Unit 3
Unit 3
Unit 3
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
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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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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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?
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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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.
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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.
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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
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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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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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?
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
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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
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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.
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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?
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.
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