Mica supply chain

We utilize mica as a primary raw material in effect pigment production. These pigments are then used in automotive and industrial coatings, as well as in the cosmetics and food industries. Mica naturally occurs in many countries around the world. We mainly procure our mica from India, where it is mined in the states of Jharkhand and Bihar. Plagued by political instability and poverty, child labor is widespread in this region, so we’ve taken special measures to ensure with our environmental and social standards.

Our principles

Responsibility in the mica supply chain

During a study conducted in 2008, we discovered that people in Jharkhand and Bihar were collecting mica from the tailings of abandoned mines or off the ground – sometimes with their children. This is a clear violation of our Values and the principles of our Human Rights Charter. We do not tolerate child labor and, as a signatory to the United Nations Global Compact, are actively working to end this practice. We require all our suppliers to act accordingly and as such prohibit child labor in our contracts.

We have made a conscious decision to maintain our business relationships in the north of India and are taking on responsibility for this region by safeguarding jobs there. To ensure that the mica we procure has been mined without the use of child labor, we have completely overhauled our supply chain, only sourcing this raw material from regulated mines. This formal work environment is the only way to ensure compliance with our standards, as we cannot rule out the use of child labor for mica collected in publicly accessible areas.

Governance of the mica supply chain

We maintain direct contact both with the mine operators and the mica processing plants, which is why we have set up an office in Jharkhand. Through this proximity to our business partners, we can better educate them on our social and environmental standards as well as monitor adherence to them. Local mine owners and processing plants help us keep the mica supply chain free of child labor.

Conducting audits

To ensure that all mines and processing plants comply with our requirements regarding environmental stewardship, safety and labor standards, we monitor the practices of our business partners. In addition to comprehensive audits announced in advance, surprise checks also take place. Once a month, for instance, the local organization IGEP performs unannounced investigations into the working standards in the mines, monitoring work safety and ensuring compliance with the ban on child labor. Moreover, the international organization Environmental Resources Management (ERM) performs annual audits that review working conditions, as well as environmental, health and safety standards. Audit reports are compiled to document any identified issues and specify corrective action. Our employees in Jharkhand then make sure that the issues have been resolved.

Tracking system to guarantee certified origin

Using a tracking system, we ensure that the mica supplied to us does not come from unregulated sources, but instead exclusively from legally operated mines that have undergone our certification process. All mine owners have a logbook in which they record the daily amount of mica produced in their mines. These records provide the basis for the license fees that they pay to the government. Were they to use mica from an unregulated source, they would also have to pay license fees for the additional amounts. Such a practice would be uneconomical, as it would cost more than the mica from their own mine. Every month, we crosscheck the amounts of mica recorded in the logbooks and delivered to processing units.

Community outreach in the mica supply chain

The states of Jharkhand and Bihar are among the most impoverished regions in India. In partnership with IGEP, we are working to improve the living conditions of the families in the mica mining regions. According to a 2016 study by the international organizations Terre des Hommes and Stichting Onderzoek Multinationale Ondernemingen, the literacy rate and the number of children who go to school there are far below the national average. In an effort to remedy this situation, we are running three schools in Jharkhand with adjoining nursery schools, as well as two vocational training centers for tailoring and carpentry. More than 500 children and young people are now enrolled at these institutions. At a fourth school opened by one of our mica suppliers in 2014, we also provide scholarships for 150 children, with plans to increase this number to 200 in 2017.

In addition to our education efforts, we are also committed to improving access to healthcare. To this end, in 2010 we established a health center operated by IGEP to serve the region’s 20,000 residents. The facility has two doctors and a nurse, who also provide health services at schools. Previously there was no healthcare of any kind in this region.

Finding new mica sources in other countries

We have found additional sources of mica outside of India that meet our stringent quality, social and environmental standards. Now, for example, part of our mica volume is supplied by companies in Brazil, and we also have access to a certified source in the United States. In this way, we are ensuring the availability of this raw material over the long term and avoiding potential supply bottlenecks. Furthermore, to provide an alternative to pigments based on natural mica, we also manufacture effect pigments based on synthetic substrates.


Business relationship with a supplier ended

The international organization Environmental Resources Management (ERM) conducted six audits in early 2016. At the time of the audit, 90% of the necessary corrective measures specified in previous audits had already been taken or were still being implemented. The defects identified were primarily related to occupational safety precautions and gaps in the implementation of management systems. However, we terminated our business relations with one of our suppliers because they failed to carry out the required corrective action in a satisfactory manner.

In 2015 and 2016, IGEP performed monthly unannounced inspections of our mica suppliers. These efforts revealed improvements in the management processes of our vendors, such as occupational safety and regular updating of important documentation. Our suppliers also provided the requested training courses for their employees. Overall, no relevant deviations from our standards were noted.

dialogue on the mica supply chain

We keep interested customers and other stakeholders regularly informed on our mica sourcing activities. The employees in our Jharkhand office are in contact with our project partners and other advocacy groups, as well as local and national authorities. In February 2016, we attended the Mica Summit in Delhi, hosted by the Natural Resources Stewardship Circle (NRSC). As a partner of this initiative, we also helped to organize the event. Since this summit, we have become involved in the Responsible Mica Initiative, also established by the NRSC, which aims to improve the traceability of mica in the supply chain and sustain the natural environments of the communities living in mica mining regions.

Adherence to laws and regulations as well as to voluntary codices that are internal to the Group. Compliance is a component of diligent corporate governance.
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.