In a major push towards Ease of Doing Business (EoDB) and compliance reform, the Andaman and Nicobar Administration has launched a Self-Inspection and Third Party Certification Mechanism for factories, shops, and commercial establishments under applicable labour laws.
Notified by the Labour Commissioner from Sri Vijaya Puram, this scheme aligns with the national EoDB policy of the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, and is effective immediately.
Objective
The mechanism aims to:
- Reduce routine inspections
- Improve transparency and accountability
- Encourage voluntary compliance
- Promote business-friendly regulatory practices
🔹 PART I: Risk-Based Factory Inspections
Factories are categorized into four risk levels:
| Category | Risk Level | Criteria |
| A | Very High | All Major Accident Hazard (MAH) factories |
| B | High | Hazardous process + >100 workers OR Non-hazardous + >250 workers |
| C | Medium | Hazardous + ≤100 workers OR Non-hazardous + 51–250 workers |
| D | Low | All others not falling in A–C |
✅ For Medium-Risk Factories
- Third Party Certification (Optional)
- Valid for 3 years
- Submit via: lodet@and.nic.in
✅ For Low-Risk Factories
- Self-Certification (Optional)
- Valid for 5 years
- Submit via: icdet@and.nic.in
Note: No major violations or accidents in the past 1–3 years is a must to qualify. Surprise inspections may still occur if complaints are received.
🔹 PART II: Shops & Establishments – Third Party Certification
✅ Covered Laws:
Includes key labour legislations like:
- Minimum Wages Act
- Payment of Wages Act
- Contract Labour Act
- Gratuity Act
- Maternity Benefit Act
- Shops & Commercial Establishments Regulation, 2004, etc.
✅ Certification Authority:
- Qualified Company Secretaries (not connected to the business for past 3 years)
- Must be approved by the Central Government
✅ Key Compliance Terms:
- Auditors must submit reports to the Labour Commissioner and establishment heads
- Establishments must act on audit findings within 60 days
- Annual audits ensure exemption from inspections unless complaints arise
- No legal action will be taken based on discrepancies in audit reports; the focus is corrective, not punitive
Safeguards & Enforcement
- Auditors violating norms may be debarred
- Confidentiality rules strictly apply
- Monitoring and grievance redressal lie with the Labour Commissioner
Why This Matters
This system helps streamline compliance for businesses while preserving worker protections under law. Establishments that proactively certify their compliance can operate without routine inspections, allowing the Labour Department to focus on serious violations and worker welfare.