Mica is an important raw material for our effect pigments, which are used in automotive, 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 livelihoods. We source the raw material only from suppliers acting in formal working environments and monitor compliance with our standards, including our prohibition of child labor.
Our mica suppliers are 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
Group Procurement has overall responsibility for sourcing mica. A steering committee is in place to involve the relevant functions and inform responsible Board members about significant developments.
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. In case of non-compliance with our standards, 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 prohibition of child labor. Our Responsible Sourcing Principles are also 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 visits by Merck employees, regular inspections are conducted by third parties, who conduct comprehensive announced audits as well as frequent, unannounced check visits.
Environmental Resources Management (ERM), a leading global provider of environmental, health, safety, risk, social consulting services, conducts external audits of 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.
If shortcomings are not rectified, we take further action, up to freezing relations with the respective company or even terminating the business relationship altogether if necessary.
Since 2013, the IGEP Foundation, a local non-government organization, has been arranging regular unannounced inspections to check labor standards along the supply chain. During these visits, IGEP monitors occupational safety as well as compliance on child labor. In 2020, the inspections focused on the availability of first aid kits with sufficient medicine, medical health check-ups for workers and health and safety training. Due to an improved escalation process, our suppliers have successfully improved the working conditions on the sites.
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. In 2020, two schools introduced an eighth grade. Tailoring and carpentry courses are also offered in vocational training centers nearby the schools. In the reporting year, we also assessed the feasibility offering new options for vocational trainings such as plumber or electrician. At a fourth school run by one of our mica suppliers, we provide scholarships for 200 children out of 450 enrolled at the school.
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, particularly during the Covid-19 pandemic, which continues to have a significant impact on the Indian economy and society.
Stronger together: Joint action in the mica supply chain
We are a founding member of the multi-stakeholder group Responsible Mica Initiative (RMI). In 2020, we once again held the presidency of the organization. The initiative aims to eradicate child labor and unacceptable working conditions in the Indian mica supply chain by joining forces across industries. During the reporting year, we continued to actively support the RMI’s work on its three main program pillars:
- Responsible workplace standards: In 2020, RMI held training sessions on workplace standards for local businesses.
- Community empowerment: Building on the first community empowerment program in 2018, the RMI has expanded the programs to cover 80 villages, reaching more than 5,800 households in 2020. 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 for drafting future policies to help ensure sustainable mica mining while eradicating the root causes of child labor.
In 2020, the RMI further developed its multi-stakeholder consultations, including representatives from processors, local authorities and non-government organizations. An important outcome of this is the “Ranchi principles,” which represent a cornerstone for alignment among all key players at a local level. They are a set of principles intended to help create a sustainable mica eco-system in the Indian mica region.
The RMI responded rapidly to the Covid-19 outbreak. At the outset, the RMI funded community kitchens in the Giridih district until local authorities took over. These community kitchens supplied two meals per day, prioritizing vulnerable groups, such as the elderly, migrant workers and underprivileged families. At a later stage, the RMI organized e-consultations so that all its stakeholders were able to continue the dialog on sustainable mica.
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 2020, we obtained a considerable amount of our mica from Brazil, where we have also established oversight mechanisms to monitor and audit adherence to these standards. In addition, we manufacture effect pigments based on synthetic substrates as an alternative to pigments based on natural mica.