Integrating Informal Sector Recycling Into Waste Management - Insights From Value Chain Analysis of 3 Asian Countries

Implementing Resource Recovery and Safe Reuse
Integrating informal sector

recycling into waste management –
Insights from value chain analysis
of 3 Asian Countries
Dr. Sanjay K Gupta
Skat Consulting Ltd
In Partnership with Ocean COnservancy

Status of the Informal Recycling Waste Sector
 Around 1% of urban population of developing countries into informal sector

waste management activities – above 15 million + people across globe
 In lower-income countries, the informal sector is often achieving recycling
rates of 20 to 30% for MSW at no cost to municipalities.
 The GIZ/CWG findings corroborate what Solid Waste Management in the
World’s Cities contends: “...recycling rates of inorganic material are already
competitive with what is being achieved by modern Western systems” (UN
Habitat 2010: 207). At a far lower cost than formal waste collection
 Some cities in developing countries such as Bengaluru (28%) and Delhi
(34%) in India compare well with developed country cities such as Rotterdam
(30%), while Bamako, Mali stands out with a recycling rate of 85 per cent.
(UN Habitat 2010).
 The informal sector (and households) are highly efficient at sorting and
collecting waste when there is value in the waste
 But often ignored and despised becuase of lack of working conditions and
organizational capacity.
The informal recycling market is highly efficient at

collecting ‘high’ value waste
Informal waste workers are more efficient at finding Informal sector cost 3-5x more per tonne than MSW
value in waste for recycling than MSW services services but generate 20-25x more revenue
Revenue from
Waste recovery of total waste generated Cost per ton collected materials collected, €,
%, 2006-07 €, 2006-07 2006-07
Formal sector Formal sector
Informal sector Informal sector
30 13
Cairo 8
55
23 90
22
23
2
Pune
13 251
297
31 4
Quezon
2 48 93
0
Cairo Pune Quezon
1 Based on modeling of average estimated recovered waste with scavenger integration in 6 cities; Cairo, Cluj, Lima, Lusaka, Pune and Quezon
SOURCE: The economics of the informal sector in solid waste management, Sheinberg et al, GTZ and CWG (2011)
The value of waste-picker-collected ‘high value’

plastic waste varies ~20% by country
Average price paid for ‘high value’ plastics to informal waste pickers by small junk shops
USD per ton, 2016
Indonesia Philippines Vietnam
+23%
320
+16%
270
260 260
245
225
-29%
140
125
100
22 18
TBD
PET white PP White PE Grocery bags
Source: Team landscape analysis survey

There are four types of waste pickers, with earnings

highest, at higher waste consolidation locations Philippines
Vietnam
Average daily wage picker earnings Indonesia
USD per day, 2016
Direct collection from
1 residential/
6.48 2.93 3.75
commercial buildings
Collection during
2 hauling trips to MRFs 5.90
or landfills
+23% +118% +75%
Collection during
3 MRF/transfer station
sorting
Collection at dump- 6.55

8.00 6.38
4 sites/ landfills
Not all waste picker roles are present in all countries, e.g.,
Vietnam does not have hauler truck waste pickers
Their earnings also increase 30-50% when they have

access to non-motorized vehicles to haul waste
Comparison of daily waste picker earnings in Indonesia Non-motorized vehicle uplift by
with and without non-motorized vehicles, USD per day, 2016 country, % difference, 2016
Street collection Landfill collection Street collection
+11% Indonesia 43
10.00
Philippines 34
9.00
150
3.50 Vietnam
4.10
+43% Landfill collection
7.50
Indonesia 11
5.25
4.50 6.50
2.25 Philippines 21
4.90
Vietnam 33
3.00 3.00
With sack With non With sack With non

motorized motorized
vehicles vehicles

Conclusion
 Build improved waste management system with
inclusion of informal sector waste workers
 Develop credible data bank of informal sector
workers to properly understand their contribution
 Recognize and legitimize their work – build on the
existing system – do not dismantle it
 Partner with the formal sector
 Train them to provide both waste management
services and in recycling and processing
 Potential to improve recycling for another 15-25%
through the above measures

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Implementing Resource Recovery and Safe Reuse

Integrating informal sector

Dr. Sanjay K Gupta

Skat Consulting Ltd

In Partnership with Ocean COnservancy

Status of the Informal Recycling Waste Sector

 Around 1% of urban population of developing countries into informal sector

The informal recycling market is highly efficient at

The value of waste-picker-collected ‘high value’

Source: Team landscape analysis survey

There are four types of waste pickers, with earnings

Collection at dump- 6.55

Their earnings also increase 30-50% when they have

Street collection Landfill collection Street collection

With sack With non With sack With non

Source: Team landscape analysis survey

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