India has grand plans for its semi-conductor industry. The country is a relatively new entrant to the world of chip manufacturing, dominated by Taiwan, South Korea, and the US. Over the last few years, India has undertaken an unprecedented push for investments in the field. “Our dream is that every device in the world will have an Indian-made chip,” said Prime Minister Narendra Modi at an event in September.

In recent years, New Delhi has invested Rs 76,000 crore into the sector as part of the India Semi-Conductor Mission, providing huge subsidies to companies that plan to manufacture chips in India and hopes to see the industry’s value grow from $29 billion in 2023, to nearly four times its size, to $109 billion, by 2030.

Such a massive expansion brings with it many questions, such as whether the government’s investment will actually result in employment creation to the extent that has been claimed. But amid all the headlines created by India’s big push into the sector, one element has gone under-reported: what this might mean for Indian workers.

The country already has a poor framework for labour rights in manufacturing industries, especially in occupational health and safety. Evidence from research in other countries and workers’ experiences indicates that the chemically intensive process of chip-manufacturing is associated with serious health hazards.

At the same time, the government is planning to codify its labour laws for occupational health and safety with the aim of doing away with regulations that delineate permissible limits for chemicals and toxic substances, while offering no improvement to the infrastructure of monitoring or inspection that could circumvent this gap. Without instituting robust mechanisms and improving existing laws on occupational health and safety, the rapid expansion of the industry in India could have dangerous consequences for its workers.

Toxic history

The manufacturing of semi-conductors is chemically intensive and involves complex processes that are repeated up to a hundred times, depending on the number of layers on a chip. The industry also closely guards information on the materials used for manufacturing. In the early days of the industry, from the 1960s to 1990s, the US was the leading manufacturer of chips and had the highest number of workers employed in the sector. A number of chemicals that workers in the industry were exposed to during the manufacturing process in those years have been linked to cancer, reproductive-health issues and higher rates of miscarriages.

A study conducted in California in the early 1980s showed that the rates of occupational illnesses among workers in the semi-conductor industry were comparatively higher, reaching up to four times those of other industries in 1978, according to data provided by the state’s Department of Industrial Relations.

By the 1990s, more data had emerged about health concerns associated with the manufacturing of semi-conductors in the US. In 1992, IBM announced the phasing out of some chemicals – such as ethylene glycol ethers (EGEs) – used in chip manufacturing, following a study commissioned by the company that showed higher than average rates of miscarriages in workers exposed to these compounds. The same year, a study commissioned by the Semi-Conductor Industry Association pointed to high rates of spontaneous abortions among women workers, with levels elevated in those who worked in fabrication areas.

During this time, many semi-conductor manufacturers in the country were sued by workers who had developed cancers, chronic illnesses, and adverse reproductive-health effects, resulting in many out-of-court settlements. In 2006, a study that involved almost 32,000 people working at IBM’s factories from 1969 to 2001 showed higher rates of cancers (including cancers associated with the brain, kidney, and skin) than the general population. The data initially came to light following a lawsuit by two IBM workers against the company, which released the information for expert analysis.

Similar health hazards for workers were witnessed when the chip-making industry moved its manufacturing operations to Asia. Research showed that the same chemicals that were “phased out” from chip manufacturing in the US were still being used by manufacturers in South Korea, along with other chemicals with limited information and assessment for toxicity. Workers at chip-making units were developing leukemia as well as other cancers and tumors, and had higher rates of miscarriages.

Following a long-drawn-out legal battle and public campaign initiated by the families of workers and labour activists in 2007, Samsung Electronics, the leading manufacturer of semi-conductors in the country, issued an apology to its workers in 2018 and agreed to pay compensation of $133,000 per case for failing to “properly manage health risks at our semiconductor and LCD factories”. The company did not acknowledge a link between the materials used in chip manufacturing and the adverse health effects workers faced.

Transparency and accountability

It is generally difficult in epidemiological studies to establish unequivocal links between certain chemicals and their effects on humans. What we do have is a history of litigation by workers who have developed occupational diseases, with cases often settled by the companies outside of court without accepting culpability for having caused harm. These present important lessons for countries like India, which are aggressively pursuing a path of rapid growth for the semi-conductor industry. Experience from other countries points to two key issues concerning occupational health in the sector: the lack of information about the use of chemicals in chip manufacturing and the lack of transparency or accountability when it comes to the materials or processes in manufacturing.

The industry has a history of failing to inform workers about the chemicals they are handling or their potential hazards. Technological advancements have led to new chemicals being introduced in manufacturing without an adequate assessment of their effect on human health. In manufacturing units, workers wear suits that cover their bodies, but these are designed primarily to protect the chips/silicon wafers from contamination, and not the workers from being exposed to toxic chemicals.

Where there have been changes in the use of chemicals or compensation given to workers for adverse health impacts, such as in the US and South Korea, these were the result of sustained campaigns from workers’ collectives. The Occupational Safety and Health Administration (OSHA), the regulatory agency that governs occupational health in the US, recognises that the permissible limits of several chemicals may not be adequately updated or in line with the rapid changes in the manufacturing process. Most permissible exposure limits were issued when the occupational health law, the Occupational Safety and Health Act, was first introduced, in 1970.

Lessons for India

The history of health risks in semi-conductor manufacturing poses challenges for India, given the state of its regulatory mechanisms on occupational health and safety. The recently enacted Code on Occupational Health and Safety, 2020, has a schedule of “hazardous” industries that includes the “semi-conductor manufacturing industry.” This puts it under the ambit of provisions that require the disclosure of health hazards (s. 84) and the maintenance of health records, as well as mandatory provision of medical examination for workers (s. 85).

While the inclusion of the industry under the “hazardous” list is welcome – the list had not been updated since 1987, after the Bhopal Gas Tragedy – an alarming omission in the Code is the “permissible threshold limits” of chemicals and toxic substances, which was present in the Second Schedule of the erstwhile Factories Act, 1948. Far from being updated in accordance with what we now know about the use of toxic chemicals in the semi-conductor industry, the Code has completely omitted any specifications on “permissible threshold limits” for any substance, and left it “to be prescribed by the State Government.” There is no provision on how the specifications may be updated, or in what manner – by contrast, under the provision in the Factories Act, 1948, the Central Government could make changes in the permissible threshold limits in the Second Schedule on specific proof given by specialised institutions or experts.

In terms of regulatory mechanisms, India does not have a body that works on setting exposure limits, like OSHA does in the US. No institution or regulatory agency is assigned the responsibility of maintaining and developing either toxicology standards or epidemiological studies in occupational health. The Directorate General Factory Advice Service and Labour Institutes (DGFASLI) acts as a technical body for the formulation of national policy and only occasionally conducts studies on occupational health. The lack of adequate infrastructure (such as laboratories and equipment) and trained professionals who are employed as inspectors has been a longstanding issue in occupational health and safety.

Inspection rates have shown a steady decline in India, across all laboyr laws, in major states. The Code introduces an inspection scheme that relies on “web-based inspections,” which means that information under the Code can be sought for electronically, and the selection of factories for inspection will be randomized under the scheme. Inspectors can no longer identify and enter factories to conduct an inspection of materials or processes.

Several states in India have already moved on to self-certification mechanisms, or given across-the-board exemptions to factories from any kind of physical inspection. Previously, there was a statutory requirement to set up a safety committee with worker representation (s. 41 G, Factories Act, 1948), but the Code reduces this to a non-mandatory provision, left to the discretion of the Central or State Government, as the case may be (s. 22).

The projected growth of the semi-conductor industry in India is set to take place in a scenario where an already inadequate regulatory mechanism has been further weakened by statutory provisions. Drawing on the experience of workers in the chip-manufacturing industry – across its many relocations—helps us understand that the push should be for “good jobs” that do not put workers at risk. This involves not only technical expertise and robust reporting requirements, but also a general framework that is worker-centred, gives them decision-making powers over their own health, and enables their concerns to be taken seriously.

While India’s decision to categorise “semi-conductor manufacturing” as a “hazardous” industry implicitly acknowledges the dangers, its occupational health and safety regulations for manufacturing are outdated, with reporting mechanisms ineffective in building a database for harmful chemicals and processes. Because we know so little about the use of chemicals in the industry, coming up with adequate prescriptions for exposure limits will be difficult in the absence of reliable data.

At the very least, the semi-conductor industry should not be allowed to use chemicals in manufacturing that have not been tested beforehand for their effects on human health. Workers should be allowed to remove themselves from a situation that poses “imminent and serious danger” to their health, (in accordance with ILO Convention no. 155, on Occupational Health and Safety). Occupational health and safety regulations for the industry need to keep up with the rapid changes in the technology, materials, and processes involved. Such mechanisms need to be not only technically sound, but responsive to workers’ concerns as they emerge. The government should redirect funding to improving the domestic infrastructure on occupational health and safety so that experts and institutions are able to adequately keep regulations on track with advancements in technology.

Jasoon Chelat is a PhD candidate at the National Law School of India University.

This article was first published in India in Transition, a publication of the Center for the Advanced Study of India, University of Pennsylvania.