Waste Pickers - Strategies To Increase Waste Pickers Productivity

6. STRATEGIES TO INCREASE WASTE PICKERS PRODUCTIVITY Although these cases appear to describe different situations, there are certain commonalities. In this chapter I extrapolate from the cases three strategies to increase waste pickers' productivity and improve waste pickers livelihoods. The three strategies are: 1. Strengthening the internal organization 2. Adding value to materials through technology and capitalization 3. Establishing closer linkages with the public and private sector 6.1 Strengthening the Internal Organization The first of the strategies to increase productivity is to fortify the internal organization. “Organizing and training informal recyclers into small and medium enterprises is a very effective way to upgrade their ability to add value to collected materials” (Wilson, Velis and Cheeseman 2006, 800). Organizing and training waste pickers is a slow process and requires external support in terms of funding and education, for two main reasons. First, in Latin America it is uncommon for low‐level workers to operate without a boss and second, many workers lack basic business and management skills, as well as soft skills needed for commercial relationships like leadership and self‐confidence. In past decades during the initial stages of forming cooperatives, local or national NGOs and community‐based organizations took the lead in improving the working conditions of the informal sector (Wilson, Velis and Cheeseman 2006). More still needs to be done with established cooperatives. Simply because a cooperative is officially registered does not mean it is functioning at its maximum potential. The success of a cooperative depends in large part on the way it is governed and managed (FAO 2010). A common denominator among waste cooperatives is the struggle to manage the business once the cooperative has formed. Cooperative members struggle to grasp and apply the principles of self‐management, or to create a business environment without a boss (WIEGO 2009). 44 For people who have been poor and marginalized it is a cultural and a social expectation in Latin America to have a boss and rely on others for important decisions and it is especially challenging for informal workers to think in organizational terms. Training and skills development is important but so are other soft skills, for example leadership and entrepreneurship, negotiation and self‐confidence, business development, policy development and advocacy. Given the nature of these social enterprises, managers need specially adapted business training that takes into account the core values and principles particular to cooperatives such as the principle of democracy (where the maximum authority is a meeting where all members are present); mutual help (people working individually for a common purpose); equality (same rights and responsibilities for every member); equity (recognition of very member's work); and solidarity (FAO 2008). It is not enough to be able to bargain hard, as one might if operating as an individual. Leaders need the agility to bargain hard with outside buyers while building a sense of common purpose and mutual support among members. While training waste pickers, special attention must also be given to improving the social status in the community to reduce harassment, violence, prejudices and exclusions. A relatively simple way to do so is to create tangible symbols that identify waste pickers as workers. Examples are uniforms, logos and identity cards. A sign or a symbol indicating membership to an organization brings professionalism to the job and raise visibility and validity of the profession of waste pickers (WIEGO 2012a). 6.1.1. Evaluation Training is a long‐term investment, especially for waste pickers who have other jobs and a family to take care of. To be effective, training has to be tailored to the specific situation of the cooperative and of its members. 45 For example, women from Luz del Futuro have had little schooling. Many of them are not comfortable reading and writing, do not feel at ease in a classroom environment, and have very short attention spans. In their case, the training should cover a wide spectrum of teachings, from basic reading and writing exercises to topics such as business and communication. The large quantity of material, with its relative complexity, indicates that it needs to be spread over time, emphasizing the practice over the theory, with a few, simple takeaways at a time. Training members of an entire cooperative is also very challenging logistically. The women of Luz del Futuro, for example, do not have the resources or the time to move away from their home neighborhood, because they need to take care of the family. Training waste pickers requires appropriate teaching materials and financial resources only an external entity can offer. A possibility for the women of Luz del Futuro comes from Fadcanic, a local NGO whose objective is the sustainable development of the Nicaraguan Atlantic Coast. Fadcanic operates thanks to funds coming from entities like USAID, the Austrian organization for development cooperation and the Norwegian embassy to Guatemala. Fadcanic specializes in the education of indigenous and ethnic people who have low literacy rates. 6.2 Adding Value to Materials Once waste pickers are organized, the next step to improve their productivity and expand the scope of their work is to engage into processes that add value to materials, a step that the industry calls valorization. Evidence shows that the productivity of waste pickers’ cooperatives is directly correlated to their level of capitalization (Oscar Fergutz 2011). Some of the valorization activities are labor‐intensive and therefore can be easily accomplished by the workers, for example collecting, sorting and washing. However, to process more volume and add more value some level of mechanization is needed. This is why cooperatives must gain access to trucks (to expand volume collected), equipment (to squeeze more value in the 46 same unit of space) and warehouses (where the value of materials can be protected from the weather or theft) Adding value to recyclables before selling them is a way to expand the scope of waste cooperatives, increase revenue and improve livelihoods (Avina, 2008; Wilson et al, 2006). There are different methods to add value to materials:  collection of more recyclables  sorting: the deeper the sorting differentiation, the higher the value  pre‐processing: washing, shredding, compacting, bailing  small‐manufacturing craftsmanship: transforming waste into useful and affordable goods to sell to the community  trading: selling materials to the global industrial value chain. The order of these activities reflects how easy it is to perform each task. At a small‐scale operation, collection and sorting is relatively simple because it requires very few assets. The rest of the valorization activities require expensive machinery and space. At a medium or large scale, the cooperative needs a good level of technology and assets at all stages: trucks for collection and transportation, conveyer belts for sorting, machinery for pre‐processing, and storage and working space. 6.2.1. Evaluation This strategy is not as easy to implement as it seems. First of all, machinery needs to be acquired. The only viable option for waste pickers is through donations from third parties, like NGOs or municipalities. Being poor, access to credit for waste pickers is basically impossible because on average poor people pay interest rates considerably more than the rich (Banerjee and Duflo 2012). This happens for many reasons: it is very costly to collect information about the trustworthiness of the borrower, poor people are much likely to default, and 47 when they do it is a lot of work on the lender's part to enforce credit contracts. For these reasons credit to the very poor is not available (Banerjee and Duflo 2012). Microfinance overcomes some of these issues but unfortunately is of no help to waste pickers. The sum needed to purchase two or three pieces of machinery is too big; the large investment would start paying back at an indefinite time in the future and the pay‐back time period itself would be too stretched out in the future to see the benefit of such a choice (Banerjee and Duflo 2012). For all these reasons waste pickers have to rely on donations from NGOs, development banks, workers associations or state entities at the local and national levels. Second, acquiring machinery implies access to electricity, resources to pay for the energy used to operate the machinery and the skills or funds to cover maintenance costs. Moreover it is advisable to acquire one machine per type or typologyy, i.e. a truck, a compactor and a shredder. Having only one of the three does not increase value of materials or productivity. Other factors hinder the implementation of using machinery to add value to materials. For example, in the case of Green Grease, the next strategy to add value to WVO is to control for quality by measuring fat content. To measure the percentage of fat present in the oil, not only is expensive machinery needed but also chemicals in order to run the machine. In other words, waste pickers would need to learn the legal framework that allows chemicals to be handled in warehouses where people and other materials are present. Acquiring the machinery and abiding by the law might make this value adding strategy less beneficial for waste pickers. 6.3 Linking the Formal with the Informal Sector Strengthening the internal organization and access to machinery are preparatory phases to the last and most important value‐adding strategy: vertical integration with the public or private sector. Once trained and provided with the technical capacity, the cooperative is ready to establish 48 partnerships with those entities that will supply an adequate quantity and quality of recyclable materials. The most important step a cooperative can take to increase productivity is to partner with local entities in order to move up the valorization pyramid (AVINA 2008). Partnerships with local governments and municipal solid waste managers are mutually beneficial, but they are not always successful. Several factors lie at the heart of a successful partnership. This stage involves good outreach strategies to fight the competition and gain the attention of business as well as the municipality. A cooperative can be involved with many businesses and can reach many households through the municipality. 6.3.1. Evaluation However, vertical integration can be challenging to implement. Often its success goes beyond the agreement per se. For example, some sort of awareness program is needed to explain thoroughly what material is being collected and how to separate it from the rest in a way that preserves quality. Another variable that plays a great role in vertical integration is the option of centralizing or decentralizing the operations to cut transportation costs and to increase efficiency. Decentralization usually implies the construction of mini transfer and sorting stations where waste pickers can unload the vehicle several times a day. The following are some of the factors that contribute to the success of inclusive models, according to researchers. First is to analyze existing informal collection and recycling systems and build on those (Wilson, Velis and Cheeseman 2006). Secondly, a great deal of planning is necessary to bring together local stakeholders (GAIA 2012). Often, an external and independent facilitating agency is the best actor to “provide proper 49 and effective incentives for all formal and informal” parties (Wilson, Velis and Cheeseman 2006, 806). Thirdly, good governance is essential for low‐income groups to influence policy and resource allocation (Marshall and Farahbakhsh 2013). Good governance means that stakeholders need to come together with clear roles and responsibilities (FAO 2012). The government, with appropriate policies and laws, can create the right business environment, design transparent laws and regulations and support successful and innovative cooperatives with the scaling‐up process (FAO 2012). NGOs need to assist and support existing cooperatives that, compared to newly created organizations, have a strong grassroots commitment. The role of research institutions is to assess the impact of cooperatives by collecting quantitative, qualitative data and make them available to the public (FAO 2012). Inclusive models are advocated by many in the literature and there are several examples of integration with the private sector that succeeded (WIEGO 2012b) (CWG 2003). Waste cooperatives can also explore partnerships with the private sector. Examples include the steel group Gerdaus in Chile and Brazil, which has asked waste cooperatives to provide packaging collection services (AVINA 2008). The cosmetic company Natura, operating in Argentina, Colombia, Brazil and Chile has asked waste cooperatives to do the same. Another example is the partnership between Wal‐Mart and CAEC (Cooperative of Ecological Agents and Waste Pickers) from Canabrava, Brazil. Customers of the Wal‐Mart stores in the Salvador metropolitan region can use recycling stations to drop‐off recyclables which are then collected by waste pickers (AVINA 2008). .In the public sector, the most common strategy is for the municipality to support waste cooperatives in developing a door‐to‐door collection system. This particular strategy allows waste collectors cooperatives gain in terms of more volume and more quality materials while it allows the municipality to reduce its cost of trash disposal. The advantage of having waste pickers segregating recyclables at the source is their advantage of providing services in areas where the formal sector is 50 unwilling to serve, such as where the access is difficult and where fees must be lower. However, the door‐to‐door strategy is meaningful only if residents are educated in waste segregation (Clarke 2012). Often, a public awareness campaign is implemented in parallel to a source‐segregation system. The main risk of such a partnership is the creation of competition, misunderstanding and hostility between the formal and informal sector (UN‐HABITAT 2010). There is also the risk of waste pickers scattering unwanted waste on the street; in addition, waste pickers who handle handcarts can cause traffic congestion because of their low speed; city authority sometimes object to the use of such carts because of bad appearance, which gives a bad impression of the city (UN‐HABITAT 2010). Especially when it comes to door‐to‐door collection models, new attitudes and behaviors of both waste collectors and residents need to change; the former have to learn to be punctual and to professionalize their appearance, while residents have to learn how to treat waste workers as human beings (WIEGO 2012a). 51 7. RECOMMENDATIONS AND CONCLUSION In recent decades, the phenomenon of people surviving by picking through trash has received increasing attention from policy makers. Waste pickers are poor people who sell recyclables found in trash for a living. Despite the fact that waste picking brings numerous benefits to the environment, the community and the local government, the practice is limited in scale and scope. To partially solve the problem, waste pickers organized into cooperatives – a particular business model with special attention to social needs. Further strategies are necessary to dramatically improve the living and working conditions of waste pickers, with positive consequences for the environment and the local community. Forming a cooperative and being part of national and international associations is necessary but not sufficient to guarantee appropriate livelihoods to waste pickers. Nonetheless, increasing waste cooperatives’ efficiency and productivity is possible. There are a few success stories of waste cooperatives that, when empowered, provide benefits for the community while breaking the cycle of poverty. My thesis proposes three strategies to increase the productivity of waste cooperatives and allow them to capture more value added. The first strategy is to strengthen the internal organization of cooperatives by teaching them basic business skills and improving their social status. This strategy is one of the building blocks of cooperatives but it is a long‐term investment that needs to be tailored to specific needs of the cooperative in order to effective. The second strategy is technology acquisition, to reach economies of scale and boost productivity. Acquiring machinery implies high up‐front costs that cooperatives alone are unable to face: Resources from an external entity such as NGO or development banks are needed. The third strategy is to create closer linkages and vertical integration with the public and private sector. A cooperative can have one partnership with the municipality and many partnerships with local businesses. This is the best strategy in the short‐term although to work it assumes the cooperative is well established and has already access to machinery 52 (unless the partner itself can provide it). Moreover, detailed planning is required to calculate accurately costs and benefits for all parties. Depending on the status of cooperatives, different policy recommendations are needed for a sound and sustainable development of a cooperative. In order, a cooperative should achieve organizational strength first, acquisition of technology second and vertical integration last. If the right combination is offered, sometimes it is advisable to follow multiple changes at a time: for example technology acquisition and vertical integration. Supporting and empowering waste pickers is challenging, yet it is worth wile to support the triple bottom line. 53