The cosmetics market is one of the fastest-growing industries in the world, with it being valued at $532 billion last year and projected to grow rapidly – buoyed by social media influencers and targeted marketing. But what is ironic is the fact that sustaining the world of glitz and sparkle ultimately boils down to lackluster supply chains, which power the market by sourcing ingredients for cosmetics businesses to continue addressing market demand.
Like all global supply chains, cosmetics logistics contends with its fair share of complexities, which flare up due to the lack of transparency and visibility into operations of all the stakeholders within the value chain. Of the several raw materials being shipped around the world to cosmetics manufacturing plants, mica is proving to be a staple commodity, with most of the cosmetic brands using the mineral to add the much-needed “glean” to their products.
However, it is only when the discussion moves to the sourcing of mica that it starts becoming a concern. Most of the biggest brands in the business – like L’Oreal and Estee Lauder – source their mica from India, which is one of the largest producers of mica worldwide. In India, mica production is concentrated in the states of Bihar and Jharkhand and account for roughly 25% of the global mica production.
The problem with sourcing mica from these states is the rampant existence of forced child labor, in a population base that is part of the poorest demographic within India. About 35% of the population of Bihar and Jharkhand live on less than $0.50 per day, forcing low-income families to send their children to the mines rather than to schools. The Bachpan Bachao Andolan (BBA), an organization fighting against child labor, estimates that around 10 to 20 kids die in collapsed mica tunnels every month in this region.
A report from the non-governmental organizations Terre des Hommes and SOMO estimates that about 20,000 children work in the mica mines. It is also estimated that 90% of mines are illegally run businesses without licenses from the central government. The illegally mined mica is then pushed into the supply chains of big corporates, often without them realizing where their mica is sourced from.
And it is here that the technology of blockchain can be of use, as it can help foster accountability into mica mining – something that cosmetics brands have been desperately trying for a decade, but with limited success. Being a decentralized network, blockchain throws open the supply chain for all the stakeholders to gain visibility into operations. And since its ledger is immutable, this prevents stakeholders from passing off mica mined by children as legal mica.
To make this work, it is vital to have all the stakeholders within the mica supply chain to be part of the blockchain network, allowing every party to be privy to the sourcing and handling of mica across every node within the supply chain. Companies cannot push in illegally sourced mica into the value chain, as that would need the express approval of all the parties within the blockchain network.
Cleaning up mica supply chains also helps cosmetics brands to band together and look at providing reasonable pay to the miners, who suffer from exploitation by intermediaries that pay them extremely low wages. Consumers of these fashion accessories will also have a way to ascertain their brand’s sourcing sustainability, as with a blockchain-based supply chain, consumers will be able to access provenance information on their cosmetics to verify its authenticity as exploitation-free products.