2012
Sadie Paschke, Serene Zhao
& Alli Zomer
University of Minnesota
ValuingWaste
2
Acknowledgements
We would like to thank the many individuals who supported this research. The Cason Family foundation provided the framework for this research, and both Roxanne Cason and Ranjith Annepu served as mentors and guides throughout the process. They helped forge connections to experts in the field and supported us in building relationships with key stakeholders. Janice Herndon served as an incredible organizer, seamlessly managing all the logistics that allowed our partnership with the Cason Foundation to run smoothly. A core group of experts agreed to serve as our Advisory Board throughout the project: Jay Bowman, Entity Green; Allison Naman, Starbucks; and Juliana Seidel, TetraPak. They each brought a unique perspective and extensive experience in the field. We are grateful to them for sharing their wisdom, time and resources with us. We would also like to thank other key informants who offered their time and experience to our research team: Michael Maggio, Johnson & Johnson; John R. Platko, II, Global Corporate Consultancy Antea Group; and Lynn Fritz, Fritz Institute.
Ragui Assaad from the University of Minnesota introduced us to the world of informal waste collection and was responsible for organizing our trip to Cairo in the summer of 2011. It was that trip that sparked our interest in researching waste and recycling. Chavanne Peercy served as our academic advisor and provided thoughtful feedback that helped us improve our research.
Thank you all for your support, guidance and encouragement. Sincerely, Sadie, Serene & Alli
3
Table of Contents
Executive Summary…………………………………………………………………...4
Introduction: Waste Management in the Developing World…….10
Section I: Research & Methodology…………………………………………..13 Data Collection………………………………………………………………14 Limitations…………………………………………………………………….16
Section II: Analysis…………………………………………………………………...17
Solid Waste Management in Cairo………………………………..19 Global Comparisons……………………………………………………...36
Section III: Strategies for Improvement………………………………….….52 Conclusion & Recommendations……………………………………………….65 Bibliography………………………………………………………………………………72 Appendix A: Terminology………………………………………………………….74
4
Valuing Waste
Executive Summary
In many developing nations, informal waste collectors play a substantial role in the
management and recycling of solid waste. The work of informal collectors and recyclers is
invaluable: it contributes to the cleanliness of cities, reduces the amount of waste in landfills,
and alleviates the environmental pressure caused by extracting virgin materials. Unfortunately,
waste collectors are at the bottom of a long and often obscured supply chain, making it difficult
for organizations or advocates to formulate strategies to improve collectors’ livelihoods and
well‐being. This report examines the supply chain for recycled plastic in order to understand the
economic position of waste collectors and proposes strategies for increasing their incomes and
improving their social and economic position.
There is a significant body of research on global waste collection, yet much of it has
focused on the social and political position of waste collectors. This report aims to add to the
small but growing literature focused on quantifying the economic value of waste in order to
further the possibility of securing sustainable livelihoods at all levels. In order to demonstrate
the complex relationships within the waste and recycling system, a case study from Cairo, Egypt
is compared with preliminary analysis of Amman, Jordan as well as data collected from a
number of other developing world cities.
Examining Assumptions
Research into informal waste management/recycling and the supply chain of recycled
plastic revealed three common assumptions. Critical examination of these assumptions shows
that, though in some cases they may be supported by data, they cannot be assumed to be true
for all informal waste systems.
Our research and observations suggest that, in certain systems, collectors and traders have a
more symbiotic relationship. In Cairo, traders are frequently engaged in further sorting,
cleaning and processing of materials in order to add value. Many of these traders/processors
were once themselves collectors and they continue to live in the same neighborhood, working
alongside collectors in extensive networks.1 In Amman, mobile traders provide a convenient
point of sale for small collectors operating with small storage capacities.2 In the Philippines,
1 GIZ (2008) The Waste Experts: Enabling Conditions for Informal Sector Integration in Solid Waste Management Lessons learned from Brazil, Egypt and India. (p. 8) 2 Entity Green. (2010). Solid Waste Behaviors Within the Formal and Informal Waste Streams of Jordan. Jordan. USAID. (19)
Collectors vs. Traders: The relationship between collectors and traders is often assumed to
be adversarial, with traders gaining excess and unjustified profits at the expense of
collectors.
5
traders provide capital investments to collectors in order to collaborate. Certainly there are
some cases in which traders exploit the relatively weak position of collectors, but there are
many other examples of collectors and traders working symbiotically.
Informal collection has been shown to be profitable in many cities, and at times incomes mirror
those earned at other levels in the system. In many cities, waste collectors report earning
higher than the minimum wage. A GIZ report titled Economic Aspects of the Informal Sector in
Solid Waste Management notes that informal sector workers in solid waste management
generally earn an income higher than the minimum wage in their respective countries, and the
income that they earn generally exceeds other income options.3 In Cairo, informal collection
activities are marginally profitable, since collectors charge a service fee as well as benefit from
the sale of materials.4 In Amman, Jordan, waste collectors report wages from €7.32 to €15.69,
which puts them above the poverty line.5 It is important to note, however, that informal waste
collectors are subject to health risks and social stigma, which those who work in other sectors
may not have to bear. There are also multiple different types of collectors, so generalizing
across all collectors obscures the discrepancies among them. Those who are able to collect
door‐to‐door often see greater profits and suffer from fewer health and safety risks than those
who collect at dumpsites.
Data show that price of materials increases as it moves along the supply chain. In Quezon City,
the Philippines, the price paid to small junk shop owners and the price paid to large junk shop
owners for materials is about 5% and 21% higher than the price paid the itinerant waste buyers,
respectively.6 Unfortunately, sale price alone is not a valid measure for comparing different
stages of the recycling process. Cost of operation and processing must be examined alongside
price in order to fully understand profitability. When costs and revenues are accounted for,
profits across various levels of the informal sector are, in some places, relatively comparable.
Once production costs were accounted for in Quezon City, itinerant waste buyers and
junkshops owners made nearly equivalent profits per ton of waste (€21 and €22, respectively).
3 Scheinberg , A. et al. (2010). Economic aspects of the informal sector in solid waste management: Volume 1, research report, 2010. Eschborn, Germany.: Gesellschaft fur Internationale Zusammenarbeit (GIZ).(9) 4 Scheinberg , A. et al. (2010). (p. 73)5 Entity Green. (2010). (16) 6 Scheinberg , A. et al. (2010). (p. 72)
Price over Profit: The variability in price has often been used to illustrate the marginalization
of waste collectors.
Extreme Poverty is the Norm: It is often assumed that waste collectors earn far less than
traders or other recyclers, and that they live in a state of extreme poverty.
6
Findings
Waste management systems differ considerably across the developing world. The
ability of local and national governments to shape waste management policies, the presence or
absence of formal waste management enterprises and the relative integration of the formal
sector in a given location make generalizations about solid waste problematic. Despite regional
and local differences, however, there are some common trends that can be identified across
cities. Variations in these trends highlight particular opportunities for localized analysis.
Waste collectors are one type of actor within a broader informal sector that includes
those who process recycled material into different forms and those who trade material at
various stages of processing. Some waste collectors collect directly from households, some
purchase specific material from individuals and businesses, and some pick waste from
dumpsites. Though in many places collectors operate as individuals or families, in some cities
they have begun to organize with other collectors as well as with traders or processors. Such
organization efforts offer significant opportunities for improved livelihoods.
This report highlights three spheres in which waste collectors face challenges: financial,
agency and social. Within each sphere, organization efforts can allow collectors to overcome
the specific challenges and thereby improve their livelihoods and relative position within the
supply chain of waste.
Financial
Waste collectors experience many financial challenges that threaten the sustainability of
their livelihoods. Price fluctuations in the recycled plastics market are common and can be
extreme. One intermediary buyer in Amman, Jordan reported that his biggest challenge is
fluctuations in price, which can occur several times per day.7 While an actor further up the
supply chain may be able to store materials until prices increase, waste collectors often lack
storage space and are therefore forced to sell their materials in smaller volumes more
frequently. As single person or family operations, individual waste collectors are not able to
control high enough volumes of material to allow them to influence market prices. Some
research implies that volume alone can attract higher prices, but our research shows that
quality and stage are equally if not more influential in setting prices. What is clear, however, is
that higher volumes can provide access to larger and more consistent buyers.
Individually, waste collectors have little access to capital or credit with which to improve
their efficiency. For example, waste collectors offering door‐to‐door service using only
handcarts could improve their efficiency and collect more waste by purchasing a truck, but that
is often cost‐prohibitive. There are also opportunities for collectors to expand into higher‐end
processing, and in fact many current traders and recyclers in Cairo began as collectors.
7 Interview by Adviser. (April 2, 2012).
7
Obtaining the capital investment to expand operations or begin processing, however, is
difficult. For comparison, purchasing a hand cart for €12.5 would allow anyone to begin
collecting; purchasing an Egyptian‐made shredder to begin processing plastic waste, however,
can cost between €1,259 and €2,643.
Municipalities and governmental agencies generally are not willing to deal with
individual collectors or small collector enterprises, therefore informal collectors can usually not
gain access to the government contracts. Such contracts, which are generally given to municipal
or private enterprises, provide access to services fees that governments often levy on the
public. Without access to such service fees, informal collectors are forced to either solicit
additional fees from residents or collect waste free of charge, hoping that the value of materials
they recover from the waste will cover the cost of collection.
Finally, collectors’ profits are directly related to the quality of material they are able to
access. Whether or not waste has been sorted at the household level, purchased prior to
disposal or picked from the dump determines its cleanliness and therefore its value. In Amman,
clean rigid plastic fetches 40% more than when it is unwashed.8 In Pune, India itinerant waste
buyers who purchase clean plastic film receive a price 150% greater than waste pickers who
collect soiled plastic film from the dump.9
When waste collectors organize, they are able to overcome many of these financial
challenges. Pooling materials with other collectors increases their market power and makes
collectors less susceptible to price fluctuations. Larger volumes can provide collectors access to
higher level buyers. In addition, pooled resources can make capital investments more feasible
and cost effective, both to support additional collection and further processing. Municipalities
are more likely to contract with organized collector groups, which would give collectors access
to service fees as well as higher quality waste collected from households rather than from
dumpsites.
Agency
To demonstrate agency is to make choices about one’s own life, and to actively
influence one’s surroundings. In many contexts, waste collectors have been denied their own
agency. Decisions have been made about and for them, rather than with them. Waste
collectors are often not well recognized by governmental bodies, therefore policy decisions are
made without regard to their well‐being. For example, when the Cairo Governate privatized
Cairo’s solid waste collection, they contracted several large companies to provide the city’s
waste management. However, a large informal system was already providing services to those
residents who were now under the purview of the private sector. Private services were
substandard, and informal collectors continued to work but yet were now operating within a
8 Interview by Adviser. (April 2, 2012) 9 Scheinberg , A. et al. (2010).
8
system of duplicated fees and services. It became clear in Cairo that by ignoring the
contributions of the informal sector, the entire system suffered.
In some places, the fragmentation of the informal sector has contributed to the lack of
collective agency. Without cohesion, trust has been difficult to establish among collectors,
traders and recyclers. This has resulted in a system that lacks transparency and is therefore
more susceptible to manipulation from external and internal actors.
Organizing can help collectors restore their individual and communal agency. Collective
action can increase their political voice, so that governmental authorities will find it increasingly
difficult to exclude them from policymaking. Through organization that connects individuals at
various levels of the system, the entire supply chain of waste can become more transparent.
Knowledge and communication can flow more freely, and collaboration can replace
competition among individual collectors. Finally, organizing provides access to a wider range of
advocates and partners that can help amplify collectors’ voices and provide access to additional
resources.
Social
Numerous scholars have detailed the social marginalization of waste collectors.
Collectors labor in difficult and dangerous conditions, and their work often exposes them to
severe health and safety risks. In addition, collectors are often discriminated against and
disparaged by the public. Organization provides collectors the opportunity to reframe
themselves and to demonstrate their social value as economic contributors and environmental
stewards. Organization can also allow collectors the opportunity to face the real health and
safety concerns in the sector and collaborate to improve working conditions.
The Challenges and Rewards of Collective Action
The evidence included in this report supports the conclusion that the best way to
improve the livelihoods of waste collectors is to invest in systems that allow them to organize,
both horizontally and vertically, to increase their capacity, strengthen their political voice and
improve their overall social inclusion. Yet simply concluding that this is the best means by which
to invest in the informal sector does not mean that it is the easiest. Distrust and competition
are common in the informal sector, which unfortunately has contributed to the lack of system
transparency and makes it challenging to move away from competition toward cooperation.
The local political and economic contexts are also extremely important when exploring
possibilities for collective action and investment. Legislation can in some cases restrict the
informal sector’s access even when acting collectively. The volume of waste and availability of
markets for recycled material varies significantly from place to place, which makes the
prospects for expanded collection, recovery and processing variable. In Cairo, for example,
9
there is still unmet capacity for the processing of plastic10 so an investment in upgrading capital
equipment could be fruitful. In contrast, in General Marino Alvarez, Philippines the
junkshop/trader market has already become oversaturated.11 Understanding the structure of
the local market is vital for wise investment.
Despite these challenges, however, there have been a number of examples from around
the world that demonstrate collective action is not only possible, but it is fruitful. Informed
investment into the social and economic organization of waste collectors can help them to
receive greater financial rewards for their work, increase their individual and collective agency,
and improve the health, well‐being and social status of their families and communities.
10 Plastic Technology Center. (2008). 11 Solid Waste Management Association of the Philippines. (2008). (p. 12‐13)
10
Waste Management in the Developing World
Managing solid waste is one of the greatest challenges in urban centers worldwide, yet
even representatives of the United Nations have remarked with surprise that the issue has
received relatively little attention from development professionals.12 Across the developing
world the collection, sorting and recycling of waste is undertaken by actors in both the formal
and informal sectors. While many cities have partial waste management systems akin to those
in Europe and the United States, these formal agents and the governments that support them
often lack the resources to collect and dispose of all the solid waste generated by residents and
businesses. In places where the formal sector is unable to manage the increasing volume of
solid waste, collectors and recyclers operating in the informal economy fill the void.13 In other
places where there is no formal municipal waste management system, the informal sector
provides the only available means of disposal. The work of informal collectors and recyclers is
invaluable: it contributes to the cleanliness of cities, reduces the amount of waste in landfills,
and alleviates the environmental pressure caused by extracting virgin materials.
Informal collectors generate significant material benefits by creating jobs and incomes,
supplying materials to domestic and international industries, and reducing the financial burden
municipalities would incur if they were forced to collect and dispose of the full volume of waste
generated.14 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the federal
enterprise that supports the German government’s endeavors in international cooperation and
12 United Nations Human Settlements Program (2010). Solid Waste Management in the World’s Cities. (Forward, XX) 13 Scheinberg , A. et al. (2010); United Nations Human Settlements Program. (2010). Solid waste management in the world's cities: Water and sanitation in the world's cities 2010. London and Washington D.C.: Earthscan. 14 Medina, M. (2008). “The Informal Recycling Sector in Developing Countries: Organizing waste pickers to enhance their impact.” Gridlines: Sharing Knowledge, Experience, and Innovations in Public‐Private Partnerships in Infrastructure, (note 44) Scheinberg , A. et al. (2010).; United Nations Human Settlements Program (2010) Solid Waste Management in the World’s Cities. (Forward, XX)
11
sustainable development, commissioned a report on the economic impact of informal waste
management in the developing world. Their report showed that in six cities across the
developing world, the informal sector saved the formal waste sector a combined total of €39
million over the course of one year, mostly from avoided collection costs.15
Despite providing clear economic and
environmental benefits, the majority of the world’s
informal waste collectors (often referred to as
waste pickers) remain economically and socially
vulnerable. Their work presents a range of physical
and health hazards, while at the same time excluding them from traditional social and
economic systems. The materials they sort are of significant economic great value, yet waste
collectors are positioned at the bottom of a long and obscured supply chain and therefore do
not reap the full rewards of the final sale of recycled goods. Dealing in small volumes, waste
collectors often sell to traders who then aggregate and sell materials in larger volumes. Access
to capital in the form of transportation, storage space and/or processing equipment generally
differentiates traders (middlemen) from collectors. The conclusion drawn by observers of this
supply chain has been that “middlemen often earn large profits, while waste collectors are paid
far too little to escape poverty.”16 This report examines the supply chain for recycled plastic in
order to understand the economic position of waste collectors and proposes strategies for
increasing their incomes and improving their social and economic position.
15 Scheinberg , A. et al. (2010) 16 Medina, M. (2008). “The Informal Recycling Sector in Developing Countries: Organizing waste pickers to enhance their impact.” Gridlines: Sharing Knowledge, Experience, and Innovations in Public‐Private Partnerships in Infrastructure, [Note 44]
Across six developing world
cities, the average informal
sector worker saved his/her
city €571. In many cities, that
is more than that same
worker earned in a year.
12
Section I presents the research methodology, data collection process and study
limitations. Section II offers an analysis of the solid waste management system specific to Cairo,
Egypt and examines the supply chain for plastic recyclables in that city. Section II also offers a
preliminary analysis of the Solid Waste Management system and supply chain in Amman Jordan
and compares existing data from several other cities in the developing world. Section III
discusses strategies that have been successful in improving financial and social well‐being in the
informal solid waste management sector. The report closes with several conclusions and
recommendations for waste collector organizations and advocates (Section IV).
13
Section I: Research and Methodology
Many interventions on behalf of waste collectors, though perhaps well‐intentioned,
have focused on removing waste collectors from waste management. This approach has failed
to incorporate the voices of waste collectors themselves while offering few employment
alternatives in a context where waste picking may in fact be a viable livelihood.17 Rather than
forcing waste collectors out of the industry, supply chain mapping demonstrates opportunities
for waste collectors and their allies to improve their position within the system. A transparent
supply chain allows various stakeholders to better understand and subsequently alter the
system:
Waste collectors can envision ways in which to improve their economic position,
Advocates can be armed with the information necessary to petition for improved
working conditions and formal sector recognition,
Purchasers of recycled material can potentially change the ways in which they source
material.
This report examines the supply chain of recycled plastic in order to demonstrate how
increased transparency can promote informed decision making and potentially improve the
economic position of waste collectors. Plastics are prevalent worldwide, serve a variety of
purposes and are generally high in value, thereby making a plastic supply chain useful for both
collectors and consumers. Waste management differs by city and country, so despite the fact
that many cities have active informal waste sectors, they do not all function in the same way.
We have chosen individual case studies in order to provide detailed analyses of particular
17 Scheinberg , A. et al. (2010). (p. 3)
14
systems. Cairo, Egypt serves as the primary case study. The city’s waste management sector has
been studied in‐depth in recent years and therefore rich data allows for a comprehensive
picture of the city’s complex system. The second case study on Amman, Jordan provides an
interesting contrast. The city’s size, system structure, and relative lack of scholarship regarding
waste management provide interesting opportunities for comparison. In addition to these case
studies, data from other cities around the globe will serve to frame the analysis and support
conclusions.
Much has been written about the physical and psycho‐social risks inherent in waste
picking. The authors firmly believe that people, no matter what their livelihood, deserve to live
and work in environments that are both physically and emotionally safe. The first portion of
this analysis is focused on the economic structure of the informal waste collection system;
therefore it will not address the broad spectrum of personal and communities concerns that,
while extremely important, are not directly related to the economics of collection and recycling.
Personal and community agency, political and civic participation and improved health and
working conditions will be addressed when examining potential strategies for improving
collectors’ livelihoods overall.
Data Collection
This report was compiled in response to a request from the Cason Family Foundation. A
three member team of graduate students from the University of Minnesota collaborated with
Cason Foundation representatives to draft a research proposal in January, 2012. The report was
then researched and compiled between January and May, 2012. In addition to the University of
15
Minnesota team and Cason Foundation representatives, data and guidance was provided by an
advisory team of professionals with experience in the field of solid waste management and
recycling.
Primary data was gathered in multiple ways. First, the University of Minnesota team
spent the summer of 2011 in Cairo working with a for‐profit solid waste management and
recycling company, conducting profitability and social cost‐benefit analysis. During this time the
team was also engaged in system‐wide qualitative research, conducting interviews with
stakeholders and observing the solid waste management system. The data and information
obtained on that trip have contributed to this study. Data was also collected by a member of
the advisory team in Jordan. Finally, data was gathered from other stakeholders including waste
collector advocates and organizers as well as corporate officers engaged in sourcing recycled
materials. Interviews were conducted in person, over the phone and by email questionnaire.
In addition to this primary data, the report’s findings are supplemented by a wide
variety of secondary sources. Though it receives relatively less attention than some other well‐
known development challenges, there is some rich literature from both scholars and
practitioners in the field of global waste management. Much of the literature has focused on
the social, economic and health challenges faced by waste collectors. Some information on
material prices and processing costs is available, yet the lack of transparency within the system
makes comprehensive data difficult to locate. This report seeks to add to the pool of available
data while providing a model by which other researchers might continue to augment the
available information in the future.
16
Limitations
Because solid waste management practices differ greatly by country and by city, the
case studies contained here cannot provide broad generalizations for all developing world
cities. Instead, they serve to highlight the particular circumstances of Cairo and Amman, which
can be compared and contrasted to other locations along common themes but not specific
attributes. Post‐Revolution Egypt is constantly changing, therefore data retrieved prior to 2011,
as well as that gathered during the summer of 2011, may not be able to reflect the ways in
which the system is and will continue to change in the coming months and years. Time and
geographic constraints limited our ability to collect comprehensive data from Amman.
Therefore, our analysis of Amman should be considered preliminary. Future research on the
city’s evolving solid waste management (SWM) system would be a beneficial addition to the
literature. Finally, data collection in the informal sector is inherently difficult. Because collectors
are operating outside of the purview of the government, their work is scrutinized and at times
criminalized. This makes participants understandably hesitant to reveal sensitive personal and
business information. The analysis contained in this report compares primary and secondary
data from a range of sources, and therefore is believed to be an accurate reflection of the
observed reality to the extent that the data is available. We recommend that future research be
based on primary data collection through extensive field work.
17
Cultivation
Harvesting
Ginning
Textile Production
Consumer Purchase
Section II: Analysis
This report examines the supply chain for recycled plastic in order to understand the
economic position of waste collectors. Supply chain is the general term for the system goods or
services move through, from inception through
production, transportation, and eventually
consumption. Consider the example of clothing
manufactured from cotton: the raw material is
grown, harvested, processed, and sold to consumers
(Figure 1).
A supply chain analysis can describe the
system, expose inefficiencies and opportunities, and
encourage participants and observers to rethink the relationships with the system. Various
elements can be tracked within a supply chain: money, products, information, etc. depending
on what one is hoping to learn. This report examines the supply chain of recycled plastics along
two dimensions: volume and price. Therefore this analysis, to the extent that the information is
available, tracks the physical flows of recycled material and the changes in prices as that plastic
moves through the system. The supply chain explored here aims to increase transparency
within the waste management and recycling system and reveal opportunities for increased
collaboration between consumers (companies using plastics) and those who are collecting,
sorting and processing the material.
In order to construct a transparent supply chain for recycled plastics, a number of key
system characteristics were examined:
Figure 1: Basic Cotton Supply Chain
18
Structure: who are the key players involved (collectors, recyclers, traders) and at what
level of the system do they operate?
Price: what price can certain plastics command in the market, and how does that price
fluctuate based upon the buyer/seller, quality, volume, or degree of processing?
Opportunities for Change: what are the barriers to and opportunities for changing
waste collector operations, and are there individuals, groups or communities who might
serve as examples of successful transformation?
Guided by these research questions, this report offers a detailed examination of the
structure of Cairo’s waste management system and the flow of recycled plastic. The Amman
situation offers a preliminary comparison case. In addition to these studies, the report
highlights various initiatives to organize and mobilize waste collectors.
19
Solid Waste Management in Cairo
The solid waste management system in Cairo has
undergone several recent transformations, driven by rapid
population growth and policy revisions. Informal collectors, most
belonging to a group known as the Zabbaleen, began operating
in Cairo at the beginning of the 20th century, and though waste
was not centrally managed by the government there was internal
collaboration between participants.18 It was only at the end of
the 20th century that the government slowly began intervening in
the organization and management of the waste sector. Then, in
2000, the Egyptian government outlined a National Strategy for
Integrated Solid Waste Management. This strategy emphasized the privatization of solid waste
management, and moved municipal governments into the role of contracting with private
entities and monitoring service provision.19
The Private Sector and Formal Solid Waste Management
In response to the shift in national strategy, Cairo was divided into sectors and collection
contracts were awarded to private companies.20 Three companies now hold the primary
contract’s for Cairo’s waste management. One of these companies is Egyptian‐owned, while the
others, Fomento de Construcciones y Contratas (FCC) and AMA, are Spanish and Italian
18 Fahmi, W. (2005). The Impact of Privatization of Solid Waste Management on the Zabaleen Garbage Collectors of Cairo. Environment and Urbanism, [17] (p. 156) 19 Scheinberg , A. et al. (2010) (p. 20‐21) 20 Fahmi, W. (2005). (p. 159)
Table 1: Cairo, Egypt
Population (2006 Census)
6.8 million
Population estimate
(2011): 9‐11
million
City area (Km2) 3,085
Projected city annual
economic growth rate
2.70%
Persons working in
formal waste sector
8,834
Persons working in
informal waste sector
33,000
Annual Tons of Waste
Generated (2006)
3.9 million
Sources: Scheinberg , A. et al. (2010), Egyptian Central Agency for Public
Mobilization and Statistics (CAPMAS)
20
respectively. By the summer of 2011, AMA alone was contracted to serve 44% of the Cairo
market.21 Fees are collected from residents in their monthly electric bills in order to pay for
waste service. The companies then use this revenue to subcontract collection operations
and/or hire workers. Despite the formal fee and contract system, however, private companies
fall far short of full collection. Observers in 2006 estimated that 29% of Cairo’s municipal solid
waste was simply left on the street. Of that which is picked up, the formal and informal sectors
each collect about half.22
Waste follows a different path depending on whether it is collected by formal or
informal actors. In general, the formal sector does not engage in recycling. Instead, formal
companies bring collected material to a transfer station and recyclable materials like plastic are
sorted and sold to informal traders. Thus, even some waste collected by formal agencies is
redirected into the informal market. Formal companies operate compost facilities, and recycle
organic material. It is interesting to note that of the waste they collect, formal companies send
65% to the landfill. This has been used as an argument in favor of the superior efficiency and
environmental contribution of the informal sector, which landfills only 20% of its collected
waste.23 This comparison should be viewed with a modicum of caution. Informal collectors
frequently sort waste in transit. They may pick up from a household, recover the valuable
materials from the waste, and then leave the remainder on the street or in and around
collection bins which are then picked up by private companies. Thus, less desirable waste may
not even make it back to the household for sorting. In this way, informal collectors are adding
to the dumped waste of private companies and reducing their own need for landfilling. It is
21 Fathy, M. (July 2011). Personal communication: Interview. Unpublished. 22 Scheinberg , A. et al. (2010). (p. 20‐129) 23 Scheinberg , A. et al. (2010). (p. 20‐129)
21
nearly impossible to measure the extent of this practice and its impact on the final tonnage
collected and dumped by formal or informal actors, but awareness of the practice should give
observers pause when comparing landfill usage between the two sectors.
The Zabbaleen: Informal Collection and Recycling
For informal sector actors, the composition of waste determines its value and thereby
dictates the ways in which it is managed. Typically, waste from higher income residents is
higher in volume and contains more valuable materials. Low income households tend to
consume less and to repurpose much of what they consume. Because of the differential in
waste quality, the Zabbaleen prefer to collect in higher income areas and, as noted above, may
sort out only those materials with market value. The overall composition of the waste that is
recovered in Cairo is summarized in Table 2.
Across Egypt and in Cairo particularly, organics make up the majority of waste. Prior to
2009, the collection of organics provided significant material benefits to waste collectors.
Zabbaleen communities used this organic waste to breed pigs, selling their pigs to traders and
Table 2: Composition of Recovered Waste in Egypt
Location Paper Plastic Glass Metal Organics Other
Egypt 10‐25% 3‐12% 1‐5% 1.5‐7% 50‐60% 11‐40%
Cairo 18% 10% 3% 3% 60% 6%
Haram City* 18% 20% 1% 5% 53% 4%
* Haram City is a housing development south of Cairo. Waste is collected by a private company and sorted on‐site. Sources: Egypt data – National Study for Plastic Recycling Sector, p. 15. Cairo data – Economic Aspects of the Informal Sector (2010) p. 15. Haram City data – collected by the authors, June‐August 2011.
22
slaughterhouses for approximately €56.6 per pig.24 This practice
allowed Zabbaleen collectors to dispose of organic waste
efficiently and supplement their income. In 2009, the Egyptian
government launched what observers saw as an extreme measure
that threatened the livelihoods of the Zabbaleen. The H1N1 swine
flu pandemic caused a global health concern, and despite the fact
that medical professionals agreed pigs were not in fact
transmitters of the flu, the Egyptian government ordered the
slaughter of between 200,000 and 300,000 pigs. Though the
government offered a small amount of compensation to pig
owners, it was not enough to make up for the loss of their animal
assets. Furthermore, the loss of the pigs removed the Zabbaleen’s
incentive for collecting organic waste. 25 The distribution of
collected waste in Table 2 reflects the situation prior to 2009. No
reliable data is yet available for the recovery of waste since the
culling of the pigs. Observations and interviews conducted by the
authors in the summer of 2011 revealed a significant decline in the
amount of waste collected by the Zabbaleen. One informant, the
financial manager of an NGO working in waste sorting and recycling, estimated that with the
loss of a market for organic material the Zabbaleen’s recycling rate dropped from 80% to 20%.26
24 Fahmi,W.,&Sutton,K.(2010).Cairo’scontestedgarbage:SustainablesolidwastemanagementandtheZabaleen’srighttothecity.Sustainability.,[2](p.1768,1774)25 Fahmi,W.,&Sutton,K.(2010).(p. 1773‐1774) 26 Interview by the authors. (June 22, 2011)
Property & Contracts Regulations regarding property rights and contract eligibility have shaped the development of the informal sector in Cairo. The largest 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, the government has negotiated deals to provide land tenure to those who have been squatting without official property rights, in exchange for an agreement to move collection and sorting operations off‐site and away from people’s homes. Activists from within the Zabbaleen community as well as outside advocates have focused on securing land tenure and contracting rights for waste collectors. Because of the 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 Zabbaleen’s prospects for improving and expanding their operations.
23
Uncollected organic waste is now either left on the street or transported to the landfill by the
formal sector.
Though plastics make up only 10% of Cairo’s recovered waste (Table 2) they are useful
material by which to examine the system of collection and recycling. Plastics have significant
sale potential because they are in demand in the global market. In order to recycle plastic, it
must pass through a series of stages prior to reuse. These stages of recycling, and the cost of
processing and price changes that occur at each stage, provide a convenient structure within
which to examine the economic position of waste collectors.
The informal supply chain
Waste that moves through the informal sector follows a complex process. Figure 2
details the flow of waste through both the formal and informal systems, as of 2007. Notably, all
plastic and other recycled materials are at some point traded in the informal market, even
those initially collected by formal enterprises. There are 33,000 Cairenes involved in the
informal sector, working at different levels of the system. Plastic waste moves through a series
of stages, each increasingly specialized, before it is ultimately processed and sold for re‐use.
The following sections detail each stage and explore the actors involved, the processing
systems used, and the ultimate sale price that results from various levels of processing.
Together, these stages combine to create the supply chain for recycled plastic in Cairo.
24
Figure 2: Cairo Waste Flow27
27 Scheinberg , A. et al. (2010).
25
Zabbaleen (collectors): 23,430
Small Scale Recyclers:
8,333
Large Recyclers
(domestic or foreign)
Figure 3: Informal Sector in Cairo
Cairo: Waste Collection
In Cairo, there are an estimated 23,430 Zabbaleen collectors, representing 71% of
livelihoods in the informal waste sector28. Collectors often operate as individuals or within
families, but there are also some who organize into larger collectives with hired labor.
Traditionally collectors in Cairo have operated on a door‐
to‐door basis, gathering waste directly from homes
and businesses. Some collectors also obtain
waste from the bins which are placed on
the street by formal collection
companies. The quality and composition
of waste varies greatly depending on socio‐
economic conditions of collecting sites. Men generally act as collectors and are therefore most
visible, but male collectors bring their material home and sort it with the help of their wives,
sisters and children.29
The informal sector collects about 1.2 million tons of waste per year in Cairo30. The level of
investment in the collection stage is the lowest compared to other stages in the supply chain,
which makes it the easiest stage for new entrants. Most collectors in Cairo use their houses for
sorting and storage. Simple handcarts, tricycles or small trucks are necessary capital
investments to launch and potentially scale up one’s collection. Transportation is a significant
operating cost for collectors, particularly those using vehicles and those who comply with
28 Scheinberg , A. et al. (2010). (p. 23, 65) 29 Scheinberg , A. et al. (2010). (p. 77) 30 Scheinberg , A. et al. (2010). (p. 71)
26
regulations to transfer waste to official dumpsites. As Zabbaleen communities are moved to the
outskirts of the city, transportation costs become larger portion of their operating cost.
GIZ’s 2006 study provides the analysis of costs per ton for informal services and waste
recovery stages, including capital costs, operating costs and revenue analysis. The cost of door‐
to‐door collection is about € 21 per ton31, the majority
of which is transportation cost and
shadow priced labor for the collector. The overall
revenue is €36 and profit is €15 per ton.32 This makes
informal collection significantly more profitable than
formal sector collection, which according to the same
data had a net cost of €8.
After the waste is collected and transported to the Zabbaleen community, mixed
materials are sorted into plastics, metal, paper, and organic waste (though since the 2009
culling of the pigs, organics are not always collected by the Zabbaleen). Collected plastics are
first sorted into thermosets and thermoplastics, and then thermoplastics are classified into
bottles, transparent plastics, rigid plastics
and flexible plastics33. Some waste collectors
may further sort materials according to type
and color. Sorted material is then sold to
traders, some of whom conduct some
31 The cost is in € in GIZ paper, all € is converted to $ according to 1€= 1.3 USD 32 Scheinberg , A. et al. (2010). (p. 69) 33 Plastic Technology Center. (2008). National Study for Plastic Recycling Sector in Egypt. Cairo, Egypt: Egypt's Technology Transfer and Innovation Center. (p. 24)
Table 3: Per ton Costs, Revenues and Profits for Informal Collection, Cairo, Egypt
Cost of door‐to‐door collection €21
Revenue, including sale of materials
€36
Profit (per ton) €15
Source: Scheinberg, A. et al. (2010), p. 69.
27
additional sorting but at times simply serve as a bridge between collectors and secondary
dealers. Secondary dealers conduct more delicate sorting according to type, color and quantity,
and then wash, clean and dry the materials.34 Many of these traders are themselves Zabbaleen
and live alongside collectors. These traders are former collectors who have been able to
accumulate the capital necessary to acquire more space for sorting and processing. Such
traders may hire other members of the community (including women and children) to sort.35
Paid laborers earn about €1.9 per day for sorting36. Based on estimates from the national study
of plastics recycling in Egypt37, the cost of labor for sorting, washing, and drying one ton of
material ranges from €19 to €27. Observations from Cairo confirm that it is reasonable to
assume it could take ten people a full day to manually sort one ton of material.
34 Plastic Technology Center. (2008). (p. 24) 35 Scheinberg , A. et al. (2010). (p. 23) 36 Exchange rate is the average exchange rate from May 6, 2010 to May 6 2012, 1 Euro= 7.9451 EGP 37 Plastic Technology Center. (2008). (p. 28)
Table 4: Fixed and Operating Costs for Collection and Sorting, Cairo, Egypt
Fixed Cost
simple handcart €12.5
small truck (1.5 ton) €378 ‐629
Operating Cost
Collection and Transportation Cost (per ton) €21
Sorting, Washing and Drying (per ton) €19‐27
Labor Cost of Sorting (per day) €1.9 Source: 1."National study of Plastic Industry in Cairo", Page 23 2. "Economic Aspects of the Informal Sector in Solid Waste
Management", Page 73 Table 32
28
Collection
Sorting
Shredding
Cleaning
Pelletizing
Processing
Cairo: Waste Processing Stage and Techniques
After plastics are sorted into types, clean and dry materials go through several processing
stages. GIZ’s study indicated that Cairo has a total of 1,000 recycling small and medium
enterprises (SMEs); most are unlicensed, small, and family owned.38 Processing techniques
include cutting plastic into smaller pieces, shredding, agglomerating, pelletizing and other
mechanical manufacturing processes. Types and qualities of final products depend on
manufacturing process employed and the ratio of recycled to virgin plastics utilized.39 Different
recycling workshops may conduct multiple processes, buying sorted material then shredding
cleaning and pelletizing, while others may only operate at one stage. This difference in
operation makes it relatively more difficult to distinguish the various costs and value additions
from each independent stage.
Processing costs can be categorized as either raw materials costs,
capital costs, production costs or transportation costs40. This analysis
provides general information about processing costs and
distinguishes by stage to the extent possible. Because the
productivity of machinery and labor and incidental costs such as
transportation and land/rent vary significantly according to
the particular circumstances of each operator, a full cost‐
benefit analysis for a particular
enterprise should be based on
38Scheinberg , A. et al. (2010). (p. 20) 39 Plastic Technology Center. (2008). (p. 37) 40 Plastic Technology Center. (2008). (p. 46)
Figure 4: Plastic Processing Stages
29
detailed location, transportation and equipment information.
Recyclers gain access to materials in a variety of ways. Some may acquire materials by
collecting it themselves. Others purchase raw materials from waste collectors or traders. The
average purchasing price for a range of sorted and clean plastics (PET, PP, HDPE, LDPE, PVC) is
about €235.5 per ton.41
In order to process plastics, recyclers must incur significant capital costs. A variety of
machines are available, however, at a wide range of prices depending on their level of
41 Plastic Technology Center. (2008). (p. 21) 42 The data was in USD. The exchange rate is the average exchange rate from May 6, 2010 to May 6, 2012, 1 USD= 0.7426 EUR
Table 5: Production costs in processing stages in Egypt
Raw material cost (per ton)
Average purchasing price from sorted trader €235.5
Capital Cost
Shredding
Shredder (locally made) €1,259‐ 2,643
Shredder (Used) €755‐1,007
Shredder(Turkish made) €4,45642
Plastic shredder (40 horsepower) (Irtiqa) €6,041
Agglomerating
Agglomerator €5,035‐7,552
Agglomerator (Turkish made) €5,941
Pelletizing
Film‐making Machine (locally made) €6,293
Film‐making Machine (Irtiqa) €16,980
Film‐making Machine(Sophisticated design) €31,466
Crystallization machine (Irtiqa) €10,487
Production Cost
The cost of shredding one ton of rigid plastics €25‐50
Transportation Cost (per ton)
Transportation cost for non‐shredded polymers €7.5‐10
Transportation cost for polymers after shedding €3.7‐5
Source: Plastic Technology Center. (2008)., Authors’ interviews May – July, 2012.
30
sophistication. Costs of locally manufactured machines are much lower compared to more
sophisticated machines that may perform the same operation, but at a different level of
precision or efficiency. For example, high end film blowing machines cost €31,466 with 100
kg/hr capacity, compared to locally manufactured machines which cost €6,293 with a capacity
of 30 kg/hr. It is difficult to determine which one is more cost‐effective without understanding
the quality of outputs, operating costs and true lifetime of the machines. From the perspective
of distributed capital cost per kg of production, the locally made machine is less expensive. If
the local machine is less reliable, requires more repairs, or is less fuel‐efficient, however, it may
not turn out to be a better investment. Conversely, if the high end machine requires more
expensive replacement parts, or cannot be repaired locally, costs over the machine’s lifetime
may in fact be greater. Detailed information about the operational costs is necessary in order to
advise collectors or recyclers about the ultimate costs and benefits of expansion.
In Cairo, the Association for the Protection of the Environment (APE) is a local non‐profit
that has begun to produce machinery for the recycling industry. They have sold their machines
to a small local enterprise collecting and sorting south of Cairo called Irtiqa. The authors
analyzed and observed the operations of that enterprise, and thus witnessed many of the
machines in use. These machines generally are more expensive than other locally made
Table 6: Distributed Capital Costs for film‐blowing machine over 1 year (260 working days, 8 hours per day)
High End Machine Locally Made Machine
Capital Cost €31,466 €6,293
Capacity 100 kg/hour 30 kg/hour
Kg per year 208,000 62,400
Cost per Kg (5 year lifetime) €0.15 €0.10
31
machines but less expensive than imports. They are designed to be repaired locally and to
withstand local operating demands. Integrating machinery producers into the landscape of the
recycling supply chain is an innovative strategy to both reduce the costs of upgrading
operations for recyclers, and support related industries that can also benefit from the growth of
the recycling industry.
Table 7 shows the total number of processing machines in Egypt and their average
productivity. Based on this information, allocated capital costs can be estimated based on
locally made machine costs (Table 5) with an assumed five year lifetime. As shown Table 7, the
total number of shredders, pelletizers and agglomerators in Egypt are 700, 450 and 400
respectively. Together, these processors handle 292,000 tons of plastic per year. In the greater
Cairo area, 175,000 tons of plastic are recycled annually, accounting for 60% of the total
recycled plastic in Egypt.
Table 7: Recycling Equipment and Their Productivity in Egypt
recycling equipment Shredders Pelletizers Agglomerators
Number 700 450 400
average productivity/day 1.25 1.5 1
productivity MT/Y 262,000 202,000 120,000
total productivity MT/Y 292000
average productivity per machine 374 449 300
Capital cost €1,951 €6,293 €6,294
Life time 5 5 5
Annual depreciation €390 €1,259 €1,259
Allocated capital cost per MT €1.4 €3.7 €5.7 Source: Plastic Technology Center. (2008). (p. 18, Table 8)
32
The allocated capital cost per ton is €1.4 for shredders, €3.7 for pelletizers and €5.7 for
agglomerator, which are relatively small when compared to the operating cost incurred
processing the material. Operating costs include labor, electricity, water and rent. There is little
reliable data on production costs, thereby making it
difficult to understand the relationship between
revenues and profits in processing. One study shows
that the cost of shredding one ton of rigid plastics
ranges from €25‐50.43 Compared with the allocated
capital cost per ton, operating cost remains the major
expenditure in the processing stage. Table 8 is an
example of percentage composition of main product costs in a pelletizing workshop in Cairo44.
As shown, labor and utilities represent the largest share of operating costs, at 30% and 25%
respectively. Transportation cost is estimated as 7% of the total cost, which is understandably
lower than the share of costs transportation represents in the collection stage. It is worth
noting that transportation cost will decrease as
plastic materials move along the supply chain
because the reduction in size allows for a greater
concentration of materials in each trip.
Transportation costs for non‐shredded plastics
vary from €7.5‐10 per ton compared to €3.7‐5 per
43 Plastic Technology Center. (2008). (p. 31) 44 Plastic Technology Center. (2008). (p. 46)
Table 8: Main operating costs (% of total
costs) of a pelletizing workshop in Cairo,
2006
Labor 30%
Transport 7%
Electricity and water supply 25%
Rent 15%
Depreciation 12%
miscellaneous cost 11%
Source: Plastic Technology Center. (2008). (p. 46, Table 13)
33
ton after shredding45. Strategies to decrease the size of waste materials and increase the ratio
of valuable materials in waste during transportation process can reduce the cost of operation
greatly, especially for waste collection stage.
Cairo: Growth Opportunities in Recycling
A comparison of current recycling volume with the amount of waste generated in Egypt
demonstrates that there is indeed great potential for the growth of the sector. The processing
of 292,000 tons of plastic accounts for only one third of plastic waste in Egypt. Improved
collection and sorting could remedy the fact that 32% of plastic waste is either not collected or
burned while 33% of plastic waste is dumped into landfills. If collectors could increase their
capacity to redirect this waste into the recycling system, there would not only be increased
opportunities within collection but there would be more room for current collectors to grow
into an expanded processing market.
45 Plastic Technology Center. (2008). (p. 47)
309, 32%
320, 33%
292, 30%
48.5, 5%
Figure 5: Management of plastic waste in Egypt (in 1000 MT)
not collected & burned landfill recycled reuse
Source: Plastic Technology Center. (2008). (p. 17)
34
Cairo: Value‐added at Various Stages
The price paid for materials does indeed change as it moves through the supply chain.
Table 9 shows the market prices for various plastics that were paid to actors at different stages
of the system. Unfortunately, these prices do not allow a fruitful examination of the
profitability of each processing stage. As noted above, the capital and operating costs
necessary for processing, which do in fact add value to the end user, may explain at least some
of the price increase. As previously noted, the cost for shredding one ton of rigid plastic ranges
from €25‐50. In Table 9 the price of PET increases €75 between the sorting and shredding
stages, which would be the shredder’s revenue. Accounting for the operating cost, the shredder
could be assumed to earn a profit of €25‐50 per ton of shredded PET. Comparing this to the
earlier revelation of the collector’s per ton profit at €15 it appears that the shredder is indeed
making a greater per‐ton profit, though not at a scale that would suggest widespread
exploitation.
Given this data, the one price increase that should be further investigated is that which
occurs between the Zabbaleen collector and the trader. Zabbaleen collectors, whether
operating as individuals or families, tend to engage in at least preliminary sorting prior to selling
Table 9: Market prices for various plastics by seller, Egypt, 2006, €/Ton
PET PP PE‐HD
injection
PE‐HD
blown
PS PVC PE‐LD
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
Virgin Material 1762 1322 1007 1007 1007 944 1196 Source: Plastic Technology Center. (2008). (p. 21)
35
to traders. The same study that calculated the collector’s profit at €15 per ton calculated
traders’ profits at €27 per ton. If traders are able to provide an addition level of sorting
precision, then the price increase in that stage may be justified. If, however, they are charging
higher prices merely because they are able to guarantee higher volumes, collectors could be
unjustifiably missing a portion of those profits. Creating systems by which collectors can both
improve their sorting precision and trade in higher volumes could help to close the gap
between collector and sorter profits.
36
Global Comparisons
Amman, Jordan
As in Cairo, solid waste in Amman is collected
and recycled by both formal and informal actors but the
structure of the system differs significantly between the
two cities. The Greater Amman Municipality (GAM)
Department of Environment and Public Sanitation is
charged with managing collection and disposal of solid
waste.46 GAM does not provide door to door collection
service, but instead residents place their waste at the
curb and municipal workers collect it and transfer to a
nearby container then it is collected by a vehicle.47 Like
in Cairo, GAM’s waste management cost is covered by monthly fees included on residents’
utility bills.48 Some businesses with large volumes of waste, including hotels or restaurants, pay
additional collection fees to GAM or contract private waste management companies. Entity
Green, the company that employs one of the advisors who provided data for this analysis,
serves as an example of one such private enterprise. Entity Green has obtained one large
contract for waste collection at the drilling site of a major international oil company.49 Other
large companies, particularly those located outside the city, also contract private waste
management services.
46 Entity Green. (2010). Solid Waste Behaviors Within the Formal and Informal Waste Streams of Jordan. Jordan. USAID. (p. 24) 47 Abu Qdais, H.A. (2007). (p. 1668) 48 Entity Green. (2010). (p. 24‐25) 49 Interview by the authors. (March 21, 2012).
Table 10: Amman, Jordan
Population of Amman (2006)
1.8 million
Population estimate for Amman (2011):
2.3 million
City area (Km2) 1,680
Persons working for GAM 4,000
Persons working in
informal waste sector
Unknown
Annual Tons of Waste
Generated in Jordan
(2005)*
1.2 million
Sources: Abu Qdais, H.A. (2007). Techno‐Economic
Assessment of Municipal Solid Waste Management in
Jordan. Irbid, Jordan. Waste Management. [27]; Jordan
Department of Statistics.
(http://www.dos.gov.jo/dos_home_e/main/index.htm)
37
Informal collectors and traders in Amman appear to be significantly less cohesive than
the Zabbaleen of Cairo. In a 2010 study commissioned by USAID and conducted by staff at
Entity Green, waste collectors were observed to exhibit high levels of distrust toward one
another, and lacked the desire to collaborate on a large scale.50 Waste collectors operated in a
variety of ways, using different levels of technology (trucks vs. hand carts) as well as variable
amounts of labor (families, individuals, or paid laborers). All initial collectors, however, appear
to gain access to waste by picking through the dumpsters provided by GAM. Collectors aim to
pick out the valuables that residents have left in the dumpsters before the dumpsters are
emptied by GAM workers.51
Collectors differ in their level of specialization. Some collect a variety of materials, while
others focus on one or two specific items. Whatever the collector’s level of specialization,
material is often sold directly on the street from a small collector on foot to a mobile trader
who owns a truck.52 Thus mobile trading appears more common in Amman than in Cairo,
where material is generally brought back to the household for sorting. Because of street‐level
trading and the overall lack of transparency in the system, recyclable material in Amman does
not follow a linear path.53 There is still a great deal that is unknown about the number of stages
and hands that plastics pass through before reaching their final reusable form. Convenience
and prior relationships, rather than market awareness, seem to dictate material flows.54
The following data provides an initial picture of some of the operations that characterize
plastic recycling in Amman. Unlike the case of Cairo where the waste system in Cairo has been
50 Entity Green. (2010). (p. 13) 51 Entity Green. (2010). (p. 15) 52 Entity Green. (2010). (p. 15) 53 Entity Green. (2010). (p. 20) 54 Interview by the authors. (April 12, 2012).
38
the subject of significant academic and institutional research, Amman’s waste sector appears to
have received relatively little attention from international advocates or academics. As a result,
the data provided here should be considered preliminary. A small number of qualitative
interviews allow us to demonstrate the current reality for a limited number of actors within the
system, but cannot provide the basis for large scale generalizations. Future research that builds
upon this initial data would be extremely beneficial for those engaged in solid waste
management in Amman.
Summary characteristics of Amman’s waste are shown in Table 10. Research suggests
that the volume of waste in Jordan will increase steadily over the next 15 years as the
population grows and living standards increase and residents use more consumer goods.55
Given this projected increase, it is vital that more research is done to document the current role
of the informal sector. In general, the informal sector can be divided into collectors and various
traders: mobile, small and large. Sorting and processing can occur at multiple levels of trade,
thus there is not a single categorization of traders by size or role. Instead, traders of all sizes
perform a variety of tasks depending on the context and their capacity. According to the USAID
report, mobile traders are essentially collectors with slightly more capacity for hauling. Mobile
traders will purchase from other collectors on the street, as well as purchase materials from
homes and businesses. For collectors operating with a small storage capacity, mobile traders
provide a convenient point of sale.56 Small and large traders are distinguished on the basis of
both land size and access to transportation. Small traders tend to receive recycled materials
on‐site but do not travel to purchase from other sellers. Large traders, in contrast, not only
55 Abu Qdais, H.A. (2007). (p. 1667) 56 Entity Green. (2010). (p. 19)
39
Figure 6: Actors in Amman’s Waste System
have more land and thus more storage capacity, they also often have vehicles which they use to
travel to and purchase from smaller traders. Beyond these traders are another set of actors
who might be highly specialized in a particular material. As noted previously, however, recycled
material does not seem to follow a straight or consistent path from collector to mobile trader,
small trader then large trader. Location, personal relationships and material type, volume and
quality appear to dictate the flow of recyclables through the system.57
Amman: Collection & Sorting
A series of interviews conducted in the spring of 2012 by Entity Green provides a
glimpse of the variability in the supply chain for plastic in Amman. Table 11 contains
information about the operations of an informal family business that collects as well as
purchases, sorts and trades. As in Cairo and elsewhere, there is a great deal of collaboration
between formal and informal actors. Formal companies with private contracts sell into the
57 Entity Green. (2010). (p. 19‐20)
Trading & Processing Reuse
Mobile traders
Small Traders
Large Traders
GAMOn foot
Cart Truck
Recycling Factories
Collection
40
informal market by working with traders such as this. This particular trader purchases materials
that have been minimally sorted and sorts them further by type. Sorting is done by hand, and
in some cases the trader is combining various types of plastic (as in Mix #1). In such a case, the
trader may then be selling that mix to another trader who, working at higher volumes, might
sort the material even further. The data obtained in this interview highlights some of the
challenges in achieving transparency in the informal sector. Our interviewer asked the
respondent to provide average prices for each material as they toured the facility. Then, a few
minutes later, the interviewer asked the respondent to outline any particular challenges he
faced in his business. The respondent cited price fluctuations as one of the primary challenges
in the sector. The evidence he cited for price fluctuations frequently did not conform to the
information about the normal price stated earlier, i.e. the normal price given was larger than
the highest price cited to define the range of fluctuation.
A number of factors can help explain this discrepancy. First, as noted earlier, there is a
general lack of cohesion within the informal sector. This may have contributed to an
58 Data was in JOD. The exchange rate is the average exchange rate from May 6,2010 to May 6, 2012, 1 EURO= 0.956 JD
Table 11: Trader #1, Amman58
Material Purchase Price (€/ton)
Mixed Plastic 314 Mixed Metal and Plastic 418 Sale Price
(€/ton) % Price change after sorting, if purchased as
mixed plastic (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: Interview conducted April 2, 2012
41
unwillingness to divulge information. In addition, much informal trading takes place without
record keeping. Traders are often negotiating day by day without the ability to capture and
record long term trends in pricing. Finally, the particular trader interviewed here noted that
prices can fluctuate three to four times per day and are driven largely by negotiations. The
circumstances of a particular collector or the external demand from a recycling factory can
dramatically shift prices as well.59
Due to these and other limitations, the data contained here should be treated with
caution. For the purpose of preliminary analysis, however, the data has been summarized as
follows: when the normal price given was higher than the highest fluctuating price, the mean of
the lowest, highest and normal price was calculated and marked by an asterisk “*”. For other
prices, the normal quoted price was in fact between the lowest and highest, therefore it is
listed as stated.
The 2010 USAID report cited a general price of plastic at between €157‐209 per ton.60
Given the reported variability in the market and two‐year inflation (5% in 2010)61, the
discrepancy between that price and the €313 /ton for mixed plastic quoted by the informant is
notable but not unreasonable. Though for this particular business certain materials appear not
to be profitable, the true profitability of the sorting process depends on the composition of the
original ton of mixed plastic and the cost of sorting. For example, if the original ton of mixed
plastic were 50% PP (Mix #2), 25% HDPE (Mix #4) and the remaining 25% Mix #1, the overall
sale price of that ton of sorted material would be €354 (Table 12).
59 Interview conducted by advisor. (April 2, 2012). 60 Entity Green. (2010). (p. 14) 61 The World Bank. (2012). Inflation, consumer prices. Retrieved 05/01, 2012, from http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
42
A higher proportion of more profitable materials in a given mixed ton will result in
greater revenues and could compensate for the relatively lower price of plastics such as PVC for
this particular trader. USAID estimated that soring 50 tons of mixed material would increase
the value of each ton by €10.4‐15.6.62 Because this mixed material can include other materials
in addition to plastic, this estimate is no sufficient to determine the true impact of increase
volume and sorting on material prices. It does support the notion, however, that access to
greater storage and sorting capacity brings the potential for higher sale prices in Amman.
There are also operational costs associated with sorting and trading that are not
reflected by pure examination of the purchase and sale prices. Land, buildings, electricity and
wages represent recurring operational costs for sorters. The sorter interviewed here reported
employing five laborers at a wage of €15.6 per day. This wage is consistent with the daily
revenue of €7.3‐15.6 reported by informal collectors in 2010.63 It is logical that the trader
would employ workers at a high enough wage to make the job equivalent to if not more
compelling than work as an independent collector. Thus, in the example given in Table 12, the
62 Entity Green. (2010). (p. 19) 63 Entity Green. (2010). (p. 13)
Table 12: Example Mixed Plastic Ton Distribution for Trader #1
Material % of mixed ton
Purchase Price (€/ton)
Sale Price (€/ton)
Mix 1 (PET, HDPE, PP)
25% 78 71
Mix 2 (PP) 50% 157 194
Mix 4 (HDPE) 25% 78 89
Total 314 354
43
five‐person crew would need to sort at least two tons of mixed plastic per day in order to cover
the cost of wages.
Amman: Shredding
As in Cairo, Amman features informal processors who purchase sorted materials and
treat them in order to prepare them for reuse. An interview conducted with a local shredder
offers some insight into the costs and revenues available following certain levels of processing.
Table 13: Purchase, Shredding and Sale of Material, Amman
Buy Range Sell Range Material Low (€/ton) High (€/ton) Low (€/ton) High (€/ton) Water jugs 335 377 439 523
Chairs (PP) 418 439 502 523
irrigation pipes (small, PP or HDPE)
209 209 241 241
Nylon (plastic bags) 262 366 Source: Interview by Adviser. (April 2, 2012)
Shredding requires significant capital and operational costs. This particular workshop runs two
shredders, one devoted solely to the shredding of plastic bags, and the other used for multiple
types of plastic. Though the informant did not provide information about the cost of his capital
investment in land and machinery, he estimated his operating expenses at €63/ton. Applying
this operating cost to the variable purchase and sale price, the shredder can expect a range of
potential profit between €0‐126 per ton, outlined in Table 14.
Table 14: Potential Profit Scenarios for Shredding Plastic, Amman
Item Profit: Buy high, Sell low Profit: Buy low, Sell high Water jugs 0 €126 Chairs (PP) 0 €42
irrigation pipes (small, PP or HDPE)
(€31) (€31)
Nylon (plastic bags) €42 €42 Source: Interview by Adviser. (April 2, 2012)
44
Given the variability in purchase and sale price and the steady cost of operation, a shredder
such as this could be in a relatively precarious position should markets fluctuate. Given that
shredding is one of many necessary steps to increase the usability of recycled plastic, however,
increased transparency could help to stabilize prices and reduce risk for processers such as this.
Data from USAID’s 2010 study support the notion that profitability from processing is
unreliable. There is indeed value added by greater degrees of processing, therefore end‐stage
recyclers are willing to pay a higher price per ton for material that has been washed, reduced or
otherwise transformed into a more usable form. Citing heavy plastics as an example (no
specific type given), researchers outlined a series of price changes corresponding to processing
level. Table 15 shows that the price paid for hard plastics can increase 240% from the time it is
initially sorted but unwashed to the time it is cleaned and pelletized. Interestingly, the
processors who provided this information cited their shredding costs at €105/ton, which
would erase any profit that could have been earned from the cleaning to the shredding stages.
Respondents did not note whether that €105 /ton represented only operating costs, or
included capital investments as well.64 In either case, consideration of processing costs
demonstrates that the mere examination of sale prices is not sufficient to understand the
relative position of various actors in the recycling supply chain.
64 Entity Green. (2010). (p. 22)
Table 15: Sale Price for Heavy Plastic at various processing stages
Unclean Clean Shredded Clean & Pelletized Price (€/ton) 262 366 471 628
Source: Entity Green. (2010). (p. 22)
45
Amman: Plastic Production
The end‐users of recycled plastic, factories producing new plastic goods, make the
decision to source materials based on quality, form and price. The data in Table 16 was
gathered from a producer of plastic irrigation tubing. The factory manager cited no quality
difference between virgin and clean recycled plastic when producing tubing, instead he said
that he chooses his material inputs based on price. He has shifted to recycled materials
because of the significant cost savings. Like many factories using recycled plastic, he is highly
sensitive to the quality and cleanliness of the material. He will only purchase recycled plastic
once it has been washed and pelletized. Then, he combines the recycled material with some
virgin resin to produce piping. This particular factory reports utilizing three tons of plastic per
day.
Table 16: Plastic Irrigation Tube Factory, Amman
Material Purchased Lowest Purchase Price (€/ton)
Highest Purchase Price (€/ton)
Typical Purchase Price (€/ton)
Virgin Plastic 523 2,092 1,255
Recycled plastic (washed and pelletized)
523 941
Source: Interview by Adviser. (April 2, 2012)
46
Multi‐City Comparisons
The process of waste collection, sorting and recycling varies significantly across the
developing world. Some similarities exist, particularly when exploring the social marginalization
and exposure to health and safety hazards for waste collectors in their respective societies.65
Materially, the distribution of various recyclables within the waste stream is relatively similar in
many developing world cities (Table 17). In the developing world organic material often
accounts for half of the waste stream. As a nation’s income grows, consumables come to
supplant organics as the majority share of collected waste.
Unlike the market for virgin plastic, where global supply chains make prices more
transparent and therefore sourcing more streamlined66, the market for recycled plastic is highly
variable depending on one’s location. Table 18 compares the prices paid to wholesalers for PET
in various cities. Though the report’s authors do not specify the quality or form of this material,
based on comparisons with data obtained from another report on the plastics industry in Cairo,
65 United Nations Human Settlements Program. (2010). (p. 16) 66 Interview with advisor. (March 15, 2012)
Table 17: Composition of Recovered Waste, Global Comparisons
Location Paper Plastic Glass Metal Organics Other
Amman, Jordan 14% 13.2% 2.8% 2.4% 54.4% 13.2%
Cairo, Egypt 18% 10% 3% 3% 60% 6%
Quezon City, Philippines 17% 16% 3% 3% 48% 13%
Pune, India 15% 13% 1% 9% 55% 7%
Rotterdam, Netherlands 27% 17% 8% 3% 26% 19%
Sources: Cairo, Quezon City & Pune data – Scheinberg , A. et al. (2010). (p. 15); Amman data – Abu Qdais (2007). (p. 1667); Rotterdam data – United Nations Human Settlements Program. (2010). (p. 12)
47
conducted over the same period of time, we can assume
that this is the price for sorted but not shredded PET.67
Prices are highly variable depending on the material
availability and the degree of industrialization that drives
the demand for recycled plastics. When seeking to advise
waste collectors on strategies for improving their
livelihoods, it is important to consider the material demand both locally and globally. In places
such as Lusaka, Zambia where the market for plastics is relatively weak, interventions to
increase waste collector’s collection capacity and processing may not be immediately
profitable. Conversely in Pune, India where end‐stage sale prices are higher, capital
investments that increase collection and processing capacity may pay off more quickly.
To understand the impact of capital investments on the size, scope and profitability of
any stage within the recycling process, information about both the costs and potential sale
price is necessary. As demonstrated by the Cairo and Amman cases, this data is often difficult
to obtain. Researchers from six cities including Cairo collected data within a shared framework
with the support of GIZ. Though their findings were not always parallel, due to the variable
nature of local circumstances, they do provide some interesting bases for comparison.
67 Plastic Technology Center. (2008). (p. 21)
Table 18: Average prices for PET(Euros per ton) paid by industries to wholesalers
Cairo, Egypt € 244
Cluj, Romania € 109
Lima, Peru € 250
Lusaka, Zambia € 30
Pune, India € 339
Quezon City, Philippines € 172 Source: Scheinberg , A. et al. (2010). (p. 71)
48
Pricing and Incomes
In Quezon City, Philippines, 2006‐2007 data showed that the price paid for various
plastics increased at each stage (Table 19) so that the final sellers of one ton of PET received
€64 more than the initial waste picker.
Table 19: Prices paid for various plastics (€/ton), Quezon City, Philippines
Material Price Paid to Waste Picker
Price Paid to Small Junk Shop (Trader)
Price Paid to Large Junkshop (Trader)
PET € 235 € 246 € 299 HDPE € 189 € 239 € 269 LDPE € 43 € 49 € 75 Source: Scheinberg , A. et al. (2010). (p. 72)
Interestingly, however, it was found that once production costs were accounted for (labor,
capital equipment, land, etc.) itinerant waste buyers and junkshop owners (those who trade in
larger volumes) made nearly equivalent profit per ton of waste (€ 21 and € 22, respectively).
Small and large junkshops (traders) frequently process materials before selling them to the next
buyer. Therefore, while prices appear higher, in fact the ultimate economic impact is relatively
similar for waste collectors and traders.68
Traders and junkshop owners in General Marino Alvarez, Philippines appear to gain
increased revenue through material consolidation and sale (Table 20). The largest junkshops
tend to have the closest connection to end‐stage purchasers, therefore they receive pricing
information first and then pass it along to smaller shops via mobile phone messaging. Larger
shops are usually able to both buy and sell at higher prices.69 Material is manually sorted and
washed by workers at each junkshop, yet unlike in Cairo processing does not appear to take
68 Scheinberg , A. et al. (2010). (p. 69) 69 Solid Waste Management Association of the Philippines. (2008). A Study on Junkshops and Itinerant Waste Buyers in General Mariano Alvarez, Cavite, Philippines. Philippines. (p. 15)
49
place in junkshops. Researchers from the Solid Waste Management Association of the
Philippines (SWAPP) surveyed small, medium and large junkshop owners and found an
extremely wide range of
reported revenue, varying
from €18 to €4,525 per
month.70 As elsewhere,
however, the true costs of
operation are not always
reflected in such reports. Many traders operate out of their homes and employ family
members, therefore they do not adequately account for costs such as land/space, electricity,
and labor. SWAPP made efforts to estimate these costs, and determined that large traders are
still making significantly more than small traders and collectors (who make about the same
monthly income) once costs have been accounted for.71 More research in this area is necessary
to fully understand why income differences between collectors and traders in General Marino
Alvarez appear so much greater than in Quezon City.
Data from Pune confirms that in some cases, individuals selling material at the same
level of processing will receive different prices (Table 21). Unfortunately, the researches were
not able to determine whether the price variability was a result of social or gender
discrimination, or whether it was a result of the relative cleanliness and quality of the material
itself. Those who pick waste from the landfill tend to suffer economic and social discrimination
and include many women, while itinerant waste buyers (IWBs) are mainly men and travel to
70 S Solid Waste Management Association of the Philippines. (2008). (p. 12‐13) 71 Solid Waste Management Association of the Philippines. (2008). (p. 13‐15)
Table 20: Purchase and Sale Price for Plastics by Traders, General Marino Alvarez, Philippines
Material Purchase Range (€/ton)
Sale Range (€/ton)
PET 181‐308 217‐398
LDPE 217 307‐362
PVC 18‐72 36‐72
Source: Solid Waste Management Association of the Philippines. (2008).
50
Quality matters when
examining price.
homes and businesses purchasing and collecting material. Gender and social discrimination
could be one factor leading to lower prices per ton for waste pickers. But quality and
cleanliness are also a factor. Waste picked from the landfill is more contaminated and thus of
lower quality than waste purchased or collected directly from households.72 Certain material,
such as paper, whose quality stands to be greatly diminished once transported to the landfill
and contaminated by other materials, has a large price differential. Other materials, like
metals, whose value is less dependent on cleanliness, appear to have more equality in pricing.
Thus, the variability of prices in Pune demonstrates the difficultly of separating social and
economic discrimination in pricing from true value distinctions between materials. In this
context, helping waste pickers access material before it arrives at the landfill would allow them
to receive a higher price at sale. This strategy requires very little capital, yet does necessitate a
shift in the power dynamics that determine access.
72 Scheinberg , A. et al. (2010). (p. 50,72)
Table 21: Prices Paid to Different Waste Pickers, Pune, India
Material Price paid to waste picker recovering from the landfill (€/ton)
Price paid to IWB recovering from households/businesses (€/ton)
Paper € 17 € 85 Ferrous Metal (contains iron) € 170 € 170
Non‐Ferrous Metal € 778 € 778 Film Plastic € 34 € 85 Rigid Plastic € 170 € 170
Source: Scheinberg , A. et al. (2010). (p 72)
51
Collectors and traders
often collaborate to
gather and sell materials
System Attributes
In Quezon City, waste collectors and traders are in fact collaborating for collection and
sale. When loosely aligned, traders often supply itinerant waste buyers with pushcarts or other
capital. A study of waste collection and recycling in General Marino Alvarez, Philippines,
detailed the integration of IWBs and junkshop owners
(traders). Most junkshop owners started as waste buyers,
collectors or junkshop employees. Owners and IWBs
collaborate daily in order to collect and trade: owners provide seed capital so that IWBs can
purchase on the street and from households, then return materials to the junkshop.73 In
Quezon City, in addition to daily collaboration with junkshops, waste collectors have aligned
and through association have as a group moved up the supply chain. The Payatas Alliance for
Recycling Exchange (PARE) has 15 associations whose members are waste pickers. These
associations serve as junkshops/traders, thus demonstrating one means by which waste
collectors can organize and operate at multiple levels within the system and thereby take
advantage of any potential differences in the profit margins at each stage.74
73 Solid Waste Management Association of the Philippines. (2008). (p. 7‐12) 74 Scheinberg , A. et al. (2010). (p. 58)
52
Strategies for Improvement
Many strategies have been initiated in order to improve the economic and social well‐
being of waste workers in the developing world. Common are top‐down development
strategies, which attempt to “rescue” waste workers by focusing on creating new income
opportunities, and welfare strategies, which focus on alleviating pressing daily needs.75 While
these approaches may improve the lives of some waste workers, they often perpetuate the
image of waste work as “dirty” and fail to respect the dignity of waste workers. 76 This report
emphasizes participatory approaches with a holistic view of the informal waste sector in order
to highlight strategies that respect the dignity of waste workers and allow for the maintenance
of sustainable livelihoods. Participatory approaches acknowledge that many informal waste
workers have chosen and would like to maintain their livelihood, particularly when there are
few alternative means by which to earn an income. Such strategies also recognize the
economic and environmental value of reducing waste and reusing material. Participatory
strategies are meant to empower waste workers and achieve sustainable change in the
structure of the informal system in a way that benefits informal waste workers and their
communities.77
The formation of cooperatives, associations, partnerships and microenterprises has
been successful in a variety of developing world waste management contexts. In Pune, India
and Quezon City, Philippines, organization efforts have been quite successful with 60% and 37%
of informal sector sorters/recyclers reporting that they belong to a sector organization,
75 Scheinberg, A; Anschütz, J, & van de Klundert, A. (2006). Waste pickers: Poor victims or waste management professionals? CWG ‐ WASH Workshop, 2006, Kolkata, India. [56] (p. 2) 76 Scheinberg, A, et al. (2006). (p. 1) 77 Samson, M. (Ed.). (2009). Refusing to be cast aside: Waste pickers organising around the world. Cambridge, MA, USA: Women in Informal Employment: Globalizing and Organizing (WIEGO). (p. 14)
53
respectively. In contrast, only 2.5% of Cairo’s informal sector reports being organized.78 The
degree to which informal organizations are integrated into the formal sector depends on the
particular context.79 Though the following discussion generalizes across many examples from
the developing world, it should be noted that the local context is extremely important in
determining the degree of formalization and specific approach that suits any particular location.
Factors like the political orientation and objectives of the particular group in question; political
orientations and objectives of supporting organizations; whether members see themselves as
workers, entrepreneurs, or in some other role; local legislative and governmental context; and
existing organizations or networks must be considered.80
Horizontal and Vertical Integration
In the SWM sector, as in any sector, it is helpful to conceptualize expansion as occurring
either horizontally or vertically.81 It is important to note, however, that the two forms are not
exclusive, rather they can be complementary and often occur simultaneously. 82 When a
business decides to expand its existing operations horizontally in order to produce more
volume it has two options; it can expand by merging with another similar operation or
purchasing more or better equipment that can enable it to deal with larger volumes. This could
include adding additional types of materials to an operation’s repertoire.
78 Gunsilius, E., Chaturvedi, B., Scheinberg, A. (2011) The Economics of the Informal Sector in Solid Waste Management, GIZ (p. 24) 79 Samson, M. (Ed.). (2009). (p. 14) 80 Samson, M. (Ed.). (2009). (p. 14) 81 Just.; Mitra, S.; & Netanyahu, S. (2005). Implications of Nash Bargaining for Horizontal Industry Integration. American Journal
of Agricultural Economics, [87] (May, 2005), 467‐481. 82 Knapp, J. (1950). Cooperative Expansion through Horizontal Integration. Journal of Farm Economics, [32] (4, Part 2), 1031‐
1047.
54
In the informal SWM sector, it is common for small‐scale waste collectors to sell their
materials to intermediaries who then accumulate materials and sell them in larger volumes.
Because the intermediary buyers are able to supply end users with the high volumes that make
a purchase attractive, it can become difficult for small‐scale collectors to assert agency in the
pricing process because they are not able to operate at scale.83 While data presented here has
shown that the evidence is mixed on whether traders do in fact gain unfair profits through
accumulation alone, it is certainly true that individual collectors cannot access large industries
on their own. Waste collector cooperatives, associations, and other types of organizations can
allow waste workers to circumvent the intermediary buyer by acquiring the ability to offer large
enough volumes to be attractive to industries.84 In Colombia, waste picker cooperatives have
gone a step further, forming regional marketing associations, which allow them to accumulate
even larger volumes and obtain higher prices than individual cooperatives were previously able
to obtain.85
Horizontal integration through organization is not limited to waste collectors; however,
generally when processors further up the supply chain decide to expand their operations, they
combine both horizontal and vertical integration.86 Vertical integration occurs when an
operation expands by integrating additional steps in the supply chain into its repertoire. An
enterprise may integrate vertically by purchasing equipment that allows further material
processing. An enterprise or organization may also vertically integrate through increased
organization by bringing together actors who work across multiple levels within the supply
83 Medina, M. (2005). Wastepicker cooperatives in developing countries. WIEGO/Cornell/SEWA Conference on Membership‐
Based Organizations of the Poor, Ahmedabad, India. (p. 20) 84 Medina, M. (2005). (p. 21) 85 Medina, M. (2005). (p. 22) 86 Samson, M. (Ed.). (2009).
55
chain. The cooperative Recicla, which consists of former dumpsite waste pickers in Maputo,
Mozambique, is a good example of vertical expansion. In 2006 a joint initiative was launched
between Caritas, LVIA, AGRESU (a GIZ program) and the Maputo municipal government in
order to integrate a plastics recycling center. The addition of processing of materials increases
their value and allows Recicla members to earn a much higher income.87
Organizing
The difference between an association, a cooperative, and a union depends upon local
definitions and laws, but the function of these organizations are the same in the informal SWM
sector. They are generally non‐profit oriented, require minimal registration with government
entities, and allow members to organize their own internal structure. Members divide labor
and distribute wages, reducing each member’s personal risk 88 for the purpose of service
delivery.89
Cooperatives are the most commonly found types of formalizing organizations in SWM
in the developing world, due to the relative ease of start‐up.90 Membership or affiliation in
waste worker organizations offers individuals a number of benefits. First, individuals can
overcome personal barriers such as illiteracy or a lack of business knowledge by leveraging the
skills of others within an organization, while offering their own expertise in other areas.91 In
addition, new divisions of labor can utilize the skills of many people, leading to more efficiency.
87 Gunsilius, E., Spies, S., García‐Cortés, S., Medina, M., Dias, S., Scheinberg, A., et al. (2011). Recovering resources, creating opportunities: Integrating the informal sector into solid waste management. Eschborn, Germany: Deutsche Gesellscha für Internationale Zusammenarbeit (GIZ). (p.34) 88 Gunsilius, E., et al. (2011). (p. 34) 89 Samson, M. (Ed.). (2009). (p. 14) 90 Gunsilius, E., et al. (2011). (p. 34) 91 Gunsilius, E., et al. (2011). (p. 32)
56
The Spirit of Youth
The Spirit of Youth (SoY) was
founded in 2004 by Ezzat Naem,
the son of a garbage collector.
SoY serves a community of
socially and economically
marginalized Christian garbage
collectors in the neighborhood
of Mokattam, Cairo, known also
as “garbage village.” Among the
services that SoY provides are
advocacy and educational
opportunities, to which the
people, known as Zabbaleen,
would not otherwise have
access.
SoY has recently succeeded in
completing the “organization
and registration process for
small and commercial traditional
collectors into formal
companies,” and now has an
agreement from the Governor of
Cairo to integrate the SMEs into
the legal tendering system of the
city, and to issue a decree of
waste segregation at source. In
addition, SoY has managed to
develop a legal syndicate of
traditional collectors and
recyclers.
An organized group of people can bring increased opportunity
for partnerships with NGOs, universities, and local and
international entrepreneurs. Furthermore, because
municipalities generally refuse to sign contracts or award
tenders to individuals, organizing is an important step for
informal sector workers if integration into the formal sector is a
goal. 92 Finally, organizing may also offer additional access to
credit that individuals may lack.93
In addition to building social cohesion, waste worker
organizations have been especially beneficial to waste
collectors as they create an opportunity to expand both
horizontally and vertically. Collaboration with other collectors
increases volume and integration with those at different stages
of the supply chain provides access to capital and new
processing opportunities. For waste collectors with little capital
or access to credit joining an organization may be an attractive
way to reduce risk, increase income, perhaps obtain access to
education, training, and health care. Furthermore, being a part
of an organization can create a new identity for individuals as “environmental professionals.”94
Organizations that have the ability to trade in larger volumes can also be beneficial for informal
recyclers by creating a more consistent and greater supply of materials.
92 Scheinberg , A. et al. (2010). (p. 39) 93 El Zanaty & Associates. (2009). Baseline study for plastic recycling companies in Cairo. Cairo, Egypt: GIZ. (p. 10)
57
Most waste worker organizations are launched and maintained with some help from
NGOs or other outside assistance and funding, which may also provide policy advocacy, training
for members, health and education benefits and income generation opportunities outside of
collection and sorting. However, within such partnerships institutional sustainability is crucial
in order to reduce the risk posed by inconsistent funding.95
Trust is one of the most important elements of developing and maintaining a waste
worker organization. This means that cooperatives and associations must be developed with
inclusion and transparency in mind. Informal workers can be generally distrusting of joint
financial ventures and many have had personal experiences with being cheated. Many
cooperatives and associations have either failed to get off the ground or have disintegrated due
to insufficient trust between members. 96 A GIZ pilot project in Chile, which was aimed at
partnering a steel company and informal waste workers failed to come to fruition due to lack of
trust. Any informal sector is susceptible to a lack of trust among actors and cases like this of
failed cooperatives are common.97
Formal Enterprises
Many waste workers in the developing world work within informal small to medium
enterprises (SMEs). An informal enterprise can consist of a group of individuals or family who
collect and sort waste for recyclables for sale to an intermediary buyer, to a small or medium‐
sized workshop that processes recyclables. SME’s provide collection services and recycling, but
94 Gunsilius, E., et al. (2011). (p. 32) 95 Gunsilius, E., et al. (2011). (p. 37) 96 Gunsilius, E., et al. (2011). (p. 34) 97 Gunsilius, E., et al. (2011). (p. 34)
58
at the time of this report there was no evidence of SME organization among dumpsite pickers
or scavengers. NIDAN, in India, was originally formed as a cooperative of door‐to‐door
collectors, but members decided that the local context was better suited for a company model
which provided greater geographic flexibility and access to capital. The company now has five
contracts in three municipalities, can easily distribute profits, and the owners have a greater
sense of pride as they now see themselves as entrepreneurs.98 It is worth noting, however, that
waste collectors may find it difficult to transition from working independently to working for a
company where they experience less freedom of operation and must transition to wage‐based
work.99 While newly formalized recycling companies have capital for space, labor and
processing machines, they share many of the same barriers of waste collectors. Many recycling
companies lack business and managerial skills and do not follow conventional accounting
practices. Their products may be of low quality, and they have limited access to finance and
markets. Furthermore, their businesses are often perceived as polluting by the general public
and governmental organizations, but they are more visible and stationary than waste collectors
and therefore susceptible to fines, bribes, and being shut down.100
SME’s are at times initiated by NGOs, and at other times by private investors. The Spirit
of Youth Association (SoY), a non‐profit serving a waste worker community in Cairo, Egypt has
been successful in implementing a registration strategy for SMEs. Irtiqa in Egypt grew out of an
NGO initiative, but was financed by private capital and now operates with the triple purpose of
providing collection and recycling services, employing informal waste workers, and making a
profit. Entity Green in Jordan is also a private company that collects and trades recycled
98 Samson, M. (Ed.). (2009). (p. 85) 99 Samson, M. (Ed.). (2009). (p. 85) 100 Gunsilius, E., et al. (2011). (p. 35)
59
material, but does not engage in processing. The benefit of the for‐profit model is that unlike an
organization that relies on outside funds, a for‐profit company must, by definition, sustain
itself. As mentioned above, however, informal workers transition from self‐employment to
becoming an employee may be difficult, establishing a formal company may be difficult, and
good financial planning is necessary in order to run a profitable business.
Networks
For existing organizations, networks that unite waste workers across countries, regions,
and even globally can provide technology and information sharing, a sense of unity within the
waste sector, and help to forge alliances with governments, large companies, and NGOs.
Networks can include conferences, such as the First World Conference of Waste pickers in
Bogota, Colombia in 2008101; online forums, such as Women in Informal Employment
Globalizing and Organizing (WIEGO), which collects and disseminates information about
informal women’s employment, including in the SWM sector102; and the Latin American Waste
pickers Network (LAWPN), which seeks to imbue a sense of solidarity among Latin American
waste pickers, change public opinions of waste pickers and the services they provide, advocate
for fairer public policies toward waste pickers, strengthen existing waste picker organizations,
and share information among waste pickers.103
While networks can succeed in building legitimacy around the informal SWM sector in
the developing world and advocate for policies that benefit informal waste workers, it should
be pointed out that waste workers generally do not have time to devote to networking through
101 WIEGO. (2012). Waste pickers. Retrieved 4/20, 2012, from http://wiego.org/informal‐economy/occupational‐groups/waste‐pickers 102 Samson, M. (Ed.). (2009). (iv) 103 Samson, M. (Ed.). (2009). (p. 47)
60
these kinds of forums; many may not have access to the internet, where much of these
networks operate; and illiteracy may prevent them from being able obtain or use any of the
information provided.104
Avenues for Corporate Involvement
Efforts from corporations can be critical in ensuring the success of informal sector
organizations and closing the loop on recycling. Corporations have identified purchasing
recycled materials as strategy to increase competitive edge, demonstrate environmental
leadership and enhance corporate image. Corporate demand for recycled material is growing,
however, as demand grows so do concerns over access. Because small scale and disintegrated
operations characterize the informal waste sector in many developing countries, corporations
often find it difficult to connect with waste collectors and recyclers for purchasing. Therefore,
strategies to guide corporations for global procurement serve both corporate and informal
sector needs.
Corporate partnerships: Project Phoenix
Johnson & Johnson serves as an example of a company that has succeeded in building a
partnership with the informal sector. This partnership not only expands Johnson & Johnson’s
access to recycled materials, but allows the company to engage with social sustainability for
those whose lives are touched by the company’s supply chain.
104 Gunsilius, E., et al. (2011). (p. 36)
61
Project Phoenix was born out of conversations that began in Brazil in 2009. It was then
that Johnson & Johnson decided to expand beyond its concern over the environmental
sustainability of its products to examine how it might engage with the community of people
that collects, sorts and recycles its products once they are consumed. The Futura Cooperative
was already operating a successful collection and recycling center in Sao Paulo and employing
Brazilian catadores (waste pickers). Johnson & Johnson partnered with Futura and
implemented the SA8000 certification program developed by Social Accountability
International, one of the world’s first auditable social certification standards for decent
workplaces, across all industrial sectors. The SA8000 standards are based on protecting the
human rights of workers along nine principles of socially responsible and ethical working
conditions: child labor, forced and compulsory labor, health and safety, freedom of association
and right to collective bargaining, discrimination, disciplinary practices, working hours,
remuneration.105 Partnering with experienced international development consultants, Johnson
& Johnson created a three stage training process that allowed Futura to become SA8000
certified.
This certification has produced incredible improvements in Futura’s operations. The
workplace has become safer, productivity and quality have increased thereby raising the price
Futura can demand for its materials, and in addition to their partnership with Johnson &
Johnson Futura has attracted other new investments. Johnson & Johnson has integrated Futura
into its supply chain and now purchases 100 tons of paperboard annually, which goes into the
production of their highly‐recognized Band‐Aid packaging in Brazil. Johnson & Johnson views its
105 Social Accountability International. (2012) SA 8000. Retrieved 5/01/2012 from http://www.sa‐ intl.org/index.cfm?fuseaction=Page.viewPage&pageId=1140&parentID=473&nodeID=1.
62
partnership with the Futura Cooperative as a major success, for it has enabled the company to
meet its “Triple Bottom Line”: it is using post‐consumer recycled materials, becoming socially
engaged with the catadores in Brazil, and providing economic benefits to both parties. Project
Phoenix has been met with such enthusiasm by Johnson & Johnson’s leadership and the
cooperative members that they are now looking for ways to engage more consumer goods
companies in the project. The growth of a partnership such as this has the potential to improve
waste picker livelihoods, increase the visibility of global waste and recycling efforts, and
ultimately lead to safer, more efficient, and more environmentally friendly supply chains for a
host of consumer goods manufacturers.
On‐line Supplier/ Purchaser System
Internet, mobile phones and advanced mapping technology provide great opportunities
to connect buyers and suppliers of recycled material. In Europe and North America, there are
several websites on the sale and purchase of recycled plastic, including plasticmarkerts.org, a
site used by the recycling industry in the United States and Canada. The site includes the list of
recycled materials buyers and suppliers, the price and volume, and updated reports and news
in the industry. This information sharing model could help increase the transparency of the
waste sector in the developing world.
Some initiatives to increase transparency and connect buyers and sellers are already
underway in some developing countries. In Brazil, the plastic industry has a site Plastivida,
which has a list of 735 recyclers.106 TetraPak, producer of packaging worldwide, is building an
106 Plastivida http://www.plastivida.org.br/2009/Default.aspx.
63
on‐line data system in Portuguese for the supply chain of TetraPak in Brazil. The online tool
began as an internal data collection strategy to understand the company’s own product chain,
but TetraPak recognized that it could be an asset to recyclers of many different materials.
TetraPak launched the map by partnering with 15 recyclers, and from there sought out the
collectors from whom they were purchasing. The entire system is growing and the effort has
been well‐received by collectors, brokers and recyclers who see that increased transparency
can improve their operations. Other companies could engage in similar expositions of their
supply chains.
Industry Associations and Third Party Supporters
Industry associations and third party associations often offer a great platform and
resources for corporations to expand their access to recycled materials. Organizations like
European Plastic Recyclers (EuPR), The Association of Postconsumer Plastic Recyclers,
Sustainable Packaging Coalition and Buy Recycled Business Alliance provide services for
recyclers and end consumers to understand latest developments and practices in the industry
through conferences, workshops and on‐line information updates, as well as a platforms to
connect with each other. In developing countries, although industry associations are still lacking
for the informal sector, NGOs and some organizations have rich experience working with waste
collectors and recyclers. Corporations could collaborate with these third party organizations to
carry forward their initiatives on recycled materials purchases.
64
Conclusion & Recommendations
No single framework can capture the complexity of waste collection across the
developing world. The ability of local and national governments to shape waste management
policies, the presence of absence of formal waste management enterprises and the relative
integration of the formal sector in a given location make generalizations about solid waste
problematic. Despite regional and local differences, however, there are some common trends
that can be identified across cities. Investments aimed at supporting the improvement of waste
collector livelihoods should consider these trends within the local context in order to achieve
sustainable and meaningful intervention.
Waste collectors are part of a broader informal sector that includes those who clean,
process and trade recycled material. Some waste collectors gather directly from households,
some purchase specific material from individuals and businesses, and some pick waste from
dumpsites. Though in many places collectors operate as individuals or families, in some cities
they have begun to organize with other collectors as well as with traders or processors. Such
organization efforts offer significant opportunities for improved livelihoods. Whether they are
organized as a cooperative or a SME, through integration collectors can gain access to more and
better material, can pave the way for governmental recognition, and can provide additional
opportunities to network and gain access to collaborators and advocates.
The data contained in this analysis offers a glimpse of the supply chain of waste and
recycled plastic in various locations across the developing world. Analysis of the data points to
three spheres in which collectors face challenges: financial, agency, and social. Within each
65
sphere, organization efforts can allow collectors to overcome the specific challenges and
thereby improve their livelihoods and relative position within the supply chain of waste.
Financial
Waste collectors experience many financial challenges that threaten the sustainability of
their livelihoods. Price fluctuations in the recycled plastics market are common and can be
extreme. While an actor further up the supply chain may be able to store materials until prices
increase, waste collectors often lack storage space and are therefore forced to sell their
materials in smaller volumes more frequently. As single person or family operations, individual
waste collectors are not able to control high enough volumes of material to allow them to
influence market prices. Some research implies that volume alone can attract higher prices, but
our research shows that quality and stage are equally if not more influential in setting prices.
What is clear, however, is that higher volumes can provide access to larger and more consistent
buyers.
Individually, waste collectors have little access to capital or credit with which to improve
their efficiency. Capital investment in expanded collection can often be cost‐prohibitive, but
when possible can allow collectors to increase their volume and thereby their access to more
consistent purchasers. There are also opportunities for collectors to expand into higher‐end
processing, and in fact many current traders and recyclers in Cairo began as collectors.
Obtaining the capital investment to expand operations or begin processing, however, is
difficult. If the market demand for recycled material is not yet being met, however, expansion
into further processing can be quite fruitful.
66
Municipalities and governmental agencies generally are not willing to deal with
individual collectors or small collector enterprises, therefore informal collectors struggle to gain
access to the government contracts. Such contracts, which are often given to municipal or
private enterprises, provide access to public services fees. Without access to such service fees,
informal collectors are forced to either solicit additional fees from residents or collect waste
free of charge, hoping that the value of materials they recover from the waste will cover the
cost of collection. Collectors’ profits are directly related to the quality of material they are able
to access. Whether or not waste has been sorted at the household level, purchased prior to
disposal or picked from the dump determines its cleanliness and therefore its value. Without
access to household collection contracts, many collectors are then forced to gather material
after it has been disposed of and its quality has been compromised.
When waste collectors organize, they are able to overcome many of these financial
challenges. Pooling materials with other collectors increases their market power and makes
collectors less susceptible to price fluctuations. Larger volumes can provide collectors access to
higher level buyers. In addition, pooled resources can make capital investments more feasible
and cost effective, both to support additional collection and processing. Municipalities are
more likely to contract with organized collector groups, which would give collectors access to
service fees as well as higher quality waste collected from households rather than from
dumpsites.
67
Agency
To demonstrate agency is to make choices about one’s own life, and to actively
influence one’s surroundings. In many contexts, waste collectors have been denied their own
agency. Decisions have been made about and for them, rather than with them. Waste
collectors are often not well recognized by governmental bodies, therefore policy decisions are
made without regard to their well‐being. The example of Cairo’s privatization process
demonstrates that by ignoring the contributions of the informal sector, the entire system
suffered. Service levels have declined, waste is collecting in the streets, and formal companies
are suffering financial losses within the dysfunctional system.
In some places, the fragmentation of the informal sector has contributed to the lack of
collective agency. Without cohesion, trust has been difficult to establish among collectors,
traders and recyclers. This has resulted in a system that lacks transparency and is therefore
more susceptible to manipulation from external and internal actors.
Organizing can help collectors restore their individual and communal agency. Collective
action can increase their political voice, so that governmental authorities will find it increasingly
difficult to exclude them from policymaking. Through organization that connects individuals at
various levels of the system, the entire supply chain of waste can become more transparent.
Knowledge and communication can flow more freely, and collaboration can replace
competition among individual collectors. Finally, organizing provides access to a wider range of
advocates and partners that can help amplify collectors’ voices and provide access to additional
resources.
68
Social
Numerous scholars have detailed the social marginalization of waste collectors.
Collectors labor in difficult and dangerous conditions, and their work often exposes them to
severe health and safety risks. In addition, collectors are often discriminated against and
disparaged by the public. Organization provides collectors the opportunity to reframe
themselves, and to demonstrate their social value as economic contributors and environmental
stewards. Organization can also allow collectors the opportunity to face the real health and
safety concerns in the sector and collaborate to improve working conditions.
The Challenges and Rewards of Collective Action
The evidence included in this report supports the conclusion that the best way to
improve the livelihoods of waste collectors is to invest in systems that allow them to organize,
both horizontally and vertically, to increase their capacity, strengthen their political voice and
improve their overall social inclusion. Yet simply concluding that this is the best means by
which to invest in the informal sector does not mean that it is the easiest. Distrust and
competition are common in the informal sector, which unfortunately has contributed to the
lack of system transparency and makes it challenging to move away from competition toward
cooperation. The local political and economic contexts are also extremely important when
exploring possibilities for collective action and investment. Legislation can in some cases
restrict the informal sector’s access even when acting collectively. The volume of waste and
availability of markets for recycled material varies significantly from place to place, which
makes the prospects for expanded collection, recovery and processing variable. In Cairo, for
69
example, there is still unmet capacity for the processing of plastic so an investment in
upgrading capital equipment could be fruitful. In contrast, in General Marino Alvarez,
Philippines the junkshop/trader market has already become oversaturated. Understanding the
structure of the local market is vital for wise investment.
Despite these challenges, however, there have been a number of examples from around
the world that demonstrate collective action is not only possible, but it is fruitful. Informed
investment into the social and economic organization of waste collectors can help them to
receive greater financial rewards for their work, increase their individual and collective agency,
and improve the health, well‐being and social status of their families and communities.
Future Research
This report has attempted to merge primary data collected in Cairo and Amman with
the growing body of data documenting the economics of waste collection and recycling in the
developing world. Gathering data in the informal sector is notoriously difficult, but reliable data
is necessary in order to understand the relationship between volume, price, and costs. In
particular, we encourage future researchers to explore the variations in purchase price and
capital and operating costs. As this report tried to demonstrate, price alone is not sufficient. In
order for collectors and advocates to have a complete understanding of the economics of
recycling, they must be able to evaluate the full cost‐revenue framework. Because land and
building costs are highly location specific, and because in some places local machinery can
replace the need for expensive foreign equipment, context‐specific cost‐benefit analysis is the
best way to truly discover avenues for expansion.
70
We recommend that the data presented in this report serves as a foundation for the
collection of more data in the future. In Amman, there is a clear opportunity to increase public
and scholarly awareness of the waste system. Additional data collection from the informal
sector, in conjunction with Jordanian academics who are engaged in formal sector research in
waste and environmental engineering, could prove extremely valuable. The January 25th, 2011
Revolution in Egypt has resulted in significant interruptions in Cairo’s waste management.
Circumstances are constantly changing, therefore researcher must continue to examine the
flow of waste though the system in order to address any new challenges that have emerged. In
Amman, Cairo and across the developing world, waste will continue to be one of the most
pressing public policy concerns. The informal sector is already active in providing economic and
environmental benefits to the public. Quantifying this value and creating economic
transparency in the system will allow waste collectors and recyclers to engage with the public
and private sectors as valued contributors.
71
Bibliography
El Zanaty & Associates. (2009). Baseline Study for Plastic Recycling Companies in Cairo. Cairo, Egypt: GIZ. Entity Green. (2010). Solid Waste Behaviors within the Formal and Informal Waste Streams of Jordan.
Jordan: USAID. Fahmi, W. (2005). The Impact of Privatization of Solid Waste Management on the Zabaleen Garbage
Collectors of Cairo. Environment and Urbanism. [17] Fahmi, W., & Sutton, K. (2010). Cairo’s Contested Garbage: Sustainable solid waste management and the
Zabaleen’s right to the city. Sustainability. [2] Fathy, M. (July 2011). Personal communication: Interview. Unpublished manuscript. GIZ (2008). The Waste Experts: Enabling Conditions for Informal Sector Integration in Solid Waste
Management Lessons learned from Brazil, Egypt and India. Gunsilius, E., Spies, S., García‐Cortés, S., Medina, M., Dias, S., Scheinberg, A., et al. (2011). Recovering
Resources, Creating Opportunities: Integrating the informal sector into solid waste management. Eschborn, Germany: GIZ.
Just, R., & Mitra, S. & Netanyahu, S. (2005). Implications of nash bargaining for horizontal industry
integration. American Journal of Agricultural Economics, [87] (2 May, 2005), 467‐481. Knapp, J. (1950). Cooperative Expansion through Horizontal Integration. Journal of Farm Economics, [32]
(4, Part 2), 1031‐1047. Medina, M. (2005). Wastepicker Cooperatives in Developing Countries. WIEGO/Cornell/SEWA
Conference on Membership‐Based Organizations of the Poor. Ahmedabad, India: WIEGO Medina, M. (2008). The Informal Recycling Sector in Developing Countries: Organizing waste pickers to
enhance their impact. Gridlines. Sharing Knowledge, Experience, and Innovations in Public‐Private Partnerships in Infrastructure, (44).
Moreno‐Sanchez, Maldonado (2006). Surviving from garbage: the role of informal waste‐pickers in a
dynamic model of solid‐waste management in developing countries. Environment and Development Economics [11], 371‐391.
Plastic Technology Center, Industrial Modernization Center. (2008). National Study for Plastic Recycling
Sector in Egypt. Cairo, Egypt: Egypt's Technology Transfer and Innovation Center. Samson, M. (Ed.). (2009). Refusing to be Cast Aside: Waste pickers organising around the world.
Cambridge, MA, USA: Women in Informal Employment: Globalizing and Organizing (WIEGO). Scheinberg, A., Anschutz, J., and van de Klundert, A.. (2006). Waste pickers: Poor victims or Waste
Management Professionals?. CWG ‐ WASH Workshop, 2006. Kolkata, India. [56].
72
Scheinberg, A., Simpson, M. Gupt,Y., Anschutz, J. Haenen,I., Tasheva, E. Hecke,J. Soos,R. Chaturvedi,B.
Garcia‐Cortes, S., Gunsilius, E. (2010). Economic Aspects of the Informal Sector in Solid Waste Management: Volume 1, research report, 2010. Eschborn, Germany: GIZ.
Social Accountability International. (2012). SA 8000. Retrieved 05/01, 2012, from http://www.sa‐
intl.org/index.cfm?fuseaction=Page.viewPage&pageId=1140&parentID=473&nodeID=1 Solid Waste Management Association of the Philippines. (2008). A study on Junkshops and Itinerant
Waste Buyers in General Mariano Alvarez, Cavite, Philippines The World Bank. (2012). Inflation, Consumer Prices. Retrieved 05/01, 2012, from
http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG United Nations Human Settlements Program. (2010). Solid Waste Management in the World's Cities:
Water and sanitation in the world's cities 2010. London and Washington D.C.: Earthscan. WIEGO. (2012). "Wastepickers". Retrieved 4/20, 2012, from http://wiego.org/informal‐economy/occupational‐groups/waste‐pickers
73
Appendix A: Terminology
Formal Waste Sector: Individuals or entities engaged in the collection and recycling of waste whose participation is recognized through the planning, sponsorship, regulation, contract or financial support of the government responsible for solid waste management.107 Informal Waste Sector: Individuals or entities engaged in the collection and recycling of waste without the sponsorship, recognition, support or acknowledgement of the government.108
Itinerant Waste Buyer (IWB): One who travels to collect recyclables from households or businesses. IWBs frequently specialize in a few materials and either pay residents for the items or barter for other services. Shadow Price: The calculated cost of a good or service for which no market price exists or the market price does not reflect the opportunity cost. Waste Collector: The general term used in this report to refer to all informal actors who collect waste either door‐to‐door, from collection sites, containers, streets, or dumpsites/landfill. Certain collectors retrieve all waste, then engage in sorting at home or at a transfer site. Waste Picker: One who recovers valuables that have been discarded, often collecting from streets, open waste containers or at dumpsites/landfills.
107 Scheinberg , A. et al. (2010). (p. 4‐5) 108 Scheinberg , A. et al. (2010). Economic aspects of the informal sector in solid waste management: Volume 1, research report,
2010. Eschborn, Germany.: Gesellschaft fur Internationale Zusammenarbeit (GIZ). (p. 4)