Complaints can be lodged in writing or online on BIS website www.bis.org.in.
For all recorded complaints against ISI marked products or services relating to
its activities such as product certification, standard formulation, management
system certification, sale of standards and publications, training etc, redressal
is done in a time bound manner.
Monitoring of complaints is done centrally by Consumer Affairs Department.
In case, complainant is not satisfied with the redressal of the complaint, he/she
may appeal before Additional Director General of BIS.
3.7 INTERNATIONAL ORGANIZATION FOR

STANDARDIZATION (ISO)
ISO originated from the union of two organizations – the ISO

(International Federation of the National Standardizing Associations) and
the UNSCC (United Nations Standard Coordinating Committee).
In 1946 over 25 countries met at the Institute of Civil Engineers in London to
create a new international organization, where the objective was to ‘facilitate
the international coordination and unification of industrial standards.’ From
this the new organization ISO began operations in February 1947. The word
ISO is derived from the Greek ISOS meaning ‘equal’.
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As the International Organization for Standardization would translate

differently across different languages with different set of acronyms, it was
decided that the short form name for the organization would be ISO.
Today the ISO has grown to a confederation of delegates representing over 150
countries and has published over 16,500 international standards. They meet on
a regular basis to further develop new and existing management standards.
3.7.1 Benefits of Certification
Each standard has its own benefits within every industry, however the common
benefits across the certifications include: widened market potential,
compliance to procurement tenders, improved efficiency and cost savings,
higher level of customer service, and therefore satisfaction, and heightened
staff moral and motivation.
By adhering to a recognized standard, an organization assures its customers
about its commitments towards their needs.
Why ISO Certification?
Apart from the overall improvements in the day to day operations of an
organization, increasing the productivity, reducing the cost etc. getting ISO
certifications has many other benefits too, a few of which are given below :
 Helps the organization build a process to improve efficiency in overall
operation of the business.
 Helps the organization improve customer satisfaction and retain
customers.
 Makes the organization eligible for contracts where ISO certification is
a must.
 Customers can trust the organization easily when they come to know
that it is ISO certified.
 Helps in communicating and marketing, because everyone involved in
the process will follow the same process.
 By displaying the ISO certification, manufacturers establishes their
credibility to the prospective clients.
There are many other benefits of getting ISO certified depending on the type of
industry, such as better waste management, evaluation of raw materials,
efficiency in planning with the help of data, and many other benefits.
3.7.2 Six Core Principles of ISO Certification
 Document Control
Issuing a document with a reference and version number to ensure that
the right document, is in the right place, at the right time.
 Record Control
A record is a completed document. Record control is an efficient
method of finding individual records. It can also refer to how you file,
remove, archive and destroy individual records.
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 Internal Review
An in-depth review of your management system, to ensure that you are
track for your validation audit at the end of the year. This also ensures
that the company satisfies internal audit requirements laid out in the
standard.
 Non-Conformance
A non-conformance is when something happens within the business
that wasn’t planned and will not be accepted either. This could be:
Internal e.g Out of date process / procedure, human error etc. External
e.g Customer complaints, supplier issues etc.
 Corrective Action
A plan created by management to rectify a non-conformance, and to
prevent it from recurring in future.
 Preventative Action
An action to clarify and address potential risks to the business, with a
view to reduce future non-conformances
ISO 9001:2008 is the title of a document (Standard) that outlines the
requirements an organization must accomplish in their quality
system for ISO 9001:2008 certification. There are several different
documents in the ISO 9000 family of standards, but ISO 9001-2008 is
the only ISO standard that requires certification. Here the “2008”
references the year of revision. It was previously called ISO 9001:2000,
which is now obsolete (as are ISO 9002 and ISO 9003) and replaced by
ISO 9001:2008 in the year 2008.
ISO 9001:2008 does NOT define the actual quality of your product or
service. The standard helps you achieve consistent results and
continually improve the process. Thus, if you can make a good
product most of the time, this helps you make it all of the time. It’s just
good business practices.
3.8 ISO 45000 SERIES OF STANDARDS

From the industrial data collated over the years, it was observed that over 6300
people die each day from work-related accidents or diseases - that’s nearly 2.3 million
every year*.
The burden of occupational injuries and diseases is significant, affecting both
for employers and the wider economy, resulting in losses from early
retirements, staff absence and rising insurance premiums.
To combat the problem, ISO has developed a new standard, ISO 45001,
Occupational health and safety management systems - to help organizations
reduce this burden by providing a framework to improve employee safety,
reduce workplace risks and create better, safer working conditions, all over the
world.
The standard follows other generic management system approaches such as
ISO 14001 and ISO 9001. It also considers other International Standards in this
area such as OHSAS 18001, the International Labour Organization's ILO –
OSH Guidelines, various national standards and the ILO's international labour
standards and conventions
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An organization is responsible for ensuring that it minimizes the risk of harm

to the people that may be affected by its activities (e.g. its workers, its
managers, contractors, or visitors), and particularly if they are engaged by the
organization to perform those activities as part of their “occupation”. The
Institute of Occupational Safety and Health, IOSH, estimates that there are 6.6
lakh deaths a year as a result of cancers arising from work environments.
Essentially for these reasons, ISO has developed an occupational health and
safety (OH&S) management system standard (ISO 45001) which is intended to
enable organizations to manage their OH&S risks and improve their OH&S
performance. The implementation of an OH&S management system will be a
strategic decision for an organization that can be used to support its
sustainability initiatives, ensuring people are safer and healthier and increase
profitability at the same time.
NOTE: The term “Occupational Safety and Health” (OSH) is often used in
place of “Occupational Health and Safety” (OH&S). An organization’s
activities can pose a risk of injury or ill-health, and can result in a serious
impairment of health, or even fatality, to those working on its behalf;
consequently it is important for the organization to eliminate or minimize its
OH&S risks by taking appropriate preventive measures. An organization’s
OH&S management system can translate its intentions to prevent incidents into
a systematic and ongoing set of processes (supported by the use of appropriate
methods and tools) and can reinforce the organization’s commitment to
proactively improving its OH&S performance.
It is logical that those working closest to an OH&S risk will be knowledgeable
about it. As such, the participation of workers in the establishment,
implementation and maintenance of an OH&S management system can play an
important role in ensuring that the risks are managed effectively. ISO 45001
emphasizes the need for worker participation in the functioning of an OH&S
management system, as well as requiring that an organization ensures that its
workers are competent to do their assigned tasks safely.
3.8.1 What is ISO 45001?
ISO 45001 is an International Standard that specifies requirements for an
Occupational Health and Safety (OH&S) management system, with guidance
for its use, to enable an organization to proactively improve its OH&S
performance in preventing injury and ill-health. ISO 45001 is intended to be
applicable to any organization regardless of its size, type and nature. All of its
requirements are intended to be integrated into an organization’s own
management processes. ISO 45001 enables an organization, through its OH&S
management system, to integrate other aspects of health and safety, such as
worker wellness/wellbeing; however, it should be noted that an organization
can be required by applicable legal requirements to also address such issues.
What ISO 45001 is NOT... ISO 45001 does not state specific criteria for
OH&S performance, nor is it prescriptive about the design of an OH&S
management system. An organization’s OH&S management system should be
specific to meet its own needs in preventing injuries and ill-health;
consequently a small business with low risks may only need to implement a
relatively simple system, whereas a large organization with high levels of risks
may need something much more sophisticated. Any type of system may be
capable of being in conformity with the requirements of the standard, provided
it can be shown to be appropriate to the organization and is effective. ISO
45001 does not specifically address issues such as product safety, property
damage or environmental impacts, and an organization is not required to take
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account of these issues unless they present a risk to its workers. ISO 45001 is
not intended to be a legally binding document, it is a management tool for
voluntary use by organizations from SME’s upwards whose aim is to eliminate
or minimize the risk of harm.
NOTE: There are a number of ILO conventions and standards (ILS)
concerning OH&S that have been adopted by countries around the world, to
varying degrees. ISO 45001 is broadly aligned with the provisions of the ILS.
3.8.2 The Benefits of Using ISO 45001.
An ISO 45001 based OH&S management system will enable an organization
to improve its OH&S performance by:
 developing and implementing an OH&S policy and OH&S objectives
 establishing systematic processes which consider its “context” and
which take into account its risks and opportunities, and its legal and
other requirements
 determining the hazards and OH&S risks associated with its activities;
seeking to eliminate them, or putting in controls to minimize their
potential effects
 establishing operational controls to manage its OH&S risks and its
legal and other requirements
 increasing awareness of its OH&S risks
 evaluating its OH&S performance and seeking to improve it, through
taking appropriate actions
 ensuring workers take an active role in OH&S matters.
In combination these measures will ensure that an organization’s
reputation as a safe place to work will be promoted, and can have more
direct benefits, such as:
 improving its ability to respond to regulatory compliance issues
 reducing the overall costs of incidents
 reducing downtime and the costs of disruption to operations
 reducing the cost of insurance premiums
 reducing absenteeism and employee turnover rates
 recognition for having achieved an international benchmark
(which may in turn influence customers who are concerned
about their social responsibilities)
3.8.3 Who are the Intended Users of the Standard?
The simple answer is all organizations. It should not matter if your
organization is a micro business, or a global conglomerate; if it is a non-profit
organization, a charity, an academic institution, or a government department.
As long as your organization has people working on its behalf, or who may be
affected by its activities, then using a systematic approach to managing health
and safety will bring benefits to it. The standard can be used by small low risk
operations as well as by high risk and large complex organizations in the same
way. While the standard requires that OH&S risks are addressed and controlled,
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it also takes a risk based approach to the OH&S management system itself, to
ensure
 that it is effective and
 being improved
to meet an organization’s ever changing “context”. This risk based
approach is consistent with the way organizations manage their other
“business” risks and hence encourages the integration of the standard’s
requirements into the overall management processes of the
organizations.
SAQ 3
a) Discuss the procedures for grant of license.
b) What is standardization? Discuss the role of BIS in monitoring
and maintaining standards.
c) List out the regional centers of BIS? What are its duties and
responsibilities?
d) What is ISO? What are benefits of acquiring ISO certification?
e) What are the core principles of ISO certification?
f) What is ISO-45000? What are its features?
g) What are the benefits of ISO-45001
3.9 SAFETY AUDIT
Suppose that you have studied this subject thoroughly but have not been
examined by anyone about your knowledge and understanding of the subject.
Then would you be recognized as safety officer?
Obviously, your answer is ‘No’.
This is because; you are not certified that you have learnt the subject. In other
words, you have not been tested authentically.
Similarly, safety audit is the authentic certification issued to an organization in
connection with its adherence to the safety principles and procedures and
commitment toward the health and safety of its employees.
Generally, a safety audit is a structured process whereby information is
collected relating to the efficiency, effectiveness, and reliability of the total
health and safety management system of a company. Safety audits are
conducted in compliance with legislation, and are used as a guide for designing
plans for corrective actions within a health and safety program.
Thus, an audit is defined as a systematic, independent and documented process
for obtaining “audit evidence” and evaluating it objectively against standards
to determine to what extent the ”audit criteria” are fulfilled.
What does safety audit check/ evaluate?
The following criteria is used to evaluate a company’s occupational safety and
health (OSH) system
 Whether or not the safety procedures the company's daily activities
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 Whether the processes conform to their planned health and safety

arrangements
 Whether their safety procedures are complying with government laws.
 Whether or not the planned arrangements are implemented effectively,
 Whether or not the safety procedures are effective to accomplish the
objectives of the organization's health and safety Policies.
Often it is a failure in health and safety management that results in a
serious incident. Safety audits assist in identifying failures within a
system, process, or program and the information gathered helps to
determine the best course of corrective action.
For example, European legislation says that ensuring the safety and
health of workers in every aspect related to the work, is the sole duty of
the employers. Hence, the employers have responsibilities not only to
take the necessary measures, including protection and prevention of
occupational risks, information and training of workers, but also to
assure an improvement in the level of protection afforded to workers.
Guidelines issued by national authorities in OSH at workplace describe
the elements of an OSH management system model, subjected to
periodic audits that could be conducted for successful implementation
of the legislation.
3.9.1 OSH Audit Information
The auditor should ensure that all necessary proofs are in place to demonstrate
the adequacy of the audit requirements. This means to collect information from
different sources that are relevant to the audit criteria. The audit information
should chiefly include:
 Employees’ declarations during interviews;
 records: inspection record, audit reports, occupational accident
records, professional diseases records, test reports (noise, dangerous
substances etc);
 documents: procedures, plans;
 web site addresses.
Information is then verified and the relevant ones become “audit evidence” to
be compared with the audit criteria in order to generate “audit findings”. These,
after being analyzed in relation to the objectives of the audit, will lead to the
“audit conclusion”.
In an audit of OSH management system, audit criteria are the references
against which the “audit evidences” are compared: policies, procedure and
requirements, related to occupational health and safety or standards, such as
OHSAS 18001, which is largely applied.
The methods of collecting/ verifying the necessary information are:
 interviews;
 examination of documents and records;
 direct observation of the performed activities and workplace
conditions, including specific measurements to be assessed, e.g.
exposure levels
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 referring relevant websites

3.9.2 OSH Audit Criteria and Standards Around the Globe
There are other standards too, containing audit criteria, applied in the United
States, Canada, Australia or even in some countries of Europe.
i. In Canada, there are a general standard/ standards for particular
economical activities, regarding specific requirements for the
implementation of a safety management system for firms engaged
in the transportation of goods and/or people on public roadways.
ii. In the United States a national standard has been developed
fulfilling the requirements for OSH management system and the
international standard regarding audit has also been adapted.
iii. In Australia and New Zeeland the audit criteria and criteria for
accreditation of OHS auditors are developed in a legal frame
adhering to the national standards.
All these standards are based on more or less the same principles and are in
most cases harmonized with the existing standards regarding quality
management system and environmental system.
The auditing process of OSH management system could be applied to the
entire organization’s system or to a subdivision of the organization.
3.9.3 Classification of Audits
The main types of OSH audits are:
i. Internal audits;
ii. External audits;
1.6.3 second party audits;
1.6.4 third party audits
OSH Internal audit
An internal audit is performed following the decision of the management and
it is applied to the activities of the same organization. The audit must be
independent and, in order to ensure the independence of the internal auditor
from the auditee, a possible solution is to use auditors from within the
organization, e.g. from other locations or other departments but not from the
auditee’s site. The other solution is to apply for external expertise.
Internal audits of the OSH management system are conducted in order to
determine whether the management system complies with the functioning plan
for OSH management, with respect to legal requirements or to the standards
and to review and evaluate the performance and effectiveness of OSH MS.
Internal audits can be made, for example, to check that hazards’
identification, risk assessment and that the controls are in place and up-to-date
and if the risk assessment reflects actual workplace conditions and practice.
OSH External audit: Second and Third Party Audits
A Second-Party Audit is performed following a decision of the organization’s
management by competent personnel from within the organization and/or by
external personnel selected by the organization and the audit is applied to the
activities of a second organization, usually a supplier of the first organization.
The purpose of the audit is for the auditor to verify if the auditee meets specific
requirements and become satisfied with the performance level of the auditee.
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The conclusions of the audit are communicated to the management of the two
organizations and to no other interested party.
A Third-Party Audit is performed following an application for
certification/registration against an OSH standard issued by an organization’s
management. It is undertaken by competent personnel from the
certification/registration body. It is applied to the applicant’s organizations and
the conclusions of the audit are communicated to the certification body and the
management of the applicant.
3.9.4 OSH Auditors – Qualifications and Abilities
The audit is performed by an audit team, which can be formed by one or more
individuals having specific competencies, abilities and experience in activities,
audit criteria and audit techniques. The team may include a lead auditor,
auditors, and technical experts.
The competence of the auditor is essential in performing a good audit and in
obtaining correct results for an audit. An auditor having a solid background in
general auditing techniques and requirements of the OSH standard, but only
superficial knowledge of the OSH regulations, procedures and standards
(legislation or best practices, hazards, risk assessment procedures,
characteristics or requirements for personal protective equipment) would be
able to only assess the formal accomplishment of the requirements and may
fail to reveal major non-conformities of the organization in adopting adequate
measures for preventing accidents or occupational diseases and for protecting
the health of the employees.
In fact, there is only one international specifications comprising various
requirements regarding the role, competencies and evaluation of auditors for
quality and/or environmental management systems. This standard is applied
worldwide, even though guidelines of documentation of the audit in a
particular industry might have been specified. In the absence of such standard
guidelines for auditors of OSH management system, these elements are
established by each certification body or organization applying OSH audits,
according to its own rules and procedure. The certification bodies adapt the
conditions established in standards for quality and environmental systems’
auditors to the particular aspects of the OSH management system.
For accomplishing the specific task, an auditor must have particular personal
attributes, knowledge and the skill to be able to apply the previous two in
conducting an audit.
An auditor should be -
i. correct, honest and discrete,
ii. with an open mind,
iii. ready to take into consideration alternative points of view or
hypotheses,
iv. able to attentively observe the surrounding environment and the
activities going on,
v. able to adapt to different situations,
vi. able to reach adequate conclusions based on logical reasons and
analysis and
vii. capable to act and perform independently the activities, although he/she
effectively interacts with other people
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In addition, an OSH management system auditor shall have knowledge and

abilities in the following fields:
 principles of prevention, legal requirements;
 other requirements related to health and safety at workplace or
environment, e.g. contractual conditions, standards or non-regulatory
guidelines related to the work environment, work equipment, personal
protective equipment;
 the requirements of the applied occupational health and safety standard
and of the guidelines for its application, including procedures, work
instructions, plans, programmes;
 identification of OSH hazards and effects on the exposed people
(human injury or ill health), risk assessment methodologies, methods of
controlling risks of incidents, statistics of accidents, good practices,
results of studies and research;
 design of work area, processes, installations, machinery/work
equipment, operating processes and work organization;
 auditing principles, procedures and techniques
A team leader must have additional knowledge and abilities for being capable
to plan the audit and to efficiently use the resources, to represent the audit team
in interactions with the client and the auditee, to organize and conduct the audit
team, to prevent or solve the eventual conflicts and to prepare and finalize the
audit report.
Experts provide consultation or advice to the auditors regarding particular
technical aspects of operations or of legal requirements, standards, etc.
A person can obtain the necessary competencies and abilities to perform
activities of auditing by a combination of education, training and experience.
In some countries (e.g. Romania), auditor of OSH management system’ is an
officially recognized occupation and the auditor’s formation is conducted by
approved institutions, on the basis of specific occupational standards.
3.9.5 OSH Audit Programme
The management of the audit programme and the activities should be in
accordance with guidelines (OHSAS, 2008) or the standards referring to
quality management system auditing. Any audit programme will be developed
taking into account the management’s priorities, OSH management system’s
requirements, legal or contractual requirements, clients' requirements etc.
The frequency and coverage of audits in an audit programme should be
established taking into account the maturity of the system, the risk of failure of
the various elements of the management system, the data obtained from the
previous management review and the extent to which the OSH management
system and the organizational activities are subject to changes. Audits must be
accomplished especially when changes occur in risk assessment or in the
organization, and when an increasing rate of incidents or of the gravity of
incidents is noted.
An audit programme can include audit follow-up, as part of each audit or
separately.
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OSH Internal Audit Programme and Objectives

The internal audit programme should be planned and established on the
basis of the risk assessment and previous audits and shall be maintained and
implemented by the organization. A typical internal audit programme, includes
series of audits, it is established for one year and shall cover all the areas and
activities and all the audit criteria/ requirements.
The OSH internal audit programme could have the following objectives
 the evaluation of the compliance of the OSH management system with
the occupational safety and health standards (system level),
 to review and evaluate the performance and effectiveness of the OSH
system (operational level),
 to analyze compliance capability of the organization to legal
requirements (compliance audit) or to some particular aspects (record
management and documentation, incident management etc.)
External Audit Programme: Second and Third Party Audits
A Second–Party Audit Programme should be planned on the basis of the
assessment of the activities of the supplier/contractor, the impact to the risk
assessment of the supplier/ contractor to the policy and objectives of the first
organization and the results of the previous audits. A typical second–party
programme length is six months.
It usually has the objective of providing and maintaining confidence in the
capability of a supplier/contractor to respect the occupational safety and health
requirements of an organization.
A Third Party Audit Programme is planned and established on the grounds
pertaining to the size of the organization and the nature of risks involved,
following the procedures of the certification bodies.
It has the objective of evaluating the conformity/ compliance of the OSH MS
of an organization with the requirements of an OSH standard or other
recognized audit criteria.
A typical certification/ registration audit programme is for three years and
includes:
 an application and an agreed contract, pre-audit (optional),
 review/examination of the documentation, certification auditing and at
least two surveillance audits (typically at 6 and 12 months spans) and,
 where the case arises, follow-up audits.
 Auditing undertaken for purposes of certification must cover all areas
and activities within the scope of OSH management system and shall
assess the conformity with all the requirements of the standard to be
applied.
3.9.6 OSH MS Audit Activities
The process of auditing originated in the domain of finance and accounting and
it was translated to social audits and OSH MS audit.
Audit generally means an on-site audit. Activities in a typical on-site audit are
similar to those for auditing quality systems:
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 initiating the audit;

 conducting document review (analysis of the relevant documents of
OSH MS, including records in order to determine their adequacy);
 preparing the activities to be undertaken during the on-site audit (audit-
plan, tasks of audit team, check-lists, questionnaires);
 conducting the audit (opening meeting, communication modalities,
collecting and verifying the information, generating the audit findings,
preparing the audit conclusions, end meeting);
 preparing and communicating audit report;
 completing the audit (preparing, approval and transmission of the audit
report);
 performing the audit follow up
The audit report must summarize all the activities performed during the audit
and must comprise information on identification of the audit, a summary of the
audit process, including obstacles which could affect the confidence in audit
conclusion, audit findings, including details of non-conformities and audit
conclusion. Internal or second-party audits may include suggestions for
improvement of the healthy and safety at work place.
The General Principles and Norms of OSH Audit
The following principles are to be observed in audit activities:
a) Principles regarding the OSH auditors
 ethical behavior;
 correct report;
 adequate professional attention
b) Principles regarding the OSH audit
a) independence;
b) evidence
The General Norms of OSH Audit
a) The audit should ensure that an important part of the main activities is
sampled and the concerned personnel are interviewed, otherwise the
audit would come out with to false conclusions.
b) The examination of the documents, records or the observation of
equipment, installations and on-site activities should not be performed
super facially but profoundly.
c) The auditors should have the capacity to detect deficiencies in
identification of dangers and risk assessment, non-conformities of
equipment, negligence in respect to preventive or monitoring measures.
d) The interviewed personnel should not be only the top-manager, OSH
management representative and executives, but also workers and, if it is
the case, external personnel, such as contractors.
e) Interviewing the workers should be an important part of an audit, in
order to determine the measure to which the organization really
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implemented the OSH arrangements, the awareness of the employers,

internal communications, and the participation of the workers in the
OSH matters.
3.9.7 Audit Review – The Utilization of Audit Results (Benefits &
Weankness)
The top management review is one of the most important instruments in order
to determine if the OSH MS is appropriate to the organization’ structure,
operations and personnel, is adequate to the organization policy and objectives
and is implemented with effectiveness and to adopt the best measures for
improvement. However, experts’ opinion is that internal audits should not be
used as a primary tool for measuring the effectiveness of OSH management
system, as long as they are of an infrequent nature. Internal audits are
characterized by the risk of concentrating on the extent of compliance by the
organization with its own OSH policies, procedures and standards, instead of
assessing if the system is capable of delivering the required level of safety
appropriate to the organization. In such cases, the organization is compared
itself with itself.
The outputs of the audit programme are performance indicators, such as safety
audits conducted, the percentage of sub-standard conditions identified and
corrected as a result of the safety audit. These outputs are used in the top
management review as inputs, together with other indicators of safety
performance or measurements. The details of non-conformities found during
the internal or third-party audit can be used in the management review for
establishing the weak points of the OSH management system and for adopting
adequate measures to prevent failures .
The findings and conclusions of internal audits having as the objective of
reviewing and evaluating the performance and effectiveness of occupational
safety and health management systems are used to define new objectives for
the OSH management system or to adopt measures for continual improvement
of the system.
Benefits of Safety Audit
The main benefits of safety audits are found in the form of:
 Ensuring the safety principles are practiced
 Assuring the employees that their health and safety are taken care of
 Promoting constant review of systems to ensure that they do not
become weakened by habit
 Facilitating planned improvements to programs, policies, and
procedures
 Identifying the weaknesses in human resources departments
 Demonstrating management’s dedication to employee health and safety
Weakness in Audit and Certification of the OSH – MS
Certification is supposed to add extra quality to the internal OSH management
system, because the audits presumably ensure both compliance and continuous
focus on improvement of the health and safety at the work place, but this goal
is not entirely fulfilled due to the weaknesses of the process, presented below.
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 Traditional management standards have a bias towards identifying

deviations and solutions in a way that promotes viewing them as
technical problems with unambiguous technical solutions and the
management of the organization, as well as auditors, prioritize safety
issues and issues having a single cause-and-effect problem and a
technical solution, ignoring the working environment related issues,
presenting a dilemma.
 The audits for certification require standardized solutions to OSH
problems, and consequently, standardization is promoted indirectly in
the certified systems, but increased standardization may at times, have
its own limitations, especially when different types of industries with
their own set of problems are concerned. Increased standardization, in
itself compromise areas as the professional judgment of workers or
more flexible solutions. The mechanisms of certification in this way
partly reconstruct the work environment that they are supposed to
control.
 The certification once done, often induces the leisureliness in
managements and OSH MS enforcement authorities
OSH audits actually fail also when one of the following causes is involved:
a) a lack of auditor independence (overt and intentional or covert) and a
lack of skill (lacking in elements of technical or legislative knowledge),
leading to confusing or misleading results
b) focus of the auditors on audit of documentation and failure to allow
worker participation;
c) paperwork for the sake of the audit – organizations generate and retain
documentation in order to meet the audit criteria, overly prescribing
work activities and making rules that are unworkable, with little impact
on the action that are necessary to make the workplace healthy and safe
and even actually prevent such actions;
d) unintended consequences of audit scoring – organizations focus on the
goal of passing an OSH management system audit at the expense of the
more vital goal of making the workplace healthy and safe;
e) the confusion of audit criteria – reductionist reporting of audit results
(done or not done, good or bad) may oversimplify matters that should
cause concern and the confusion of audit criteria with the OSH MS
itself may divert attention away from actions to improve OSH and
towards activities that ensure audit success.
Such aspects explain why a positive conclusion of an audit or certification of
the occupational safety and health management system is not a guarantee of
the compliance with all the requirements of OSH MS and may lead to a false
sense of security and why serious accidents have happened soon after an on-
site audit.
Even in organizations with successful implementation and certification of OSH
MS, it can be observed that the external performance for an external audience
became the major issue for company management and the demand for visible
performance changes the focus from internal identification and control of the
work environment to the ability to demonstrate that the work environment is
safe and problem-free. The subtle difference between making the workplace
safe and getting a certificate that it is safe, needs to be appreciated here.
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Management’s focus on safety, especially the system of monitoring safety, led

to a neglect of some areas, such as psychosocial issues, job intensity (related to
work pressure and production goals), poor management and general concern
for employee well-being. Auditors appear to accept these priorities, most of
them identifying minor technical deviations and no offering comments on the
exclusion of psychosocial risks.
Accreditation of certification bodies and their periodical independent
evaluation focused on critical factors that may undermine the effectiveness of
the audit procedures could minimize the impact of negative factors that lead to
a false conclusion of the external audits.
SAQ 4
a) What is safety audit? What is its significance? How is it different
from financial audit?
b) Classify audit systems? Explain about the internal audit.
c) What is an external audit? Discuss.
d) What are the qualifications and abilities required/ desirable for
auditors?
e) What are the objectives of OSH- MS audit?
f) What are the general principles and norms of OSH audit?
g) What are issues that are taken care in safety audit process?
h) What are the benefits of safety audit?
i) What are the weaknesses of audit and certification of OSH-MS?
3.10 CASE STUDY
Case Study: Bhopal Gas Tragedy

In the early morning hours of December 3, 1984, a poisonous grey cloud (forty
tons of toxic gases) from Union Carbide India Limited (UCIL's)1 pesticide
plant at Bhopal spread throughout the city. Water carrying catalytic material
had entered Methyl Isocyanate (MIC) storage tank No. 610. What followed
was a nightmare.
The killer gas spread through the city, sending residents scurrying through the
dark streets. No alarm ever sounded a warning and no evacuation plan was
prepared. When victims arrived at hospitals breathless and blind, doctors did
not know how to treat them, as UCIL had not provided emergency information.
It was only when the sun rose the next morning that the magnitude of the
devastation was clear. Dead bodies of humans and animals blocked the streets,
leaves turned black, the smell of burning chilli peppers lingered in the air.
Estimates suggested that as many as 10,000 may have died immediately and
30,000 to 50,000 were too ill to ever return to their jobs.
The company involved in what became the worst industrial accident in history
immediately tried to dissociate itself from legal responsibility. Eventually it
reached a settlement with the Indian Government through mediation of that
country's Supreme Court and accepted moral responsibility. It paid $470
million in compensation, a relatively small amount of based on significant
underestimations of the long-term health consequences of exposure and the
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number of people exposed. The disaster indicated a need for enforceable

international standards for environmental safety, preventative strategies to
avoid similar accidents and industrial disaster preparedness.
Since the disaster, India has experienced rapid industrialization. While some
positive changes in government policy and behavior of a few industries have
taken place, major threats to the environment from rapid and poorly regulated
industrial growth remain. Widespread environmental degradation with
significant adverse human health consequences continues to occur throughout
India.
Background:
In the 1970s, the Indian government initiated policies to encourage foreign
companies to invest in local industry. Union Carbide Corporation (UCC) was
asked to build a plant for the manufacture of Sevin, a pesticide commonly used
throughout Asia. The company built the plant in Bhopal because of its central
location and access to transport infrastructure. The specific site within the city
was zoned for light industrial and commercial use, not for hazardous industry.
The plant was initially approved only for formulation of pesticides from
component chemicals, such as MIC imported from the parent company, in
relatively small quantities. However, pressure from competition in the
chemical industry led UCIL to implement "backward integration" – the
manufacture of raw materials and intermediate products for formulation of the
final product within one facility. This was inherently a more sophisticated and
hazardous process.
HOW DID IT HAPPEN?
The gas leak in the Union Carbide was reported after midnight on the
intervening night of December 2 and 3. The incident had taken place at the
Plant Number C of the Union Carbide factory in Bhopal.
As the cool morning breeze picked up pace, it carried the poisonous gas
leaking from the Union Carbide factory to rest of the city and killing people -
both awake and asleep. As per government's affidavit, about 3,000 people died
of poisonous gas within a few hours of the incident.
It is estimated that about 40 tonnes of methyl isocyanate (MIC) gas and other
chemicals leaked from the Union Carbide factory. Methyl isocyanate is
extremely toxic and if its concentration in air touches 21ppm (parts per
million), it can cause death within minutes of inhaling the gas. In Bhopal, the
level was multiple times higher.
Negligence on the part of the Management:
It seems that the UCIL was trying to minimize cost by compromising with the
health and safety standards. There is no sensitivity towards the environment or
the wellbeing of the locals residing around the plant. The loss could have been
significantly less if only UCC had a crisis management plan. Instead, the plant
focused on evading liability, withholding information and ignoring the impact.
It accepted moral responsibility but denied legal liability.
UCC admitted in their own investigation report that most of the safety systems
were not functioning on the night of the 3rd December 1984
Tank temperatures were not logged;
· The vent gas scrubber (VGS) was not in use;
· The cooling system was not in use;
· A slip bind was not used when the pipes were washed;
105
· The concentration of chloroform in Tank 610 was too high;

· The tank was not pressurized;
· Iron was present because of corrosion;
· The tank’s high-temperature alarm was not functioning;
· Tank 619 (the evacuation tank) was not empty.
This shows how the safety of the workers as well as the city was taken casually.
The company was reluctant in investing more in the safety standards as the
plant was already in loss. Further, it seems that the lack of governmental
pressure and monitoring did not invoke any sense of urgency for the company.
The responsibility for the incident lies majorly with the company but the state
has neglected its own part too.
In the Constitution of India, it is clearly stated that it is the duty of the state to
‘protect and improve the environment and to safeguard the forests and wildlife
of the country’ Environment has also been discussed in the Directive Principles
of State Policy. The Department of Environment was established in India in
1980 to ensure a healthy environment for the country.
The state failed in monitoring the industry properly. It should not have granted
permission for a hazardous plant to be in operation in such a populated area.
Even if the plant operates within the city, it is the duty of the state to closely
monitor its activities in order to ensure compliance of safety standards. The
state should have a mechanism in place for an emergency situation. A gas leak
is a reasonably foreseeable event. The government should have gathered
information on the type of gases that the company uses. It should have
organized mock drills and ensured that the public is aware of the dangers.
Stringent action should have been taken in case of any non-compliance.
Aftermath
Immediately after the disaster, UCC began attempts to dissociate itself from
responsibility for the gas leak. Its principal tactic was to shift culpability to
UCIL, stating the plant was wholly built and operated by the Indian subsidiary.
It also fabricated scenarios involving sabotage by previously unknown Sikh
extremist groups and disgruntled employees but this theory was impugned by
numerous independent sources.
In March 1985, the Indian government enacted the Bhopal Gas Leak Disaster
Act as a way of ensuring that claims arising from the accident would be dealt
with speedily and equitably. The Act made the government the sole
representative of the victims in legal proceedings both within and outside India.
Eventually all cases were taken out of the U.S. legal system under the ruling of
the presiding American judge and placed entirely under Indian jurisdiction
much to the detriment of the injured parties.
The Legal Battle: - In the February of 1985, the Indian Government filed a
case in the U.S Court for a claim of $3.3 billons against the Union Carbide
Corporation. But by 1986 all of these litigations in the U.S District were
transferred to India on the grounds of forum non conveniens. It means that the
case should be transferred to a more convenient forum so that the trial
proceeds smoothly. Meanwhile in March 1985, the Bhopal Gas Leak Disaster
(Processing of Claims) Act was passed which empowered the Central
Government to become the sole representative of all the victims in all kinds of
litigations so that interests of the victims of the disaster are fully protected and
106
the claims for compensation are pursued speedily. In the year 1987, cases were
filed in the Bhopal District Court which ordered the Union Carbide
Corporation to pay 350 crores as interim compensation. But the interim order
could not be decreed and therefore the UCC refused to pay the amount. Later
on, at the High Court, this interim compensation amount was reduced to 250
crores. Both the Union of India and the UCC preferred appeals by special leave
against this High Court's order.
The Settlement Order: - But a major twist to these legal proceedings came
through the settlement order which was stroked out between the Indian
Government and the Union Carbide in an out of Court settlement in February
1989. Through this deal the liability of the Union Carbide was fixed at $470
millions in full and final settlement of all claims, rights, and liabilities arising
out of the disaster. The terms of the settlement were such that it limited liability
under all future claims as well, whether they were civil or criminal. This would
mean that henceforth, all kinds of liability arising out of the disaster could be
fixed only upon the Government of India and the Union Carbide would be held
liable only to the extent of $470 millions.
This was indeed a bad move as the settlement would limit liabilities under
future claims as well. Moreover, $470 millions was not sufficient to
compensate all the injured. In fact, it is hardly 15% of the original claim of
$3.3 billions at the U.S Supreme Court.
This obviously evoked criticisms from all corners. A number of review
petitions were filed at the Supreme Court questioning the validity of the
settlement order. The settlement order was challenged on various grounds.
Firstly, it was pointed out that the settlement order was between the Union of
India and the Union Carbide Corporation, whereas the actual people who are
going to be affected by such a settlement order would be the victims of the
tragedy. Thus, the first argument raised was that the settlement order is void
because no notice was given to any of the people whose interests would be
affected.
But all these contentions were rejected by the Supreme Court and the validity
of the settlement order was upheld in the case, Union Carbide Corporation v
Union of India, the judgment being delivered on October 3, 1991. The Court
upheld the validity of the settlement order in all aspects except the condition
quashing the criminal proceedings. The condition quashing the criminal
proceedings alone was held unjustifiable but all other aspects including the
amount of compensation decided in the settlement order were held to be valid.
The Court was of the opinion that the subject matter of the deal was not illegal
and that there was no valid reason to render the contract void. The settlement
only limits the liability of the Union Carbide and this does not affect the
victims in anyway because in any case the settlement fund is to be found
insufficient, then the deficiency is to be made good by the Union of India. Thus,
no liability could be fixed on the Union Carbide. This would obviously mean
that if the claims exceed $470 millions, the excess liability can only be
compensated by the Union of India and the Union Carbide cannot be made
responsible for that in any manner.
The settlement order was reached because of the urgent demands to
compensate the victims. The very basic consideration motivating the
conclusion of the settlement order was the compelling need for urgent relief.
Though the amount stroked out may prove to be inadequate the deal stands
valid in all aspects and no further liability could be placed on the Union
107
Carbide. The rationale behind the judgment is that withdrawal of a prosecution

with a good motive, such as providing relief to the victims of a disaster is not
opposed to public policy and hence the deal would stand valid.
The Criminal Proceedings: - Apart from these civil proceedings, criminal
proceedings were also initiated before the Chief Judicial Magistrate in Bhopal.
The case was instituted in the year 1987. Since the clause in the settlement
order which quashed the criminal proceedings was held invalid and
unjustifiable, the criminal proceedings initiated could continue. The judgment
was delivered only on June 7, 2010, 26 years after the disaster. The
proceedings were initiated under Section 304 A, and Sections 336, 337, and
338 read with Section 35 of the Indian Penal Code. Section 304 A deals with
causing death by negligence. Sections 336, 337 and Section 338 deal with the
offences of endangering life and personal safety of others. This is read along
with Section 35 which deals with the aspect of common intention.
In this case, the prosecution argued that the whole disaster was a result of
running a defectively designed plant with a number of operational defects
without any reasonable care. The prosecution submitted the findings by the
Council of Scientific and Industrial Research (CSIR) to substantiate their
contentions. The team of scientists from the CSIR noticed series of negligence
and wrong doings while operating the plant, which show that the business was
carried out with reckless indifference to the public. The Company authorities
had the knowledge and the properties of how dangerous a gas is MIC and still
carried on the activities with gross negligence, recklessness and utter disregard
to the public. The element of criminality is introduced by the accused having
run the risk of doing such an act with recklessness and indifference to the
consequences. The UCC being a company dealing with a substance like MIC,
it owes a duty of care to the public. The activities of the enterprise falls far
below the standards required and therefore, the prosecution argued that it
amounted to gross negligence.
For all these contentions, the UCC came up with several defenses. Firstly, they
argued that the reports by the CSIR cannot be admitted as evidence. It was that
CSIR was merely a fact finding body and that it was constituted for a very
limited purpose. Therefore, it was argued that its contents could not be taken as
proof. Secondly, it was contended that the Company had obtained all licenses
and approvals from the Government for carrying out the business under the
Designed Transfer Agreement & Technical Service Agreement. All other
permits required were also duly obtained and hence the UCC argued that they
carried out their business in a completely authorized manner with the
permission being obtained by the Government of India itself. Moreover, it was
submitted that none of the Company officials had any criminal intention to
cause any harm to any member of the public. The Company refused to admit
any kind of negligence on its part. All these were based on the principle that
vicarious liability is not applicable under criminal law and therefore the
directors cannot be held liable for the negligence of the workers.
The UCC also denied all allegations that the UCIL plant in India was not
properly designed. It further submitted that the MIC plant at Bhopal was
designed in the same pattern as that of the MIC plant in Verginia, USA. But it
is important to note that The Government of India was never permitted to visit
the plant at Vergina.
The Judgment: - But all of these contentions were rejected and all the accused
were found guilty and were subjected to imprisonment and were also liable to
fine. But these orders could not be enforced as some of the accused did not
108
appear in the Court. Mr. Warren Anderson, who was the chairman of the UCC
at the time the disaster took place, is still absconding and all requests for his
extradition still remain unsuccessful as the U.S Government rejected it.
Legal Issues: One of the main issues which the Bhopal Gas tragedy raises is
the issue of absolute liability. This issue was elaborately discussed in the case
of M.C Mehta v Union of India. The principle of absolute liability states that
when an enterprise is engaged in hazardous or inherently dangerous industry
and if any harm results in account of such activity then the enterprise is
absolutely liable to compensate for such harm and that it should be no answer
to the enterprise to say that it had taken all reasonable care and that the harm
occurred without any negligence on its part. In such industries, the principle of
safe design would be that one does not guard merely against the most
predictable, routine type of accidents. Rather one tries to anticipate the worst
that could happen, even if it is highly unlikely, and not only guard against it,
but prepare to contain it and make sure that there is no way for that even to
take place.
This is the principle of absolute liability and liability can be fixed even if there
is no negligence on part of the accused. In the case of absolute liability, even
the defenses available under strict liability would not apply. Thus, even if the
accident is some freak incident, liability would still be fixed. In such a case, it
would be no good defense to argue that the direct or the proximate cause of the
accident was not the carrying of such hazardous activity, but it actually is an
Act of God or that it is due to some third party intervention. Even if the
Company had taken extreme precautions to ensure that such events do not take
place, responsibility would still be fixed on them.
The Bhopal Gas Tragedy is also in a way responsible for the passing of the
Public Liability Insurance Act, 1991 which provides for compulsory insurance
of any unit or factory undertaking a hazardous activity.
Conclusion:- The tragedy is still considered to be the world’s worst industrial
disaster. To prevent such events from occurring in the future, the government
should thoroughly check and regulate such industries. They should be placed
under constant surveillance and the activities of such industries should be
monitored at least once in every six months. Any kind of repair in any of the
machines or equipments should be immediately attended to. The government
should take it upon itself to make sure that everything is functioning properly.
Apart from this, the government should also make sure that there is a proper
mechanism for compensation to the victims. It should ensure speedy justice
and should make sure that proper relief is given to the victims.
In the event of such a large scale disaster as Bhopal, the questions like who is
right and who is wrong and who was negligent and who was not become
totally irrelevant in the plight of thousands of people who get affected in one
single night.
It is totally unjustifiable to leave even a single victim without providing relief.
Hopefully, such incidents should never occur again, and even if they do, we
should not forget the lessons from Bhopal and we should make sure that any
law capping the limit on the liability of such large magnitude disasters should
be declared as unconstitutional.
109
Questions:
a) Briefly describe the background of the disaster
b) Do you think that the negligence on the part of the management was
the prime reason for the disaster? If yes, justify your views
c) Could the accident be prevented?
d) What was the attitude of the management after the disaster?
e) Give an elaborate description of the legal battles started after it
f) Do you find the settlement order fair and just?
g) Please explain your understanding of absolute liability
h) What did we learn from this unfortunate disaster?
3.11 LET US SUM UP
This unit focuses on approval, licensing and registration of factories in

accordance with the provisions under Section 6 of the Factories Act – 1948. If
approval is not done automatically, an appeal against refusal to grant
permission may be submitted through a notice by occupier. The contents of
notice are given. The inspection is another important aspect for establishing a
new factory while for monitoring and compliance with norms particularly, for
quality and safety for already existing firm. The role and duties of inspectors
and the consequences of hiding or misinterpreting the information, misleading
and obstructing an inspector are discussed. Yet another important aspect is
appointing the certifying surgeons, whose duties are to certify the worker’s age,
and other health conditions as required by the employment in compliance with
the Factories Act-1948. The Process of recognition is narrated including the
scrutiny, processing as well as rejection procedures of application. Procedure
for grant of license is explicated. The importance of standardization and
certification of the products and processes at both national level (BIS) and
international level (ISO) are described. The advancements and an exclusive
ISO Certification in safety are discussed by introducing ISO 45001. Finally,
the safety audit, audit programs, auditor qualifications, audit activities, benefits
and weaknesses are also discussed at the end of this unit.
3.12 KEY WORDS
 Section 6 of Factories Act: empowers State Govt to licensing and

registration of factories.
 Notice by Occupier: An obligation on the occupier to send a written
notice, with prescribed particulars, to the Chief Inspector at least 15
days before starting.
 Inspector: Every District Magistrate is an Inspector for his/her district.
 Certifying Surgeons: Qualified medical practitioners to certify for
specified local areas/factories.
 BIS: Bureau of Indian Standards
110
 ISO: International Organization for Standardization

 OHS or OH & S: Operational Health and Safety
 OSH: Occupational Safety and Health
 OSH-MS: Occupational Safety and Health – Management System
 ISO-9000: Guidelines for international standards in quality systems
 ISO-45001: Guidelines for international standards in Occupational
Safety and Health systems
 Initial Audit: A team for initial audit constituted to visit the applicant
lab.
 Hallmarking: The certification for quality standards for Gold Jewellery
in India
 Safety Audit: Evaluation and authentication of a company’s
occupational safety and health (OSH) system
 OSH Internal Audit: An audit performed by an independent internal
committee following a decision of the organization’s management and
it is applied to the activities of the same organization.
 OSH External Second-Party Audit: Following a decision of the
organization’s management, within the organization and/or by external
personnel, the audit is applied to the activities of a second organization,
usually a supplier of the first organization.
 OSH External Third-Party Audit: Following an application for
certification/ registration against an OSH standard issued by an
organization’s management, undertaken by competent personnel from
the certification/registration body.
3.13 ANSWERS TO SAQ’s
Refer the relevant preceding text in the unit or other useful books on the topic
listed in the section “Further Reading” given at the end of the block to get the
answers of the self assessment questions.
111
112

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UNIT 3 LICENSING AND REGISTRATION

It is necessary to obtain a license before a factory is started. Section 6 of the

 describe the process of certification for factory

3.2 APPROVAL, LICENSING AND REGISTRATION OF

 the State Government against the order of any other authority.

3.3 THE INSPECTION

The Factories Act empowers the State Government to appoint Inspectors,

Duties of Certifying Surgeon

3.4 THE PROCESS OF RECOGNITION

To have a better understanding of the process of recognition, let us consider the

or any such Competent Authority indicating premises of the applicant

 Non-payment of any prescribed fees.

 Inform BIS about shifting of premises and removal/relocation of any

3.5 PROCEDURE FOR GRANT OF LICENSE

The Product Certification Scheme of BIS aims at providing Third Party

3.5.1 Normal Procedure

be introduced without changing the color, and is difficult to detect

3.6 STANDARDIZATION AND CERTIFICATION

Bureau of Indian Standards (BIS) is the National Standard Body of India

3.7 INTERNATIONAL ORGANIZATION FOR

ISO originated from the union of two organizations – the ISO

As the International Organization for Standardization would translate

3.8 ISO 45000 SERIES OF STANDARDS

An organization is responsible for ensuring that it minimizes the risk of harm

3.9 SAFETY AUDIT

 Whether the processes conform to their planned health and safety

 referring relevant websites

In addition, an OSH management system auditor shall have knowledge and

OSH Internal Audit Programme and Objectives

 initiating the audit;

implemented the OSH arrangements, the awareness of the employers,

 Traditional management standards have a bias towards identifying

Management’s focus on safety, especially the system of monitoring safety, led

3.10 CASE STUDY

Case Study: Bhopal Gas Tragedy

number of people exposed. The disaster indicated a need for enforceable

· The concentration of chloroform in Tank 610 was too high;

Carbide. The rationale behind the judgment is that withdrawal of a prosecution

3.11 LET US SUM UP

This unit focuses on approval, licensing and registration of factories in

3.12 KEY WORDS

 Section 6 of Factories Act: empowers State Govt to licensing and

 ISO: International Organization for Standardization

3.13 ANSWERS TO SAQ’s

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