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Third party risk

Supply chain risk: The price of a lipstick’s sparkle

Monique Villa  CEO of the Thomson Reuters Foundation

Monique Villa  CEO of the Thomson Reuters Foundation

Take a closer look at the mica supply chain

It is Saturday afternoon in London. A store in Oxford Street is packed with teenagers scrambling to get their hands on the latest deals. A popular lipstick is on offer. It’s an absolute bargain. Baskets fill up quickly. The girls queue, pay and leave the store happy. They have never heard of ‘mica’.

Across the world, it’s a different story. There, children know only too well what mica is. They are dying because of it. Just ask Manan Ansari, who was only eight years old when he began working in a mica mine for a pittance, digging out the mineral that puts sparkle into that lipstick. Many of the children who worked with him – including his best friend – are now dead.

According to recent estimates by the Dutch campaign group SOMO, about 20,000 children are working in excruciating circumstances in India, mining mica in the states of Bihar, Jharkhand and Rajasthan. The country produces 60 per cent of the world’s mica.

Some of these children are as young as five years old. They live in utter poverty, forced to work against their will. They are barefoot, exposed to heat, snake and scorpion bites, and are prone to contract respiratory illnesses. That is if they make it out of the collapsed cave alive.

There are deaths each month, but the exact number isn’t known. Families mourn in silence. Slavery is kept secret.

In the meantime, demand for mica is booming. The mineral is used not only in make-up but also in varnish and electrical components for smartphones. This is a multibillion-dollar industry that keeps growing.

If you thought slavery was confined to history books, think again. It is far from over. According to the Walk Free Foundation, 45.8 million people are currently enslaved in the world, the highest number in history and roughly equivalent to the population of Australia, Portugal and Sweden combined. It’s a fast-growing industry worth $150 billion a year, more than the GDP of most African countries, and three times the annual profits of Apple.

Mica is just the tip of the iceberg. The U.S. Federal Government compiles an official list of products believed to be the result of child and forced labour. It includes 136 products from 74 countries, from coconuts hand-picked in the Philippines, to diamonds mined in Angola, to prawns fished in Thailand. Anti-slavery NGOs say the list is far from exhaustive.

The mines in which many of the children die are illegal – they had been abandoned because they were so dangerous. Indian law also bans children under the age of 18 from working in mines. Neither of these things stops them from mining, if only for a handful of rupees a day that is worth less than a dollar.

So who is to blame for this cycle of exploitation?

Cheap labour, slavery, debt bondage and human trafficking are all intertwined.

Their common denominator is poverty: victims are always desperate and vulnerable, they don’t know their rights. They don’t know they have everything to lose.

At the root of all of this is corruption. And corruption flourishes where there is poverty and the opportunity for quick financial gains.

The global economic system is delivering cheap products and creating jobs worldwide, but it is out of synch with the human rights agenda. Multinational corporations often do not know what is happening in their supply chains, even when they try to monitor them. They may be outsourcing regulation to third party certification schemes, but this alone guarantees nothing.

In plain and simple terms: we need to know how workers enter the supply chain of a company. Have they paid a recruiter? Have they contracted a debt to get that job? Have they been promised a different job altogether? And once in the job, are they enduring unbearable working conditions? Are they even being paid?

The battle against slavery can only become meaningful if it is being fought with major corporations onside. Think about it: companies can switch suppliers overnight. This would transform millions of lives.

This is why the Thomson Reuters Foundation launched the Stop Slavery Award. To be conferred at the Trust Women conference in November this year, the prize will honour corporations that have made exceptional efforts to eradicate forced labour from their supply chains.

Corporations can really pave the way in the fight against slavery. They can send the message that profit resulting from exploitation is not going to be tolerated: it’s not only morally wrong but it’s also a reputational risk.

In order to trigger this virtuous cycle, we, as consumers, also have a vital role. We can vote with our money, rewarding companies that have demonstrated courage and integrity and rejecting those that seek profit at all costs.

Our choices make a difference. Slavery won’t be eradicated overnight. We’ll know we have made progress when we see a cheap sparkly lipstick as a red flag, rather than a bargain.

View the story as it originally appeared on Chatham House – Royal Institute of International Affairs.

Learn more

Read the white paper, Expanding existing due diligence programs to cover modern day slavery in the supply chain.

More on third party risk management.

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