May 21st, 2018, Written By Andrew Almack, CEO of Plastics For Change.
Lessons from the last mile
I decided to create Plastics For Change after visiting Cambodia in 2010. Cambodia was the first developing country I visited. I was completely blown away by the amount of plastic pollution everywhere. It puzzled me that the many Cambodian’s who were living on only 50 cents a day, couldn’t earn a living by picking up all this discarded plastic. My prevailing logic was that this petroleum resource should be a valuable commodity since it takes an enormous about of Co2 and energy to create new plastic from oil.
Ever since that trip to Cambodia, I have been relentlessly dedicated to finding out how used plastic can be effectively utilized as a way to create sustainable livelihoods.
So what prevents people living in extreme poverty from earning a living wage through recycling? Here are a few lessons I’ve learnt so far.
Need for Transparency
The traditional informal recycling supply chain in developing countries tends to be a very exploitative system. The waste pickers at the base of the supply chain face numerous challenges when trying to access fair market prices for the discarded plastics they collect.
The informal recycling economy is intrinsically problematic since because it lacks transparency and it is often completely unregulated. The middlemen are incentivized to buy low and sell high, with little regard for social and environmental impacts. This results in high levels of mistrust and inequality in the supply chain. In our model, the middlemen earn a commission that is based upon the price that the waste pickers receive. Therefore, both parties are incentivized to work together to get the best price.
Gaining access to working capital
The second problem is access to working capital. In the current system, the middlemen need to wait until the end buyer settles, before they have the cash to pay the waste pickers. The waste pickers often get paid weeks or months later.`
Our ethical sourcing platform builds transparency and accountability into the deal process, which in turn, enables the availability of working capital finance. This process ensures all members of the supply chain are paid at the point of exchange.
Inconsistent price of plastic
The final main barrier waste pickers face is constant fluctuation price for discarded plastic. The wastepicker commonly experience 40-50% volatility in the price they receive. Our platform reduces price volatility of this plastic resource by facilitating long- term relationships with buyers who guarantee a fair rate. Creating transparency and accountability through the supply chain also resultsin better quality material
Education and inclusion from the ground up
Economic inclusion is the most important part factor to help those at the base of the supply chain escape the poverty trap. However, it is also imperative that the waste pickers are provided with access to financial literacy and social services. They must have their voices heard in order to advocate for policy reforms that address inequality. Plastics For Change works in partnership with Hasirudala to provide this holistic approach to transitioning those at the base of the supply chain into a formal economy.
Our ultimate goal is to create new markets for recycled plastic in communities with poor waste management infrastructure. We are looking to expand our model to additional communities. To accelerate the development of recycling infrastructures and mitigate the plastic pollution crisis. If you share our passion for changing lives through recycled plastic, please share this post with your network.