Global Recycling Supply Chains and Waste Picking in Developing Countries

Martin Medina

As world leaders gather in Copenhagen this month for the fifteenth United Nations Climate Change Conference (COP15) the challenges facing developing country industrialization have again been brought to the fore. One of the central challenges relates to industrial waste, which both threatens and offers opportunities for environmentally sustainable industrialization. The growing demand for recyclable materials is creating the world’s largest recycling effort ever seen in history. These global supply chains constitute a new phenomenon in which several million waste pickers worldwide play a significant role. It has implications for industrialization, for greenhouse gas emissions, and for the reduction of poverty.

On the left: Waste pickers in Indonesia. At least 15 million scavengers worldwide make a living by recovering materials from waste for recycling. The global economic impact of scavenging activities is likely to be of several billion US dollars annually.

In this light this article briefly outlines some of the issues pertaining to global recycling supply chains and waste picking in developing countries. The article is based on a paper presented at a recent workshop on New Pathways to Industrialization co-organized by UNU-WIDER, UNU-MERIT and UNIDO, and held in Maastricht, The Netherlands.

Background: Industrialization and Waste

Industrial activities require a wide variety of inputs, such as energy, water, metals, plastics, wood, textiles, glass, and so on. Its production, and resulting consumption of final goods, also generates a huge amount of waste. Hence industrialization in the past has been a terribly wasteful process. Take the example of China, which has in recent decades undergone a remarkable process of industrialization. From 2003-6, China’s industrial production grew at an annual rate of 11.5-12.8 per cent. In 2006, the added value of industrial activities accounted for 43.1 per cent of the national economy. As a result China now tops the world in production of steel, coal, cement, TV sets and cotton fabric, and ranks second in power generation, third in sugar output, and fifth in crude oil output. This success has been accompanied by waste. In 2005, China surpassed the US as the world’s largest generator of solid waste. Indeed, no other country in history has generated as much waste in such a short period as China.

But with the move towards more environmentally sustainable production, waste also offers an opportunity in the industrialization process. For one, no country is self-sufficient in a number of raw materials needed in industry, such as crude oil, coke, paper, metals, and plastics. In China, the fact that large amounts of these raw materials need to be imported, has led to the encouragement of one of the world’s largest recycling efforts, so that a growing proportion of industrial inputs in China now constitute of recyclable materials recovered from waste across the world. To an extent, Chinese industrialization has been fueled by waste from many countries. In 2001, China became the world’s largest importer of scrap metal.

Industrial recycling is become widespread throughout the world and is expected to increase in extent as manufacturing runs into tighter resource constraints. In an era of rising commodity prices, recyclable materials are in high demand due to their low cost. The main factors that account for the lower prices of secondary materials are due to the facts that

(i) Material recovered from waste often includes impurities, such as tags, traces of glue, and moisture.

(ii) Most developed countries have created recycling programs that produce large amounts of secondary materials. But supply of these materials usually exceeds domestic demand, so a large percentage of materials must be exported and sold in international markets.

(iii) Recycling requires less energy and water than processing virgin materials.

(iv) The recovery of material in developing countries relies on large numbers of scavengers, who lack the organization and power to have an impact on prices. These factors translate into lower prices for recyclable materials: For example, in Mexico the price per ton of wood pulp imported from the US is seven times more expensive than recovered waste paper.

The contribution of scavenging

Central to the recycling effort in which Chinese industry is playing such a strong role, but which also includes other emerging countries such as India and Brazil, and countries in the West, is the use of scavengers or waste pickers. Worldwide, millions of scavengers or waste pickers form the basis of this supply chain. Scavengers from many developing countries are benefitting from strong Chinese and Indian demand for recyclables, which has translated into high prices and higher incomes.

This has allowed many scavengers to escape poverty. Indeed, waste picking constitutes a common income-generating activity for low-income individuals in developing countries. It has been estimated that in African, Asian, and Latin American cities about 1 per cent of the urban population worldwide (15 million people) survives by scavenging. Scavengers recover materials to sell for reuse or recycling, as well as diverse items for their own consumption. Despite the lack of reliable data at the national level, various studies have highlighted the economic importance of scavenging activities. In Mumbai, India, the economic impact of scavenging has been estimated at nearly US $1 billion a year in the recovery of materials and the manufacture of products from them. The global economic impact of scavenging activities is likely to be of several billion US dollars annually.

A growing number of experiences in Africa, Asia, and Latin America demonstrate that formalization of scavenging can promote grassroots development, empowerment, poverty reduction, as well as protect the environment and improve industrial competitiveness. The most common models are:

  • Scavenger cooperatives – By getting organized, waste pickers become empowered. They can strengthen their bargaining position with industry and government, become actors in the development process, and overcome poverty through grassroots development. Working together, they can gain stability, higher incomes, and legalization of their activities. They can enter into contracts with industry or grant agreements with donors. In South America alone, there are about 1,000 scavenger cooperatives.

  • Micro-enterprises – Scavengers can also create their own micro-enterprises to perform waste collection, recycling, and various manufacturing activities that use waste as raw materials. There are thousands of them in the developing world. 

  • Public-private partnerships – PPPs can combine the energy, creativity and low-operating costs of scavengers in the waste management sector. Public-private partnerships for collecting waste and recyclables can be beneficial to waste picker groups as well as to the broader society. In partnerships in several Colombian cities, the municipality provides infrastructure and equipment while waste pickers provide labor. In Bogotá a partnership has been formed to operate a recycling plant, managed by the Bogotá Association of Waste Pickers, to which the municipality takes recyclables separated at source.

In addition to its impact on reducing household poverty, scavenging renders environmental benefits. Recycling has a lower environmental impact compared to the use of virgin resources, and extends the life of disposal facilities, which saves municipalities’ money. Recycling can result in a more competitive economy and a cleaner environment, and can contribute to a more sustainable development.

Scavenging activities can reduce emissions of greenhouse gases by recycling inorganic and organic materials. The recycling of inorganic materials by scavengers saves energy. Power generation is one of the largest sources of greenhouse gases. Assuming that everything else remains the same, recycling reduces the emissions of greenhouse gases. When organic waste –mostly food leftovers, kitchen waste, and garden waste– is sent to open dumps and landfills it gets buried under layers of waste. Eventually, all oxygen is consumed and organic matter decomposes in anaerobic conditions. Anaerobic decomposition generates methane, a greenhouse gas that is 20 times more potent than CO2 in trapping the sun’s heat. Garbage dumps and landfills generate about 11 per cent of anthropogenic emissions of greenhouse gases. Diverting organic waste from dumps and landfills can prevent the generation of methane and reduce greenhouse emissions. 

Issues that need to be addressed

Global recycling chains can benefit millions of low-income and vulnerable individuals worldwide, as well as contributing to a more competitive economy and environmental protection in the fight against climate change.

But there are several important issues that need to be addressed. Scavengers face multiple hazards and problems. Due to their daily contact with garbage, scavengers are usually associated with dirt, disease, squalor, and perceived as a nuisance, a symbol of backwardness, and even as criminals. They survive in a hostile physical and social environment. Recent migrants, children, women, unemployed and the elderly account for most of the scavenger population. They also face serious risks to their health that result in high morbidity rates and shorter life expectancy than the rest of society. But a growing number of experiences demonstrate that once scavengers are organized and public policy supports them, these problems can be greatly diminished or eliminated.

Further, the existence of middlemen allows the possibility of exploitation and/or political control of scavengers. Because industry demands large volumes of materials that are processed – sorted, baled, crushed, or granulated – it does not buy directly from individual waste pickers. Instead, middlemen purchase recyclables recovered by waste pickers, then sell the materials – after some sorting, cleaning, and processing – to scrap dealers, who in turn sell to industry. In sicj circumstances, middlemen often earn large profits, while waste pickers are paid much too little to escape poverty. This exploitation accounts for scavengers’ low incomes.

When scavengers are supported it can constitute a perfect example of sustainable development: Jobs are created, poverty is reduced, industry is supplied with inexpensive raw materials, natural resources are conserved, and the environment can be protected.

Scavenger cooperatives, micro-enterprises, and public-private partnerships can be successful models that formalize and incorporate scavengers into domestic and global supply chains. But  external support is necessary in order to unlock the development potential of scavenging and to recognize its contribution in the climate change challenge. Unfortunately, scavenging is ignored by most multilateral, bilateral, and international non-governmental agencies that work in international development and environmental protection.

Martin Medina
Martin Medina

About the author

Martin Medina has collaborated with academic, nongovernmental, and international organizations in waste management projects in Africa, Asia, Latin America and the Middle East. He is a participant in UNU-WIDER’s joint project with UNU-MERIT and UNIDO on New Pathways to Industrial Development. His main interests are community-based resource use, the informal recycling sector, and solid waste policy and planning. He holds a Ph.D. from Yale University and is the author of the book The World’s Scavengers: Salvaging for Sustainable Consumption and Production

Further reading 

The World’s Scavengers: Salvaging for Sustainable Consumption and Production. Martin Medina(2007)

WIDER Angle newsletter, December 2009
ISSN 1238-9544