Merck's Mica Supply Chain
Update May 2011
Merck„s mica supply chain – update May 20112
Bihar
Jharkhand
GayaNawada Jamui Banka
Bhagalpur
Hazaribagh
Koderma
Giridih
Bihar
Jharkhand
GayaNawada Jamui Banka
Bhagalpur
Hazaribagh
Koderma
Giridih
Bihar
Jharkhand
GayaNawada Jamui Banka
Bhagalpur
Hazaribagh
Koderma
Giridih
Background
The effect pigment business of Merck‟s chemical division is based to a large extend on
Indian mica. This specific mica has the characteristics necessary for the production of the
high quality pigments. This mica is sourced mainly from Bihar and Jharkhand.
India
Bihar
Jharkhand
Merck„s mica supply chain – update May 20113
Background
The mica from India is sourced through a supply chain with many actors, Merck buys
mica from exporters. Processors have been visited and audited regularly for many years
by Merck.
In recent years reports proved that child labour occurs in the very first step of the mica
supply chain, i.e. the collection of mica.
Unorganised(e.g. private persons)
Company/organisation
Collection of MicaFunction
Local traders(unknown)
Trading of Mica
Partners
Milling and sieving
Partners
Trading and Processing
MerckMerckCollector Trader Processor Exporter
Mines
Quarries
Decreasing influence of Merck
BrandBrand ShopShop
Consumer
Merck„s mica supply chain – update May 20114
Our commitment
Merck strongly opposes child labour. As a signatory of the United Nations Global
Compact, the company is actively engaged in eliminating child labour and the Merck
Social Charter explicitly bans child labour. Moreover, Merck KGaA stipulates in its
contracts that suppliers do not employ children.
Merck has started activities to get better control of this initial stage of the mica supply
chain and initiate change
– To secure a child-labour-free supply chain
– To improve living conditions in the region
Merck„s mica supply chain – update May 20115
Our target: Merck will eliminate child labour in its supply chain for natural mica.
As of October 1, 2010, Merck guarantees that all mica used for the
manufacture of its Merck-branded cosmetics and Candurin® portfolio
will be from child-labour-free sources. The conversion process for all
Taizhu-branded cosmetic pigments from China will be completed by
July 2011. This means that all cosmetic pigments produced from July
2011 onwards are based on controlled mica.
By End of 2011 we will have converted all raw mica supply for our
entire effect pigment portfolio.
Promising steps towards a child-labour-free supply chain have been
achieved by:
1. establishment of business relationships with mining companies in India
2. start of a project to develop “child-friendly villages”
3. operation of schools and a medical centre
Merck„s mica supply chain – update May 20116
1. Routine supply of mica from mines in India
In 2010 we began contracting with mine owners. In the mean time we
established routine processes for sourcing mica from these mines. This is an
important element for securing a child-labour-free mica supply for our entire
portfolio because these contained facilities are easier to control.
A tracking system that gives us transparency throughout the supply chain was
implemented.
Further mines are being evaluated in order to expand our direct supply of child-
labour-free mica.
An audit system was developed to ensure that the mines are socially
compliant, including unannounced audits by third parties (IGEP, ERM) and
specialists from Merck.
MerckMerckProcessor ExporterMines
BrandBrand ShopShop
Consumer
2. Social activities
Besides our strategy to gain control along the mica supply chain, we want to
improve the social and living situation of families in the mica region
Based on a detailed evaluation and assessment, Merck is collaborating with
expert partners to develop and implement educational and health programs in
Jharkhand:
– With IGEP, we are operating schools and a health centre within close proximity to
the mines from which Merck is sourcing mica
– BBA is implementing the concept of child-friendly villages
Merck„s mica supply chain – update May 20117
Merck„s mica supply chain – update May 20118
2. Social activities: school in Tisri run by IGEP
The first Merck-sponsored school was opened in Tisri in January 2010 and has been well accepted by the villagers and their children. There are app. 70 students in two classes. The education provided is holistic and includes civics , hygiene and health education. Additional benefits include free mid-day snacks, drinking water, uniforms, books and school supplies.
Regular tests are given in order to identify students in need of special attention by the teachers. Supplementary classes help these students to catch up.
In addition, the school offers vocational training in the field of sewing and tailoring. There are 15 students aged 12 years and older who are learning the basics of tailoring, sewing and embroidery. These vocational lessons are given in the students´ free time and have become a popular activity.
Also, a crèche was opened and is well received by the residents. It offers basic lessons and supervision for 13 children. Most of their parents are working in the mica-industry.
Merck„s mica supply chain – update May 20119
2. Social activities: schools and medical centre
A second Merck school was opened in Barkitand in January 2011 with over 50 children in 2 classes. The educational approach that proved successful in Tisri was transferred to this school.
We are looking for an appropriate location for a third school in the proximity of another mine we are using.
A medical centre was opened close to a mine in the village of Saphi. The medical centre is highly welcomed by the 20,000 residents in this area, where no medical care has been available.
.
Merck„s mica supply chain – update May 201110
2. Social activities: child-friendly villages
BBA (Bachpan Bachao Andolan)and Merck signed a cooperation agreement to develop child-friendly villages in Jharkhand. A steering committee, including representatives of Merck, local communities, traders, processors and exporters, identified 30 villages were the concept of the child-friendly village will be established. This committee meets on a regular basis to supervise the development of the project.
In July 2010, BBA began working in these 30 villages, located in three districts of Jharkhand and Bihar – Koderma, Giridih and Nawada. The activities in 20 villages are sponsored by Merck.
In the first year of the project, BBA worked with local communities and stakeholders such as government officials, teachers and especially with the children and young people in the villages to gain acceptance for the project and to develop a sound relationship. Various activities were carried out to create awareness of the importance of education, enrol children in school and disseminate information on the concept of child-friendly villages.
Merck„s mica supply chain – update May 201111
Back up
Merck„s mica supply chain – update May 201112
Engagement with Bachpan Bachao Andolan (BBA) – child friendly villages
A child-friendly village is a place where all children are free from labour and
attend school. A child-friendly village engenders the principles of democracy,
good governance, gender parity and economic sustainability. The project goals
are the withdrawal of children from work, enhancement of quality education
and also a holistic development of Indian villages toward creation of a child-
friendly society.
Throughout the process, emphasis
is given to child participation,
community mobilization, promotion
of education and ensuring long-
term sustainability. The conversion
of the selected villages to child-
friendly villages is planned to take
about three years.