2012

Valuing Waste

SadiePaschke,SereneZhao &AlliZomer UniversityofMinnesota

 Acknowledgements Wewouldliketothankthemanyindividualswhosupportedthisresearch.TheCason Familyfoundationprovidedtheframeworkforthisresearch,andbothRoxanneCasonand RanjithAnnepuservedasmentorsandguidesthroughouttheprocess.Theyhelpedforge connectionstoexpertsinthefieldandsupportedusinbuildingrelationshipswithkey stakeholders.JaniceHerndonservedasanincredibleorganizer,seamlesslymanagingallthe logisticsthatallowedourpartnershipwiththeCasonFoundationtorunsmoothly. AcoregroupofexpertsagreedtoserveasourAdvisoryBoardthroughouttheproject: JayBowman,EntityGreen;AllisonNaman,Starbucks;andJulianaSeidel,TetraPak.Theyeach broughtauniqueperspectiveandextensiveexperienceinthefield.Wearegratefultothem forsharingtheirwisdom,timeandresourceswithus. Wewouldalsoliketothankotherkeyinformantswhoofferedtheirtimeandexperience toourresearchteam:MichaelMaggio,Johnson&Johnson;JohnR.Platko,II,GlobalCorporate ConsultancyAnteaGroup;andLynnFritz,FritzInstitute. RaguiAssaadfromtheUniversityofMinnesotaintroducedustotheworldofinformal wastecollectionandwasresponsiblefororganizingourtriptoCairointhesummerof2011.It wasthattripthatsparkedourinterestinresearchingwasteandrecycling.ChavannePeercy servedasouracademicadvisorandprovidedthoughtfulfeedbackthathelpedusimproveour research. Thankyouallforyoursupport,guidanceandencouragement. Sincerely, Sadie,Serene&Alli

TableofContents ExecutiveSummary...4 Introduction:WasteManagementintheDevelopingWorld.10 SectionI:Research&Methodology..13 DataCollection14 Limitations.16 SectionII:Analysis...17 SolidWasteManagementinCairo..19 GlobalComparisons...36 SectionIII:StrategiesforImprovement..52 Conclusion&Recommendations.65 Bibliography72 AppendixA:Terminology.74

ValuingWaste ExecutiveSummary Inmanydevelopingnations,informalwastecollectorsplayasubstantialroleinthe managementandrecyclingofsolidwaste.Theworkofinformalcollectorsandrecyclersis invaluable:itcontributestothecleanlinessofcities,reducestheamountofwasteinlandfills, andalleviatestheenvironmentalpressurecausedbyextractingvirginmaterials.Unfortunately, wastecollectorsareatthebottomofalongandoftenobscuredsupplychain,makingitdifficult fororganizationsoradvocatestoformulatestrategiestoimprovecollectorslivelihoodsand wellbeing.Thisreportexaminesthesupplychainforrecycledplasticinordertounderstandthe economicpositionofwastecollectorsandproposesstrategiesforincreasingtheirincomesand improvingtheirsocialandeconomicposition. Thereisasignificantbodyofresearchonglobalwastecollection,yetmuchofithas focusedonthesocialandpoliticalpositionofwastecollectors.Thisreportaimstoaddtothe smallbutgrowingliteraturefocusedonquantifyingtheeconomicvalueofwasteinorderto furtherthepossibilityofsecuringsustainablelivelihoodsatalllevels.Inordertodemonstrate thecomplexrelationshipswithinthewasteandrecyclingsystem,acasestudyfromCairo,Egypt iscomparedwithpreliminaryanalysisofAmman,Jordanaswellasdatacollectedfroma numberofotherdevelopingworldcities. ExaminingAssumptions Researchintoinformalwastemanagement/recyclingandthesupplychainofrecycled plasticrevealedthreecommonassumptions.Criticalexaminationoftheseassumptionsshows that,thoughinsomecasestheymaybesupportedbydata,theycannotbeassumedtobetrue forallinformalwastesystems. Collectorsvs.Traders:Therelationshipbetweencollectorsandtradersisoftenassumedto beadversarial,withtradersgainingexcessandunjustifiedprofitsattheexpenseof collectors. Ourresearchandobservationssuggestthat,incertainsystems,collectorsandtradershavea moresymbioticrelationship.InCairo,tradersarefrequentlyengagedinfurthersorting, cleaningandprocessingofmaterialsinordertoaddvalue.Manyofthesetraders/processors wereoncethemselvescollectorsandtheycontinuetoliveinthesameneighborhood,working alongsidecollectorsinextensivenetworks.1InAmman,mobiletradersprovideaconvenient pointofsaleforsmallcollectorsoperatingwithsmallstoragecapacities.2InthePhilippines,
1

GIZ(2008)TheWasteExperts:EnablingConditionsforInformalSectorIntegrationinSolidWasteManagementLessonslearned fromBrazil,EgyptandIndia.(p.8) 2 EntityGreen.(2010).SolidWasteBehaviorsWithintheFormalandInformalWasteStreamsofJordan.Jordan.USAID.(19)

tradersprovidecapitalinvestmentstocollectorsinordertocollaborate.Certainlythereare somecasesinwhichtradersexploittherelativelyweakpositionofcollectors,butthereare manyotherexamplesofcollectorsandtradersworkingsymbiotically. ExtremePovertyistheNorm:Itisoftenassumedthatwastecollectorsearnfarlessthan tradersorotherrecyclers,andthattheyliveinastateofextremepoverty. Informalcollectionhasbeenshowntobeprofitableinmanycities,andattimesincomesmirror thoseearnedatotherlevelsinthesystem.Inmanycities,wastecollectorsreportearning higherthantheminimumwage.AGIZreporttitledEconomicAspectsoftheInformalSectorin SolidWasteManagementnotesthatinformalsectorworkersinsolidwastemanagement generallyearnanincomehigherthantheminimumwageintheirrespectivecountries,andthe incomethattheyearngenerallyexceedsotherincomeoptions.3InCairo,informalcollection activitiesaremarginallyprofitable,sincecollectorschargeaservicefeeaswellasbenefitfrom thesaleofmaterials.4InAmman,Jordan,wastecollectorsreportwagesfrom7.32to15.69, whichputsthemabovethepovertyline.5Itisimportanttonote,however,thatinformalwaste collectorsaresubjecttohealthrisksandsocialstigma,whichthosewhoworkinothersectors maynothavetobear.Therearealsomultipledifferenttypesofcollectors,sogeneralizing acrossallcollectorsobscuresthediscrepanciesamongthem.Thosewhoareabletocollect doortodooroftenseegreaterprofitsandsufferfromfewerhealthandsafetyrisksthanthose whocollectatdumpsites. PriceoverProfit:Thevariabilityinpricehasoftenbeenusedtoillustratethemarginalization ofwastecollectors. Datashowthatpriceofmaterialsincreasesasitmovesalongthesupplychain.InQuezonCity, thePhilippines,thepricepaidtosmalljunkshopownersandthepricepaidtolargejunkshop ownersformaterialsisabout5%and21%higherthanthepricepaidtheitinerantwastebuyers, respectively.6Unfortunately,salepricealoneisnotavalidmeasureforcomparingdifferent stagesoftherecyclingprocess.Costofoperationandprocessingmustbeexaminedalongside priceinordertofullyunderstandprofitability.Whencostsandrevenuesareaccountedfor, profitsacrossvariouslevelsoftheinformalsectorare,insomeplaces,relativelycomparable. OnceproductioncostswereaccountedforinQuezonCity,itinerantwastebuyersand junkshopsownersmadenearlyequivalentprofitspertonofwaste(21and22,respectively).
3

Scheinberg,A.etal.(2010).Economicaspectsoftheinformalsectorinsolidwastemanagement:Volume1,researchreport, 2010.Eschborn,Germany.:GesellschaftfurInternationaleZusammenarbeit(GIZ).(9) 4 Scheinberg,A.etal.(2010).(p.73) 5 EntityGreen.(2010).(16) 6 Scheinberg,A.etal.(2010).(p.72)

 Findings Wastemanagementsystemsdifferconsiderablyacrossthedevelopingworld.The abilityoflocalandnationalgovernmentstoshapewastemanagementpolicies,thepresenceor absenceofformalwastemanagemententerprisesandtherelativeintegrationoftheformal sectorinagivenlocationmakegeneralizationsaboutsolidwasteproblematic.Despiteregional andlocaldifferences,however,therearesomecommontrendsthatcanbeidentifiedacross cities.Variationsinthesetrendshighlightparticularopportunitiesforlocalizedanalysis. Wastecollectorsareonetypeofactorwithinabroaderinformalsectorthatincludes thosewhoprocessrecycledmaterialintodifferentformsandthosewhotradematerialat variousstagesofprocessing.Somewastecollectorscollectdirectlyfromhouseholds,some purchasespecificmaterialfromindividualsandbusinesses,andsomepickwastefrom dumpsites.Thoughinmanyplacescollectorsoperateasindividualsorfamilies,insomecities theyhavebeguntoorganizewithothercollectorsaswellaswithtradersorprocessors.Such organizationeffortsoffersignificantopportunitiesforimprovedlivelihoods. Thisreporthighlightsthreespheresinwhichwastecollectorsfacechallenges:financial, agencyandsocial.Withineachsphere,organizationeffortscanallowcollectorstoovercome thespecificchallengesandtherebyimprovetheirlivelihoodsandrelativepositionwithinthe supplychainofwaste. Financial Wastecollectorsexperiencemanyfinancialchallengesthatthreatenthesustainabilityof theirlivelihoods.Pricefluctuationsintherecycledplasticsmarketarecommonandcanbe extreme.OneintermediarybuyerinAmman,Jordanreportedthathisbiggestchallengeis fluctuationsinprice,whichcanoccurseveraltimesperday.7Whileanactorfurtherupthe supplychainmaybeabletostorematerialsuntilpricesincrease,wastecollectorsoftenlack storagespaceandarethereforeforcedtoselltheirmaterialsinsmallervolumesmore frequently.Assinglepersonorfamilyoperations,individualwastecollectorsarenotableto controlhighenoughvolumesofmaterialtoallowthemtoinfluencemarketprices.Some researchimpliesthatvolumealonecanattracthigherprices,butourresearchshowsthat qualityandstageareequallyifnotmoreinfluentialinsettingprices.Whatisclear,however,is thathighervolumescanprovideaccesstolargerandmoreconsistentbuyers. Individually,wastecollectorshavelittleaccesstocapitalorcreditwithwhichtoimprove theirefficiency.Forexample,wastecollectorsofferingdoortodoorserviceusingonly handcartscouldimprovetheirefficiencyandcollectmorewastebypurchasingatruck,butthat isoftencostprohibitive.Therearealsoopportunitiesforcollectorstoexpandintohigherend processing,andinfactmanycurrenttradersandrecyclersinCairobeganascollectors.
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InterviewbyAdviser.(April2,2012).

Obtainingthecapitalinvestmenttoexpandoperationsorbeginprocessing,however,is difficult.Forcomparison,purchasingahandcartfor12.5wouldallowanyonetobegin collecting;purchasinganEgyptianmadeshreddertobeginprocessingplasticwaste,however, cancostbetween1,259and2,643. Municipalitiesandgovernmentalagenciesgenerallyarenotwillingtodealwith individualcollectorsorsmallcollectorenterprises,thereforeinformalcollectorscanusuallynot gainaccesstothegovernmentcontracts.Suchcontracts,whicharegenerallygiventomunicipal orprivateenterprises,provideaccesstoservicesfeesthatgovernmentsoftenlevyonthe public.Withoutaccesstosuchservicefees,informalcollectorsareforcedtoeithersolicit additionalfeesfromresidentsorcollectwastefreeofcharge,hopingthatthevalueofmaterials theyrecoverfromthewastewillcoverthecostofcollection. Finally,collectorsprofitsaredirectlyrelatedtothequalityofmaterialtheyareableto access.Whetherornotwastehasbeensortedatthehouseholdlevel,purchasedpriorto disposalorpickedfromthedumpdeterminesitscleanlinessandthereforeitsvalue.InAmman, cleanrigidplasticfetches40%morethanwhenitisunwashed.8InPune,Indiaitinerantwaste buyerswhopurchasecleanplasticfilmreceiveaprice150%greaterthanwastepickerswho collectsoiledplasticfilmfromthedump.9 Whenwastecollectorsorganize,theyareabletoovercomemanyofthesefinancial challenges.Poolingmaterialswithothercollectorsincreasestheirmarketpowerandmakes collectorslesssusceptibletopricefluctuations.Largervolumescanprovidecollectorsaccessto higherlevelbuyers.Inaddition,pooledresourcescanmakecapitalinvestmentsmorefeasible andcosteffective,bothtosupportadditionalcollectionandfurtherprocessing.Municipalities aremorelikelytocontractwithorganizedcollectorgroups,whichwouldgivecollectorsaccess toservicefeesaswellashigherqualitywastecollectedfromhouseholdsratherthanfrom dumpsites. Agency Todemonstrateagencyistomakechoicesaboutonesownlife,andtoactively influenceonessurroundings.Inmanycontexts,wastecollectorshavebeendeniedtheirown agency.Decisionshavebeenmadeaboutandforthem,ratherthanwiththem.Waste collectorsareoftennotwellrecognizedbygovernmentalbodies,thereforepolicydecisionsare madewithoutregardtotheirwellbeing.Forexample,whentheCairoGovernateprivatized Cairossolidwastecollection,theycontractedseverallargecompaniestoprovidethecitys wastemanagement.However,alargeinformalsystemwasalreadyprovidingservicestothose residentswhowerenowunderthepurviewoftheprivatesector.Privateserviceswere substandard,andinformalcollectorscontinuedtoworkbutyetwerenowoperatingwithina
8 9

InterviewbyAdviser.(April2,2012) Scheinberg,A.etal.(2010).

systemofduplicatedfeesandservices.ItbecameclearinCairothatbyignoringthe contributionsoftheinformalsector,theentiresystemsuffered. Insomeplaces,thefragmentationoftheinformalsectorhascontributedtothelackof collectiveagency.Withoutcohesion,trusthasbeendifficulttoestablishamongcollectors, tradersandrecyclers.Thishasresultedinasystemthatlackstransparencyandistherefore moresusceptibletomanipulationfromexternalandinternalactors. Organizingcanhelpcollectorsrestoretheirindividualandcommunalagency.Collective actioncanincreasetheirpoliticalvoice,sothatgovernmentalauthoritieswillfinditincreasingly difficulttoexcludethemfrompolicymaking.Throughorganizationthatconnectsindividualsat variouslevelsofthesystem,theentiresupplychainofwastecanbecomemoretransparent. Knowledgeandcommunicationcanflowmorefreely,andcollaborationcanreplace competitionamongindividualcollectors.Finally,organizingprovidesaccesstoawiderrangeof advocatesandpartnersthatcanhelpamplifycollectorsvoicesandprovideaccesstoadditional resources. Social Numerousscholarshavedetailedthesocialmarginalizationofwastecollectors. Collectorslaborindifficultanddangerousconditions,andtheirworkoftenexposesthemto severehealthandsafetyrisks.Inaddition,collectorsareoftendiscriminatedagainstand disparagedbythepublic.Organizationprovidescollectorstheopportunitytoreframe themselvesandtodemonstratetheirsocialvalueaseconomiccontributorsandenvironmental stewards.Organizationcanalsoallowcollectorstheopportunitytofacetherealhealthand safetyconcernsinthesectorandcollaboratetoimproveworkingconditions. TheChallengesandRewardsofCollectiveAction Theevidenceincludedinthisreportsupportstheconclusionthatthebestwayto improvethelivelihoodsofwastecollectorsistoinvestinsystemsthatallowthemtoorganize, bothhorizontallyandvertically,toincreasetheircapacity,strengthentheirpoliticalvoiceand improvetheiroverallsocialinclusion.Yetsimplyconcludingthatthisisthebestmeansbywhich toinvestintheinformalsectordoesnotmeanthatitistheeasiest.Distrustandcompetition arecommonintheinformalsector,whichunfortunatelyhascontributedtothelackofsystem transparencyandmakesitchallengingtomoveawayfromcompetitiontowardcooperation. Thelocalpoliticalandeconomiccontextsarealsoextremelyimportantwhenexploring possibilitiesforcollectiveactionandinvestment.Legislationcaninsomecasesrestrictthe informalsectorsaccessevenwhenactingcollectively.Thevolumeofwasteandavailabilityof marketsforrecycledmaterialvariessignificantlyfromplacetoplace,whichmakesthe prospectsforexpandedcollection,recoveryandprocessingvariable.InCairo,forexample,

thereisstillunmetcapacityfortheprocessingofplastic10soaninvestmentinupgradingcapital equipmentcouldbefruitful.Incontrast,inGeneralMarinoAlvarez,Philippinesthe junkshop/tradermarkethasalreadybecomeoversaturated.11Understandingthestructureof thelocalmarketisvitalforwiseinvestment. Despitethesechallenges,however,therehavebeenanumberofexamplesfromaround theworldthatdemonstratecollectiveactionisnotonlypossible,butitisfruitful.Informed investmentintothesocialandeconomicorganizationofwastecollectorscanhelpthemto receivegreaterfinancialrewardsfortheirwork,increasetheirindividualandcollectiveagency, andimprovethehealth,wellbeingandsocialstatusoftheirfamiliesandcommunities.

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PlasticTechnologyCenter.(2008). SolidWasteManagementAssociationofthePhilippines.(2008).(p.1213)

WasteManagementintheDevelopingWorld Managingsolidwasteisoneofthegreatestchallengesinurbancentersworldwide,yet evenrepresentativesoftheUnitedNationshaveremarkedwithsurprisethattheissuehas receivedrelativelylittleattentionfromdevelopmentprofessionals.12Acrossthedeveloping worldthecollection,sortingandrecyclingofwasteisundertakenbyactorsinboththeformal andinformalsectors.Whilemanycitieshavepartialwastemanagementsystemsakintothose inEuropeandtheUnitedStates,theseformalagentsandthegovernmentsthatsupportthem oftenlacktheresourcestocollectanddisposeofallthesolidwastegeneratedbyresidentsand businesses.Inplaceswheretheformalsectorisunabletomanagetheincreasingvolumeof solidwaste,collectorsandrecyclersoperatingintheinformaleconomyfillthevoid.13Inother placeswherethereisnoformalmunicipalwastemanagementsystem,theinformalsector providestheonlyavailablemeansofdisposal.Theworkofinformalcollectorsandrecyclersis invaluable:itcontributestothecleanlinessofcities,reducestheamountofwasteinlandfills, andalleviatestheenvironmentalpressurecausedbyextractingvirginmaterials. Informalcollectorsgeneratesignificantmaterialbenefitsbycreatingjobsandincomes,

supplyingmaterialstodomesticandinternationalindustries,andreducingthefinancialburden municipalitieswouldincuriftheywereforcedtocollectanddisposeofthefullvolumeofwaste generated.14DeutscheGesellschaftfrInternationaleZusammenarbeit(GIZ),thefederal enterprisethatsupportstheGermangovernmentsendeavorsininternationalcooperationand

UnitedNationsHumanSettlementsProgram(2010).SolidWasteManagementintheWorldsCities.(Forward,XX) Scheinberg,A.etal.(2010);UnitedNationsHumanSettlementsProgram.(2010).Solidwastemanagementintheworld's cities:Waterandsanitationintheworld'scities2010.LondonandWashingtonD.C.:Earthscan. 14 Medina,M.(2008).TheInformalRecyclingSectorinDevelopingCountries:Organizingwastepickerstoenhancetheirimpact. Gridlines:SharingKnowledge,Experience,andInnovationsinPublicPrivatePartnershipsinInfrastructure,(note44)Scheinberg, A.etal.(2010).;UnitedNationsHumanSettlementsProgram(2010)SolidWasteManagementintheWorldsCities.(Forward, XX)
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sustainabledevelopment,commissionedareportontheeconomicimpactofinformalwaste managementinthedevelopingworld.Theirreportshowedthatinsixcitiesacrossthe developingworld,theinformalsectorsavedtheformalwastesectoracombinedtotalof39 millionoverthecourseofoneyear,mostlyfromavoidedcollectioncosts.15 Despiteprovidingcleareconomicand

environmentalbenefits,themajorityoftheworlds informalwastecollectors(oftenreferredtoas wastepickers)remaineconomicallyandsocially vulnerable.Theirworkpresentsarangeofphysical

Acrosssixdevelopingworld cities,theaverageinformal sectorworkersavedhis/her city571.Inmanycities,that ismorethanthatsame workerearnedinayear.

andhealthhazards,whileatthesametimeexcludingthemfromtraditionalsocialand economicsystems.Thematerialstheysortareofsignificanteconomicgreatvalue,yetwaste collectorsarepositionedatthebottomofalongandobscuredsupplychainandthereforedo notreapthefullrewardsofthefinalsaleofrecycledgoods.Dealinginsmallvolumes,waste collectorsoftenselltotraderswhothenaggregateandsellmaterialsinlargervolumes.Access tocapitalintheformoftransportation,storagespaceand/orprocessingequipmentgenerally differentiatestraders(middlemen)fromcollectors.Theconclusiondrawnbyobserversofthis supplychainhasbeenthatmiddlemenoftenearnlargeprofits,whilewastecollectorsarepaid fartoolittletoescapepoverty.16Thisreportexaminesthesupplychainforrecycledplasticin ordertounderstandtheeconomicpositionofwastecollectorsandproposesstrategiesfor increasingtheirincomesandimprovingtheirsocialandeconomicposition.

Scheinberg,A.etal.(2010) Medina,M.(2008).TheInformalRecyclingSectorinDevelopingCountries:Organizingwastepickerstoenhancetheirimpact. Gridlines:SharingKnowledge,Experience,andInnovationsinPublicPrivatePartnershipsinInfrastructure,[Note44]

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SectionIpresentstheresearchmethodology,datacollectionprocessandstudy limitations.SectionIIoffersananalysisofthesolidwastemanagementsystemspecifictoCairo, Egyptandexaminesthesupplychainforplasticrecyclablesinthatcity.SectionIIalsooffersa preliminaryanalysisoftheSolidWasteManagementsystemandsupplychaininAmmanJordan andcomparesexistingdatafromseveralothercitiesinthedevelopingworld.SectionIII discussesstrategiesthathavebeensuccessfulinimprovingfinancialandsocialwellbeinginthe informalsolidwastemanagementsector.Thereportcloseswithseveralconclusionsand recommendationsforwastecollectororganizationsandadvocates(SectionIV).

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SectionI:ResearchandMethodology Manyinterventionsonbehalfofwastecollectors,thoughperhapswellintentioned, havefocusedonremovingwastecollectorsfromwastemanagement.Thisapproachhasfailed toincorporatethevoicesofwastecollectorsthemselveswhileofferingfewemployment alternativesinacontextwherewastepickingmayinfactbeaviablelivelihood.17Ratherthan forcingwastecollectorsoutoftheindustry,supplychainmappingdemonstratesopportunities forwastecollectorsandtheiralliestoimprovetheirpositionwithinthesystem.Atransparent supplychainallowsvariousstakeholderstobetterunderstandandsubsequentlyalterthe system: Wastecollectorscanenvisionwaysinwhichtoimprovetheireconomicposition, Advocatescanbearmedwiththeinformationnecessarytopetitionforimproved workingconditionsandformalsectorrecognition, Purchasersofrecycledmaterialcanpotentiallychangethewaysinwhichtheysource material. Thisreportexaminesthesupplychainofrecycledplasticinordertodemonstratehow increasedtransparencycanpromoteinformeddecisionmakingandpotentiallyimprovethe economicpositionofwastecollectors.Plasticsareprevalentworldwide,serveavarietyof purposesandaregenerallyhighinvalue,therebymakingaplasticsupplychainusefulforboth collectorsandconsumers.Wastemanagementdiffersbycityandcountry,sodespitethefact thatmanycitieshaveactiveinformalwastesectors,theydonotallfunctioninthesameway. Wehavechosenindividualcasestudiesinordertoprovidedetailedanalysesofparticular

17

Scheinberg,A.etal.(2010).(p.3)

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systems.Cairo,Egyptservesastheprimarycasestudy.Thecityswastemanagementsectorhas beenstudiedindepthinrecentyearsandthereforerichdataallowsforacomprehensive pictureofthecityscomplexsystem.ThesecondcasestudyonAmman,Jordanprovidesan interestingcontrast.Thecityssize,systemstructure,andrelativelackofscholarshipregarding wastemanagementprovideinterestingopportunitiesforcomparison.Inadditiontothesecase studies,datafromothercitiesaroundtheglobewillservetoframetheanalysisandsupport conclusions. Muchhasbeenwrittenaboutthephysicalandpsychosocialrisksinherentinwaste picking.Theauthorsfirmlybelievethatpeople,nomatterwhattheirlivelihood,deservetolive andworkinenvironmentsthatarebothphysicallyandemotionallysafe.Thefirstportionof thisanalysisisfocusedontheeconomicstructureoftheinformalwastecollectionsystem; thereforeitwillnotaddressthebroadspectrumofpersonalandcommunitiesconcernsthat, whileextremelyimportant,arenotdirectlyrelatedtotheeconomicsofcollectionandrecycling. Personalandcommunityagency,politicalandcivicparticipationandimprovedhealthand workingconditionswillbeaddressedwhenexaminingpotentialstrategiesforimproving collectorslivelihoodsoverall. DataCollection ThisreportwascompiledinresponsetoarequestfromtheCasonFamilyFoundation.A threememberteamofgraduatestudentsfromtheUniversityofMinnesotacollaboratedwith CasonFoundationrepresentativestodraftaresearchproposalinJanuary,2012.Thereportwas thenresearchedandcompiledbetweenJanuaryandMay,2012.InadditiontotheUniversityof
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MinnesotateamandCasonFoundationrepresentatives,dataandguidancewasprovidedbyan advisoryteamofprofessionalswithexperienceinthefieldofsolidwastemanagementand recycling. Primarydatawasgatheredinmultipleways.First,theUniversityofMinnesotateam spentthesummerof2011inCairoworkingwithaforprofitsolidwastemanagementand recyclingcompany,conductingprofitabilityandsocialcostbenefitanalysis.Duringthistimethe teamwasalsoengagedinsystemwidequalitativeresearch,conductinginterviewswith stakeholdersandobservingthesolidwastemanagementsystem.Thedataandinformation obtainedonthattriphavecontributedtothisstudy.Datawasalsocollectedbyamemberof theadvisoryteaminJordan.Finally,datawasgatheredfromotherstakeholdersincludingwaste collectoradvocatesandorganizersaswellascorporateofficersengagedinsourcingrecycled materials.Interviewswereconductedinperson,overthephoneandbyemailquestionnaire. Inadditiontothisprimarydata,thereportsfindingsaresupplementedbyawide varietyofsecondarysources.Thoughitreceivesrelativelylessattentionthansomeotherwell knowndevelopmentchallenges,thereissomerichliteraturefrombothscholarsand practitionersinthefieldofglobalwastemanagement.Muchoftheliteraturehasfocusedon thesocial,economicandhealthchallengesfacedbywastecollectors.Someinformationon materialpricesandprocessingcostsisavailable,yetthelackoftransparencywithinthesystem makescomprehensivedatadifficulttolocate.Thisreportseekstoaddtothepoolofavailable datawhileprovidingamodelbywhichotherresearchersmightcontinuetoaugmentthe availableinformationinthefuture.
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Limitations Becausesolidwastemanagementpracticesdiffergreatlybycountryandbycity,the casestudiescontainedherecannotprovidebroadgeneralizationsforalldevelopingworld cities.Instead,theyservetohighlighttheparticularcircumstancesofCairoandAmman,which canbecomparedandcontrastedtootherlocationsalongcommonthemesbutnotspecific attributes.PostRevolutionEgyptisconstantlychanging,thereforedataretrievedpriorto2011, aswellasthatgatheredduringthesummerof2011,maynotbeabletoreflectthewaysin whichthesystemisandwillcontinuetochangeinthecomingmonthsandyears.Timeand geographicconstraintslimitedourabilitytocollectcomprehensivedatafromAmman. Therefore,ouranalysisofAmmanshouldbeconsideredpreliminary.Futureresearchonthe citysevolvingsolidwastemanagement(SWM)systemwouldbeabeneficialadditiontothe literature.Finally,datacollectionintheinformalsectorisinherentlydifficult.Becausecollectors areoperatingoutsideofthepurviewofthegovernment,theirworkisscrutinizedandattimes criminalized.Thismakesparticipantsunderstandablyhesitanttorevealsensitivepersonaland businessinformation.Theanalysiscontainedinthisreportcomparesprimaryandsecondary datafromarangeofsources,andthereforeisbelievedtobeanaccuratereflectionofthe observedrealitytotheextentthatthedataisavailable.Werecommendthatfutureresearchbe basedonprimarydatacollectionthroughextensivefieldwork.

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SectionII:Analysis Thisreportexaminesthesupplychainforrecycledplasticinordertounderstandthe

economicpositionofwastecollectors.Supplychainisthegeneraltermforthesystemgoodsor servicesmovethrough,frominceptionthrough production,transportation,andeventually consumption.Considertheexampleofclothing manufacturedfromcotton:therawmaterialis grown,harvested,processed,andsoldtoconsumers (Figure1). TextileProduction Asupplychainanalysiscandescribethe system,exposeinefficienciesandopportunities,and ConsumerPurchase Harvesting Ginning
Figure 1: Basic Cotton Supply Chain

Cultivation

encourageparticipantsandobserverstorethinktherelationshipswiththesystem.Various elementscanbetrackedwithinasupplychain:money,products,information,etc.depending onwhatoneishopingtolearn.Thisreportexaminesthesupplychainofrecycledplasticsalong twodimensions:volumeandprice.Thereforethisanalysis,totheextentthattheinformationis available,tracksthephysicalflowsofrecycledmaterialandthechangesinpricesasthatplastic movesthroughthesystem.Thesupplychainexploredhereaimstoincreasetransparency withinthewastemanagementandrecyclingsystemandrevealopportunitiesforincreased collaborationbetweenconsumers(companiesusingplastics)andthosewhoarecollecting, sortingandprocessingthematerial. Inordertoconstructatransparentsupplychainforrecycledplastics,anumberofkey

systemcharacteristicswereexamined:
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Structure:whoarethekeyplayersinvolved(collectors,recyclers,traders)andatwhat levelofthesystemdotheyoperate? Price:whatpricecancertainplasticscommandinthemarket,andhowdoesthatprice fluctuatebaseduponthebuyer/seller,quality,volume,ordegreeofprocessing? OpportunitiesforChange:whatarethebarrierstoandopportunitiesforchanging wastecollectoroperations,andarethereindividuals,groupsorcommunitieswhomight serveasexamplesofsuccessfultransformation? Guidedbytheseresearchquestions,thisreportoffersadetailedexaminationofthe structureofCairoswastemanagementsystemandtheflowofrecycledplastic.TheAmman situationoffersapreliminarycomparisoncase.Inadditiontothesestudies,thereport highlightsvariousinitiativestoorganizeandmobilizewastecollectors.

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SolidWasteManagementinCairo ThesolidwastemanagementsysteminCairohas undergoneseveralrecenttransformations,drivenbyrapid populationgrowthandpolicyrevisions.Informalcollectors,most belongingtoagroupknownastheZabbaleen,beganoperating inCairoatthebeginningofthe20thcentury,andthoughwaste wasnotcentrallymanagedbythegovernmenttherewasinternal collaborationbetweenparticipants.18Itwasonlyattheendof the20thcenturythatthegovernmentslowlybeganinterveningin theorganizationandmanagementofthewastesector.Then,in 2000,theEgyptiangovernmentoutlinedaNationalStrategyfor
Table1:Cairo,Egypt 6.8million Population (2006Census) 911 Populationestimate (2011): million Cityarea(Km2) 3,085 Projectedcityannual 2.70% economicgrowthrate Personsworkingin 8,834 formalwastesector Personsworkingin 33,000 informalwastesector AnnualTonsofWaste 3.9million Generated(2006)
Sources: Scheinberg,A.etal.(2010), EgyptianCentralAgencyforPublic MobilizationandStatistics(CAPMAS)

IntegratedSolidWasteManagement.Thisstrategyemphasizedtheprivatizationofsolidwaste management,andmovedmunicipalgovernmentsintotheroleofcontractingwithprivate entitiesandmonitoringserviceprovision.19 ThePrivateSectorandFormalSolidWasteManagement

Inresponsetotheshiftinnationalstrategy,Cairowasdividedintosectorsandcollection contractswereawardedtoprivatecompanies.20Threecompaniesnowholdtheprimary contractsforCairoswastemanagement.OneofthesecompaniesisEgyptianowned,whilethe others,FomentodeConstruccionesyContratas(FCC)andAMA,areSpanishandItalian

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Fahmi,W.(2005).TheImpactofPrivatizationofSolidWasteManagementontheZabaleenGarbageCollectorsofCairo. EnvironmentandUrbanism,[17](p.156) 19 Scheinberg,A.etal.(2010)(p.2021) 20 Fahmi,W.(2005).(p.159)

19

respectively.Bythesummerof2011,AMAalonewascontractedtoserve44%oftheCairo market.21Feesarecollectedfromresidentsintheirmonthlyelectricbillsinordertopayfor wasteservice.Thecompaniesthenusethisrevenuetosubcontractcollectionoperations and/orhireworkers.Despitetheformalfeeandcontractsystem,however,privatecompanies fallfarshortoffullcollection.Observersin2006estimatedthat29%ofCairosmunicipalsolid wastewassimplyleftonthestreet.Ofthatwhichispickedup,theformalandinformalsectors eachcollectabouthalf.22 Wastefollowsadifferentpathdependingonwhetheritiscollectedbyformalor

informalactors.Ingeneral,theformalsectordoesnotengageinrecycling.Instead,formal companiesbringcollectedmaterialtoatransferstationandrecyclablematerialslikeplasticare sortedandsoldtoinformaltraders.Thus,evensomewastecollectedbyformalagenciesis redirectedintotheinformalmarket.Formalcompaniesoperatecompostfacilities,andrecycle organicmaterial.Itisinterestingtonotethatofthewastetheycollect,formalcompaniessend 65%tothelandfill.Thishasbeenusedasanargumentinfavorofthesuperiorefficiencyand environmentalcontributionoftheinformalsector,whichlandfillsonly20%ofitscollected waste.23Thiscomparisonshouldbeviewedwithamodicumofcaution.Informalcollectors frequentlysortwasteintransit.Theymaypickupfromahousehold,recoverthevaluable materialsfromthewaste,andthenleavetheremainderonthestreetorinandaround collectionbinswhicharethenpickedupbyprivatecompanies.Thus,lessdesirablewastemay notevenmakeitbacktothehouseholdforsorting.Inthisway,informalcollectorsareadding tothedumpedwasteofprivatecompaniesandreducingtheirownneedforlandfilling.Itis
21 22

Fathy,M.(July2011).Personalcommunication:Interview.Unpublished. Scheinberg,A.etal.(2010).(p.20129) 23 Scheinberg,A.etal.(2010).(p.20129)

20

nearlyimpossibletomeasuretheextentofthispracticeanditsimpactonthefinaltonnage collectedanddumpedbyformalorinformalactors,butawarenessofthepracticeshouldgive observerspausewhencomparinglandfillusagebetweenthetwosectors. TheZabbaleen:InformalCollectionandRecycling Forinformalsectoractors,thecompositionofwastedeterminesitsvalueandthereby dictatesthewaysinwhichitismanaged.Typically,wastefromhigherincomeresidentsis higherinvolumeandcontainsmorevaluablematerials.Lowincomehouseholdstendto consumelessandtorepurposemuchofwhattheyconsume.Becauseofthedifferentialin wastequality,theZabbaleenprefertocollectinhigherincomeareasand,asnotedabove,may sortoutonlythosematerialswithmarketvalue.Theoverallcompositionofthewastethatis recoveredinCairoissummarizedinTable2.

Location Egypt Cairo HaramCity*

Paper 1025% 18% 18%

Table2:CompositionofRecoveredWasteinEgypt Plastic Glass Metal 312% 10% 20% 15% 3% 1% 1.57% 3% 5%

Organics 5060% 60% 53%

Other 1140% 6% 4%

*HaramCityisahousingdevelopmentsouthofCairo.Wasteiscollectedbyaprivatecompanyandsortedonsite. Sources:EgyptdataNationalStudyforPlasticRecyclingSector,p.15.CairodataEconomicAspectsoftheInformalSector(2010)p.15. HaramCitydatacollectedbytheauthors,JuneAugust2011.

AcrossEgyptandinCairoparticularly,organicsmakeupthemajorityofwaste.Priorto 2009,thecollectionoforganicsprovidedsignificantmaterialbenefitstowastecollectors. Zabbaleencommunitiesusedthisorganicwastetobreedpigs,sellingtheirpigstotradersand

21

slaughterhousesforapproximately56.6perpig.24Thispractice allowedZabbaleencollectorstodisposeoforganicwaste efficientlyandsupplementtheirincome.In2009,theEgyptian governmentlaunchedwhatobserverssawasanextrememeasure thatthreatenedthelivelihoodsoftheZabbaleen.TheH1N1swine flupandemiccausedaglobalhealthconcern,anddespitethefact thatmedicalprofessionalsagreedpigswerenotinfact transmittersoftheflu,theEgyptiangovernmentorderedthe slaughterofbetween200,000and300,000pigs.Thoughthe governmentofferedasmallamountofcompensationtopig owners,itwasnotenoughtomakeupforthelossoftheiranimal assets.Furthermore,thelossofthepigsremovedtheZabbaleens incentiveforcollectingorganicwaste.25Thedistributionof collectedwasteinTable2reflectsthesituationpriorto2009.No reliabledataisyetavailablefortherecoveryofwastesincethe cullingofthepigs.Observationsandinterviewsconductedbythe authorsinthesummerof2011revealedasignificantdeclineinthe amountofwastecollectedbytheZabbaleen.Oneinformant,the

Property&Contracts Regulations regarding property rights and contract eligibility have shaped the development of the informalsectorinCairo.Thelargest Zabbaleen settlement in Cairo is located on what was officially government land. There have been numerous waves of government intervention with the aim of relocating the collectors to areas outside the city center. In some neighborhoods,thegovernment has negotiated deals to provide land tenure to those who have been squatting without official property rights,inexchangeforanagreement to move collection and sorting operations offsite and away from peopleshomes. Activists from within the Zabbaleen community as well as outside advocates have focused on securing land tenure and contracting rights forwastecollectors.Becauseofthe privatization strategy implemented in 2000, the contract system has favored large corporations. The ability to operate without fear of government reprisal and the possibility of contract negotiations have direct implications for the Zabbaleens prospects for improving andexpandingtheiroperations.

financialmanagerofanNGOworkinginwastesortingandrecycling,estimatedthatwiththe lossofamarketfororganicmaterialtheZabbaleensrecyclingratedroppedfrom80%to20%.26

24

Fahmi, W., & Sutton, K. (2010). Cairos contested garbage: Sustainable solid waste management and the Zabaleens right to the city. Sustainability.,[2] (p.1768, 1774) 25 Fahmi, W., & Sutton, K. (2010). (p.17731774) 26 Interviewbytheauthors.(June22,2011)

22

Uncollectedorganicwasteisnoweitherleftonthestreetortransportedtothelandfillbythe formalsector. Thoughplasticsmakeuponly10%ofCairosrecoveredwaste(Table2)theyareuseful materialbywhichtoexaminethesystemofcollectionandrecycling.Plasticshavesignificant salepotentialbecausetheyareindemandintheglobalmarket.Inordertorecycleplastic,it mustpassthroughaseriesofstagespriortoreuse.Thesestagesofrecycling,andthecostof processingandpricechangesthatoccurateachstage,provideaconvenientstructurewithin whichtoexaminetheeconomicpositionofwastecollectors. Theinformalsupplychain Wastethatmovesthroughtheinformalsectorfollowsacomplexprocess.Figure2

detailstheflowofwastethroughboththeformalandinformalsystems,asof2007.Notably,all plasticandotherrecycledmaterialsareatsomepointtradedintheinformalmarket,even thoseinitiallycollectedbyformalenterprises.Thereare33,000Cairenesinvolvedinthe informalsector,workingatdifferentlevelsofthesystem.Plasticwastemovesthroughaseries ofstages,eachincreasinglyspecialized,beforeitisultimatelyprocessedandsoldforreuse. Thefollowingsectionsdetaileachstageandexploretheactorsinvolved,theprocessing systemsused,andtheultimatesalepricethatresultsfromvariouslevelsofprocessing. Together,thesestagescombinetocreatethesupplychainforrecycledplasticinCairo.

23

Figure2:CairoWasteFlow27

27

Scheinberg,A.etal.(2010).

24

Cairo:WasteCollection InCairo,thereareanestimated23,430Zabbaleencollectors,representing71%of livelihoodsintheinformalwastesector28.Collectorsoftenoperateasindividualsorwithin families,buttherearealsosomewhoorganizeintolargercollectiveswithhiredlabor. TraditionallycollectorsinCairohaveoperatedonadoor todoorbasis,gatheringwastedirectlyfromhomes andbusinesses.Somecollectorsalsoobtain wastefromthebinswhichareplacedon thestreetbyformalcollection companies.Thequalityandcomposition ofwastevariesgreatlydependingonsocio economicconditionsofcollectingsites.Mengenerallyactascollectorsandarethereforemost visible,butmalecollectorsbringtheirmaterialhomeandsortitwiththehelpoftheirwives, sistersandchildren.29 Theinformalsectorcollectsabout1.2milliontonsofwasteperyearinCairo30.Thelevelof investmentinthecollectionstageisthelowestcomparedtootherstagesinthesupplychain, whichmakesittheeasieststagefornewentrants.MostcollectorsinCairousetheirhousesfor sortingandstorage.Simplehandcarts,tricyclesorsmalltrucksarenecessarycapital investmentstolaunchandpotentiallyscaleuponescollection.Transportationisasignificant operatingcostforcollectors,particularlythoseusingvehiclesandthosewhocomplywith
Figure3:InformalSectorinCairo

Zabbaleen(collectors):23,430 SmallScaleRecyclers: 8,333 LargeRecyclers (domesticorforeign)

28 29

Scheinberg,A.etal.(2010).(p.23,65) Scheinberg,A.etal.(2010).(p.77) 30 Scheinberg,A.etal.(2010).(p.71)

25

regulationstotransferwastetoofficialdumpsites.AsZabbaleencommunitiesaremovedtothe outskirtsofthecity,transportationcostsbecomelargerportionoftheiroperatingcost. GIZs2006studyprovidestheanalysisofcostspertonforinformalservicesandwaste recoverystages,includingcapitalcosts,operatingcostsandrevenueanalysis.Thecostofdoor todoorcollectionisabout21perton31,themajority ofwhichistransportationcostand shadowpricedlaborforthecollector.Theoverall revenueis36andprofitis15perton. Thismakes informalcollectionsignificantlymoreprofitablethan
Source: Scheinberg,A.etal.(2010),p.69.
32

Table3:PertonCosts,Revenuesand ProfitsforInformalCollection,Cairo, Egypt Costofdoortodoorcollection 21 Revenue,includingsaleof materials Profit(perton) 36 15

formalsectorcollection,whichaccordingtothesame datahadanetcostof8. AfterthewasteiscollectedandtransportedtotheZabbaleencommunity,mixed materialsaresortedintoplastics,metal,paper,andorganicwaste(thoughsincethe2009 cullingofthepigs,organicsarenotalwayscollectedbytheZabbaleen).Collectedplasticsare firstsortedintothermosetsandthermoplastics,andthenthermoplasticsareclassifiedinto bottles,transparentplastics,rigidplastics andflexibleplastics33.Somewastecollectors mayfurthersortmaterialsaccordingtotype andcolor.Sortedmaterialisthensoldto traders,someofwhomconductsome

31 32

ThecostisininGIZpaper,allisconvertedto$accordingto1=1.3USD Scheinberg,A.etal.(2010).(p.69) 33 PlasticTechnologyCenter.(2008).NationalStudyforPlasticRecyclingSectorinEgypt.Cairo,Egypt:Egypt'sTechnology TransferandInnovationCenter.(p.24)

26

additionalsortingbutattimessimplyserveasabridgebetweencollectorsandsecondary dealers.Secondarydealersconductmoredelicatesortingaccordingtotype,colorandquantity, andthenwash,cleananddrythematerials.34ManyofthesetradersarethemselvesZabbaleen andlivealongsidecollectors.Thesetradersareformercollectorswhohavebeenableto accumulatethecapitalnecessarytoacquiremorespaceforsortingandprocessing.Such tradersmayhireothermembersofthecommunity(includingwomenandchildren)tosort.35 Paidlaborersearnabout1.9perdayforsorting36.Basedonestimatesfromthenationalstudy ofplasticsrecyclinginEgypt37,thecostoflaborforsorting,washing,anddryingonetonof materialrangesfrom19to27.ObservationsfromCairoconfirmthatitisreasonableto assumeitcouldtaketenpeopleafulldaytomanuallysortonetonofmaterial.
Table4:FixedandOperatingCostsforCollectionandSorting,Cairo,Egypt FixedCost simplehandcart smalltruck(1.5ton) OperatingCost CollectionandTransportationCost(perton) Sorting,WashingandDrying(perton) LaborCostofSorting(perday)

12.5 378629 21 1927 1.9

Source:1."NationalstudyofPlasticIndustryinCairo",Page232."EconomicAspectsoftheInformalSectorinSolidWaste Management",Page73Table32

34 35

PlasticTechnologyCenter.(2008).(p.24) Scheinberg,A.etal.(2010).(p.23) 36 ExchangerateistheaverageexchangeratefromMay6,2010toMay62012,1Euro=7.9451EGP 37 PlasticTechnologyCenter.(2008).(p.28)

27

Cairo:WasteProcessingStageandTechniques Afterplasticsaresortedintotypes,cleananddrymaterialsgothroughseveralprocessing stages.GIZsstudyindicatedthatCairohasatotalof1,000recyclingsmallandmedium enterprises(SMEs);mostareunlicensed,small,andfamilyowned.38Processingtechniques includecuttingplasticintosmallerpieces,shredding,agglomerating,pelletizingandother mechanicalmanufacturingprocesses.Typesandqualitiesoffinalproductsdependon manufacturingprocessemployedandtheratioofrecycledtovirginplasticsutilized.39Different recyclingworkshopsmayconductmultipleprocesses,buyingsortedmaterialthenshredding cleaningandpelletizing,whileothersmayonlyoperateatonestage.Thisdifferencein operationmakesitrelativelymoredifficulttodistinguishthevariouscostsandvalueadditions fromeachindependentstage. Processingcostscanbecategorizedaseitherrawmaterialscosts, capitalcosts,productioncostsortransportationcosts40.Thisanalysis providesgeneralinformationaboutprocessingcostsand distinguishesbystagetotheextentpossible.Becausethe productivityofmachineryandlaborandincidentalcostssuchas transportationandland/rentvarysignificantlyaccordingto theparticularcircumstancesofeachoperator,afullcost benefitanalysisforaparticular
Sorting Cleaning Processing

Pelletizing

Shredding

enterpriseshouldbebasedon
Collection Figure4:PlasticProcessingStages
38 39

Scheinberg,A.etal.(2010).(p.20) PlasticTechnologyCenter.(2008).(p.37) 40 PlasticTechnologyCenter.(2008).(p.46)

28

detailedlocation,transportationandequipmentinformation. Recyclersgainaccesstomaterialsinavarietyofways.Somemayacquirematerialsby collectingitthemselves.Otherspurchaserawmaterialsfromwastecollectorsortraders.The averagepurchasingpriceforarangeofsortedandcleanplastics(PET,PP,HDPE,LDPE,PVC)is about235.5perton.41 Table5:ProductioncostsinprocessingstagesinEgypt

Rawmaterialcost(perton) Averagepurchasingpricefromsortedtrader CapitalCost Shredding Shredder(locallymade) Shredder(Used) Shredder(Turkishmade) Plasticshredder(40horsepower)(Irtiqa) Agglomerating Agglomerator Agglomerator(Turkishmade) Pelletizing FilmmakingMachine(locallymade) FilmmakingMachine(Irtiqa) FilmmakingMachine(Sophisticateddesign) Crystallizationmachine(Irtiqa) ProductionCost Thecostofshreddingonetonofrigidplastics TransportationCost(perton) Transportationcostfornonshreddedpolymers Transportationcostforpolymersaftershedding
Source: PlasticTechnologyCenter.(2008).,AuthorsinterviewsMayJuly,2012.

235.5 1,2592,643 7551,007 4,45642 6,041 5,0357,552 5,941 6,293 16,980 31,466 10,487 2550 7.510 3.75

Inordertoprocessplastics,recyclersmustincursignificantcapitalcosts.Avarietyof machinesareavailable,however,atawiderangeofpricesdependingontheirlevelof
41 42

PlasticTechnologyCenter.(2008).(p.21) ThedatawasinUSD.TheexchangerateistheaverageexchangeratefromMay6,2010toMay6,2012,1USD=0.7426EUR

29

sophistication.Costsoflocallymanufacturedmachinesaremuchlowercomparedtomore sophisticatedmachinesthatmayperformthesameoperation,butatadifferentlevelof precisionorefficiency.Forexample,highendfilmblowingmachinescost31,466 with100 kg/hrcapacity,comparedtolocallymanufacturedmachineswhichcost6,293withacapacity of30kg/hr.Itisdifficulttodeterminewhichoneismorecosteffectivewithoutunderstanding thequalityofoutputs,operatingcostsandtruelifetimeofthemachines.Fromtheperspective ofdistributedcapitalcostperkgofproduction,thelocallymademachineislessexpensive.If thelocalmachineislessreliable,requiresmorerepairs,orislessfuelefficient,however,itmay notturnouttobeabetterinvestment.Conversely,ifthehighendmachinerequiresmore expensivereplacementparts,orcannotberepairedlocally,costsoverthemachineslifetime mayinfactbegreater.Detailedinformationabouttheoperationalcostsisnecessaryinorderto advisecollectorsorrecyclersabouttheultimatecostsandbenefitsofexpansion.
Table6:DistributedCapitalCostsforfilmblowingmachineover1year(260workingdays,8hours perday) CapitalCost Capacity Kgperyear CostperKg(5yearlifetime) HighEndMachine 31,466 100kg/hour 208,000 0.15 LocallyMadeMachine 6,293 30kg/hour 62,400 0.10

InCairo,theAssociationfortheProtectionoftheEnvironment(APE)isalocalnonprofit thathasbeguntoproducemachineryfortherecyclingindustry.Theyhavesoldtheirmachines toasmalllocalenterprisecollectingandsortingsouthofCairocalledIrtiqa.Theauthors analyzedandobservedtheoperationsofthatenterprise,andthuswitnessedmanyofthe machinesinuse.Thesemachinesgenerallyaremoreexpensivethanotherlocallymade

30

machinesbutlessexpensivethanimports.Theyaredesignedtoberepairedlocallyandto withstandlocaloperatingdemands.Integratingmachineryproducersintothelandscapeofthe recyclingsupplychainisaninnovativestrategytobothreducethecostsofupgrading operationsforrecyclers,andsupportrelatedindustriesthatcanalsobenefitfromthegrowthof therecyclingindustry. Table7showsthetotalnumberofprocessingmachinesinEgyptandtheiraverage productivity.Basedonthisinformation,allocatedcapitalcostscanbeestimatedbasedon locallymademachinecosts(Table5)withanassumedfiveyearlifetime.AsshownTable7,the totalnumberofshredders,pelletizersandagglomeratorsinEgyptare700,450and400 respectively.Together,theseprocessorshandle292,000tonsofplasticperyear.Inthegreater Cairoarea,175,000tonsofplasticarerecycledannually,accountingfor60%ofthetotal recycledplasticinEgypt.

Table7:RecyclingEquipmentandTheirProductivityinEgypt recyclingequipment Number averageproductivity/day productivityMT/Y totalproductivityMT/Y averageproductivitypermachine Capitalcost Lifetime Annualdepreciation AllocatedcapitalcostperMT Shredders 700 1.25 262,000 374 1,951 5 390 1.4 Pelletizers Agglomerators 450 400 1.5 1 202,000 120,000 292000 449 300 6,293 6,294 5 5 1,259 1,259 3.7 5.7

Source:PlasticTechnologyCenter.(2008).(p.18,Table8)

31

Theallocatedcapitalcostpertonis1.4forshredders,3.7forpelletizersand5.7for agglomerator,whicharerelativelysmallwhencomparedtotheoperatingcostincurred processingthematerial.Operatingcostsincludelabor,electricity,waterandrent.Thereislittle reliabledataonproductioncosts,therebymakingit difficulttounderstandtherelationshipbetween revenuesandprofitsinprocessing.Onestudyshows thatthecostofshreddingonetonofrigidplastics rangesfrom2550.43Comparedwiththeallocated capitalcostperton,operatingcostremainsthemajor expenditureintheprocessingstage.Table8isan
Table8:Mainoperatingcosts(%oftotal costs)ofapelletizingworkshopinCairo, 2006 Labor 30% Transport 7% Electricityandwatersupply 25% Rent 15% Depreciation 12% miscellaneouscost 11%
Source:PlasticTechnologyCenter.(2008).(p.46, Table13)

exampleofpercentagecompositionofmainproductcostsinapelletizingworkshopinCairo44. Asshown,laborandutilitiesrepresentthelargestshareofoperatingcosts,at30%and25% respectively.Transportationcostisestimatedas7%ofthetotalcost,whichisunderstandably lowerthantheshareofcoststransportationrepresentsinthecollectionstage.Itisworth notingthattransportationcostwilldecreaseas plasticmaterialsmovealongthesupplychain becausethereductioninsizeallowsforagreater concentrationofmaterialsineachtrip. Transportationcostsfornonshreddedplastics varyfrom7.510pertoncomparedto3.75per

43 44

PlasticTechnologyCenter.(2008).(p.31) PlasticTechnologyCenter.(2008).(p.46)

32

tonaftershredding45.Strategiestodecreasethesizeofwastematerialsandincreasetheratio ofvaluablematerialsinwasteduringtransportationprocesscanreducethecostofoperation greatly,especiallyforwastecollectionstage. Cairo:GrowthOpportunitiesinRecycling AcomparisonofcurrentrecyclingvolumewiththeamountofwastegeneratedinEgypt demonstratesthatthereisindeedgreatpotentialforthegrowthofthesector.Theprocessing of292,000tonsofplasticaccountsforonlyonethirdofplasticwasteinEgypt.Improved collectionandsortingcouldremedythefactthat32%ofplasticwasteiseithernotcollectedor burnedwhile33%ofplasticwasteisdumpedintolandfills.Ifcollectorscouldincreasetheir capacitytoredirectthiswasteintotherecyclingsystem,therewouldnotonlybeincreased opportunitieswithincollectionbuttherewouldbemoreroomforcurrentcollectorstogrow intoanexpandedprocessingmarket.

Figure5:ManagementofplasticwasteinEgypt(in1000MT)
notcollected&burned landfill recycled reuse

48.5,5%

292,30%

309,32%

320,33%

Source:PlasticTechnologyCenter.(2008). (p.17)

45

PlasticTechnologyCenter.(2008).(p.47)

33

Cairo:ValueaddedatVariousStages Thepricepaidformaterialsdoesindeedchangeasitmovesthroughthesupplychain. Table9showsthemarketpricesforvariousplasticsthatwerepaidtoactorsatdifferentstages ofthesystem.Unfortunately,thesepricesdonotallowafruitfulexaminationofthe profitabilityofeachprocessingstage.Asnotedabove,thecapitalandoperatingcosts necessaryforprocessing,whichdoinfactaddvaluetotheenduser,mayexplainatleastsome ofthepriceincrease.Aspreviouslynoted,thecostforshreddingonetonofrigidplasticranges from2550.InTable9thepriceofPETincreases75betweenthesortingandshredding stages,whichwouldbetheshreddersrevenue.Accountingfortheoperatingcost,theshredder couldbeassumedtoearnaprofitof2550pertonofshreddedPET.Comparingthistothe earlierrevelationofthecollectorspertonprofitat15itappearsthattheshredderisindeed makingagreaterpertonprofit,thoughnotatascalethatwouldsuggestwidespread exploitation. Giventhisdata,theonepriceincreasethatshouldbefurtherinvestigatedisthatwhich occursbetweentheZabbaleencollectorandthetrader.Zabbaleencollectors,whether operatingasindividualsorfamilies,tendtoengageinatleastpreliminarysortingpriortoselling
Table9:Marketpricesforvariousplasticsbyseller,Egypt,2006,/Ton PET PP PEHD PEHD PS PVC PELD injection blown Collector 189 214 189 201 189 227 227 Trader(sorted) 227 239 214 227 214 252 277 Shredded 302 315 289 302 277 277 327 Washed 403 415 340 352 315 315 403 Pelletized 0 503 453 478 403 403 503 VirginMaterial 1762 1322 1007 1007 1007 944 1196
Source: PlasticTechnologyCenter.(2008).(p.21)

34

totraders.Thesamestudythatcalculatedthecollectorsprofitat15pertoncalculated tradersprofitsat27perton.Iftradersareabletoprovideanadditionlevelofsorting precision,thenthepriceincreaseinthatstagemaybejustified.If,however,theyarecharging higherpricesmerelybecausetheyareabletoguaranteehighervolumes,collectorscouldbe unjustifiablymissingaportionofthoseprofits.Creatingsystemsbywhichcollectorscanboth improvetheirsortingprecisionandtradeinhighervolumescouldhelptoclosethegap betweencollectorandsorterprofits.

35

GlobalComparisons Amman,Jordan AsinCairo,solidwasteinAmmaniscollected andrecycledbybothformalandinformalactorsbutthe structureofthesystemdifferssignificantlybetweenthe

Cityarea(Km2) 1,680 4,000 Unknown Table10:Amman,Jordan PopulationofAmman (2006) Population estimatefor Amman(2011): 1.8million

2.3million

twocities.TheGreaterAmmanMunicipality(GAM) DepartmentofEnvironmentandPublicSanitationis chargedwithmanagingcollectionanddisposalofsolid waste. GAMdoesnotprovidedoortodoorcollection service,butinsteadresidentsplacetheirwasteatthe curbandmunicipalworkerscollectitandtransfertoa nearbycontainerthenitiscollectedbyavehicle.47Like

46

PersonsworkingforGAM Personsworkingin informalwastesector AnnualTonsofWaste GeneratedinJordan (2005)*

1.2million

Sources:AbuQdais,H.A.(2007).TechnoEconomic AssessmentofMunicipalSolidWasteManagementin Jordan.Irbid,Jordan.WasteManagement.[27];Jordan DepartmentofStatistics. (http://www.dos.gov.jo/dos_home_e/main/index.htm)

inCairo,GAMswastemanagementcostiscoveredbymonthlyfeesincludedonresidents utilitybills.48Somebusinesseswithlargevolumesofwaste,includinghotelsorrestaurants,pay additionalcollectionfeestoGAMorcontractprivatewastemanagementcompanies.Entity Green,thecompanythatemploysoneoftheadvisorswhoprovideddataforthisanalysis, servesasanexampleofonesuchprivateenterprise.EntityGreenhasobtainedonelarge contractforwastecollectionatthedrillingsiteofamajorinternationaloilcompany.49Other largecompanies,particularlythoselocatedoutsidethecity,alsocontractprivatewaste managementservices.

46 47

EntityGreen.(2010).SolidWasteBehaviorsWithintheFormalandInformalWasteStreamsofJordan.Jordan.USAID.(p.24) AbuQdais,H.A.(2007).(p.1668) 48 EntityGreen.(2010).(p.2425) 49 Interviewbytheauthors.(March21,2012).

36

InformalcollectorsandtradersinAmmanappeartobesignificantlylesscohesivethan

theZabbaleenofCairo.Ina2010studycommissionedbyUSAIDandconductedbystaffat EntityGreen,wastecollectorswereobservedtoexhibithighlevelsofdistrusttowardone another,andlackedthedesiretocollaborateonalargescale.50Wastecollectorsoperatedina varietyofways,usingdifferentlevelsoftechnology(trucksvs.handcarts)aswellasvariable amountsoflabor(families,individuals,orpaidlaborers).Allinitialcollectors,however,appear togainaccesstowastebypickingthroughthedumpstersprovidedbyGAM.Collectorsaimto pickoutthevaluablesthatresidentshaveleftinthedumpstersbeforethedumpstersare emptiedbyGAMworkers.51 Collectorsdifferintheirlevelofspecialization.Somecollectavarietyofmaterials,while othersfocusononeortwospecificitems.Whateverthecollectorslevelofspecialization, materialisoftensolddirectlyonthestreetfromasmallcollectoronfoottoamobiletrader whoownsatruck.52ThusmobiletradingappearsmorecommoninAmmanthaninCairo, wherematerialisgenerallybroughtbacktothehouseholdforsorting.Becauseofstreetlevel tradingandtheoveralllackoftransparencyinthesystem,recyclablematerialinAmmandoes notfollowalinearpath.53Thereisstillagreatdealthatisunknownaboutthenumberofstages andhandsthatplasticspassthroughbeforereachingtheirfinalreusableform.Convenience andpriorrelationships,ratherthanmarketawareness,seemtodictatematerialflows.54 Thefollowingdataprovidesaninitialpictureofsomeoftheoperationsthatcharacterize plasticrecyclinginAmman.UnlikethecaseofCairowherethewastesysteminCairohasbeen
50 51

EntityGreen.(2010).(p.13) EntityGreen.(2010).(p.15) 52 EntityGreen.(2010).(p.15) 53 EntityGreen.(2010).(p.20) 54 Interviewbytheauthors.(April12,2012).

37

thesubjectofsignificantacademicandinstitutionalresearch,Ammanswastesectorappearsto havereceivedrelativelylittleattentionfrominternationaladvocatesoracademics.Asaresult, thedataprovidedhereshouldbeconsideredpreliminary.Asmallnumberofqualitative interviewsallowustodemonstratethecurrentrealityforalimitednumberofactorswithinthe system,butcannotprovidethebasisforlargescalegeneralizations.Futureresearchthatbuilds uponthisinitialdatawouldbeextremelybeneficialforthoseengagedinsolidwaste managementinAmman. SummarycharacteristicsofAmmanswasteareshowninTable10.Researchsuggests thatthevolumeofwasteinJordanwillincreasesteadilyoverthenext15yearsasthe populationgrowsandlivingstandardsincreaseandresidentsusemoreconsumergoods.55 Giventhisprojectedincrease,itisvitalthatmoreresearchisdonetodocumentthecurrentrole oftheinformalsector.Ingeneral,theinformalsectorcanbedividedintocollectorsandvarious traders:mobile,smallandlarge.Sortingandprocessingcanoccuratmultiplelevelsoftrade, thusthereisnotasinglecategorizationoftradersbysizeorrole.Instead,tradersofallsizes performavarietyoftasksdependingonthecontextandtheircapacity.AccordingtotheUSAID report,mobiletradersareessentiallycollectorswithslightlymorecapacityforhauling.Mobile traderswillpurchasefromothercollectorsonthestreet,aswellaspurchasematerialsfrom homesandbusinesses.Forcollectorsoperatingwithasmallstoragecapacity,mobiletraders provideaconvenientpointofsale.56Smallandlargetradersaredistinguishedonthebasisof bothlandsizeandaccesstotransportation.Smalltraderstendtoreceiverecycledmaterials onsitebutdonottraveltopurchasefromothersellers.Largetraders,incontrast,notonly
55 56

AbuQdais,H.A.(2007).(p.1667) EntityGreen.(2010).(p.19)

38

havemorelandandthusmorestoragecapacity,theyalsooftenhavevehicleswhichtheyuseto traveltoandpurchasefromsmallertraders.Beyondthesetradersareanothersetofactors whomightbehighlyspecializedinaparticularmaterial.Asnotedpreviously,however,recycled materialdoesnotseemtofollowastraightorconsistentpathfromcollectortomobiletrader, smalltraderthenlargetrader.Location,personalrelationshipsandmaterialtype,volumeand qualityappeartodictatetheflowofrecyclablesthroughthesystem.57

Figure6:ActorsinAmmansWasteSystem

GAM

On foot

Mobile traders Large Traders Small Traders

Recycling Factories

Cart

Truck

Collection

Trading&Processing

Reuse

Amman:Collection&Sorting Aseriesofinterviewsconductedinthespringof2012byEntityGreenprovidesa glimpseofthevariabilityinthesupplychainforplasticinAmman.Table11contains informationabouttheoperationsofaninformalfamilybusinessthatcollectsaswellas purchases,sortsandtrades.AsinCairoandelsewhere,thereisagreatdealofcollaboration betweenformalandinformalactors.Formalcompanieswithprivatecontractssellintothe

57

EntityGreen.(2010).(p.1920)

39

informalmarketbyworkingwithtraderssuchasthis.Thisparticulartraderpurchasesmaterials thathavebeenminimallysortedandsortsthemfurtherbytype.Sortingisdonebyhand,and insomecasesthetraderiscombiningvarioustypesofplastic(asinMix#1).Insuchacase,the tradermaythenbesellingthatmixtoanothertraderwho,workingathighervolumes,might sortthematerialevenfurther.Thedataobtainedinthisinterviewhighlightssomeofthe challengesinachievingtransparencyintheinformalsector.Ourintervieweraskedthe respondenttoprovideaveragepricesforeachmaterialastheytouredthefacility.Then,afew minuteslater,theintervieweraskedtherespondenttooutlineanyparticularchallengeshe facedinhisbusiness.Therespondentcitedpricefluctuationsasoneoftheprimarychallenges inthesector.Theevidencehecitedforpricefluctuationsfrequentlydidnotconformtothe informationaboutthenormalpricestatedearlier,i.e.thenormalpricegivenwaslargerthan thehighestpricecitedtodefinetherangeoffluctuation.

Table11:Trader#1,Amman58 Material PurchasePrice (/ton) MixedPlastic 314 MixedMetalandPlastic 418 SalePrice %Pricechangeaftersorting,ifpurchasedas (/ton) mixedplastic(314/ton) Mix#1(PET,HDPE,PP) 286* (9%) Mix#2(PP) 387 23% Mix#3(PVC) 209 (33%) Mix#4(HDPE) 356* 13% Source:InterviewconductedApril2,2012

Anumberoffactorscanhelpexplainthisdiscrepancy.First,asnotedearlier,thereisa generallackofcohesionwithintheinformalsector.Thismayhavecontributedtoan

58

DatawasinJOD.TheexchangerateistheaverageexchangeratefromMay6,2010toMay6,2012,1EURO=0.956JD

40

unwillingnesstodivulgeinformation.Inaddition,muchinformaltradingtakesplacewithout recordkeeping.Tradersareoftennegotiatingdaybydaywithouttheabilitytocaptureand recordlongtermtrendsinpricing.Finally,theparticulartraderinterviewedherenotedthat pricescanfluctuatethreetofourtimesperdayandaredrivenlargelybynegotiations.The circumstancesofaparticularcollectorortheexternaldemandfromarecyclingfactorycan dramaticallyshiftpricesaswell.59 Duetotheseandotherlimitations,thedatacontainedhereshouldbetreatedwith caution.Forthepurposeofpreliminaryanalysis,however,thedatahasbeensummarizedas follows:whenthenormalpricegivenwashigherthanthehighestfluctuatingprice,themeanof thelowest,highestandnormalpricewascalculatedandmarkedbyanasterisk*.Forother prices,thenormalquotedpricewasinfactbetweenthelowestandhighest,thereforeitis listedasstated. The2010USAIDreportcitedageneralpriceofplasticatbetween157209perton.60 Giventhereportedvariabilityinthemarketandtwoyearinflation(5%in2010)61,the discrepancybetweenthatpriceandthe313/tonformixedplasticquotedbytheinformantis notablebutnotunreasonable.Thoughforthisparticularbusinesscertainmaterialsappearnot tobeprofitable,thetrueprofitabilityofthesortingprocessdependsonthecompositionofthe originaltonofmixedplasticandthecostofsorting.Forexample,iftheoriginaltonofmixed plasticwere50%PP(Mix#2),25%HDPE(Mix#4)andtheremaining25%Mix#1,theoverall salepriceofthattonofsortedmaterialwouldbe354(Table12).

59 60

Interviewconductedbyadvisor.(April2,2012). EntityGreen.(2010).(p.14) 61 TheWorldBank.(2012).Inflation,consumerprices.Retrieved05/01,2012,from http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG

41

 Ahigherproportionofmoreprofitablematerialsinagivenmixedtonwillresultin greaterrevenuesandcouldcompensatefortherelativelylowerpriceofplasticssuchasPVCfor thisparticulartrader.USAIDestimatedthatsoring50tonsofmixedmaterialwouldincrease thevalueofeachtonby10.415.6.62Becausethismixedmaterialcanincludeothermaterials inadditiontoplastic,thisestimateisnosufficienttodeterminethetrueimpactofincrease volumeandsortingonmaterialprices.Itdoessupportthenotion,however,thataccessto greaterstorageandsortingcapacitybringsthepotentialforhighersalepricesinAmman. Therearealsooperationalcostsassociatedwithsortingandtradingthatarenot reflectedbypureexaminationofthepurchaseandsaleprices.Land,buildings,electricityand wagesrepresentrecurringoperationalcostsforsorters.Thesorterinterviewedherereported employingfivelaborersatawageof15.6perday.Thiswageisconsistentwiththedaily revenueof7.315.6reportedbyinformalcollectorsin2010.63Itislogicalthatthetrader wouldemployworkersatahighenoughwagetomakethejobequivalenttoifnotmore compellingthanworkasanindependentcollector.Thus,intheexamplegiveninTable12,the
Table12:ExampleMixedPlasticTonDistributionforTrader#1 Material %ofmixed PurchasePrice SalePrice ton (/ton) (/ton) Mix1(PET,HDPE, 25% 78 71 PP) Mix2(PP) 50% 157 194 Mix4(HDPE) 25% 78 89 Total 314 354

62 63

EntityGreen.(2010).(p.19) EntityGreen.(2010).(p.13)

42

fivepersoncrewwouldneedtosortatleasttwotonsofmixedplasticperdayinordertocover thecostofwages. Amman:Shredding AsinCairo,Ammanfeaturesinformalprocessorswhopurchasesortedmaterialsand

treattheminordertopreparethemforreuse.Aninterviewconductedwithalocalshredder offerssomeinsightintothecostsandrevenuesavailablefollowingcertainlevelsofprocessing.
Table13:Purchase,ShreddingandSaleofMaterial,Amman BuyRange SellRange Material Low(/ton) High(/ton) Low(/ton) High(/ton) Waterjugs 335 377 439 523 Chairs(PP) 418 439 502 523 irrigationpipes(small, 209 209 241 241 PPorHDPE) Nylon(plasticbags) 262 366
Source:InterviewbyAdviser.(April2,2012)

Shreddingrequiressignificantcapitalandoperationalcosts.Thisparticularworkshoprunstwo shredders,onedevotedsolelytotheshreddingofplasticbags,andtheotherusedformultiple typesofplastic.Thoughtheinformantdidnotprovideinformationaboutthecostofhiscapital investmentinlandandmachinery,heestimatedhisoperatingexpensesat63/ton.Applying thisoperatingcosttothevariablepurchaseandsaleprice,theshreddercanexpectarangeof potentialprofitbetween0126perton,outlinedinTable14.

Table14:PotentialProfitScenariosforShreddingPlastic,Amman Item Profit:Buyhigh,Selllow Profit:Buylow,Sellhigh Waterjugs 0 126 Chairs(PP) 0 42 irrigationpipes(small,PPor (31) (31) HDPE) Nylon(plasticbags) 42 42 Source:InterviewbyAdviser.(April2,2012) 43

 Giventhevariabilityinpurchaseandsalepriceandthesteadycostofoperation,ashredder suchasthiscouldbeinarelativelyprecariouspositionshouldmarketsfluctuate.Giventhat shreddingisoneofmanynecessarystepstoincreasetheusabilityofrecycledplastic,however, increasedtransparencycouldhelptostabilizepricesandreduceriskforprocesserssuchasthis. DatafromUSAIDs2010studysupportthenotionthatprofitabilityfromprocessingis unreliable.Thereisindeedvalueaddedbygreaterdegreesofprocessing,thereforeendstage recyclersarewillingtopayahigherpricepertonformaterialthathasbeenwashed,reducedor otherwisetransformedintoamoreusableform.Citingheavyplasticsasanexample(no specifictypegiven),researchersoutlinedaseriesofpricechangescorrespondingtoprocessing level.Table15showsthatthepricepaidforhardplasticscanincrease240%fromthetimeitis initiallysortedbutunwashedtothetimeitiscleanedandpelletized.Interestingly,the processorswhoprovidedthisinformationcitedtheirshreddingcostsat105/ton,which
Table15:SalePriceforHeavyPlasticatvariousprocessingstages Unclean Clean Shredded Clean&Pelletized 262 366 471 628

Price(/ton)

Source: EntityGreen.(2010).(p.22)

woulderaseanyprofitthatcouldhavebeenearnedfromthecleaningtotheshreddingstages. Respondentsdidnotnotewhetherthat105/tonrepresentedonlyoperatingcosts,or includedcapitalinvestmentsaswell.64Ineithercase,considerationofprocessingcosts demonstratesthatthemereexaminationofsalepricesisnotsufficienttounderstandthe relativepositionofvariousactorsintherecyclingsupplychain.

64

EntityGreen.(2010).(p.22)

44

Amman:PlasticProduction Theendusersofrecycledplastic,factoriesproducingnewplasticgoods,makethe

decisiontosourcematerialsbasedonquality,formandprice.ThedatainTable16was gatheredfromaproducerofplasticirrigationtubing.Thefactorymanagercitednoquality differencebetweenvirginandcleanrecycledplasticwhenproducingtubing,insteadhesaid thathechooseshismaterialinputsbasedonprice.Hehasshiftedtorecycledmaterials becauseofthesignificantcostsavings.Likemanyfactoriesusingrecycledplastic,heishighly sensitivetothequalityandcleanlinessofthematerial.Hewillonlypurchaserecycledplastic onceithasbeenwashedandpelletized.Then,hecombinestherecycledmaterialwithsome virginresintoproducepiping.Thisparticularfactoryreportsutilizingthreetonsofplasticper day.

Table16:PlasticIrrigationTubeFactory,Amman MaterialPurchased LowestPurchase HighestPurchase Price(/ton) Price(/ton) VirginPlastic 523 2,092 Recycledplastic(washedand 523 941 pelletized)
Source:InterviewbyAdviser.(April2,2012)

TypicalPurchase Price(/ton) 1,255

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MultiCityComparisons Theprocessofwastecollection,sortingandrecyclingvariessignificantlyacrossthe

developingworld.Somesimilaritiesexist,particularlywhenexploringthesocialmarginalization andexposuretohealthandsafetyhazardsforwastecollectorsintheirrespectivesocieties.65 Materially,thedistributionofvariousrecyclableswithinthewastestreamisrelativelysimilarin manydevelopingworldcities(Table17).Inthedevelopingworldorganicmaterialoften accountsforhalfofthewastestream.Asanationsincomegrows,consumablescometo supplantorganicsasthemajorityshareofcollectedwaste.

Location Amman,Jordan Cairo,Egypt

Table17:CompositionofRecoveredWaste,GlobalComparisons Paper Plastic Glass Metal Organics 14% 18% 17% 15% 27% 13.2% 10% 16% 13% 17% 2.8% 3% 3% 1% 8% 2.4% 3% 3% 9% 3% 54.4% 60% 48% 55% 26%

Other 13.2% 6% 13% 7% 19%

QuezonCity,Philippines Pune,India Rotterdam,Netherlands

Sources:Cairo,QuezonCity&PunedataScheinberg,A.etal.(2010).(p.15);AmmandataAbuQdais(2007).(p.1667); RotterdamdataUnitedNationsHumanSettlementsProgram.(2010).(p.12)

Unlikethemarketforvirginplastic,whereglobalsupplychainsmakepricesmore transparentandthereforesourcingmorestreamlined66,themarketforrecycledplasticishighly variabledependingononeslocation.Table18comparesthepricespaidtowholesalersforPET invariouscities.Thoughthereportsauthorsdonotspecifythequalityorformofthismaterial, basedoncomparisonswithdataobtainedfromanotherreportontheplasticsindustryinCairo,

65 66

UnitedNationsHumanSettlementsProgram.(2010).(p.16) Interviewwithadvisor.(March15,2012)

46

Table18:Averagepricesfor PET(Eurosperton)paidby industriestowholesalers Cairo,Egypt Cluj,Romania Lima,Peru Lusaka,Zambia Pune,India QuezonCity,Philippines

conductedoverthesameperiodoftime,wecanassume thatthisisthepriceforsortedbutnotshreddedPET.67

244 Pricesarehighlyvariabledependingonthematerial 109 250 availabilityandthedegreeofindustrializationthatdrives 30 339 thedemandforrecycledplastics.Whenseekingtoadvise 172

Source:Scheinberg,A.etal.(2010).(p.71)

wastecollectorsonstrategiesforimprovingtheir

livelihoods,itisimportanttoconsiderthematerialdemandbothlocallyandglobally.Inplaces suchasLusaka,Zambiawherethemarketforplasticsisrelativelyweak,interventionsto increasewastecollectorscollectioncapacityandprocessingmaynotbeimmediately profitable.ConverselyinPune,Indiawhereendstagesalepricesarehigher,capital investmentsthatincreasecollectionandprocessingcapacitymaypayoffmorequickly. Tounderstandtheimpactofcapitalinvestmentsonthesize,scopeandprofitabilityof

anystagewithintherecyclingprocess,informationaboutboththecostsandpotentialsale priceisnecessary.AsdemonstratedbytheCairoandAmmancases,thisdataisoftendifficult toobtain.ResearchersfromsixcitiesincludingCairocollecteddatawithinasharedframework withthesupportofGIZ.Thoughtheirfindingswerenotalwaysparallel,duetothevariable natureoflocalcircumstances,theydoprovidesomeinterestingbasesforcomparison.

67

PlasticTechnologyCenter.(2008).(p.21)

47

PricingandIncomes InQuezonCity,Philippines,20062007datashowedthatthepricepaidforvarious plasticsincreasedateachstage(Table19)sothatthefinalsellersofonetonofPETreceived 64morethantheinitialwastepicker.

Table19:Pricespaidforvariousplastics(/ton),QuezonCity,Philippines PricePaidtoWaste PricePaidtoSmallJunk PricePaidtoLarge Picker Shop(Trader) Junkshop(Trader) 235 246 299 189 239 269 43 49 75

Material PET HDPE LDPE

Source:Scheinberg,A.etal.(2010).(p.72)

Interestingly,however,itwasfoundthatonceproductioncostswereaccountedfor(labor, capitalequipment,land,etc.)itinerantwastebuyersandjunkshopowners(thosewhotradein largervolumes)madenearlyequivalentprofitpertonofwaste(21and22,respectively). Smallandlargejunkshops(traders)frequentlyprocessmaterialsbeforesellingthemtothenext buyer.Therefore,whilepricesappearhigher,infacttheultimateeconomicimpactisrelatively similarforwastecollectorsandtraders.68 TradersandjunkshopownersinGeneralMarinoAlvarez,Philippinesappeartogain

increasedrevenuethroughmaterialconsolidationandsale(Table20).Thelargestjunkshops tendtohavetheclosestconnectiontoendstagepurchasers,thereforetheyreceivepricing informationfirstandthenpassitalongtosmallershopsviamobilephonemessaging.Larger shopsareusuallyabletobothbuyandsellathigherprices.69Materialismanuallysortedand washedbyworkersateachjunkshop,yetunlikeinCairoprocessingdoesnotappeartotake

68

69

Scheinberg,A.etal.(2010).(p.69) SolidWasteManagementAssociationofthePhilippines.(2008).AStudyonJunkshopsandItinerantWasteBuyersinGeneral MarianoAlvarez,Cavite,Philippines.Philippines.(p.15)

48

placeinjunkshops.ResearchersfromtheSolidWasteManagementAssociationofthe Philippines(SWAPP)surveyedsmall,mediumandlargejunkshopownersandfoundan
Table20:PurchaseandSalePriceforPlasticsbyTraders,General MarinoAlvarez,Philippines Material PET LDPE PVC PurchaseRange (/ton) 181308 217 1872 SaleRange(/ton) 217398 307362 3672

extremelywiderangeof reportedrevenue,varying from18to4,525per month.70Aselsewhere, however,thetruecostsof operationarenotalways

Source:SolidWasteManagementAssociationofthePhilippines.(2008).

reflectedinsuchreports.Manytradersoperateoutoftheirhomesandemployfamily members,thereforetheydonotadequatelyaccountforcostssuchasland/space,electricity, andlabor.SWAPPmadeeffortstoestimatethesecosts,anddeterminedthatlargetradersare stillmakingsignificantlymorethansmalltradersandcollectors(whomakeaboutthesame monthlyincome)oncecostshavebeenaccountedfor.71Moreresearchinthisareaisnecessary tofullyunderstandwhyincomedifferencesbetweencollectorsandtradersinGeneralMarino AlvarezappearsomuchgreaterthaninQuezonCity. DatafromPuneconfirmsthatinsomecases,individualssellingmaterialatthesame levelofprocessingwillreceivedifferentprices(Table21).Unfortunately,theresearcheswere notabletodeterminewhetherthepricevariabilitywasaresultofsocialorgender discrimination,orwhetheritwasaresultoftherelativecleanlinessandqualityofthematerial itself.Thosewhopickwastefromthelandfilltendtosuffereconomicandsocialdiscrimination andincludemanywomen,whileitinerantwastebuyers(IWBs)aremainlymenandtravelto
70 71

SSolidWasteManagementAssociationofthePhilippines.(2008).(p.1213) SolidWasteManagementAssociationofthePhilippines.(2008).(p.1315)

49

Qualitymatterswhen examiningprice.
homesandbusinessespurchasingandcollectingmaterial.Genderandsocialdiscrimination couldbeonefactorleadingtolowerpricespertonforwastepickers.Butqualityand cleanlinessarealsoafactor.Wastepickedfromthelandfillismorecontaminatedandthusof lowerqualitythanwastepurchasedorcollecteddirectlyfromhouseholds.72Certainmaterial, suchaspaper,whosequalitystandstobegreatlydiminishedoncetransportedtothelandfill andcontaminatedbyothermaterials,hasalargepricedifferential.Othermaterials,like metals,whosevalueislessdependentoncleanliness,appeartohavemoreequalityinpricing. Thus,thevariabilityofpricesinPunedemonstratesthedifficultlyofseparatingsocialand economicdiscriminationinpricingfromtruevaluedistinctionsbetweenmaterials.Inthis context,helpingwastepickersaccessmaterialbeforeitarrivesatthelandfillwouldallowthem toreceiveahigherpriceatsale.Thisstrategyrequiresverylittlecapital,yetdoesnecessitatea shiftinthepowerdynamicsthatdetermineaccess.
Table21:PricesPaidtoDifferentWastePickers,Pune,India Material Pricepaidtowaste PricepaidtoIWBrecoveringfrom pickerrecoveringfrom households/businesses(/ton) thelandfill(/ton) Paper 17 85 FerrousMetal(containsiron) 170 170 NonFerrousMetal 778 778 FilmPlastic 34 85 RigidPlastic 170 170
Source:Scheinberg,A.etal.(2010).(p72)

72

Scheinberg,A.etal.(2010).(p.50,72)

50

SystemAttributes InQuezonCity,wastecollectorsandtradersareinfactcollaboratingforcollectionand sale.Whenlooselyaligned,tradersoftensupplyitinerantwastebuyerswithpushcartsorother capital.AstudyofwastecollectionandrecyclinginGeneralMarinoAlvarez,Philippines, detailedtheintegrationofIWBsandjunkshopowners (traders).Mostjunkshopownersstartedaswastebuyers, collectorsorjunkshopemployees.OwnersandIWBs

Collectorsandtraders oftencollaborateto gatherandsellmaterials

collaboratedailyinordertocollectandtrade:ownersprovideseedcapitalsothatIWBscan purchaseonthestreetandfromhouseholds,thenreturnmaterialstothejunkshop.73In QuezonCity,inadditiontodailycollaborationwithjunkshops,wastecollectorshavealigned andthroughassociationhaveasagroupmovedupthesupplychain.ThePayatasAlliancefor RecyclingExchange(PARE)has15associationswhosemembersarewastepickers.These associationsserveasjunkshops/traders,thusdemonstratingonemeansbywhichwaste collectorscanorganizeandoperateatmultiplelevelswithinthesystemandtherebytake advantageofanypotentialdifferencesintheprofitmarginsateachstage.74

73
74

SolidWasteManagementAssociationofthePhilippines.(2008).(p.712) Scheinberg,A.etal.(2010).(p.58)

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StrategiesforImprovement Manystrategieshavebeeninitiatedinordertoimprovetheeconomicandsocialwell beingofwasteworkersinthedevelopingworld.Commonaretopdowndevelopment strategies,whichattempttorescuewasteworkersbyfocusingoncreatingnewincome opportunities,andwelfarestrategies,whichfocusonalleviatingpressingdailyneeds.75While theseapproachesmayimprovethelivesofsomewasteworkers,theyoftenperpetuatethe imageofwasteworkasdirtyandfailtorespectthedignityofwasteworkers.76Thisreport emphasizesparticipatoryapproacheswithaholisticviewoftheinformalwastesectorinorder tohighlightstrategiesthatrespectthedignityofwasteworkersandallowforthemaintenance ofsustainablelivelihoods.Participatoryapproachesacknowledgethatmanyinformalwaste workershavechosenandwouldliketomaintaintheirlivelihood,particularlywhenthereare fewalternativemeansbywhichtoearnanincome.Suchstrategiesalsorecognizethe economicandenvironmentalvalueofreducingwasteandreusingmaterial.Participatory strategiesaremeanttoempowerwasteworkersandachievesustainablechangeinthe structureoftheinformalsysteminawaythatbenefitsinformalwasteworkersandtheir communities.77 Theformationofcooperatives,associations,partnershipsandmicroenterpriseshas

beensuccessfulinavarietyofdevelopingworldwastemanagementcontexts.InPune,India andQuezonCity,Philippines,organizationeffortshavebeenquitesuccessfulwith60%and37% ofinformalsectorsorters/recyclersreportingthattheybelongtoasectororganization,

75

Scheinberg,A;Anschtz,J,&vandeKlundert,A.(2006).Wastepickers:Poorvictimsorwastemanagementprofessionals? CWGWASHWorkshop,2006,Kolkata,India.[56](p.2) 76 Scheinberg,A,etal.(2006).(p.1) 77 Samson,M.(Ed.).(2009).Refusingtobecastaside:Wastepickersorganisingaroundtheworld.Cambridge,MA,USA:Women inInformalEmployment:GlobalizingandOrganizing(WIEGO).(p.14)

52

respectively.Incontrast,only2.5%ofCairosinformalsectorreportsbeingorganized.78The degreetowhichinformalorganizationsareintegratedintotheformalsectordependsonthe particularcontext.79Thoughthefollowingdiscussiongeneralizesacrossmanyexamplesfrom thedevelopingworld,itshouldbenotedthatthelocalcontextisextremelyimportantin determiningthedegreeofformalizationandspecificapproachthatsuitsanyparticularlocation. Factorslikethepoliticalorientationandobjectivesoftheparticulargroupinquestion;political orientationsandobjectivesofsupportingorganizations;whethermembersseethemselvesas workers,entrepreneurs,orinsomeotherrole;locallegislativeandgovernmentalcontext;and existingorganizationsornetworksmustbeconsidered.80 HorizontalandVerticalIntegration IntheSWMsector,asinanysector,itishelpfultoconceptualizeexpansionasoccurring eitherhorizontallyorvertically.81Itisimportanttonote,however,thatthetwoformsarenot exclusive,rathertheycanbecomplementaryandoftenoccursimultaneously.82Whena businessdecidestoexpanditsexistingoperationshorizontallyinordertoproducemore volumeithastwooptions;itcanexpandbymergingwithanothersimilaroperationor purchasingmoreorbetterequipmentthatcanenableittodealwithlargervolumes.Thiscould includeaddingadditionaltypesofmaterialstoanoperationsrepertoire.

78

Gunsilius,E.,Chaturvedi,B.,Scheinberg,A.(2011)TheEconomicsoftheInformalSectorinSolidWasteManagement,GIZ(p. 24) 79 Samson,M.(Ed.).(2009).(p.14) 80 Samson,M.(Ed.).(2009).(p.14) 81 Just.;Mitra,S.;&Netanyahu,S.(2005).ImplicationsofNashBargainingforHorizontalIndustryIntegration.AmericanJournal ofAgriculturalEconomics,[87](May,2005),467481. 82 Knapp,J.(1950).CooperativeExpansionthroughHorizontalIntegration.JournalofFarmEconomics,[32](4,Part2),1031 1047.

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IntheinformalSWMsector,itiscommonforsmallscalewastecollectorstoselltheir materialstointermediarieswhothenaccumulatematerialsandselltheminlargervolumes. Becausetheintermediarybuyersareabletosupplyenduserswiththehighvolumesthatmake apurchaseattractive,itcanbecomedifficultforsmallscalecollectorstoassertagencyinthe pricingprocessbecausetheyarenotabletooperateatscale.83Whiledatapresentedherehas shownthattheevidenceismixedonwhethertradersdoinfactgainunfairprofitsthrough accumulationalone,itiscertainlytruethatindividualcollectorscannotaccesslargeindustries ontheirown.Wastecollectorcooperatives,associations,andothertypesoforganizationscan allowwasteworkerstocircumventtheintermediarybuyerbyacquiringtheabilitytoofferlarge enoughvolumestobeattractivetoindustries.84InColombia,wastepickercooperativeshave goneastepfurther,formingregionalmarketingassociations,whichallowthemtoaccumulate evenlargervolumesandobtainhigherpricesthanindividualcooperativeswerepreviouslyable toobtain.85 Horizontalintegrationthroughorganizationisnotlimitedtowastecollectors;however, generallywhenprocessorsfurtherupthesupplychaindecidetoexpandtheiroperations,they combinebothhorizontalandverticalintegration.86Verticalintegrationoccurswhenan operationexpandsbyintegratingadditionalstepsinthesupplychainintoitsrepertoire.An enterprisemayintegrateverticallybypurchasingequipmentthatallowsfurthermaterial processing.Anenterpriseororganizationmayalsoverticallyintegratethroughincreased organizationbybringingtogetheractorswhoworkacrossmultiplelevelswithinthesupply
83

Medina,M.(2005).Wastepickercooperativesindevelopingcountries.WIEGO/Cornell/SEWAConferenceonMembership BasedOrganizationsofthePoor,Ahmedabad,India.(p.20) 84 Medina,M.(2005).(p.21) 85 Medina,M.(2005).(p.22) 86 Samson,M.(Ed.).(2009).

54

chain.ThecooperativeRecicla,whichconsistsofformerdumpsitewastepickersinMaputo, Mozambique,isagoodexampleofverticalexpansion.In2006ajointinitiativewaslaunched betweenCaritas,LVIA,AGRESU(aGIZprogram)andtheMaputomunicipalgovernmentin ordertointegrateaplasticsrecyclingcenter.Theadditionofprocessingofmaterialsincreases theirvalueandallowsReciclamemberstoearnamuchhigherincome.87 Organizing Thedifferencebetweenanassociation,acooperative,andauniondependsuponlocal definitionsandlaws,butthefunctionoftheseorganizationsarethesameintheinformalSWM sector.Theyaregenerallynonprofitoriented,requireminimalregistrationwithgovernment entities,andallowmemberstoorganizetheirowninternalstructure.Membersdividelabor anddistributewages,reducingeachmemberspersonalrisk88forthepurposeofservice delivery.89 CooperativesarethemostcommonlyfoundtypesofformalizingorganizationsinSWM inthedevelopingworld,duetotherelativeeaseofstartup.90Membershiporaffiliationin wasteworkerorganizationsoffersindividualsanumberofbenefits.First,individualscan overcomepersonalbarrierssuchasilliteracyoralackofbusinessknowledgebyleveragingthe skillsofotherswithinanorganization,whileofferingtheirownexpertiseinotherareas.91In addition,newdivisionsoflaborcanutilizetheskillsofmanypeople,leadingtomoreefficiency.
87

Gunsilius,E.,Spies,S.,GarcaCorts,S.,Medina,M.,Dias,S.,Scheinberg,A.,etal.(2011).Recoveringresources,creating opportunities:Integratingtheinformalsectorintosolidwastemanagement.Eschborn,Germany:DeutscheGesellscha fr InternationaleZusammenarbeit(GIZ).(p.34) 88 Gunsilius,E.,etal.(2011).(p.34) 89 Samson,M.(Ed.).(2009).(p.14) 90 Gunsilius,E.,etal.(2011).(p.34) 91 Gunsilius,E.,etal.(2011).(p.32)

55

TheSpiritofYouth TheSpiritofYouth(SoY)was foundedin2004byEzzatNaem, thesonofagarbagecollector. SoYservesacommunityof sociallyandeconomically marginalizedChristiangarbage collectorsintheneighborhood ofMokattam,Cairo,knownalso asgarbagevillage.Amongthe servicesthatSoYprovidesare advocacyandeducational opportunities,towhichthe people,knownasZabbaleen, wouldnototherwisehave access. SoYhasrecentlysucceededin completingtheorganization andregistrationprocessfor smallandcommercialtraditional collectorsintoformal companies,andnowhasan agreementfromtheGovernorof CairotointegratetheSMEsinto thelegaltenderingsystemofthe city,andtoissueadecreeof wastesegregationatsource.In addition,SoYhasmanagedto developalegalsyndicateof traditionalcollectorsand recyclers.

Anorganizedgroupofpeoplecanbringincreasedopportunity forpartnershipswithNGOs,universities,andlocaland internationalentrepreneurs.Furthermore,because municipalitiesgenerallyrefusetosigncontractsoraward tenderstoindividuals,organizingisanimportantstepfor informalsectorworkersifintegrationintotheformalsectorisa goal.92Finally,organizingmayalsoofferadditionalaccessto creditthatindividualsmaylack.93 Inadditiontobuildingsocialcohesion,wasteworker organizationshavebeenespeciallybeneficialtowaste collectorsastheycreateanopportunitytoexpandboth horizontallyandvertically.Collaborationwithothercollectors increasesvolumeandintegrationwiththoseatdifferentstages ofthesupplychainprovidesaccesstocapitalandnew processingopportunities.Forwastecollectorswithlittlecapital oraccesstocreditjoininganorganizationmaybeanattractive waytoreducerisk,increaseincome,perhapsobtainaccessto education,training,andhealthcare.Furthermore,beingapart

ofanorganizationcancreateanewidentityforindividualsasenvironmentalprofessionals.94 Organizationsthathavetheabilitytotradeinlargervolumescanalsobebeneficialforinformal recyclersbycreatingamoreconsistentandgreatersupplyofmaterials.

92
93

Scheinberg,A.etal.(2010).(p.39) ElZanaty&Associates.(2009).BaselinestudyforplasticrecyclingcompaniesinCairo.Cairo,Egypt:GIZ.(p.10)

56

Mostwasteworkerorganizationsarelaunchedandmaintainedwithsomehelpfrom NGOsorotheroutsideassistanceandfunding,whichmayalsoprovidepolicyadvocacy,training formembers,healthandeducationbenefitsandincomegenerationopportunitiesoutsideof collectionandsorting.However,withinsuchpartnershipsinstitutionalsustainabilityiscrucial inordertoreducetheriskposedbyinconsistentfunding.95 Trustisoneofthemostimportantelementsofdevelopingandmaintainingawaste workerorganization.Thismeansthatcooperativesandassociationsmustbedevelopedwith inclusionandtransparencyinmind.Informalworkerscanbegenerallydistrustingofjoint financialventuresandmanyhavehadpersonalexperienceswithbeingcheated.Many cooperativesandassociationshaveeitherfailedtogetoffthegroundorhavedisintegrateddue toinsufficienttrustbetweenmembers.96AGIZpilotprojectinChile,whichwasaimedat partneringasteelcompanyandinformalwasteworkersfailedtocometofruitionduetolackof trust.Anyinformalsectorissusceptibletoalackoftrustamongactorsandcaseslikethisof failedcooperativesarecommon.97 FormalEnterprises Manywasteworkersinthedevelopingworldworkwithininformalsmalltomedium enterprises(SMEs).Aninformalenterprisecanconsistofagroupofindividualsorfamilywho collectandsortwasteforrecyclablesforsaletoanintermediarybuyer,toasmallormedium sizedworkshopthatprocessesrecyclables.SMEsprovidecollectionservicesandrecycling,but

94 95

Gunsilius,E.,etal.(2011).(p.32) Gunsilius,E.,etal.(2011).(p.37) 96 Gunsilius,E.,etal.(2011).(p.34) 97 Gunsilius,E.,etal.(2011).(p.34)

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atthetimeofthisreporttherewasnoevidenceofSMEorganizationamongdumpsitepickers orscavengers.NIDAN,inIndia,wasoriginallyformedasacooperativeofdoortodoor collectors,butmembersdecidedthatthelocalcontextwasbettersuitedforacompanymodel whichprovidedgreatergeographicflexibilityandaccesstocapital.Thecompanynowhasfive contractsinthreemunicipalities,caneasilydistributeprofits,andtheownershaveagreater senseofprideastheynowseethemselvesasentrepreneurs.98Itisworthnoting,however,that wastecollectorsmayfinditdifficulttotransitionfromworkingindependentlytoworkingfora companywheretheyexperiencelessfreedomofoperationandmusttransitiontowagebased work.99Whilenewlyformalizedrecyclingcompanieshavecapitalforspace,laborand processingmachines,theysharemanyofthesamebarriersofwastecollectors.Manyrecycling companieslackbusinessandmanagerialskillsanddonotfollowconventionalaccounting practices.Theirproductsmaybeoflowquality,andtheyhavelimitedaccesstofinanceand markets.Furthermore,theirbusinessesareoftenperceivedaspollutingbythegeneralpublic andgovernmentalorganizations,buttheyaremorevisibleandstationarythanwastecollectors andthereforesusceptibletofines,bribes,andbeingshutdown.100 SMEsareattimesinitiatedbyNGOs,andatothertimesbyprivateinvestors.TheSpirit ofYouthAssociation(SoY),anonprofitservingawasteworkercommunityinCairo,Egypthas beensuccessfulinimplementingaregistrationstrategyforSMEs.IrtiqainEgyptgrewoutofan NGOinitiative,butwasfinancedbyprivatecapitalandnowoperateswiththetriplepurposeof providingcollectionandrecyclingservices,employinginformalwasteworkers,andmakinga profit.EntityGreeninJordanisalsoaprivatecompanythatcollectsandtradesrecycled
98 99

Samson,M.(Ed.).(2009).(p.85) Samson,M.(Ed.).(2009).(p.85) 100 Gunsilius,E.,etal.(2011).(p.35)

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material,butdoesnotengageinprocessing.Thebenefitoftheforprofitmodelisthatunlikean organizationthatreliesonoutsidefunds,aforprofitcompanymust,bydefinition,sustain itself.Asmentionedabove,however,informalworkerstransitionfromselfemploymentto becominganemployeemaybedifficult,establishingaformalcompanymaybedifficult,and goodfinancialplanningisnecessaryinordertorunaprofitablebusiness. Networks Forexistingorganizations,networksthatunitewasteworkersacrosscountries,regions, andevengloballycanprovidetechnologyandinformationsharing,asenseofunitywithinthe wastesector,andhelptoforgeallianceswithgovernments,largecompanies,andNGOs. Networkscanincludeconferences,suchastheFirstWorldConferenceofWastepickersin Bogota,Colombiain2008101;onlineforums,suchasWomeninInformalEmployment GlobalizingandOrganizing(WIEGO),whichcollectsanddisseminatesinformationabout informalwomensemployment,includingintheSWMsector102;andtheLatinAmericanWaste pickersNetwork(LAWPN),whichseekstoimbueasenseofsolidarityamongLatinAmerican wastepickers,changepublicopinionsofwastepickersandtheservicestheyprovide,advocate forfairerpublicpoliciestowardwastepickers,strengthenexistingwastepickerorganizations, andshareinformationamongwastepickers.103 WhilenetworkscansucceedinbuildinglegitimacyaroundtheinformalSWMsectorin thedevelopingworldandadvocateforpoliciesthatbenefitinformalwasteworkers,itshould bepointedoutthatwasteworkersgenerallydonothavetimetodevotetonetworkingthrough
101 102

WIEGO.(2012).Wastepickers.Retrieved4/20,2012,fromhttp://wiego.org/informaleconomy/occupationalgroups/wastepickers Samson,M.(Ed.).(2009).(iv) 103 Samson,M.(Ed.).(2009).(p.47)

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thesekindsofforums;manymaynothaveaccesstotheinternet,wheremuchofthese networksoperate;andilliteracymaypreventthemfrombeingableobtainoruseanyofthe informationprovided.104 AvenuesforCorporateInvolvement Effortsfromcorporationscanbecriticalinensuringthesuccessofinformalsector organizationsandclosingthelooponrecycling.Corporationshaveidentifiedpurchasing recycledmaterialsasstrategytoincreasecompetitiveedge,demonstrateenvironmental leadershipandenhancecorporateimage.Corporatedemandforrecycledmaterialisgrowing, however,asdemandgrowssodoconcernsoveraccess.Becausesmallscaleanddisintegrated operationscharacterizetheinformalwastesectorinmanydevelopingcountries,corporations oftenfinditdifficulttoconnectwithwastecollectorsandrecyclersforpurchasing.Therefore, strategiestoguidecorporationsforglobalprocurementservebothcorporateandinformal sectorneeds. Corporatepartnerships:ProjectPhoenix Johnson&Johnsonservesasanexampleofacompanythathassucceededinbuildinga partnershipwiththeinformalsector.ThispartnershipnotonlyexpandsJohnson&Johnsons accesstorecycledmaterials,butallowsthecompanytoengagewithsocialsustainabilityfor thosewhoselivesaretouchedbythecompanyssupplychain.

104

Gunsilius,E.,etal.(2011).(p.36)

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ProjectPhoenixwasbornoutofconversationsthatbeganinBrazilin2009.Itwasthen thatJohnson&Johnsondecidedtoexpandbeyonditsconcernovertheenvironmental sustainabilityofitsproductstoexaminehowitmightengagewiththecommunityofpeople thatcollects,sortsandrecyclesitsproductsoncetheyareconsumed.TheFuturaCooperative wasalreadyoperatingasuccessfulcollectionandrecyclingcenterinSaoPauloandemploying Braziliancatadores(wastepickers).Johnson&JohnsonpartneredwithFuturaand implementedtheSA8000certificationprogramdevelopedbySocialAccountability International,oneoftheworldsfirstauditablesocialcertificationstandardsfordecent workplaces,acrossallindustrialsectors.TheSA8000standardsarebasedonprotectingthe humanrightsofworkersalongnineprinciplesofsociallyresponsibleandethicalworking conditions:childlabor,forcedandcompulsorylabor,healthandsafety,freedomofassociation andrighttocollectivebargaining,discrimination,disciplinarypractices,workinghours, remuneration.105Partneringwithexperiencedinternationaldevelopmentconsultants,Johnson &JohnsoncreatedathreestagetrainingprocessthatallowedFuturatobecomeSA8000 certified. ThiscertificationhasproducedincredibleimprovementsinFuturasoperations.The workplacehasbecomesafer,productivityandqualityhaveincreasedtherebyraisingtheprice Futuracandemandforitsmaterials,andinadditiontotheirpartnershipwithJohnson& JohnsonFuturahasattractedothernewinvestments.Johnson&JohnsonhasintegratedFutura intoitssupplychainandnowpurchases100tonsofpaperboardannually,whichgoesintothe productionoftheirhighlyrecognizedBandAidpackaginginBrazil.Johnson&Johnsonviewsits
105

SocialAccountabilityInternational.(2012)SA8000.Retrieved5/01/2012fromhttp://www.sa intl.org/index.cfm?fuseaction=Page.viewPage&pageId=1140&parentID=473&nodeID=1.

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partnershipwiththeFuturaCooperativeasamajorsuccess,forithasenabledthecompanyto meetitsTripleBottomLine:itisusingpostconsumerrecycledmaterials,becomingsocially engagedwiththecatadoresinBrazil,andprovidingeconomicbenefitstobothparties.Project PhoenixhasbeenmetwithsuchenthusiasmbyJohnson&Johnsonsleadershipandthe cooperativemembersthattheyarenowlookingforwaystoengagemoreconsumergoods companiesintheproject.Thegrowthofapartnershipsuchasthishasthepotentialtoimprove wastepickerlivelihoods,increasethevisibilityofglobalwasteandrecyclingefforts,and ultimatelyleadtosafer,moreefficient,andmoreenvironmentallyfriendlysupplychainsfora hostofconsumergoodsmanufacturers. OnlineSupplier/PurchaserSystem Internet,mobilephonesandadvancedmappingtechnologyprovidegreatopportunities

toconnectbuyersandsuppliersofrecycledmaterial.InEuropeandNorthAmerica,thereare severalwebsitesonthesaleandpurchaseofrecycledplastic,includingplasticmarkerts.org,a siteusedbytherecyclingindustryintheUnitedStatesandCanada.Thesiteincludesthelistof recycledmaterialsbuyersandsuppliers,thepriceandvolume,andupdatedreportsandnews intheindustry.Thisinformationsharingmodelcouldhelpincreasethetransparencyofthe wastesectorinthedevelopingworld. Someinitiativestoincreasetransparencyandconnectbuyersandsellersarealready

underwayinsomedevelopingcountries.InBrazil,theplasticindustryhasasitePlastivida, whichhasalistof735recyclers.106TetraPak,producerofpackagingworldwide,isbuildingan

106

Plastividahttp://www.plastivida.org.br/2009/Default.aspx.

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onlinedatasysteminPortugueseforthesupplychainofTetraPakinBrazil.Theonlinetool beganasaninternaldatacollectionstrategytounderstandthecompanysownproductchain, butTetraPakrecognizedthatitcouldbeanassettorecyclersofmanydifferentmaterials. TetraPaklaunchedthemapbypartneringwith15recyclers,andfromtheresoughtoutthe collectorsfromwhomtheywerepurchasing.Theentiresystemisgrowingandtheefforthas beenwellreceivedbycollectors,brokersandrecyclerswhoseethatincreasedtransparency canimprovetheiroperations.Othercompaniescouldengageinsimilarexpositionsoftheir supplychains. IndustryAssociationsandThirdPartySupporters Industryassociationsandthirdpartyassociationsoftenofferagreatplatformand

resourcesforcorporationstoexpandtheiraccesstorecycledmaterials.Organizationslike EuropeanPlasticRecyclers(EuPR),TheAssociationofPostconsumerPlasticRecyclers, SustainablePackagingCoalitionandBuyRecycledBusinessAllianceprovideservicesfor recyclersandendconsumerstounderstandlatestdevelopmentsandpracticesintheindustry throughconferences,workshopsandonlineinformationupdates,aswellasaplatformsto connectwitheachother.Indevelopingcountries,althoughindustryassociationsarestilllacking fortheinformalsector,NGOsandsomeorganizationshaverichexperienceworkingwithwaste collectorsandrecyclers.Corporationscouldcollaboratewiththesethirdpartyorganizationsto carryforwardtheirinitiativesonrecycledmaterialspurchases.

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Conclusion&Recommendations Nosingleframeworkcancapturethecomplexityofwastecollectionacrossthe developingworld.Theabilityoflocalandnationalgovernmentstoshapewastemanagement policies,thepresenceofabsenceofformalwastemanagemententerprisesandtherelative integrationoftheformalsectorinagivenlocationmakegeneralizationsaboutsolidwaste problematic.Despiteregionalandlocaldifferences,however,therearesomecommontrends thatcanbeidentifiedacrosscities.Investmentsaimedatsupportingtheimprovementofwaste collectorlivelihoodsshouldconsiderthesetrendswithinthelocalcontextinordertoachieve sustainableandmeaningfulintervention. Wastecollectorsarepartofabroaderinformalsectorthatincludesthosewhoclean, processandtraderecycledmaterial.Somewastecollectorsgatherdirectlyfromhouseholds, somepurchasespecificmaterialfromindividualsandbusinesses,andsomepickwastefrom dumpsites.Thoughinmanyplacescollectorsoperateasindividualsorfamilies,insomecities theyhavebeguntoorganizewithothercollectorsaswellaswithtradersorprocessors.Such organizationeffortsoffersignificantopportunitiesforimprovedlivelihoods.Whethertheyare organizedasacooperativeoraSME,throughintegrationcollectorscangainaccesstomoreand bettermaterial,canpavethewayforgovernmentalrecognition,andcanprovideadditional opportunitiestonetworkandgainaccesstocollaboratorsandadvocates. Thedatacontainedinthisanalysisoffersaglimpseofthesupplychainofwasteand recycledplasticinvariouslocationsacrossthedevelopingworld.Analysisofthedatapointsto threespheresinwhichcollectorsfacechallenges:financial,agency,andsocial.Withineach

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sphere,organizationeffortscanallowcollectorstoovercomethespecificchallengesand therebyimprovetheirlivelihoodsandrelativepositionwithinthesupplychainofwaste. Financial Wastecollectorsexperiencemanyfinancialchallengesthatthreatenthesustainabilityof theirlivelihoods.Pricefluctuationsintherecycledplasticsmarketarecommonandcanbe extreme.Whileanactorfurtherupthesupplychainmaybeabletostorematerialsuntilprices increase,wastecollectorsoftenlackstoragespaceandarethereforeforcedtoselltheir materialsinsmallervolumesmorefrequently.Assinglepersonorfamilyoperations,individual wastecollectorsarenotabletocontrolhighenoughvolumesofmaterialtoallowthemto influencemarketprices.Someresearchimpliesthatvolumealonecanattracthigherprices,but ourresearchshowsthatqualityandstageareequallyifnotmoreinfluentialinsettingprices. Whatisclear,however,isthathighervolumescanprovideaccesstolargerandmoreconsistent buyers. Individually,wastecollectorshavelittleaccesstocapitalorcreditwithwhichtoimprove theirefficiency.Capitalinvestmentinexpandedcollectioncanoftenbecostprohibitive,but whenpossiblecanallowcollectorstoincreasetheirvolumeandtherebytheiraccesstomore consistentpurchasers.Therearealsoopportunitiesforcollectorstoexpandintohigherend processing,andinfactmanycurrenttradersandrecyclersinCairobeganascollectors. Obtainingthecapitalinvestmenttoexpandoperationsorbeginprocessing,however,is difficult.Ifthemarketdemandforrecycledmaterialisnotyetbeingmet,however,expansion intofurtherprocessingcanbequitefruitful.
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Municipalitiesandgovernmentalagenciesgenerallyarenotwillingtodealwith individualcollectorsorsmallcollectorenterprises,thereforeinformalcollectorsstruggletogain accesstothegovernmentcontracts.Suchcontracts,whichareoftengiventomunicipalor privateenterprises,provideaccesstopublicservicesfees.Withoutaccesstosuchservicefees, informalcollectorsareforcedtoeithersolicitadditionalfeesfromresidentsorcollectwaste freeofcharge,hopingthatthevalueofmaterialstheyrecoverfromthewastewillcoverthe costofcollection.Collectorsprofitsaredirectlyrelatedtothequalityofmaterialtheyareable toaccess.Whetherornotwastehasbeensortedatthehouseholdlevel,purchasedpriorto disposalorpickedfromthedumpdeterminesitscleanlinessandthereforeitsvalue.Without accesstohouseholdcollectioncontracts,manycollectorsarethenforcedtogathermaterial afterithasbeendisposedofanditsqualityhasbeencompromised. Whenwastecollectorsorganize,theyareabletoovercomemanyofthesefinancial challenges.Poolingmaterialswithothercollectorsincreasestheirmarketpowerandmakes collectorslesssusceptibletopricefluctuations.Largervolumescanprovidecollectorsaccessto higherlevelbuyers.Inaddition,pooledresourcescanmakecapitalinvestmentsmorefeasible andcosteffective,bothtosupportadditionalcollectionandprocessing.Municipalitiesare morelikelytocontractwithorganizedcollectorgroups,whichwouldgivecollectorsaccessto servicefeesaswellashigherqualitywastecollectedfromhouseholdsratherthanfrom dumpsites.
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Agency Todemonstrateagencyistomakechoicesaboutonesownlife,andtoactively influenceonessurroundings.Inmanycontexts,wastecollectorshavebeendeniedtheirown agency.Decisionshavebeenmadeaboutandforthem,ratherthanwiththem.Waste collectorsareoftennotwellrecognizedbygovernmentalbodies,thereforepolicydecisionsare madewithoutregardtotheirwellbeing.TheexampleofCairosprivatizationprocess demonstratesthatbyignoringthecontributionsoftheinformalsector,theentiresystem suffered.Servicelevelshavedeclined,wasteiscollectinginthestreets,andformalcompanies aresufferingfinanciallosseswithinthedysfunctionalsystem. Insomeplaces,thefragmentationoftheinformalsectorhascontributedtothelackof collectiveagency.Withoutcohesion,trusthasbeendifficulttoestablishamongcollectors, tradersandrecyclers.Thishasresultedinasystemthatlackstransparencyandistherefore moresusceptibletomanipulationfromexternalandinternalactors. Organizingcanhelpcollectorsrestoretheirindividualandcommunalagency.Collective actioncanincreasetheirpoliticalvoice,sothatgovernmentalauthoritieswillfinditincreasingly difficulttoexcludethemfrompolicymaking.Throughorganizationthatconnectsindividualsat variouslevelsofthesystem,theentiresupplychainofwastecanbecomemoretransparent. Knowledgeandcommunicationcanflowmorefreely,andcollaborationcanreplace competitionamongindividualcollectors.Finally,organizingprovidesaccesstoawiderrangeof advocatesandpartnersthatcanhelpamplifycollectorsvoicesandprovideaccesstoadditional resources.
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Social Numerousscholarshavedetailedthesocialmarginalizationofwastecollectors. Collectorslaborindifficultanddangerousconditions,andtheirworkoftenexposesthemto severehealthandsafetyrisks.Inaddition,collectorsareoftendiscriminatedagainstand disparagedbythepublic.Organizationprovidescollectorstheopportunitytoreframe themselves,andtodemonstratetheirsocialvalueaseconomiccontributorsandenvironmental stewards.Organizationcanalsoallowcollectorstheopportunitytofacetherealhealthand safetyconcernsinthesectorandcollaboratetoimproveworkingconditions. TheChallengesandRewardsofCollectiveAction Theevidenceincludedinthisreportsupportstheconclusionthatthebestwayto improvethelivelihoodsofwastecollectorsistoinvestinsystemsthatallowthemtoorganize, bothhorizontallyandvertically,toincreasetheircapacity,strengthentheirpoliticalvoiceand improvetheiroverallsocialinclusion.Yetsimplyconcludingthatthisisthebestmeansby whichtoinvestintheinformalsectordoesnotmeanthatitistheeasiest.Distrustand competitionarecommonintheinformalsector,whichunfortunatelyhascontributedtothe lackofsystemtransparencyandmakesitchallengingtomoveawayfromcompetitiontoward cooperation.Thelocalpoliticalandeconomiccontextsarealsoextremelyimportantwhen exploringpossibilitiesforcollectiveactionandinvestment.Legislationcaninsomecases restricttheinformalsectorsaccessevenwhenactingcollectively.Thevolumeofwasteand availabilityofmarketsforrecycledmaterialvariessignificantlyfromplacetoplace,which makestheprospectsforexpandedcollection,recoveryandprocessingvariable.InCairo,for
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example,thereisstillunmetcapacityfortheprocessingofplasticsoaninvestmentin upgradingcapitalequipmentcouldbefruitful.Incontrast,inGeneralMarinoAlvarez, Philippinesthejunkshop/tradermarkethasalreadybecomeoversaturated.Understandingthe structureofthelocalmarketisvitalforwiseinvestment. Despitethesechallenges,however,therehavebeenanumberofexamplesfromaround theworldthatdemonstratecollectiveactionisnotonlypossible,butitisfruitful.Informed investmentintothesocialandeconomicorganizationofwastecollectorscanhelpthemto receivegreaterfinancialrewardsfortheirwork,increasetheirindividualandcollectiveagency, andimprovethehealth,wellbeingandsocialstatusoftheirfamiliesandcommunities. FutureResearch ThisreporthasattemptedtomergeprimarydatacollectedinCairoandAmmanwith

thegrowingbodyofdatadocumentingtheeconomicsofwastecollectionandrecyclinginthe developingworld.Gatheringdataintheinformalsectorisnotoriouslydifficult,butreliabledata isnecessaryinordertounderstandtherelationshipbetweenvolume,price,andcosts.In particular,weencouragefutureresearcherstoexplorethevariationsinpurchasepriceand capitalandoperatingcosts.Asthisreporttriedtodemonstrate,pricealoneisnotsufficient.In orderforcollectorsandadvocatestohaveacompleteunderstandingoftheeconomicsof recycling,theymustbeabletoevaluatethefullcostrevenueframework.Becauselandand buildingcostsarehighlylocationspecific,andbecauseinsomeplaceslocalmachinerycan replacetheneedforexpensiveforeignequipment,contextspecificcostbenefitanalysisisthe bestwaytotrulydiscoveravenuesforexpansion.
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Werecommendthatthedatapresentedinthisreportservesasafoundationforthe collectionofmoredatainthefuture.InAmman,thereisaclearopportunitytoincreasepublic andscholarlyawarenessofthewastesystem.Additionaldatacollectionfromtheinformal sector,inconjunctionwithJordanianacademicswhoareengagedinformalsectorresearchin wasteandenvironmentalengineering,couldproveextremelyvaluable.TheJanuary25th,2011 RevolutioninEgypthasresultedinsignificantinterruptionsinCairoswastemanagement. Circumstancesareconstantlychanging,thereforeresearchermustcontinuetoexaminethe flowofwastethoughthesysteminordertoaddressanynewchallengesthathaveemerged.In Amman,Cairoandacrossthedevelopingworld,wastewillcontinuetobeoneofthemost pressingpublicpolicyconcerns.Theinformalsectorisalreadyactiveinprovidingeconomicand environmentalbenefitstothepublic.Quantifyingthisvalueandcreatingeconomic transparencyinthesystemwillallowwastecollectorsandrecyclerstoengagewiththepublic andprivatesectorsasvaluedcontributors.

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AppendixA:Terminology FormalWasteSector:Individualsorentitiesengagedinthecollectionandrecyclingof wastewhoseparticipationisrecognizedthroughtheplanning,sponsorship,regulation, contractorfinancialsupportofthegovernmentresponsibleforsolidwaste management.107 InformalWasteSector:Individualsorentitiesengagedinthecollectionandrecyclingof wastewithoutthesponsorship,recognition,supportoracknowledgementofthe government.108 ItinerantWasteBuyer(IWB):Onewhotravelstocollectrecyclablesfromhouseholdsor businesses.IWBsfrequentlyspecializeinafewmaterialsandeitherpayresidentsfor theitemsorbarterforotherservices. ShadowPrice:Thecalculatedcostofagoodorserviceforwhichnomarketpriceexists orthemarketpricedoesnotreflecttheopportunitycost. WasteCollector:Thegeneraltermusedinthisreporttorefertoallinformalactorswho collectwasteeitherdoortodoor,fromcollectionsites,containers,streets,or dumpsites/landfill.Certaincollectorsretrieveallwaste,thenengageinsortingathome oratatransfersite. WastePicker:Onewhorecoversvaluablesthathavebeendiscarded,oftencollecting fromstreets,openwastecontainersoratdumpsites/landfills.

107 108

Scheinberg,A.etal.(2010).(p.45) Scheinberg,A.etal.(2010).Economicaspectsoftheinformalsectorinsolidwastemanagement:Volume1,researchreport, 2010.Eschborn,Germany.:GesellschaftfurInternationaleZusammenarbeit(GIZ).(p.4)

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