Waste Pickers Strategies to Enhance Livelihoods

Waste Pickers: Strategies to Enhance Livelihoods EXECUTIVE SUMMARY Recently in Latin America, the phenomenon of people surviving by picking through trash has received attention from artists, NGOs and policy makers. Waste pickers are poor people who sell recyclables found in trash for a living. Most are neither part of the sophisticated commercial waste management sector nor the public municipal services bureaucracy. Waste picking expanded as a profession in the mid‐twentieth century as immigrants and marginalized people could not find jobs in the formal sector and so turned to collecting and selling recyclables to make a living from the rising use of disposable goods. Despite the fact that waste picking brings numerous benefits to the environment, and to the well‐being of the community and local government, waste pickers are poor, marginalized and trapped in a cycle of low productivity. To partially solve the problem, waste pickers have organized into cooperatives, a particular business model with special attention to social needs. While this has raised income, further strategies are necessary to improve the living and working conditions of waste pickers, with positive consequences for the environment and the local community. A central premise of this policy paper is that waste pickers struggle to make a living and develop their business because the current model of waste picking is limited in scale and scope. Limitation in scale is caused by social discrimination and economic exploitation. Waste pickers are discriminated against by the community and local authorities because of their condition of poverty and the nature of the job. As a consequence they are excluded from engagement with people in neighborhoods and waste facilities in ways that might increase the volume of goods collected. When access to waste is reduced or prohibited, the livelihood of waste pickers is compromised. Moreover, waste pickers are exploited by the intermediaries of the recycling supply chain, because waste cooperatives cannot provide the desired consistency in high quality and large volume for recyclables. The limitation in scope derives from lack of capital, lack of technology and lack of access to trash. Usually waste pickers collect only one or few materials and operate only in one or few neighborhoods because of constricted capacity in transportation, processing machinery, credit, working space and limited or no support provided by the municipality. As a result, cooperatives are unable to scale up and capture value added from forward linkages. To address these problems some waste pickers have started to organize into cooperatives as a way of pooling human and financial resources to capture economies of scale and scope. This increases the visibility of waste pickers and their needs in the broader society. It also gives them collective bargaining power, allowing them to negotiate a better price for the materials, impact legislature in favor of small scale waste solutions, and better strike deals and agreements with the public or private sector. Unfortunately, this is not enough; additional changes are needed to develop the full potential of waste cooperatives. The goal of this policy paper is to identify the opportunities to raise the productivity of cooperatives through better business management, improved technology and access to more recyclable resources. It is important to empower waste pickers because their job has significant potential for social and environmental spillovers. The practice of waste picking benefits the workers by providing a source of employment for those who are very poor and received little education. It benefits the environment because more material is recycled, thus increasing the capacity of landfills and reducing water and air pollution from inappropriate disposal of waste. Waste picking also benefits the community: cleaner neighborhoods increase the standard of living while decreasing the spread of disease. Moreover the generation of employment mitigates the risk of people engaging in criminal and illegal activities. Last but not least, waste pickers reduce the cost of the municipal waste management system, essentially providing a very cheap service for the local government. The objective of this paper is to recommend strategies that empower waste pickers to improve their lives, the environment and the community they live in. Waste pickers' empowerment is possible by helping them to reach economies of scale and move up the value chain. How? By tackling three things: 1. Strengthening the internal organization of waste cooperatives by providing better business skills, management training, with particular emphasis on the core values and principles particular to cooperatives. 2. Providing the cooperative with technology that allows it to add value to materials before selling them. Examples of value‐adding activities are sorting, washing and compacting recyclables. 3. Developing vertical integration with the public and private sector to secure access to higher volume and higher quality materials, for example by entering partnerships with the local municipality or businesses. Pursuing the steps listed above allows waste pickers to improve their business skills, acquire technology and partner with the municipality or private businesses to access more and better quality recyclables. These changes let the waste pickers scale up their businesses, capture more value in their products and increase revenue for their cooperatives. The first 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 be effective. The second strategy allows waste cooperatives to reach economies of scale and boost productivity. However acquiring machinery implies high up‐front costs that cooperatives alone are unable to face: Resources from an external entity such an NGO or Development Bank are needed. The first and second strategies are necessary in order to implement the third strategy, i.e. vertical integration. Vertical integration is the best strategy in the short term but it is complex to successfully implement because a great deal of analysis, planning, and coordination is required by all parties. Empowering waste pickers improves not only their social status, but also their incomes and working conditions. In short, empowering waste pickers means supporting the triple bottom line by providing environmental, social, and pecuniary benefits. 1. INTRODUCTION How can waste pickers be more productive and therefore improve their own livelihoods? What are the strategies that allow waste pickers to increase revenue and get out of poverty? These questions were constantly going through my mind during my fieldwork research in Brazil and Nicaragua. In the summer of 2012 I had the privilege to work and observe waste pickers for the first time in Brazil. I stumbled on the project randomly; I had never heard of “waste picking” as a job and I was not very familiar with the working conditions in the informal economy either. What I found appealing was the opportunity not only to discover a world that is ignored by many but also to contribute by giving waste pickers the visibility they deserve among policy makers in democratic societies. Waste pickers are people who make a living out of collecting and selling recyclables. For three weeks, I worked closely with catadores – Brazilian for waste pickers – who were organized in cooperatives in the outskirts of Saó Paulo. It was disturbing to see these people work tirelessly collecting materials door‐to‐door or sorting huge piles of recyclables, hoping to earn enough to support their families. It was just as eye‐opening to learn about the numerous difficulties that waste pickers face in performing their job. Lack of technology and access to credit, poor bargaining positions with buyers, combined with the ambiguous and inconsistent support by the local municipality, hinder cooperatives' current and future business operation. It seemed to me waste picking fills an important niche market, yet too many constraints inhibit their current business model. What could be done to solidify waste pickers' business and, consequently, to improve their working condition? A few months later, I was in Bluefields, a town located on the Caribbean coast of Nicaragua, working with a young waste cooperative formed solely by women. Where the Brazilian cooperatives 1 are fairly established and developed, this Nicaraguan cooperative was struggling to keep the pieces together. The women were dealing with many issues related to the internal organization of the cooperative. The underlying problem was that the women were struggling with understanding their rights and responsibilities within the organization; in other words, to master the difference between working individually and working in a group. They were having trouble working as a team to achieve a common goal. As a consequence, their business was not prosperous and they were desperate to make more money. Again, I asked myself what kind of policies and practices could help the pepenadoras make a better living with waste picking. The reason for my interest towards this profession is that waste picking lies at the heart of sustainable development. Its challenges and opportunities affect “the triple bottom line” of sustainable development, an agenda that factors in income, the environment and the social value when considering the merit of a project. Waste pickers' work benefits the local community by creating jobs in high‐unemployment areas. The generation of employment also mitigates the risk of people engaging in criminal and illegal activities. Waste pickers' work benefits the municipality because they provide what is sometimes the only recycling program alternative to landfilling, while providing a cheap service for the municipality. The work of waste pickers benefits the environment by extending the life of landfills and supplying a stream of recyclables that diminishes demand for raw materials. Cleaner neighborhoods increase the standard of living in communities while decreasing the risk of spreading diseases. These qualities become even more valuable when put in the global framework of current ongoing trends. Population growth and urbanization is putting and will put more and more stress on urban developments, the environment, and the demand for raw materials. Although waste picking is a market‐driven activity, it is not a prosperous one. Because waste picking has the potential for considerable positive social and environmental spillovers, policy 2 intervention is needed. The goal is to identify strategies to make waste picking a profitable economic activity, which in turns make the positive social and environmental spillovers visible and significant. Some NGOs are currently helping, including WIEGO, Inclusive Cities and Avian as well as other intergovernmental institutions such as the Inter‐American Development Bank (IDB) and the United Nation Development Program (UNDP). This paper intends to provide a framework for NGOs to help waste pickers in their struggle to develop a sustainable business model with great social and environmental impact for the local community. Chapter Two gives an overview of waste picking in Latin America. It gives background information on about the people who are waste pickers, how they are organized at the local and international level, how significant their work is compared to official municipal collection systems, and about how they fit within or are excluded from societies in ways that both undermine their self‐ esteem and reduce their incomes. Chapter Three analyzes the obstacles waste pickers face in their operation as well as in their attempt to further their enterprises. Waste pickers’ productivity is constrained by factors internal to their groups such as lack of education and skills, as well as barriers erected by municipal and national governments. Chapter Four applies the theoretical analysis to the fieldwork I conducted in Brazil and Nicaragua. The case of Green Grease in Brazil demonstrates the importance of municipalities in providing access to waste as well as the complexity of sharing facilities for processing waste oil. The case of Luz del Futuro in Nicaragua highlights the importance of strengthening the internal organization of the cooperative by building management skills. Chapter Five extrapolates lessons from the cases and presents strategies to enhance waste pickers' productivity. It offers three promising strategies to raise waste pickers’ productivity: strengthening the internal organization, providing access to technology and credit, and vertical 3 integration through cooperation with the municipality. How relevant each strategy is depends on the particular characteristics of each cooperative. The conclusion offers suggestions for assessing needs and applying these policy tools to cooperatives in Latin America. 4 2. WHO ARE WASTE PICKERS? The terms waste pickers, waste collectors, waste workers and recyclers refer to people who make a living by selling recyclables found in trash. They are found in the city streets, in the dumps and even on the municipal trucks that collect and transport waste to disposal locations (Wilson, Velis and Cheeseman 2006) (Scheinberg, SPies, et al. 2011). Although some waste pickers work alone, the field is dominated by family and micro‐private enterprises, women, kids and elderly included. There are families who have been waste picking for generations, others who start because they cannot get a job elsewhere (Wilson, Velis and Cheeseman 2006) (WIEGO 2012b). The appeal of waste picking comes from low barriers of entry and decent profit margins: Waste is easy to access and it is always valuable. Thus, waste picking is the preferred job option for immigrants, marginalized groups, uneducated people and minorities (Wilson, Velis and Cheeseman 2006). Other individuals who do not fall into those categories also become waste pickers in cases of unemployment due to economic downturns (Schamber n.d.). Particularly as Latin Americans have increased their use of disposable bottles and packaging, the sector offers many work opportunities. It is hard to quantify how many people survive as waste pickers in Latin America and the Caribbean, as data show that they are anywhere between 500,000 and 3.8 million people in the sector (IBD, AIDIS, PAHO 2010) . Nonetheless, the different names for waste collectors in Latin America are witness to the size of the phenomenon; cartoneros, buscabotes in Mexico, pepenadores in Nicaragua and Panama, basuriegos, cartoneros, traperos and chatarreros in Colombia, chamberos in Ecuador, catadores in Brazil, buzos in Costa Rica, cirujas in Argentina and others like recuperadores, recicladores, clasificadores, minaderos and gancheros (Wilson, Velis and Cheeseman 2006) (Oscar Fergutz 2011) (WIEGO 2009). 5 2.1 Hurdles Presented by the Informal Economy and Discrimination Waste pickers are a vulnerable population for two main reasons: they operate in the informal economy, which means they do not enjoy legal and social protection; and they undergo systematic humiliation and discrimination because of the nature of their job. Waste pickers work in the informal sector. In the informal economy, the working poor are often unable to work their way out of poverty. Earnings are low while costs and risks are high due to several constraints: lack of productive resources and economic opportunities; lack of economic rights (as workers and producers); lack of social protection; lack of organization and lack of political representation (WIEGO 2012c). In the informal sector of waste, activities are labor intensive and characterized by low technology (CWG; GIZ 2011). Workers often lack the education and skills to adopt more sophisticated technology or they lack access to credit to buy equipment. From an economic standpoint, informal sector activities are not registered or taxed or reported (Scheinberg, SPies, et al. 2011). Moreover they are not organized, sponsored, financed or recognized by the formal sector of waste management, where the formal sector is represented by the municipal waste management system, whether public or private (CWG; GIZ 2011). Skirting the rules and costs of the formal sector yields mixed results, as municipalities and municipal workers often shun waste pickers, denying them access to the formal waste stream and to social services. Not only do waste pickers lack legal and welfare protection, they endure humiliation, harassment and exclusion because they work with trash (Scheinberg, Value Added: Modes of Sustainable Recycling in the Modernisation of Waste Management Systems 2011). The nature of the job, with its stereotypes and prejudices, is used as an excuse to leave out waste pickers from any sort of waste management decisions (Scheinberg, Value Added: Modes of Sustainable Recycling in the Modernisation of Waste Management Systems 2011). 6 One reason for exclusion lies in the unpleasant characteristics of the occupation. The dirtiness of the tasks involved in waste picking affects the status of the workers. Scavenging through rubbish is clearly a very unclean job, with strong visual and olfactory impact. Too often though feelings associated with trash are transposed onto the people handling it. As a result of ignorance, many stereotypes and prejudices are created and used as an excuse for discrimination. Discrimination and low social status leads to harassment and humiliations towards waste pickers, which additionally burdens their own self‐esteem. In many situations, discrimination and exclusion lead to the same outcome: no waste access, as workers are barred from entering wealthy neighborhoods. Without waste access the livelihood of waste pickers is disrupted, their primary mean of subsistence is taken away (Scheinberg, Value Added: Modes of Sustainable Recycling in the Modernisation of Waste Management Systems 2011). A waste picker once said: “It is the status that we want to change, not the profession itself” (WIEGO 2012a, 14). The literal and perceived dirtiness of their job affect the status of waste pickers, who then get excluded and discriminated against by the rest of the population as well as local authorities. Although in Latin America as well as the rest of the developing world, waste pickers form the base layer of most recycling activity, waste pickers are unrecognized stakeholders of local waste management activities (Scheinberg, Value Added: Modes of Sustainable Recycling in the Modernisation of Waste Management Systems 2011). 2.2 Waste Pickers Recycle More Than the Local Official Waste Management Sector Despite the difficulties encountered by operating in the informal sector, and despite the additional burden of stereotypes about working with trash, evidence from the literature shows waste pickers recover and recycle much more material than the local official formal sector of waste management (Wilson, et al. 2012) (Scheinberg, SPies, et al. 2011). Table1. Material recovered from waste entering the system by sector 7 City Country % recovered by % recovered by Total % materials Proportion formal sector recovered overall recovered by informal sector informal sector (informal/total) Belo Horizonte Brazil 0.5 1 1.5 67 Canete Peru 1 11 12 92 Managua Nicaragua 3 16 19 84 (Adapted from Figure 6 and table 6 of (Wilson, et al. 2012)) There are two major takeaways from Table 1. First, in developing countries the material recovered, in other words the material that is prevented from being landfilled, is very low, from 2 to 20% in the cities examined. Secondly, most of the material is recovered via informal channels (Wilson, et al. 2012) (Scheinberg, SPies, et al. 2011) (CWG; GIZ 2011). With their work, waste pickers provide a cheap service for the local municipality. The municipality usually has an official waste collection system in place, which operates at a loss and recovers only a small quantity of recyclables. Conversely waste pickers recover a high percentage of recyclables and their business is economically sustainable. Moreover, many Latin American cities have found it difficult to promote mechanized collection. In the future, waste management will be a major challenge because of industrialization and urbanization. Thus collaboration between the formal and the informal sector is desirable under what is known as integrated waste management system. For most municipalities the primary aim of the Solid Waste Management system (SWM) is to protect public health; the priority is service provision, that is waste removal and waste collection, often with open dumping as the only disposal method available (Marshall and Farahbakhsh 2013) (Wilson, Velis and Cheeseman 2006). “The cities of many developing countries face two major problems in managing their municipal solid waste (MSW), namely insufficient collection and 8 inappropriate disposal” (Medina 2005, 390). The formal sector faces high operational costs, since the labor costs are high and the quantities recovered are small. Thus it does not achieve high recycling rates. On the other hand, the informal sector activities are solely market driven, based on adding value and trading (Scheinberg, SPies, et al. 2011) (CWG; GIZ 2011) (Wilson, Velis and Cheeseman 2006). These different underlying incentives explain the miserable failure of the formal sector and the partial success of the informal sector. The latter compensates high operational costs with high revenue from materials, which almost always results as a net benefit (CWG; GIZ 2011). 2.3 Threats to Waste Pickers: Waste Sector Modernization and Privatization With rapid population growth and urbanization, “waste collection services seem to fall further and further behind” (CWG 2003, 1). More urbanization and advanced economic development lead to a higher volume and higher complexity of solid waste, with the consequence of higher solid waste management costs (Ahmed and Ali 2004). Thus it is going to be more and more difficult for local municipalities to find the resources, knowledge and skills needed to tackle the issue. Currently two trends seem to be prevalent in developing countries: privatization and modernization of the waste sector. They are closely tied together because often one implies the other and vice versa. National governments are opting more often for private solutions for their waste management problems. Privatization adds new, often large, competitors to the waste sector, and essentially transfers resources from a public to a private domain (WIEGO 2012a). Waste pickers feel threatened because big private corporations are biased towards technology‐intensive systems that potentially limit access to waste and negatively impact the environment (WIEGO 2012a). Commercial recyclers tend to gather the most valuable waste, leaving low value, scattered litter to pickers. A waste picker once said: “The threat is the private companies that want recyclable 9 materials to make a profit out of it, while we – the waste pickers – remain with their problems” Maria Ortiz, Santa Cruz, Bolivia (WIEGO 2012b). International donors such as the World Bank and the IDB have pressed Latin American countries to clean up unsightly, unhygienic landfills and, in some cases, to adopt waste‐to‐energy schemes. When it comes to technological innovation in the waste management sector, the disadvantage of such ‘progress’ is the risk of high‐tech bias (CWG 2003). Evidence shows that often stakeholders opt for modern waste management solutions that are technology‐intensive and reduce labor cost. In the majority of cases, this approach excludes the informal sector in the decision‐ making process, often leaving them out of long‐term projects all together (CWG 2003). Studies show that “expensive technologies create reverse institutional and systemic linkages that drive out the informal sector in order to pay for themselves” (CWG; GIZ 2011). Marshall (2013) provides a great description of the phenomenon: “..donor biases exist towards certain technical approaches or insistence on the use of equipment that supports their own export industries; the scale at which donors work is often inappropriate for local conditions; either too small, without sufficient consideration for various larger contexts, or too large for a particular situation; coordination issues arise between donors from different countries, which may be competing for contracts, and within countries as development agencies work at cross‐purposes; and donors without the time or political will to produce locally appropriate results opt for large, technical interventions rather than small‐scale, context appropriate approaches, since they are easier to understand, finance, and monitor.”(p.8) This process is ongoing in many cities in Central and South America. The most controversial cases of closing and converting landfills into energy plants are La Chureca in Managua, Jardim Gramacho in Rio de Janeiro and Bordo Poniente in Mexico City. For example, in December 2011 Mexico City closed its biggest landfill, Bordo Poniente, after 27 years of life. The city contracted a consortium of Mexican and Spanish companies to build a waste‐to‐energy plant on the site with the 10 aim of producing and selling energy to Mexico City. Over 1,500 families of pepenadores and recicladores lived on the landfill and based their livelihoods on waste. They were excluded from the decision‐making process and to this date it is unclear what form of benefits or compensation they will receive once the plant is operating (Malkin 2012). 11 3. WASTE PICKERS RESPOND TO DIFFICULTIES AND THREATS BY FORMING COOPERATIVES 3.1 Waste Pickers Organized Into Cooperatives, Labor Unions and NGOs “The first step to overcome poverty and to securing the livelihoods of informal workers is to be organized, as evidence from the ground suggests” (Dias 2012, 3). If waste picking as a profession is fairly old, the idea of organizing waste pickers into cooperatives is fairly new. Worldwide cooperative organizations bring many benefits to their members. Waste pickers cooperatives have started ad hoc labor unions, national movements and international organizations to give voice to their concerns and have their voices heard. Non‐Governmental Organizations (NGOs) operating worldwide support waste pickers further by creating platforms for knowledge sharing though reports and online documentation. With some exceptions, in Latin American waste pickers initiated collectives and cooperatives at the end of the 20th century (WIEGO 2012b). Instead of working individually, waste collectors started operating as groups, realizing that membership‐based organizations bring many advantages with regard to working conditions. Some of these benefits enable waste pickers to gain access to waste, access to work and storage space, increased collected volume and increased bargaining power with the middleman. Moreover collectives of waste pickers can more effectively express their needs and concerns to the local municipality and advocate for supportive policies (WIEGO 2012b). In recent decades, waste pickers have organized at city, national and international levels. Every stage is an opportunity for waste workers to identify and discuss opportunities and threats to their occupation (WIEGO 2012a). A small local cooperative, for example, is unlikely to challenge international donor support for landfill modernization, while international organizations offer little help in dealing directly with local municipal waste agencies. The degree of organization varies across cities, countries and continents. Nonetheless, there are a few milestones that are worth noting. Across Latin America, Colombia is the country where waste pickers were first recognized by the government as a political force in the 1990s, followed by 12 Brazil. The oldest movements of waste pickers’ cooperatives include the Colombian Asociación de Recicladores de Bogota (ARB) and the Brazilian Movimento Nacional dos Catadores de Materiais Recicláveis (MNCR), both created in the early 1990s. Soon other countries such as Argentina and Uruguay followed (WIEGO 2009). Waste pickers from all over the continent met in Brazil for the first Latin American Waste Pickers Network (LAWPN) in 2005. The mission of LAWPN consists of raising awareness on the social, economic and environmental benefits brought by waste pickers, advocating for waste picker‐ inclusive national and local policies, strengthening waste pickers' organizations and facilitating knowledge sharing (WIEGO 2009). Besides LAWPN, many other entities work with waste pickers to achieve the same mission: Women in the Informal Employment Globalizing and Organizing (WIEGO), Global Alliance for Incineration Alternatives (GAIA), the Avina foundation, Inclusive Cities, Ciudad Saludable, and the Collaborative Working Group on Solid Waste Management in Low‐ and Middle‐Income Countries (CWG), to name a few. Although Latin America has been the world pioneer of multi‐strata waste pickers’ organization for scale and scope, more needs to be done organizationally. National and regional movements need to be more inclusive, more transparent and less corrupt (WIEGO 2012a). The ultimate purpose is to acquire a significant voice to change legislation at multiple levels in favor of waste pickers and waste cooperatives. 3.2 Why a Cooperative Structure? “Co‐operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.” ‐ Ban Ki‐moon, UN Secretary General at the inauguration of the International Year of Cooperatives (2012) 13 According to the International Cooperative Alliance “a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise” (Ki‐Moon 2012). This section examines the advantages enjoyed by workers who organize into cooperatives. 3.3 Benefits of Cooperative Organizations Because of its particular structure and philosophy, the business model of cooperatives is the ideal starting point for small producers. Cooperatives allow small businesses to overcome many constraints while enjoying several strategic advantages. Cooperatives allow small producers to take advantage of market opportunities; they constitute the perfect environment for small producers to develop and acquire needed skills; they help develop a stronger local community; and in certain cases they even carry out tasks normally done by the government. The structure of cooperatives is different than other small enterprises because it puts the people before the business. In a cooperative, the workers or producers of the organization are also the managers and the owners of the organization (WIEGO 2012c). The principles according to which cooperatives operate are: democratic control by members, transparency to members, promotion of solidarity, concern for collective benefits and independence from other entities (WIEGO 2012c). When working individually, small producers face several difficulties that hinder the economic activity and, as a consequence, social development (FAO 2012). Constraints such as limited access to markets, to high‐quality inputs, to loans and to transportation reduce the scale and scope of small businesses (FAO 2012). Cooperatives enable members to take advantage of market opportunities and mitigate the negative effects of economic shocks and crises (FAO 2012). As part of a collective, members “participate in production, profit‐sharing, cost‐saving, risk‐sharing and income generating activities” that boost bargaining power in the market place (FAO 2012, 4). By pooling human and financial 14 resources, cooperatives are able to offer members several services: information, communication, input and output markets, technologies and training that reduce transactions costs and improve services and prices (A.Zeuli and Cropp n.d.)(FAO 2012). This increased access creates the right environment for small producers to develop and acquire new skills. Cooperatives members are essentially entrepreneurs who need to develop the flexibility and the mindset required to grow the business as well as to adapt to changing markets (FAO 2012). Moreover, cooperatives constitute a powerful setting to voice the concerns of small producers, thus gaining visibility and influencing the policy‐making process (FAO 2012). Cooperatives not only improve the lives of their workers, they also help develop the local community. Well‐established cooperatives are more likely to retain and create local jobs, invest in the local community and provide community leadership (FAO 2012). They are also more likely to forge relationships with other economic actors or Public‐Private Partnerships (PPP). In certain communities, especially in rural areas, cooperatives help replace goods and services that are normally provided by the government such as waste collection, health care, education and public housing (FAO 2012). 3.4 Benefits of Cooperatives Operating in the Waste Sector In the waste sector the main advantage is that cooperatives sell more volume for better prices. Additional advantages come from the ability to negotiate formal agreements with local authorities, partner with local entities, and voice interests and concerns to change local and national legislation. Last but not least, waste cooperatives are better equipped to fight threats. In the informal economy, the general rule is that the more organized, the less vulnerable workers are to exploitation. With specific reference to the waste sector, the more organized the more workers are capable of adding value to the raw materials they collect (Wilson, Velis and Cheeseman 2006). 15 For waste pickers the difference between working individually and working as a group is huge. The most immediate benefit derives from selling the recyclables as a group, because selling materials in bulk allows for better prices and thus increases revenues (WIEGO 2012b). To capture even more value, sometimes multiple cooperatives from a region form networks to sell materials as a group. In this way, cooperatives combine the materials to gather even larger quantities to sell at higher prices to bigger buyers (WIEGO 2012b). For example, in Brazil in the city of Belo Horizonte, nine cooperatives formed the network called Cataunidos, which opened the first plastic factory run by waste pickers in Latin America. The factory produces plastic pellets that are then sold to manufacturers. The hope of Cataunidos is to close the loop by manufacturing hoses and buckets from the plastic pellets (WIEGO 2012b). When organized into collectives, waste pickers can better express their needs and interests to third parties. Since waste workers have organized into cooperatives, labor unions and national movements, they have been able to change national constitutions and laws that legally recognize waste pickers as workers. These changes enabled waste pickers to participate in social security systems for pension and health care and in many cases new laws providing legal access to waste (WIEGO 2009). Emblematic is the case of Buenos Aires: “Formed in 2005, the Movement of Excluded Workers (MTE) is the group with the most members (2,500). The city government provides the cooperative with buses and trucks to transport workers and the recyclable materials, plus a monthly incentive of A $900 (US $209) for each member, which is on top of what is earned through the sale of products. Workers also receive health insurance, risk insurance, and uniforms. Finally, the cooperative has a child care center as part of their fight against child labor, financed both by the MTE and the city and national governments” (GAIA 2012, 78). Additionally, organized waste pickers have increased leverage to negotiate formal agreements with local municipalities, thus gaining inclusion in the formal sector. Waste pickers working in collectives can put pressure on a municipality to donate certain resources necessary for waste 16 cooperatives to operate. Municipalities' contributions are very important and usually involve the donation of a working space such as warehouses, paying utilities or rent on behalf of the cooperative, or sometimes even the donation of machinery. For example, in Argentina ”waste management legislation, the official recognition and inclusion of cartoneros in the waste management legislation, the creation of an agency within the government dedicated to cartoneros, the extension of alliances with local and international organizations and companies, and a dramatic increase in the budget allocated to cartoneros (according to a local source, in 2007 the city government allocated US $300,000 to grassroots recyclers; by 2008 it reached US $30 million)” (GAIA 2012, 78‐79). Organized waste workers can also more easily enter agreements with international organizations and NGOs to attract economic and technical resources (IBD, AIDIS, PAHO 2010). Not only is it easier for waste pickers to gain support when organized in collectives, but they are also better equipped to fight threats. Many threats menace the profession of waste pickers, including privatization of the sector, incineration and corruption (WIEGO 2012a). From an individual and personal perspective, waste pickers agree that being part of a collective has improved their lives. “Some have gone from homelessness and illiteracy to taking on leadership roles that have given them the chance to speak at conferences around the world” (WIEGO 2012b, 5). Despite great achievements, many waste pickers feel the need to do more. Even though cooperatives have great potential to improve waste pickers' life, not all waste pickers' cooperatives across Latin America enjoy the same achievements. A major factor is the presence of a regulatory framework that recognizes waste pickers as stakeholders with the ability to assume legal and institutional commitments (IBD, AIDIS, PAHO 2010). This is the principal reason why Brazil and Colombia are two countries where waste pickers associations are strongest and where the formalization of relationship between formal and informal sector is most advanced (IBD, AIDIS, PAHO 2010). 17