These EHS requirements are categorized into 3 clauses i.e. Financial, Safety and Top Management bandwidth & HR Practices. Here EHS requirements are related to Environment, Health and Safety requirements. These requirements are extracted from ISO 14001 and ISO 45001 standards.
Financial Data of the Company:
- Plant Sales Turnover of the auditee plant and also group Turnover if available.
- PAT/Net Sales (%) where PAT is Profit after tax.
- Total Debt/Equity ratio (times)
- Return on Capital employed (%)
- Internal Cash Generation/ Net Sale (%)
- Debt service coverage ratio (%)
- Current Ratio (times)
Safety (Working Conditions, Human & Machine Safety, Fire Safety):
Working conditions:
- Is the Layout and Escape route on the shop floor OK? Escape route indicators / marking in company OK?
- Is the Machine area sufficient enough to allow easy movement of workforce and tools?
- Is Shop floor temperature, noise level, and air quality (Fumes) OK? Is the Rest area and Toilets available? Check the Rest area and Toilet condition.
Human and Machine Safety:
- Does the Supplier have a safety policy?
- Is responsibility for safety-related activities defined to specific personnel within the company? Responsibility for safety should be defined in the Organization Chart.
- Are Safety standards made as per process requirements? So there is a need for processwise safety standards. Like separate standards for press, welding, machining, grinding, and painting processes.
- Are Safety standard training provided to all and followed on the shop floor as per process requirements? So there must be awareness among all associates about safety standards.
- Are Operation control procedures (OCP/SOP) available wrt Safety and followed properly? Operation control procedure/Work Instruction for safe working required.
- Firefighting training and first aid training are given to workers.
- Are Machine safety systems (sensor, Two-hand push button, machine guarding, Emergency switches, mechanical stopper, Cam guard etc) available?
- Is Safety in material movement and tool ensured or not? Defined procedure to be checked.
- Are PPEs defined as per the process and followed as per standard or not? Defined process to be checked.
- Accident reporting mechanism defined.
- Accident data is available and maintained.
- Countermeasures against accidents taken and periodic verification being done?
- Availability of Medical/ First aid.
- Material handling procedure defined and adhered.
- Is Risk assessment done and documented for routine and Non-routine activities? Documents to be verified.
- Are Pits and floor openings covered or otherwise guarded?
- Are paint spray booths, dip tanks, exhaust ducts etc cleaned regularly?
- The lockout / tagout procedure was established and rigidly followed.
- Are License operating permits and records up to date for such items as Lifts, boilers, Air pressure tanks and LPG tanks?
- Is an HSD storage license of more than 2500 liters available?
Fire and Safety:
- Audit conducted by reputed 3rd party on MSIL defined check sheet? Audit report should not be more than 3 years old, if green and not more than 1 year old if not green.
- Countermeasure plan available defined timelines (not more than 6 months from date of audit)
Note: All safety-related activities are mandatory and require 100% compliance.
Top Management Bandwidth and HR Practices:
Management bandwidth and Organization Structure:
- Do you have an adequate organizational structure and defined roles/ responsibilities for key areas such as Plant head, Quality, Production, Maintenance and Safety?
- Are HR and HR persons available and responsibility defined?
Review Mechanism:
- Does the top management monitor the safety parameters and verify the countermeasures implemented every month?
Statutory Compliance:
- Is child labor policy available?
- Is minimum wage being paid as per skill level?
- Factory license available and valid.
- Contractor license is available.
- Standing order there or not valid.
- Is Posh policy available and compulsory training given for the same?
Consent to Operate:
- Consent to operate (CTO valid as on date) available or not (Air & Water)?
ESI & PF:
- Are eligible workers or employees covered or entitled under ESI?
- Is PF contribution of employees and employers done? The due date for monthly challan remittance to the Bank for PF is the 15th of every month.
- Management reviews the status of ESI /PF contribution payments. The due date for ESI is the 15th of the following month.
- If ESI and PF are managed by the Contractor, then does management review and check the ESI enrollment/payment?
Hazardous Waste Management:
- Are a different type of wastes identified on the shop floor and standards/ procedures made?
- Is Segregation done at source for different types of waste? Storage and disposal are done as per consent and periodic confirmation at the disposal stage.
MSIL Requirements as per Vendor System Audit Check Sheet for Tier 2