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Case Study: Plastic Bank and Informal Waste

Issues with informal waste management have been gaining more and more attention as organisations try to address social and environmental problems. Yet are there any hidden roadblocks in this issue that we've yet to discover?

This is one of the case studies we're creating on different companies that are working in the plastic pollution space. We're hoping to highlight the good and bad examples of what kind of work is effective in solving this massive problem, keeping in mind that there are a lot of subcategories in this issue!

This case study focuses on companies working on improving informal waste management economies in developing countries, which bring several unique environmental and social challenges when it comes to addressing plastic pollution! One major company here is Plastic Bank, as well as other organisations like Kabadiwalla Connect. We’ll be focusing on the Plastic Bank’s work as an example.


How it Works

First of all, it makes sense to describe how informal waste management works. In developing countries like the Philippines, about 1% of the population works as waste pickers (Source). They are often low-income members of the social class that earn a living by scavenging reusable materials from open dumps in developing countries (Source).

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Waste pickers in Brazil, 2008 — Source: Marcello Casal Jr.

It would make sense that a lifestyle like this brings up a lot of challenges, both for these waste pickers and for the environment. Some of them include biohazard exposure for waste pickers, chemical leakage into the environment, and little market transparency for recycling. These are the issues that companies like Plastic Bank try to address (Source).

Their name is a good indicator of how they go about doing that. For these waste pickers, the company is like a bank in how it operates. Plastic Bank has centres in developing countries for waste pickers (and the general population) to bring in any recyclable materials they find. They then pay the local community members higher rates for these materials than people typically find in that country.

How does Plastic Bank afford to pay these higher rates? This is where they work with the other stakeholders in the market for recyclable material: the producers buying the plastics to turn them into new products. Plastic Bank works with these companies to manufacture their products with greater amounts of recycled plastics that they acquire while supporting local community members.

Through this partnership, Plastic Bank helps producers market their corporate social responsibility initiatives while also gaining reliable buyers for the plastics they collect from local communities in developing countries. This creates the key economic incentive that helps them maintain a scalable business that can work across several developing countries.


What are the Benefits?

The primary benefit that Plastic Bank’s approach has is its scalability. Often, companies who sell recycled plastics to the industry have to find the lowest prices possible to incentivise producers to use recycled plastics instead of just manufacturing new plastic (which can sometimes be cheaper).

But since Plastic Bank works with producers to increase the usage of recycled plastics and documents how the plastics are sourced ethically in terms of fair payments to local community members that collect the plastic — they’re seen as a source of ‘social plastics’ which producers are willing to invest in regardless of higher prices.

The Ocean Cleanup's work is very different from other organisations that work on cleanup activities, which often involve manual cleanup of beaches or shallow waters. The autonomous approach at The Ocean Cleanup is comparatively more scalable in cleaning plastic waste, because it doesn't rely on volunteers and doesn't involve costs in hiring many staff.

When it comes to the Interceptor specifically, their idea of collecting waste at rivers instead of at the garbage patches in the oceans makes a lot of sense since 20 rivers worldwide account for 67% of all the plastic that enters the ocean (Source).

As a result, they’ve been able to scale their efforts to help improve informal recycling economies and increase the usage of recycled plastics across multiple countries (like Haiti, Indonesia, and the Philippines). This creates both social and environmental impact since developing countries are often where the greatest efforts are needed to prevent pollution from mismanaged waste and improve the quality of life for waste pickers (Source).

That being said, there is also a key advantage to working to promote recycling systems in developing countries rather than developed countries. Instead of getting a mixed stream of waste from average households that is hard to sort, Plastic Bank gets all its plastics presorted when it receives them from waste pickers and the local community at its collection centres.

This enables it to bypass several challenges that come with sorting plastics to process them (Source). This enables Plastic Bank to work with producers to recycle types of plastic that typically aren’t recycled, such as LDPE from plastic bags. They also don’t have to invest in as much sorting infrastructure and have lower costs to process every unit of plastic they collect.


What are the Limitations?

Some issues that Plastic Bank still faces include that it’s still limited by any contaminants or mixed plastic types found in plastic products. Based on conversations I had with Taylor Leigh Cannizzaro (CAO of Plastic Bank) and Shaun Frankson (CTO of Plastic Bank), they’re still working with producers to phase out the use of multilayer plastics, which are a common issue with products in developing countries.

Additionally, they’re still in the process of scaling to more developing countries. This is especially important for countries in the Asia Pacific region which lead to over 60% of all mismanaged plastic waste (Source). Both Taylor and Shaun are confident in their ability to scale (based on their outreach strategy with the local community), but identified their ability to educate local waste collectors on the benefits of recycling as a challenge.

Since recycling programs are often informal in developing countries (and only certain materials have historically been recycled), Plastic Bank needs to educate local waste collectors on the incentives to recycle materials that are typically sent to open dumps. This is another factor that they need to get right in many regions to scale effectively.


Does this Area need More Attention?

Given how more than 60% of mismanaged waste comes from developing countries in Asia, it follows that effective solutions to the problems faced by the (somewhat informal) waste management industries in these countries can create a large impact in reducing plastic pollution. These problems are also often different than the problems in developed countries, which warrants more focus on their unique aspects.

In our opinion, addressing the challenges for the waste management industry in developing countries is a very promising area to create scalable solutions for. This can take the form of creating scalable alternatives to informal waste management systems (like Plastic Bank) or working to create new solutions for the problems they’re still facing (like recycling multilayered plastics and educating local waste collectors).

Alongside these problems in informal waste management systems, there are still other issues that need work when it comes to waste management in developing countries:

  1. For one, there needs to be work on improving infrastructural issues with open dumps that lead to plastic and chemical leakage into waterways in countries like the Philippines (Source)
  2. Additionally, technical/environmental guidelines need to be established to implement formal waste management systems (like incinerators) as an alternative to open dumps without creating other environmental risks (Source)

We hope to inspire more research and action on areas such as these, as well as to support organisations like Plastic Bank in further scaling their efforts which have been successful so far!


Further Reading: