The Sustainability of Global Waste

Trade

Introduction
The global waste trade is the international trade of waste between countries for further
treatment, disposal or recycling, the flow of waste being generally from developed countries
to developing countries. The formation of this trade industry began with a simple economic
principle: waste is produced daily and needs to be treated. As there are some types of materials
that can be recycled and resold for profit, a waste-recycling industry became a necessity.

In 1991, Lawrence Summers, former President of Harvard University and Chief Economist of
the World Bank, issued a confidential note openly arguing for a global waste trade. The memo
stated:

"I think the economic logic behind dumping a load of toxic waste in the lowest-wage
country is impeccable and we should face up to that… I’ve always thought that countries
in Africa are vastly under polluted; their air quality is probably vastly inefficiently low
compared to Los Angeles… Just between you and me shouldn't the World Bank be
encouraging more migration of the dirty industries to the Least Developed Countries?"

This posed the question whether it would be advisable to dump toxic waste in countries with
low wages and low population densities. Low population density implies that the number of
people affected by environmental risks is small, and that poor incomes result in a low
willingness to pay for environmental quality or—to put it the other way around—high degree
of tolerance to environmental hazards. In a way, this situation can be regarded as both an
economical and environmental gain for both parties.

On the other hand, critics of global waste trade claim that lack of regulation and failed policies
have allowed developing nations to become toxic dump sites for hazardous waste. The latter
is produced mainly in developed countries, especially in the US and European nations. The

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ever-increasing amount of hazardous waste being shipped to developing countries increases

the disproportionate risk that the people in these nations face, such as poor health and
environmental pollution.

Background Information

Current Situation
The global waste trade is a multi-billion dollar industry. The United Nations Commodity Trade
Database recorded that world’s plastic waste export and import in 2020 was valued at USD 2.5
billion and USD 2.3 billion respectively. In 1993, the global plastic waste market accelerated
rapidly, with China importing almost half of the produced waste for processing and disposal
in the period between 1988 and 2016.

Waste is classified by taking into consideration: its state (solid or liquid), the material (plastic,
paper, metal, etc.), and its dangerousness (hazardous and non-hazardous waste). In global
waste trade, the majority of traded materials are non-hazardous, and mostly consist of
plastics, ferrous and some non-ferrous metal scraps.

Currently, the hazardous waste trade is regulated under the Basel Convention on the Control
of Transboundary Movements of Hazardous Wastes and Their Disposal, which states in
Article 4 clause 2.e to:

“Not allow the export of hazardous wastes or other wastes to a State or a group of States
to an economic and/or political integration organisation that are Parties, particularly
developing countries, which have prohibited by their legislation all imports or if it has
reason to believe that the wastes in question will not be managed in an environmentally
sound manner, according to criteria to be decided on by the Parties at their first meeting”.

According to this convention, the transboundary movement of hazardous waste can take
place only if: both parties (the exporter and the importer) agree upon the trade and the disposal
of waste is judged as environmentally safe. As for non-hazardous waste trade, importing
countries have the right to send the waste containers back to the exporter if they detect any
kind of waste smuggling (mixing in non-recyclable or hazardous materials).

Case Studies

China’s National Sword Policy and e-Waste

Since 1980, China has been the world‘s largest importer of recycled paper and plastics.
Between 1995 and 2016, Chinese imports of recyclables grew tenfold, from 4.5m to 45m tonnes,
and since 2007, recyclables have been one of China‘s largest import categories. “National
Sword” (or “Green Sword”) is a policy which bans the importation of certain types of solid

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waste and indicates the contamination limits on recyclable materials. This means that China
will not accept shipments that are either mixed with trash, wrong type of recyclable, or low-
quality recyclables like greasy paper. The policy was promulgated in July 2017, with the ban
officially beginning on January 1st , 2018. China‘s policy has impacted the global market for
recyclable material noticeably: by stopping the importation of billions of tons of waste,
developed countries faced problems relating to logistics (storage and disposal of waste),
economics, and environmental protection.

For instance, hundred tons of e-waste (e.g. computers, televisions, internal components of
tech devices, etc.) are produced each year in the USA and later exported to developing Asian
countries. The main reason for the increased export of e-waste is that the estimated disposal
cost for a developing country ranges between US$2.50 to US$50 per ton compared with the
cost of US$100 to US$2,000 per ton in OECD countries.

Khian Sea Incident

An example of incinerator ash being dumped onto the Global South from the Global North in
an unfair trade exchange is the Khian Sea waste disposal incident. Carrying 14,000 tons of ash
from an incinerator in Philadelphia, the cargo ship, ‘Khian Sea’, was to dispose of its waste.
However, upon being refused by The Dominican Republic, Panama, Honduras, Bermuda,
Guinea Bissau, and the Dutch Antilles, the crew finally dumped a portion of the ash near Haiti.
After changing the name of the ship to conceal its identity, Senegal, Morocco, Yemen, Sri
Lanka, and Singapore still banned the ship’s entry. Upon several rejections, the ash is believed
to have been disposed of in the Atlantic and Indian Oceans. Following this disaster of handling
hazardous waste, the Haitian government banned all waste imports, by also leading a
movement to denounce the disastrous consequences of this global waste trade.

India’s Importation of Paper Waste

One kind of waste that has been traded world-wide is paper. It is found that developing
countries are net importers of waste paper and developed countries are net exporters. In 1993,
India was ranked as the 17th largest producer of pulp and the 20th largest producer of paper
in the world. The consumption of paper in India is still low, but the rapid urbanisation and
industrial development is expected to increase the consumption of paper and paper products.
India is a net importer of waste paper, because the country is effective in the utilisation of it.
The usage rate of imported paper waste is higher than the use of domestically produced pulp,
since the longer fibres in the recycled paper results in higher quality paper. The share of paper
with a base of wood pulp declined from 65% to 49% over the period 1985 to 1992. At the same
time, the share of waste paper rose from 13% to 22%. This change (the use of more waste paper
than wood pulp in the Indian paper production) has had positive impacts on the environment,
decreasing both water consumption and the amount of solid waste produced.

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Waste Pickers in Vietnam

Ho Chi Minh City in Vietnam is a typical example of the growing problem of waste
management in a developing country. Like in many other countries, municipalities are
responsible for the disposal of waste; its employees clean the streets and transport the waste
to suburban dumps. Parallel to this formal sector, waste-pickers, itinerary buyers and
shopkeepers, collect and sell recycled waste. The formal and the informal sectors can work
together effectively. For example, by letting waste-pickers collect the valuable waste out of
garbage-bins (these placed around town by the municipality), what is left in them is just non-
recyclable waste, thus easing the sorting and disposal of waste operated by municipal waste
collectors. To sum up, the waste recycling industry in Ho Chi Minh City makes an important
contribution to the urban environment and also to the economy.

Possible Solutions
➔ Encouraging changes to regulation and infrastructure in order to achieve equitable
exporting and importing to and from nations;
➔ Investigating the waste industry with a focus on possible corruption and fraudulent
practices;
➔ Supporting developing countries to put in place stricter laws on the disposal of waste
while building up the right infrastructure to be able to sustainably manage solid waste;
➔ Urging developed nations to build up infrastructure at home to manage as much waste
as they can;
➔ Providing more domestic waste processing facilities;
➔ Requiring waste operators to perfect their waste tracking system, by also conducting
due diligence prior to the exportation of waste;
➔ Prohibiting the use of unnecessary single-use plastic by multinationals gradually, and
developing alternatives based on systems of refill and reuse;
➔ Increasing the recycling rate;
➔ Minimising plastic packaging and producing goods that can be easily disassembled or
reclaimed and remanufactured;
➔ Organising awareness campaigns for consumers (of all ages) to be smarter in what
they choose to purchase and discard.

Sources & Useful Links

Sembiring, M. (2019). Global Waste Trade Chaos: Rising Environmentalism or Cost-Benefit
Analysis?. NTS Insight, no. IN19-02

UN Comtrade Analytics

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Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and

Their Disposal (1992)

Willén, J. (2008). International Trade with Waste: Do developed countries use the third world
as a garbage-can or can it be a win-win situation? (Thesis). Uppsala University Department of
Economics

Al-Ademi, R. (2020). The National Sword Policy of China and its Effect on Global Policy. (Term
paper). Social Sciences University of Ankara, Department of International Relations

Rauscher, M. (1999). International Trade in Hazardous Waste, Thünen-Series of Applied

Economic Theory - Working Paper, No. 19, Universität Rostock, Institut für
Volkswirtschaftslehre, Rostock

Global waste trade (2022)

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Intellectual Property Rights on Life-Saving

Medications and Drugs

Introduction
The right to own property is often classified as a human right. It is at the basis of individuals’
and societies’ advancement in order to reach their maximum potential. Yet when it comes to
pharmaceutical research and development (R&D), this system does not work, causing major
problems to humanity. Part of the problem is that the process of researching and patenting
new medications is largely carried out by private firms, thus leading to a strong reduction in
access to these medications by the general population.

Definition of Key Terms

Intellectual property: intangible property resulting from the creation of the mind (inventions,
artistic works, names, symbols, chemical compositions, etc.);

Patent: a government licence giving an individual or a company the exclusive right to make,
sell, or use an invention for a limited period of time (after which it expires);

Patent infringement: the violation of a patent without the permission of the patent owner (i.e.,
stealing other people’s intellectual property);

Commercial drug (also brand-name drug): a medication whose chemical composition is

protected by a patent and is under a trademark;

Generic drug (also generic): a medication whose patent expired and which is sold without a
brand name;

Life-saving medication (also essential medication): a drug that, if not used or taken properly
in emergency situations, could cause a patient’s death;

“Big pharma”: colloquial name for big pharmaceutical companies;

Licence: with licensing, a patent owner can allow somebody else to use their patent in
exchange for money.

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Background Information
Nowadays, most research on new medications is carried out in private laboratories on behalf
of big pharmaceutical companies. When they discover a new drug, they trial it on patients and
if it proves effective and harmless, they apply for a patent and then sell it on the market.

Patents allow private individuals and companies to claim intellectual property (IP) on new
medications and drugs. If they obtain the patent, no other company can copy their product
and sell it legally. If somebody tries to copy a patented product, the patent owner can sue for
patent infringement. In this way, people and companies can profit from their own inventions
and discoveries.

In other words, a pharmaceutical patent is a public policy instrument which provides a

monopoly on that specific medication, thus economically benefiting the patent owner (the
pharmaceutical company): they can freely set the price for their product and they will be able
to profit from its sale for a number of years, until the patent expires. In return, the benefit for
society at large is that companies, in their pursuit of profit, are pushed to research and develop
new and better medicines.

However, the patent system may make many drugs less accessible to lower social classes or
to less economically developed countries. This is because companies want to make the most
out of their investments in research, and will sometimes set extremely high prices.

This system is also vulnerable to unscrupulous investors. Patents for medicines can be bought
and sold, and in 2015, “Pharma Bro” Martin Shkreli famously bought Daraprim, a life-saving
medication used for treating seizures and pneumonia related to HIV. He increased its price
from $13.50 to $750 overnight. He was later arrested and convicted on fraud charges.

Another problem is the difference in the number and quality of infrastructures and skills
dedicated to medical research within the less economically developed countries. Their
governments cannot afford to make large investments due to the poor development in this
field. This means that hospitals and healthcare providers in these countries have no choice
but to buy drugs from “big pharma,” further increasing their profits and intensifying their
dependence on them.

Finally, the patent system and patent expirations encourage companies to keep developing
new medications, some of which are not really useful, and sometimes dangerous. Patents on
brand-name drugs expire after 20 years in the US, after which a company loses its monopoly
and generics can be sold. This means that they are always seeking new ways of making
profits. Purdue Pharma was doing just that when it pushed OxyContin on the market with
misleading information, generating an opioid crisis in the US.

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The WTO and Patent Protection

Patent rights are protected worldwide by the World Intellectual Property Organization, a
specialised UN agency. An international patent system makes it easy for people to apply for
patents in different countries.

WTO agreements also cover intellectual property rights, which are deemed fundamental to
encourage innovation and research. In particular, the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) was signed by all the WTO members and it established a
series of minimum requirements of patent protection that national laws must respect. For
example, when it comes to drug patents, TRIPS states that the minimum duration is 20 years.

In 2001, the WTO Ministerial Conference amended TRIPS by adopting the Declaration on the
TRIPS Agreement and Public Health (also known as the Doha Declaration), which clearly
stated that patent protection must not come at the expense of public health. It afforded more
flexibility to countries that need to access essential medications. For example, during
“national emergencies,” Member States can force big pharmaceutical companies to issue
licences for their patents (to local companies, so that a medicine can be manufactured
quickly).

The point of the Doha Declaration was to introduce some flexibility so that poorer countries
could afford essential medicines better. However, they are still undoubtedly at a disadvantage.

The problem does not even only concern LEDCs. Among developed countries, those with
public healthcare systems can negotiate the prices of some drugs, while others are at the
mercy of private companies. Moreover, even in public systems, hospitals sometimes need to
pay absurd prices for more and more specialised medicines (for example, cancer treatments).

COVID-19 Vaccines
The vital need to ensure a worldwide access to medications was exposed by the COVID-19
pandemic. The World Health Organization (WHO) said that if COVID-19 vaccines had been
properly distributed to poorer countries, the pandemic would have lasted less. Some used this
to argue that patents on certain medicines, such as the COVID-19 vaccines, should be lifted to
make sure everyone could manufacture them. Others said that this would have taken away
the incentive for pharmaceutical companies to develop the vaccine, so that in the future, we
will never see such a quick development of a new medicine.

What is certain is that while vaccines are not life-saving medications strictly speaking, they
played an essential role in the recovery from the pandemic. The need for a better distribution
of quality, affordable healthcare became clear.

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Possible Solutions
There is a delicate balance between, on the one hand, rewarding companies for their research
efforts and incentivising them to produce better and better medicines, and on the other,
making sure everyone can access life-saving medications. LEDCs will want to make sure the
benefits from new scientific findings and medicines are shared, while some developed
countries will tend to be protective of their own companies.

Delegates may focus on:

➔ Calling for patents to expire earlier in the case of life-saving drugs, or banning patents
on them altogether;
➔ Monitoring the imbalance in access to life-saving drugs regularly;
➔ Providing infrastructure at public prices;
➔ Rewarding research rather than companies;
➔ Treating the R&D results related to life-saving medication as public goods rather than
private property by:
➔ Democratising the pharmaceutical production system;
➔ Implementing a global patent pool based on the free exchange of research results
without the traditional proprietary restrictions;
➔ Nationalising the entire pharmaceutical R&D activities related to life saving drugs;
➔ Limiting the participation of private pharmaceutical companies into the production
and distribution of drugs in the market.

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Sources & Useful Links

Patenting of life-saving drugs has created a global health crisis where human life has become
a commercial commodity. | Impact of Social Sciences

Intellectual property and access to medicine | Oxfam

Intellectual Property and Pharmaceutical Drugs: An Ethical Analysis

https://heinonline.org/HOL/LandingPage?handle=hein.journals/cqhe20&div=41&id=&page=

Martin Shkreli as the Face of US Health Care - The Atlantic

THE PATENT LAW

Patent Expiration and Pharmaceutical Prices | NBER

Pharmaceutical patents and the TRIPS Agreement

WTO IP rules amended to ease poor countries' access to affordable medicines

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