TAG overview

Mica supply chain

Mica is an important raw material of our effect pigments, which are used in automotive and industrial coatings and plastics, as well as in the cosmetics and food industries. We procure the majority of our mica from India, specifically the north-eastern states of Jharkhand and Bihar. This region suffers from political instability and poverty, with widespread child labor. We’ve taken special measures to comply with our social and environmental standards.

Our approach to responsibility in the mica supply chain

In procuring mica from northeast India, we are supporting this region by safeguarding local employment and livelihood. We only source the raw material from suppliers acting in formal working environments and monitor with our standards, including our ban on child labor.

Our mica suppliers have been informed of our standards and have confirmed that they adhere to the principles of our Human Rights Charter as well as the requirements of our Responsible Sourcing Principles. We do not tolerate child labor and contractually prohibit our suppliers from employing children. Hence, we are driving initiatives and taking measures to improve the conditions of mica sourcing based on our high standards. We constantly review our monitoring processes and work on improving their effectiveness.

How we organize our mica supply chain

We have established direct business relationships with those suppliers who handle the mica supply chain in India. Our procurement unit is in direct contact with the suppliers to reiterate the importance we place on ethical, social and environmental standards. Whenever non-compliance with our standards is identified, we work with suppliers to ensure the appropriate implementation of corrective measures.

Our commitment: Compliance with guidelines and standards

As a signatory to the United Nations Global Compact, we are actively involved in working to abolish child labor. Our Human Rights Charter underscores this commitment. In our Responsible Sourcing Principles, we set out our expectations for our suppliers in terms of corporate responsibility and human rights, including a ban on child labor. Our Responsible Sourcing Principles also form an integral part of our supplier contracts.

Auditing our mica supply chain

We have implemented a series of oversight mechanisms through a system that monitors and audits compliance with our social and environmental standards. In addition to regular inspections by employees of Merck KGaA, Darmstadt, Germany and third parties used for this purpose, we conduct comprehensive announced audits as well as frequent, unannounced check visits in the region.

Regular audits

Environmental Resources Management (ERM), an international management consulting services company, conducts regular audits of all mines and processing plants, investigating working conditions as well as environmental, health and safety issues. The audit reports document any identified shortcomings in this respect and propose corrective actions. Our employees in Kolkata (India) and Darmstadt (Germany) then follow up to work on resolving any identified issues.

When shortcomings are not rectified, we take further actions up to freezing relations with the respective company or even terminating the business relationship altogether.

Unannounced inspections

Since 2013, the IGEP Foundation, a local non-government organization, has been arranging regular unannounced visits to check the working standards along the supply chain. During these visits, IGEP monitors occupational safety as well as compliance on child labor. In 2019, these inspections focused on the upgrade of personal protective equipment and training sessions on proper use.

Tracking system for mica sources

We use a tracking system to help ensure that the mica we purchase is derived from sources qualified by our company, and to monitor their productivity. Based on written records of the daily extraction quantities, we review the volumes of mica reported and supplied to the processing companies.

Community outreach in the mica supply chain

The states of Jharkhand and Bihar are among the most impoverished regions in India. Together with IGEP, we are working to improve the living conditions of the families in the mica mining areas. The literacy rate and the number of children who attend school are far below the Indian national average, according to a study conducted in 2016 and a report published in 2018 by the organization Terre des Hommes and the Centre for Research on Multinational Corporations.

As part of our efforts, we are funding three schools in Jharkhand run by our partner IGEP, which are attended by nearly 500 children and adolescents. All schools go up to at least sixth grade. In 2019, two schools introduced a seventh grade. Tailoring and carpentry courses are also offered. At a fourth school run by one of our mica suppliers, we provide scholarships for 200 children.

In addition to our education efforts, we are committed to improving local access to healthcare. To this end, we have established a health center operated by IGEP to serve the 20,000 residents in the region. Two medical professionals work at the center and also provide regular health services to schools. This center provides an important contribution to improving the medical care of the population in the region.

Stronger together: Joint action in the mica supply chain

We are a founding member of the Responsible Mica Initiative (RMI), which was established as a multi- group. Our company held the presidency of the organization in 2019. The initiative aims to eradicate child labor and unacceptable working conditions in the Indian mica supply chain by joining forces across industries. In 2019, we continued to actively support the RMI’s work on its three main goals:

  • Responsible workplace standards: In 2019, RMI held several training sessions on workplace standards for local businesses.
  • Community empowerment: Building on the first community empowerment program in 2018, which reached 40 villages, in 2019 RMI launched a second program covering a further 40 villages. The goal is to address the root causes of child labor and to improve livelihoods within the local community.
  • Advocacy: Through continuous advocacy work, the RMI is recognized as an important partner in drafting future policies to help ensure sustainable mica mining while eradicating the root causes of child labor.

In 2019, the RMI participated in multiple local and global stakeholder meetings, such as the OECD Forum on Responsible Mineral Supply Chains in Paris (France). The goal of the event was to assess and facilitate progress on minerals sourcing globally with a special focus on conflict minerals. The RMI also attended the event marking the publication of the National Commission for Protection of Child Rights (NCPCR) study on education and child welfare in the Indian mica mining regions of Bihar and Jharkhand. Also in 2019, RMI signed a Memorandum of Understanding () with the Responsible Minerals Initiative to help prevent child labor and improve working conditions in mica industry supply chains globally.

New sources of mica

Our processes undergo constant review and improvement. We are evaluating other sources for mica according to our quality, social and environmental standards both in India and in other regions. In 2019, a considerable amount of our mica was obtained from Brazil, where we have also established oversight mechanisms to monitor and audit adherence to our CR standards. Furthermore, we manufacture effect pigments based on synthetic substrates as an alternative to pigments based on natural mica.

Compliance
Adherence to laws and regulations as well as to voluntary codices that are internal to a company. Compliance is a component of diligent corporate governance.
Stakeholder
People or organizations that have a legitimate interest in a company, entitling them to make justified demands. Stakeholders include people such as employees, business partners, neighbors in the vicinity of our sites, and shareholders.
Memorandum of understanding (MoU)
A type of agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action.

Information

The current Sustainability Report 2020 can be found here.

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