Engagement Framework

The challenge

The global demand for mica has created a vicious cycle of poverty and exploitation. Millions are trapped in poverty, and the dire economic situation often drives children into illegal mica mines.

Our Solution

The engagement framework for living income in the mica supply chain. This is a critical tool for companies committed to human rights and sustainable practices.

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Built on the OECD Due Diligence Guidance for Responsible Business Conduct, this framework provides a clear, six-step approach for companies to identify, prevent, and mitigate adverse impacts within their operations and supply chains.

Its strength lies in its 24 detailed sub-steps, which transform broad policy into concrete, actionable guidance. This provides companies with a structured path to not only meet regulatory compliance but also actively build a more just and equitable supply chain.

Seven actions are marked by a coloured frame in the Living Income Engagement Framework. These actions belong to a minimum that small-sized companies should conduct to ensure that at least one action per due diligence step is taken. Medium-sized companies and multinational enterprises should do more actions.

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Diagram showing the Engagement Framework with its six main steps, and their substeps

Kristina Ullrich

Sr. Private Sector Engagement Officer

The framewerk is like a menu: you can choose the steps that suit you best. And with many concrete examples you can directly get started!

Step 1:Embed responsible business conduct
OECD Due Diligence
- This policy should align with the general strategies of the company. Make sure to include all relevant departments in the process (sales, procurement, Human Resources (HR), Corporate Sustainable Responsibility (CSR)) and involve the Board of Directors for full agreement.
  
  A full example is given here
  
  Example text Responsible Business Conduct on living income:
  
  [Company name] expects their business partners to ensure that a living income is being paid within a reasonable period. A living income is ‘an income that is sufficient to provide for the basic needs of a family of average size in a particular economy’. A living income is defined as sufficient income to afford a decent standard of living for all household members – including a nutritious diet, clean water, decent housing, education, health care and other essential needs, plus a little extra for emergencies and savings.
- To have sustainable business, both parties (customer and supplier) should have sustainable conduct and take into consideration each other’s needs. For example, including cultural beliefs and customs, festive days in the planning of orders and shipment, adjustment of prices based on raw materials price fluctuations, gender sensitive beliefs in behaviour, and others. To get to know the supplier’s needs, it is recommended to pursue regular dialogues with the supplier.
  
  A full example is given here, adjustable to your business. best practice is Zeeman’s Code of Conduct (see Annex 4 of the report).
  
  Example clause for Living income/wage in a two-way Code of Conduct:
  
  Payment of a living income and wage
  1. Wages and benefits paid for a standard working week shall meet at least legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families and to provide some discretionary income, known as living income (Anker & Anker method).
  2. Deductions from wages for disciplinary measures shall not be permitted.
  3. Employees shall be adequately and clearly informed about the specifications of their wages including wage rates, deductions and pay period.
  4. Companies will pay according to their salary matrix per function and contract.
  5. All workers shall be provided with written and understandable information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid.
- The Ethical Trading Initiative (ETI) and True Price can assist in making the sourcing practices more efficient and sustainable (also decreasing unexpected costs). Key practices linked to living income are:
  - Preferring suppliers that offer living income and safe working conditions;
  - Including subcontractors, cooperatives or small-scale producers in the RBC practice;
  - Avoiding products from companies known for unethical labour practices;
  - Developing a sustainable procurement policy that includes living income criteria;
  - Collaborating with suppliers to improve their sustainability practices;
  - Incorporating sustainability KPIs into vendor evaluations and contracts.
- Another possibility is to include sector specific memberships in the company’s RBC strategy and/or to choose for certified products or raw materials. Related to auditing, certification, complaints, or grievance mechanisms, joining a multi-stakeholder membership with peers and NGOs can make company knowledge and strategies more effective. Make sure the membership has local connections so that impactful interventions for the workers in the upstream supply chain take place, and costs will be spent on the ground instead of on administrative systems. This will enlarge coverage within the supply chain.
  
  For mica from India and Madagascar, there is no reliable certification. If this changes somewhere in the future and a company chooses for a certification, make sure that living income is a criterion that is part of the certification scheme and audited by an independent third-party audit.
  
  To make it more effective, include the sector specific membership and/or certification in suppliers’ contracts as advice or even a must to join or to have. Annex 4 of the report contains more details on the incorporation of living income in the audits and certifications.
  
  Auditing examples:
  Social audits (e.g., SMETA, Sedex, SA8000), ISO 45001 – Occupational health & safety, EITI (Extractive Industries Transparency Initiative), Environmental and safety inspections (e.g., ISO 14001, OHSAS 18001)
  
  Certification, complaints, and grievance:
  RMI (mica), IRMA (Initiative for Responsible Mining Assurance), Responsible Minerals Initiative
- It is much easier to work towards a living income when the company’s management is convinced that this is beneficial. To achieve this, it needs discussion internally, covering these internal steps:
  - Set a RBC vision and mission aligned with business goals;
  - Approve and oversee RBC strategies, policies, and KPIs;
  - Appoint a Chief Sustainability Officer or similar role;
  - Integrate sustainability and ethics into risk assessments and decision-making;
  - Allocate dedicated budgets for RBC programmes (e.g., community, workers, environment);
  - Include Environmental, Social, and Governance (ESG) criteria in investment decisions and capital expenditures;
  - Report non-financial metrics (carbon footprint, social impact) in annual reports;
  - Conduct cost-benefit analyses of RBC initiatives (including long-term social Risks, Opportunities and Impacts (ROI)).
- To make sure that all relevant departments of the company support the concept of living income and implement it in the company operations and business practices, all (relevant) staff has to be trained on RBC in general and living income in particular. The best thing to do is to tailor the training to the target group covering these topics: OECD Due Diligence, human and labour rights, social and environmental sustainability, anti-corruption and whistle blowing, the supply chain of the company (tiers, countries, stakeholders), The two-way company code of conduct, used third-party audits and certifications can help to ensure compliance, eco-friendly or socially responsible practices per department.
- Since these teams often have a focus on quality and price, it is important to train the sales and procurement teams on living income and how to incorporate this in their daily business. The following topics are useful for a training:
  - Understand supplier risks: Show how the fact that workers are underpaid can lead to inferior quality, less turnover, and reputational damage;
  - Engage suppliers: Train on how to start conversations about living income improvements and ethical sourcing;
  - Living income costing: Teach how to assess supplier costs and factor in fair pricing for living income and wages;
  - Value proposition: Teach how to assess the social value of living income-compliant products;
  - Handling objections: Help them respond to price-related pushbacks by emphasising quality, ethics, and customer trust.
  The International Responsible Business Conduct Agreements in the Netherlands (sectoral multistakeholder agreement between companies, government, trade unions, and NGOs) and the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland – RVO) assist companies in these trainings with webinars and training materials. (see Annex 4 of the report for more details)
Step 2:Identify and assess adverse impacts
OECD Due Diligence
- Map the supply chain (tier by tier) until the most upstream actors. The last tier(s) is/are the most difficult, but if the sourcing location/region is known the assessment of the human rights and labour risks and impacts can start based on this location. In the mica supply chain, there are the following groups of private sector actors:
  
  Tier 1 – Exporters/Manufacturers
  - Export mica flakes or powder.
  - Sell to cosmetics, electronics, automotive, or paint industries.
  Tier 2 – Aggregators/Processors
  - Sort, clean, grade mica.
  - Prepare for domestic or international buyers.
  - May include medium-sized processors with formal business structures and employees.
  Tier 3 – Local Traders/Agents/Middlemen
  - Buy directly from mica pickers/mica collectors.
  - Often operate informally and pay very low prices.
  Tier 4/5- Extraction – Often Informal
  - Small-scale miners or informal workers (many are women and children).
  - Family-based pickers and collectors.
  - Community landowners (sometimes illegal mining on forest or public land).
- When setting up an own analysis, make sure to take into consideration the income of self-employed informal mica miners or collectors (and not the wage of waged or hired workers working in mica sorting, processing units, transport, etc.) that often work independently or in family units, and calculate the living income gap (based on the household income of all the members). Make sure the analysis includes all costs (food, housing, healthcare, education, transportation, modest savings, festivity costs) plus some money for mica mining and processing tools, and use the Anker method for comparable calculations. Visualise with a gap bar chart or income ladder to show how far households are from the target income (based on the living income benchmarks).
  
  The analysis can be done by local NGOs, or through a check at the website of the RMI or the Global Living Wage Coalition. The RMI has done a living income benchmark [footnote, if Neel’s report not used].
  
  For companies sourcing mica from Jharkhand, India, the most recent living income gap analysis can be found here.
- Together with the supplier (or through independent research) map the payment systems which are in place, even the informal systems without contracts. With this mapping, adverse impacts and risks linked to payment, payment methods and pricing of the mica become visible. The following questions are leading:
  - Who pays whom?
  - How is payment calculated? (per kg, per day, per load)
  - What is the payment frequency? (daily, weekly, after sale)
  - What method is used? (cash, mobile money, bank transfer)
  - Are there deductions, fees, or pre-financing costs?
  - Is payment documented or informal?
- After mapping the payment systems, it is vital to check if they are executed in a fair matter and/or if there are any red flags of possible risks and adverse impacts for the workers. Use surveys, focus groups or interviews to get the details, through these questions:
  - Are cash-only systems used with no receipts?
  - Are intermediaries controlling the payments, prices, and scales?
  - Are workers underpaid or misinformed about pay rates and actual pricing of mica?
  - Are children working with no personal earnings?
  - Are there irregular or delayed payments tied to mica selling?
  - Are informal loans with (high) interest rates on payment in return used, or debt bondage (if a worker cannot pay back the loan and is not free to choose other middlemen to sell to)?
  - Is the worker in control of how and when they receive payment?
  - Do they face wage theft, deductions, or abuse?
  - Are payments linked to performance, piecework, or weight?
  When assessing workers’ risks, make sure the methods and questions are designed in a gender sensitive way, translated in the common local languages and executed by a neutral, independent party (to create trust). In order to work with larger groups and for monitoring and collecting of data for long term commitment, consider using the Worker voice app of Ulula, which gives details and insights on community level or workers level on all kinds of topics.
  
  The tools of the Fair Wage Network and similar tools implemented by multiple companies, like Fairphone, Adidas, Puma, Fair Wear Foundation members, can be found in Annex 4 of the report, for more information and details.
Step 3:Cease, prevent or mitigate impact
OECD Due Diligence
- To cease, mitigate and prevent negative impacts all actors in the mica supply chain need to be involved on the same level of knowledge about international workers rights, standards and rules of the International Labour Organisation (ILO), especially on living income. The training should be tailored to the specific needs and understanding of the local suppliers and local workers, using appropriate methods to reach all participants – including those who are illiterate.
  
  Due to the specific context, language barriers, training upstream actors goes best through a local independent trade union or NGO who is knowledgeable about workers’ rights. The training would cover the following themes:
  1. Understanding Living Income & Living Wage
  2. Workers’ Rights Basics
  3. Pricing Systems and Wage Payment Systems
  4. Income Transparency and Record Keeping
  5. Supply Chain Awareness
  6. Complaints and Grievance Mechanisms
  7. Gender Equity in Labour and Income
  8. Social Protection and Legal Support
  9. Worker Advocacy and Collective Action
  10. Practical Role Plays and Tools
- The middlemen pay the mica pickers/workers for the mica they have collected or mined. To improve the income for mica pickers, a pricing system can be introduced:
  - Set a day pricing system which is transparent and available for mica pickers;
  - Recommend digital payment pilots (mobile wallets, bank transfers) for informal workers;
  - Collaborate with the of mica-processing units for fair pricing;
  - Partner with TdH NL to set up and pilot mica cooperatives;
  - Ask RMI to integrate fair pricing into the third-party audits of mica processors.
- To work towards a living income for mica workers at the upstream node of the mica supply chain and get the commitment of other tiers in the supply chain, it is recommended to include living income in suppliers’ contracts.
  
  View a full example of such a clause here. In Annex 4 of the report, there are multiple examples of companies who have such supplier contracts with clauses on living income/wage, like Merck, L’Oreal, and Unilever have in different sectors.
- To support all workers (including undocumented, illegal, or informal labourers) in achieving a living income, community-based support is vital. This can be delivered in the form of programmes with meaningful interventions addressing poverty as one of the root causes of child labour. Since child labour and poverty are complex issues to solve, these programmes should support workers, children, families and communities by engaging different stakeholders like teachers, the government and the private sector.
  
  Companies that don’t know how or are not able to set up community-based programmes by themselves, can collaborate with NGOs that are present on the ground or engage through a membership with RMI.
Step 4:Track and Implement results
OECD Due Diligence
- To ensure that target workers and mica-dependent families achieve a living income, it is important to develop relevant KPIs and objectives to measure and monitor impacts.
  
  A comprehensive list of KPIs for living income monitoring, grouped by category is provided in this link.
- Through annually auditing incomes of mica pickers, the traceability of payments and the living income gaps can be monitored. Audits and assessments should be conducted by an independent third-party auditor which uses participatory methods and includes all actors (also informal and vulnerable groups) in the auditing to guarantee that the information gathered is correct.
  
  The following elements should be investigated in a thorough living income and wage audit:
  1. Collect income and selling prices as well as working hour details on self-employed informal workers.
  2. Verify payments with informal mica pickers interviews (confidential).
  3. Analyse payment levels, penalties, deductions for self-employed informal workers.
  4. Ensure data integrity and regular updates from actors.
  5. Integrate traceability with living income compliance data.
  6. Identify gaps, non-compliances, or inconsistencies against benchmarks.
  7. Report traceability outcomes and gaps to stakeholders.
  8. Engage suppliers in corrective action plans.
- A short-term solution – as long as the mica cooperatives are in a pilot phase – to bridge the current living income gap is by paying a premium to mica pickers. A first step is to engage with a NGO that has a local partner on the ground. Secondly, through the method of blockchain, data on payment for mica can be digitalised so that it is possible to add a living income premium for every kg of mica collected. The payment will go directly to the bank account of the mica picker (if there is a digital bank account).
  
  To make the payment of the premium possible, a company can take the following steps (see also an example from another sector is the Dutch spices company Verstegen that has used blockchain to pay a fair income for nutmeg farmers):
  - A company can utilise a blockchain platform to collect and share data from various points in the supply chain, enabling comprehensive mapping and verification of all members committed to responsible workplace practices;
  - By sharing a common database between companies, transparency is promoted across mica supply chains, facilitating more efficient risk identification and easier reporting processes. Deployment of this traceability platform allows to closely monitor the sustainability performance of all actors involved in the mica supply chain and pay a living income;
  A company being member of RMI can support and participate in the multi-stakeholder pilot project RMI and the blockchain company Tilkal launched aimed at enhancing traceability across mica supply chains on living wage. And ask RMI to the scope of this RMI project to the mica pickers level and living income.
Step 5:Communication and Transparency
OECD Due Diligence
- Companies should provide an integrated, broader, and more comprehensive sustainability disclosure in annual (sustainability) reports. In these reports, a company should also describe the topic of living income. The reports must be made accessible for the public which can be done through the company’s website.
  
  There are several types of reports fit for purpose or linked to specific reporting and disclosure frameworks: Most common is the sustainability report or Corporate Social Responsibility (CSR) report, or the Environment Social Governance (ESG) report. Specific common reporting frameworks are Global Reporting Initiative (GRI) reporting, United Nations (UN) Global Compact (UNGC) or B-Corp (Benefit Corporation). More distinctions between these reporting frameworks can be found here.
  
  While Step 5 is mainly meant to publish information on the due diligence process done so far, it can be useful to broaden this scope to other forms of communications and stakeholders, like lobby and advocacy towards the government of Jharkhand (5.2) and to showcase the progress made by the company as a best practice to other companies to motivate them to take similar steps (5.3).
- Setting up a lobby towards the government of Jharkhand for the legalisation of mica picking in Jharkhand requires a strategic and well-organised approach of all players in the field. A coalition of companies and their European suppliers can form a coalition, maybe under the umbrella and with the coordination of the RMI. This coalition can jointly develop an advocacy plan to lobby the government. This structured approach which can be found here, will help to create a comprehensive and persuasive lobbying campaign for the legalisation of mica picking in Jharkhand.
- The more companies engage in working towards a living income for mica pickers, the more leverage is created leading to a faster process of achieving this living income. By promoting ethical mica trading, a company can convince its suppliers, other companies from the same sector or companies from other mica-using sectors to follow its best practice. The mica supply chain will become more transparent, sustainable, and will benefit all stakeholders, including miners, communities, and businesses. Ethical mica trading can ensure living incomes, transparent supply chains, and responsible environmental practices. Especially if this is embedded in an ethical trading and/or supplier policy.
  
  Here are several ways to encourage and promote ethical mica trading.
Step 6:Remediation and Redressal
OECD Due Diligence
- Systemic issues require collective solutions – no single actor can address all root causes alone. Therefore, collaborations in the industry makes the risk of recurrence less high and enables a collective remediation of affected workers and children. The following steps are necessary and vital to offer systemic solutions:
  - Lobby the (local) governments to enforce regulations – Enable legalisation, formalisation, and law enforcement for mica pickers’ living income. This can be done through the membership of a multi-stakeholder initiative (RMI), together with the upstream suppliers or the NGOs and/or trade unions working on the ground (see also step 5.2 about the lobby towards governments);
  - Increase the supply of responsibly produced mica – several companies together can give “basket funding” (individual funding from companies is jointly used for a project) to engage in community support to cease, mitigate and prevent adverse impacts (see step 3) and prevent remediation. With existing adverse impacts, this basket fund can be used to provide for remediation;
  - Collaborate with (local) NGOs: NGOs understand the ground reality – they represent communities, deliver services, set up effective programmes and projects, and ensure rights for affected stakeholders;
  - Build trust and share accountability between companies and initiatives – Ensure joint inclusive, transparent action plans to tackle the living income gap in the supply chain. Include due diligence step 6 – a community-led grievance mechanism and an appropriate access to remediation – in these actions plans;
  - Combine resources and expertise within companies and in initiatives – Strengthen and align financial, legal, and social capacities within collective due diligence systems that ensure consistency and cooperation across companies and supply chains (for instance by using Tilkal or Ullula);
  - Enable sustainable impact – Even given the fact that a living income for mica pickers in Jharkhand/India can only be achieved in the long-term, companies should support and pursue lasting systems and institutional change (like cooperatives, see Annex 5 of the report) through collaboration between companies in the mica supply chain, especially with their suppliers.
- Establish monitoring, complaint and grievance systems that work effectively at the local level (for instance toll-free hotlines, mobile apps (e.g., Ulula, Labourlink), on-site complaint boxes, WhatsApp/text message numbers, in-person local contact points (via NGOs or cooperatives)) to detect issues and provide reliable anonymous channels that workers can use to safely report work-related issues as well as individual level grievances in their own language. Communicate about the reporting channels in a way that workers are informed about the existence of these channels and how to use them, for instance through radio commercials, posters, and leaflets with visuals (for illiterate stakeholders).  This can be done with the support of local NGOs and/or trade unions.
  
  Define a transparent response system with clear processes for receiving and logging reports, investigating claims, and providing feedback and resolution timelines. An example for living wage is the Fair Wear Foundation that has a complaint and grievance system for its members, through a hotline, and another example for living income is the TruStone IRBC agreement in the Netherlands that has a complaint system for their members.
- In order to provide for financial remediation, set up an emergency income support system in the form of a fund for the living income gap. Affected rights holders can be paid the income they did not receive previously from this fund, as an emergency support.
  
  Integrate the management of the emergency support system in a local mica community cooperative, to ensure the access for local victims and impacted rights holders. The village cooperative can take the responsibility to identify the mica pickers and families eligible to this support, and to control the payments.
  
  TdH NL is currently piloting with village cooperatives in Jharkhand, therefore it is essential to take into consideration the knowledge of TdH NL, if a company wants to set up such a system of severance pay through a cooperative (see also Annex 5 of the report).

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