AQM

Assignment 2
Topic – Compliances by Indian govt. for the apparel
industry Vs Compliances by Foreign Buyers

Compiled By – Tanya
(BFT/18/639)
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What is a COMPLIANCE?
A Compliance means fulfilling / conforming to certain standard, rule,
regulation, policies, SOP’s or goals set out by organization. It can be:
 National legal requirement
 International legal requirement
 Customer Requirement
 Certification requirements
 Internal Policies, procedures, guidelines

Categories of Compliance:
1. Social /Labour Compliance:
This is the type of compliance where you are required to fulfil labour law
requirement as required by National labour Law or ILO and some best practice
requirements by customer. It covers:
 Payment issues
 Working Hours
 Working Environment
 Disciplinary practices
 Labour Practices

2. OHS Compliance:
In this type of compliance, you are asked to fulfil Occupation, health and safety
requirements. It can Standards set out by local authorities or standards made by
customer. Customers can also ask you to fulfil different international standard
e.g. OSHAS etc. It covers:
 Fire Safety
 Machine Safety
 Electrical Safety
 Physical/biological Hazards

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3. Environmental Compliance:
Here a factory has to comply with Environmental requirements that can be local
or international or requirements set out by customer. Environmental
Compliance covers:
 How you manage waste of your facility?
 You have environment permit or not?
 What is the impact of your activities / processes?
 How you manage your processes/activities to make it environment
friendly

4. Product Quality Compliance:

Product quality is a very important compliance area. This is where there is zero
tolerance. If a product is not a quality product then you won’t get the customer.
In Product quality compliance, we consider:
 How a company manages its products?
 How a quality product is ensured?
 What are the faults?
 How the defects are removed?
 How material is handled?

5. Security Compliance
This compliance is mostly applicable on export-oriented industries. This
compliance arises due to terrorism and customer data protection issues. It will
include:
 Who have access to certain areas?
 Who have access to data/files?
 How products are packed?
 How some areas are access restricted?
 How site security is ensured?
 How product design security is ensured?

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6. Structural / Building Compliance:
After collapse of Rana Plaza in Bangladesh, international brands have now been
trying to make sure that this does not happen again. Brands are conducting
building assessment.
 What is the strength of building?
 What is the load capacity of the building?
 What is defect in the building?
 How building can be made safe?

7. Certification Compliances:
There can be different types of certification e.g. Management system
certification, social, environmental, quality, safety certification against different
standards e.g. ISO standards, BSCI, SMETA etc. there might be some special
requirements of these certifications depending on standards e.g. how documents
are managed etc.
Conformance with these requirements depending on their applicability is
compulsory. If some requirement is not meet, it leads to Non-Conformance or
Non- Compliance.
If there is any serious non-compliance then:
 Customer can stop business
 Legal authority can seal the company
 Certification body can cancel certification

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Indian Manufacturing industry –
Company name - Majgenta Fashions
Business Type - Manufacturer / Exporters / Wholesale Suppliers / Retailer
Of ladies’ leather garments, men’s leather garments
Location - B-139, Sector - 63, Noida, Uttar Pradesh, India

In 2013, Versace Inks pact with Majgenta fashions to tap Indian market.
While Versace is directly involved in the styling and marketing of the brand in
India, Majgenta Fashions is responsible for manufacturing, retailing and other
related functions.

In India, Under the Factories Act, the following compliances

should be followed -

Licensing of Factory
The occupier of the factory is required the previous permission from the State
Government or the Chief Inspector in writing for the site on which factory is to
be situated.
And to get a license, the occupier must send the notice under section 7 of the act
to the Chief Inspector, at least 15 days before he begins to use the premise as a
factory containing the following details
 Name and address of the occupier
 Name and address of the factory
 Name and owner of the premise
 Address for communication
 Nature of the manufacturing process to be carried in the factory
 Total horsepower to be installed
 Name of the manager of the factory
 Number of workers likely to be employed
 Other particulars which may be prescribed

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Health Provisions

 Cleanliness– Every factory must be clean and there should be no

accumulation of dirt. Floor, windows, passage, benches of workrooms,
staircase etc. should be cleaned on a regular basis with disinfectant.   
 Disposal of wastes and effluents– the factory shall have proper
arrangements for the treatment of wastes and effluents.
 Ventilation and Temperature– the factory premises should have
adequate ventilation by the circulation of the fresh air. The walls and
roofs should be of such quality that temperature in the factory doesn’t
rise beyond the reasonable conditions of comfort.
 Dust and Fume– If the work carried in factories is such that dust and
fume are released in substantial quantities, effective measures should
be taken to prevent its accumulation in any workroom.
 Artificial Humidification– If the humidity in any factory is increased
artificially, the water used for this purpose should be taken from a
public water supply or should be purified before it is used.
 Overcrowding– No room in any factory shall be overcrowded to the
extent that it becomes injurious to the health of the workers employed
in the factory.
 Lighting– The working area for the workers and the passage have
adequate and sufficient light, natural or artificial or both.
 Drinking Water– There should be suitable points in every factory
which provide a sufficient supply of drinking water and the ‘drinking
water’ shall be mentioned in the language understood by the workers.
 Latrines and Urinals– Sufficient latrine and urinal accommodation
should be there in every factory and they should be accessible to the
workers all the time while they are present in the factory. The
accommodation so provided should be separate for male and female
with proper lights and ventilation.
 Spittoons– Every factory shall have a sufficient number of spittoons
placed at a convenient place. The spittoons should be clean regularly.

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Safety provisions

 Fencing of Machinery– Every moving part of a prime mover and

every flywheel should be fenced securely unless they are safe to be
used otherwise.
 Work on Near Machinery in Motion– When it becomes necessary to
examine any part of the machinery while the machinery is in motion,
such task should be done only be a specially trained adult male worker
wearing tight fitted cloth.
 Employment of Young Persons on Dangerous Machines– Only a
fully instructed person about the dangers arising in connection with the
machine and precautions to be observed, shall be allowed to work on
dangerous machines under the supervision of a person who is
knowledge and experience of the machine.
 Striking Gear and Devices for Cutting-off Power– An appliance
should be provided and maintained to move driving belts to and from
fast and loose pulleys.
 Self-Acting Machines– No self-acting machine shall be kept in such a
space over which any person is liable to pass.
 The Casing of New Machinery– Every set, screw, bolt or key in all
machinery driven by power and installed in a factory should be
encased effectively to prevent danger.
 Prohibition of Employment of Women and Children near Cotton-
openers– Ia cotton-opener work is done by the factory, no woman or
child should be employed for pressing cotton in such work.
 Hoists and Lifts– Every hoist and lift should be sound, adequately
strong and properly maintained.
 Lifting Machines, Chains, Ropes and Lifting Tackles– All parts of
lifting machines, chain, rope and lifting tackle should be of good
construction, sound material and free from defects. They should be
thoroughly checked by a competent officer at least once in 12 months.
 Revolving Machinery– Revolving machinery shall be permanently
affixed to or placed and there should be a notice indicating the
minimum safe working area around the machinery.

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 Pressure Plant– If a factory is using any machinery which is operated
at a pressure above the atmospheric pressure, then the pressure should
be kept under check.
 Floors, Stairs, and Means of Access– All floors, stairs, and passages
should be properly constructed and maintained.
 Pits, Sumps, Opening in floors etc.-If there is any vessel, tank or pit
in the floor which may be a source of danger shall be securely covered
or fenced.
 Excessive Weight– No worker employed in the factory shall be made
to carry or move any load which might cause any injury to him.
 Protection of Eyes– If any process is carried out in the factory which
involves a risk of injury to the eyes from particles or fragments,
suitable goggles or effective screens should be provided to the workers
who are working in such circumstances.
 Precautions Against Dangerous Fumes, Gases etc.- No person
should be allowed to enter any confined space until precautionary
measures have been taken to remove such fumes and gases.
 Precautions Regarding the Use of Portable Electric Light– No
portable electric light of more than 24 volts should be used in any
confined space or chamber or tank.
 Explosive or Inflammable Dust, Gas etc.– All precautionary
measures should be taken to prevent an explosion of gases which are
likely to explode on ignition.
 Precaution in Case of Fire– The factory should take all the practical
measures to prevent the outbreak of fire and its spread, both inside and
outside the factory. Safe means of escape should be in the factory for
the persons, in case of a fire.
 Maintenance of Building– The building of the factory should be
maintained properly so that it does not cause any injury to the health
of the workers.
 Appointment of Safety Officer– In a factory, where the number of
employers is more than 1000 than the factory is required to appoint a
safety officer.

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Welfare Provisions

 Washing Facilities– Separate and adequate facilities to be provided

for male and female worker. The facilities should be clean and
conveniently accessible.
 Facility for Storing and Drying Clothing– The factory should
provide a suitable place for keeping the clothes not worn during the
working hours and for the drying of wet clothes.
 Facilities for Sitting– The workers who are obliged to work in a
standing position should be given proper suitable sitting arrangements
during their rest hours.
 First-aid Appliances– First-aid boxes or cupboards containing with
necessary contents, should be maintained and provided during all the
working hours.
 Canteens– If the factory has more than 250 workers employed,
minimum one canteen should be provided and maintained by the
occupier.
 Shelters, Restrooms, and Lunch Rooms- A factory having more
than 150 workers should provide adequate and suitable restrooms and
lunch rooms, with provision for drinking water.
 Creches– If the factory employs more than 30 women workers, it
should provide a suitable room for the use of children under the age of
6 years of such women.
 Welfare Officers– If a factory has more than 500 employers, such
numbers of welfare officers should be employed as may be prescribed.

Working Hours of Adults

 Weekly Hours– Any adult worker should not be allowed to work in a

factory for more than 48 hours a week. 
 Weekly Holidays– No worker should be made work for continuously
10 days without any holiday. No worker should work on the first day
of the week unless he has or will have a holiday on one of the 3 days
immediately before or after the said day.

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 Compensatory Holidays– If a worker is deprived of any of the
weekly holidays, he should be allowed take that holiday in that month
or within the two months immediately following that month.
 Daily Hours– No worker should be allowed to work in a day more
than 9 hours a day. (Subject to the previous approval of Chief
Inspector)
 Intervals for Rest– The working hours of an adult worker should be
set in a way that he doesn’t work for more than 5 hours without taking
an interval for rest of at least half an hour.
 Spread over– The working periods of an adult worker in a factory
shall be arranged in such a manner that they do not work for more than
ten and a half hours a day including the intervals for rest.
 Night Shifts-If a worker works on a night shift, the hours he has
worked for after the midnight should be counted in the previous day.
 Prohibition of Overlapping Shifts– Not more than one worker
should be given works of the same kind at the same time.
 Extra Wages for Overtime– If any worker works for more than 48
hours in any week, he should be entitled to wages at the rate of twice
his ordinary rate of wages.
 Restriction on Double Employment– A worker should not be
allowed to work in a factory if he is already doing work in one.
 Notice of Periods of Work for Adults– A notice should be put every
day clearly showing the periods in which adult worker may be
required to work that day.
 Register of Adult Workers– Every factory is required to maintain a
register of adult workers showing the name and nature of the work of a
worker.
 Hours of Work to Correspond with Notice and Register– No
worker should be allowed to work any work other than mentioned in
the notice and the register.

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 Employment for young persons

 Prohibition of Employment of Young Children– No child who is

less than 14 years of age be allowed to work in any factory.
 Non-adult Workers to Carry Tokens– An adolescent should not be
allowed to work in a factory unless a certificate of fitness has been
granted to him under section 69 of the Act.
 Certificate of Fitness– A certifying surgeon can issue a certificate of
fitness to an adolescent only when the manager of the factory and the
guardian of the adolescent sign a document that he will be employed
in that particular factory.
 Working Hours for Children– No child should be allowed to work
more than four and a half day in a day and should not be allowed to
work in the night at all.
 Notice of Periods of Work for Children– Every factory should
display and maintain a notice every day for the periods during which
children will be allowed to work.
 Register of Child Workers– A register should be maintained in the
factory mentioning the name of the child worker, the nature of his
work, the group in which he is included, the shift of his group and his
certificate of fitness. No child worker should be allowed to work in the
factory unless his name is entered in the register of child workers.
 Hours of Work to Correspond with Notice– No child should be
employed in the factory otherwise in accordance with the notice of
periods of work for children displayed in the factory.

An adolescent (both male and female) who has obtained a certificate of fitness
can work in the factory only during the time period of 6 A.M.- 7 P.M.

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 Annual Leave with Wages

 Annual Leave with Wages– Every worker who has worked for 240
days or more in a factory in a year should be allowed to have leaves
with wages in the subsequent year.
 Wage During Leave Period– A worker who has taken leave under
section 79 or 80 of the act, shall be entitled to wages at a rate equal to
the daily average of his total earnings for the day during the month
immediately preceding his leave.
 Payment in advance in Certain Cases– A worker who has been
allowed leave for less than four days, in the case of an adult, and five
days, in the case of a child, should, before his leave begins, be paid the
wages due for the period of the leave allowed.     

In addition, the occupier a Health Register in respect of persons employed in

occupations declared to be dangerous operation under section 87 of the Act.

 Maintain a Bound Inspection Book.

 Annual return to be filed on time.
 Report form Health Officer.

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 VERSACE is a brand under Capri Holdings Limited the company is
dedicated conducting their operations throughout the world on principles of
ethical business practice and recognition of the dignity of workers.
They conduct their operations in accordance with the below criteria and they
expect their business partners to respect and adhere to the same standards in
the operation of their business.
They utilize these criteria to evaluate their relationships with customers and
suppliers.
This Code of Conduct may be updated from time to time.

WAGES/BENEFITS/WORKING HOURS
Our business partners must comply with all laws regulating local wages, work
hours and benefits. Wage and benefit policies must be consistent with
prevailing national standards, and also be acceptable under a broader
international understanding as to the basic needs of workers and their families.
We will not work with companies whose wage structure violates local law or
prevailing industry practice.

CHILD LABOR
Our business partners must not use child labour, defined as school-age children.
Our business partners will not employ workers under the age of 15 or under the
legal minimum age for employment in the applicable country, whichever is
greatest. This provision extends to all partner facilities. In addition, workers
under the age of 18 should not be exposed to hazardous working conditions.

HEALTH & SAFETY

Our business partners must ensure that their workers are provided a safe and
healthy work environment, and are not subject to unsanitary or hazardous
conditions.

FREEDOM OF ASSOCIATION
Our business partners should respect the legal rights of employees to freely and
without harassment participate in worker organizations of their choice.

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PRISON OR FORCED LABOR
Our business partners shall not use any form of slave, forced, bonded,
indentured, or prison labour in any stage of the manufacture of our products. All
work must be voluntary and workers must be free to terminate their
employment at any time, without penalty. Involuntary labour includes the
transportation, harbouring, recruitment, transfer, receipt, or employment of
persons by means of threat, force, coercion, abduction, fraud, or payments to
any person having control over another person for the purpose of exploitation.
Our business partners must ensure that no fees or costs have been charged,
directly or indirectly, in whole or in part, to jobseekers and workers for their
services directly related to recruitment for temporary or permanent job
placement, including when using the services of private recruitment, labour
broker or employment agent or performing recruitment activities directly.
Workers shall not be required to pay employers’ or their agents’ recruitment
fees or other similar fees (such as host country fees like levies, fees for work
permit, or fees for renewing work documents, or home country fees like visa
fees, medical checks, or any other costs that are not the legal responsibility of
the worker) to obtain their employment. If such fees are found to have been
paid by workers, our business partners must promptly repay such fees to the
worker. Workers shall receive a written contract in a language understood by
the workers stating in a truthful, clear manner their rights and responsibilities in
connection with their employment. Our business partners shall not retain any
documents or demand monetary deposits or other collateral as a condition of
employment. Workers must not be subject to the withholding of wages, original
identification cards, original passports or other original travel documents or
personal belongings. Our business partners shall also ensure that the third-party
recruitment agencies (including labour brokers) it uses are compliant with the
provisions of this Code and applicable law, and shall provide us with a list of
the recruitment agencies they are using and the amount of fees being paid to
such agencies.

DISCIPLINARY PRACTICES
Our business partners will not employ or conduct any business activity with
partners who employ any form of physical or mental coercion or punishment
against workers.

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DISCRIMINATION
Our business partners will not practice nor do business with business partners
who practice any form of improper discrimination in hiring and employment,
including on the basis of age, race, colour, gender, religion, sexual orientation,
ethnicity or national origin.

ENVIRONMENT
Our business partners must embrace a fundamental concern for environmental
protection and conduct their operations consistent with both local and
internationally recognized environmental practices.

LEGAL REQUIREMENTS
Our business relationship must be built on a mutual respect for and adherence
to legal requirements. Our business partners will observe both local and
applicable international standards.

ETHICAL STANDARDS
We intend to conduct all our business in a manner consistent with the highest
ethical standards, and we will seek and utilize partners who will do likewise, as
this contributes directly to our corporate reputation and the collective success of
our organization and selected business partners.

CONFLICT MINERALS
We encourage our suppliers that use cassiterite (tin), columbite-tantalite
(tantalum), gold and wolframite (tungsten) that are necessary to the
functionality or production of products that we manufacture or contract to
manufacture, to source product in a socially and environmentally responsible
manner and in accordance with the separate Conflict Minerals Policy of the
Company.

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SUBCONTRACTING
Our business partners may not subcontract all or any part of the work on our
products or the services provided without our express written consent, which
will not be given unless each subcontractor meets all of the criteria set forth
herein.

ANTI-BRIBERY
It is illegal and against Company policy for our business partners to offer, pay,
promise to pay or authorize the payment of money or anything else of value to
any government or administrative official (whether directly or through an agent
or other intermediary) for the purpose of influencing an act or decision or
securing an improper advantage for the Company. It is also against Company
policy and illegal in certain jurisdictions for our business partners to offer or
accept corrupt payments and other advantages between private (non-
government) persons and entities (also known as commercial bribery or
“kickbacks”).

TAX EVASION
Our business partners are expected to comply with their tax responsibilities, and
are prohibited from taking any action that would undermine an obligation to pay
taxes by the Company or from assisting any third party with whom any of our
business partners interact as a part of their relationship with the Company to
evade taxes. Tax evasion is a crime which occurs when somebody deliberately
attempts not to pay a tax and anybody who facilitates these actions is also at
risk of being held liable.

GIFT GIVING
Our business partners are prohibited from giving to our employees or agents, or
receiving from our employees or agents, gifts in excess of US$100.00 and no
gifts may be given or received in cash or its equivalent. Furnishing or receiving
meals, refreshments and entertainment in conjunction with business discussions
is permitted.

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CONFLICTS OF INTEREST
Our business partners are expected to avoid conflicts of interest or potential
conflicts of interest with our employees. A conflict of interest may arise when
an employee or a member of his or her family or any of his or her affiliates
receives improper personal benefits (in the form of money, gifts, personal
favours or anything else of value) as a result of his or her position in the
Company (other than in accordance with the Company’s gift giving policy
referred to above).

IMPLEMENTATION
We will apply these criteria in all business partner determinations, and will
continue to implement these policies in the conduct of all activities of the
Company and activities performed on its behalf. This will include our business
partners sharing information on production facilities and procedures, with the
objective of improving our collective service to customers in a responsible
manner. Failure by a business partner to meet these standards will result in our
taking appropriate actions, up to and including termination of the business
relationship.

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