The ingredient under discussion is called pearl essence. (Some sources give this as “pearlescence.”) It’s the silvery stuff found in fish scales that’s used in some lipsticks, nail polishes, ceramic glazes, etc., to make them shimmery.
Pearl essence is obtained primarily from herring and is one of many by-products of large-scale commercial fish processing. Synthetic versions have been developed, but to what extent they’ve supplanted the natural variety I hesitate to say. The cosmetics companies were not forthcoming and give contrary stories from different industry observers. Fishermen still collect the stuff, though, and one presumes it’s being put to good use.
For more wild facts about cosmetics with animal parts, go to straightdope.com.