Informal Sector involvement

Wednesday, Aug 7, 2013
Informal Sector involvement

Studies have shown that in low- and middle-income countries the resource recovery rate by the informal sector is up to three times higher than by the formal solid waste management system. Informal recyclers are also able to valorize recyclable materials at lower costs than the formal sector due to their experience and special knowledge about identifying materials and marketing them.

The carbon footprint of the informal sector is much smaller, using less fossil energy. The activities of the informal solid waste sector also create social benefits and indirect economic benefits for municipalities. Collecting recyclable materials and reselling them generates income for this mostly unskilled, marginalized group of people, who would otherwise need social assistance. Since the informal waste pickers collect their material directly from the streets, local authorities avoid collection costs, in Cairo for instance an estimated 12 million Euro per year, allowing for higher investments into other fields like transport, landfills and treatment.
While being the driving recycling force in many low- and middle-income countries, the living, working and health conditions of informal waste workers are often alarming. They belong mostly to the poorest of the poor, do not have social insurance, and are exposed to incomparable health hazards at work. Their children need to work to help their families survive and can therefore not go to school. Some companies have taken the decision to owe up to their responsibility as producers and to their social corporate responsibility. There are product stewardship initiatives on the way, where private companies work together with the informal sector to recover their own products. The informal sector benefits from this partnership by improving their working conditions and income generation, while the private sector reduces material costs, “greens” its image and in some cases better protects its brand names.
The relations between informal, public and private sector are complex when it comes to solid waste management and recycling. Though complementary in many cases, they can also compete fiercely with each other. The private and public sectors and the informal micro-enterprises often are in competition for the same materials and the same markets. Governments sometimes even restrict the informal sector’s access to those markets. It is essential to understand that all these actors are part of one big system and to try to understand how they interact with each other. If you change one of the factors, you will immediately create an impact on the whole system, since they are closely interlinked.
We would welcome your contribution with own experiences, good practices or even your suggestions and recommendations to the presented cases.
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