Study of Informal Recycling Business In Bandung, West Java, Indonesia

Public Policy Design 06M55092 Agus Mujib Ali, Tatsuro SAKANO

ABSTRACT Bandung Bandung Bandung 18% 8.6%

1. Introduction Management of municipal waste has become a critical issue for Bandung city. The increase volume of waste cannot be supported by the capacity of the cleansing enterprise of Bandung. According to Statistical Bureau of Bandung, the city can handle around 54 % of generated waste. The remaining waste of 46 % is left in temporary dumping station (TPS) and assumed to be recycled by informal sector recycling. With this assumption, it can be interpreted that informal sector has important role to the city. However Medina (2005) pointed out that despite their large number in most African, Asian and Latin American cities, the informal sectors especially waste pickers have been largely ignored by scholars. There is also only a few study in Indonesia, especially in Bandung city. The objective of this research is to get better insight of the informal sector recycling role in municipal waste management. The focus is especially upon identifying entrepreneurial opportunities in the waste economy. I.2 The research Question 1. How important the informal sector role in municipal waste management in Bandung? 2. What is the structure of informal waste management system in Bandung? 3. How does the informal system work? 4. What are the possibility to improve waste management system as a whole? I.3 The Approach To answer the research questions, the following approach has been undertaken: 1. Conducting preliminary field survey; to identify waste management system in general, informal sector involvement and determine the sampling site

2. Sampling and interviewing: visiting TPS and interviewing waste pickers 3. Conducting interview with agents: small, middle and top agents; to explore actor involvement, waste exchange mechanism, price per unit recyclable etc. 2. The Importance of the Informal Sector Recycling This chapter discusses the importance of informal recycling sector in the context of municipal waste management 2.1 The relative importance of the informal sector recycling In the context of Bandung waste management, the role of informal can be interpreted as the complementary of the formal sector. It is described in the figure 1 that in the limitation of the formal sector in handling volume of waste generated by the city has given the informal sector a chance to reduce the rest of remaining waste by sorting them for recycling. In general, the important role of informal sector capacity is increasing and highly adaptable to the increase of total volume municipal waste in Bandung (figure 1) Figure (1) Trend of waste volume

2.2 The potential of the informal sector recycling in Bandung To elaborate the involvement of informal sector into waste management in Bandung, in the preliminary survey the writer analyzed the activities of informal sector from waste distribution of source point, temporary station (TPS) and dump site (TPA). As it

can be described in the figure 2. The figure can indicate actively involvement of waste pickers in each stages of waste flow in Bandung. Figure 2. The flowing scheme of waste and leaking points

field survey.

4.1 Demographic Condition Based on figure 3, the residential status of waste pickers is categorized into four origin areas: Bandung city, Bandung districts, West Java Province and out of west Java Provinces. The percentage of their number is respectively 2.0%, 23.0 %, 70.0 % and 5.0 %. Thus the biggest percentage is from west java province areas that is about 150 200 Km distance from Bandung city. And only 2.0 %, waste pickers are from Bandung city. In general, the waste picking activities is dominated by immigrant from West Java Provinces area, especially from the east areas. No one is from Sumatra, Sulawesi or other islands in Indonesia. Figure 3. residential status of waste pickers

3.The structure of informal recycling sector In Bandung context, the structure of informal sector recycling is categorized by several elements; actors involvement, relationship among the actors and exchange mechanisms (table 1). The field survey revealed that although it is informal sector, the structure of their operation work like formal. It can be illustrated like the structure in a factory. There are labors in the low level, foreman, middle management and top management. Table 1. The structure of informal sector recycling While the table 2 shows the previous predominant occupations are seller (51.2%) and farmer (16.3%). The rest of the proportion is distributed evenly among house servant, factory worker, etc. accounted for about 30 %. Some migrants then found difficulty to find a job or unsatisfied with the previous one, they engage in waste picker because it give them freedom, stable income, no investment, and no skill in this activities. Table 2. The previous occupation

Big agent in informal sector recycling can act as a top management. Being a direct supplier of recycling factories, his recognition of price and recyclables the factories need makes the top agent having a negotiation power among other actors in informal recycling sector. Middle agent can be subordinate of a big agent or his business partner. A small agent can act as foreman in factory. As his base camp is located in TPS or TPA, he is the one who directly gets in touch with waste pickers. Waste pickers are like labor in factory. They function as producer of raw material of recyclables. In general It can conclude that the structure of informal sector recycling is well organized and so coordinated. 4.The Work of Informal System This section will elaborate the characteristic of informal sector and how the system works. To identify the characteristic and the system work, the series of interviews with actors of informal recycling have been undertaken. The questions related to their socio demographic condition, the relation among actors, economic condition and demand of recyclable material are scrutinized during

4.2. Social Relationship Social relationships among those who involved in the informal sector of recycling activities is one of the factors that influences the work of the informal system. The actors involved are waste pickers, local agent, middle agent and big agent (whole seller), as well as the municipal waste workers. The field survey finds out that the social relationship characterized into two conditions, homogenous group of west pickers and patron-client relationship. Homogenous indicate that they tend to occupy TPS with group of people from the same region of origin and patron client relationship happens since waste picker as migrant are vulnerable and having strong dependency for survive, then it is used by agent

for their profit. For instance, waste picker should sell the recyclable to them with low price. 4.2.1 Types of marketable materials The primary objective of waste picking is identifying and collecting marketable materials from mix waste. The field survey revealed that there are generally 5 categories of marketable material which are daily collected and recycled by informal sector especially waste pickers. They are plastic, papers, rubber, glass and metal. All categories is divided into several subcategories based on type of virgin materials and forms (Description and percentage of each types is available in appendix 1. The most dominant material collected is plastic (51%) and the second is glass (19%). The rest of percentage is distributed evenly among rubber, papers and metal (30%). (table 3) Table 3 The recyclables collected by waste picker (in Kg) Plastic 2333.8 Papers 616.5 Rubber 237.2 Glass 869.8 Metal 505.6 total 4562.9

waste picker is Rp. 830,882. While minimum industrial wage in Bandung city is Rp.860,565 per month. Furthermore their income is almost double compared to the contract municipal waste workers who earn Rp. 450,000 per month (based on an interview April 2008). Therefore, waste picking the writer assumes is not temporary job. It is waste pickers` choice after comparing to the available jobs in urban city and it can be reinforced by referring to the previous demographic data of their reason of being waste picker, some of them are want to have a better and stable income. It is clear that the daily or monthly income of waste picking is a strong incentive for waste pickers even they have to face the poor condition of working. The real description of economic condition of agents can be illustrated by combining the profit margin and recyclable accumulation. The figure 4 shows that chain of recyclable supply is accumulated gradually in every agent. This accumulation will give impact to the increase of gross benefit as it is calculated with the profit margin of every recyclables. It can be inferred that the more accumulation of recyclables the more benefit agents will have. Figure 4. The accumulated recyclable material

. 4.2.2 Economic condition The price mechanism has been identified in the field survey by giving a questioner to all actors of this sector. In the questioner, the writer firstly asked the waste pickers about the quantities of waste they collected per day on average of the previous week and also the value of each materials purchase to the local agent. With several adjustments of questions, questioner was also given to the agents. By using the data above, the income condition of each actors in informal sector recycling can be calculated. Average income of waste pickers The financial condition of waste pickers can be found by firstly calculating all total value of each recyclable that waste pickers purchase to small agent. The result then is divided by the number of waste pickers (137 people). Therefore, the average daily income that waste pickers have, is adopted. Since most of them have holiday, once in a week, monthly income is calculated by multiplying the average daily income with 26 days. The calculation description is as follow,

5. Role of informal sector recycling in waste management The role of informal sector recycling to the city can be generally correlated with the amount of volume recycled waste in the context of reducing available waste in the city and the value of that recycled 5.1 Ecological Contribution The waste collected by waste pickers, clearly reduce the quantum of garbage that has to find its way to disposal sites. If this were not collected by them, given the percentage of uncollected waste, it would very likely accumulate in the city and contribute to degradation of environment. To put the issue into perspective, the following calculations illustrate the quantum of waste removed by the waste pickers from the waste stream.

The waste picker is slightly competitive compared to minimum wage that set for industrial sector. The average monthly income of

Figure 5. recycling rate

6..1 Conclusion 1. As long as poverty and waste exist in combination, informal recycling especially waste picking is always a reality in urban life 2. Lack of job opportunity in formal and informal sector in the main factor of their involvement in waste picking 3. Waste pickers are not the poorest in the society, they are poorest in the hierarchy trading in informal sector 4. Informal recycling system is structured through network of market mechanism among waste picker, local agent, middle agent and top agent 5. Informal sector reach 18 % of recycling rate and converted to cost saving of municipal waste is around 8.6%. While the value of recyclables is calculated almost equal with the cost of disposing remaining waste 6.2 Recommendation 1. Need to conduct official census of waste picker exist in Bandung. 2. Need to establish waste picker cooperatives as a means of achieving standard of living for its member, dignify their occupation and strengthen their bargaining position with agents and industries. 3. Need to increase collaboration between formal and informal as well as community in general to achieve zero waste program by using market mechanism in order to encourage all actors to participate. References Badand Pusat Statistik Jawa Barat. (2007) Value of Gross Output, Input Cost and value Added at Market Prices. http://jabar.bps. go.id/update2007/industri/nilaioutput3.html. Accessed on June, 2008 GBWMC (2007). Technical Assistance for Greater Bandung Waste Management Corporation: Interim Report. Greater Bandung Waste Management Corporation, Under West Java Environmental Management Project (WJEMP). Bandung, Indonesia Hayami, Y., Dikshit. A., Mishra. S. (2003). Waste Pickers and Collectors in Delhi: Poverty and Environment in an Urban Informal Sector. Foundation for Advanced Studies on International Development, Tokyo. Medina, M. (2005). Waste Picker Cooperatives in Developing Countries. Paper prepared for WEIGO/Cornell/SEWA Conference on Membership-Based Organizations of the Poor, Ahmadabad, India. January, 2005 Nas, P., Jaffe, R. (2004). INFORMAL WASTE MANAGEMENT. Shifting the focus from problem to potential. Environment, Development and Sustainability; Kluwer Academic Publisher, Netherlands OntarioWilson, D., Velis, C., Cheesman. C, (2006). Role of informal sector recycling in waste management in developing countries. http://www.elsevier.com/ locate/habitat; accessed on June 2008 Sarkar, P. (2003). Solid Waste Management in DelhiA Social Vulnerability Study. Toxics Link, New Delhi, India

Figure 5 shows that waste picker can reduce waste by recycling around 18 %. It mean that it can decrease availability of land for TPA and also saving resource and energy as factory are using second material. 5.2. Economic Contribution No less important than the environmental implications of reducing the total quantum of waste to be transported and disposed is the impact on the municipal expenditure. Take the case of 22 TPS, how much contribution that waste pickers can save the cost of municipal waste management? To answer that question, we have to estimate how much cost that the city spends per meter cubic waste. While waste pickers can collect and recycle the waste around 4,563 Kg of waste per days or it is the same with 19 M3 per day. To find the cost saving of waste management resulting from this operation, is estimated by multiplying 19 M3 with Rp. 21,078. The writer then adopted about Rp. 400,482 per days the city can save the cost of waste management for 22 TPS. Moreover, It can also be seen from perspective of the value of waste recycled by waste pickers. Since the recyclable is also marketable, it means that we can monetize the value of the waste collected by them. By taking again the sample research from 22 TPS, The table 4 shows that every material collected, has very immense amount of value with total calculation around Rp. 4,373,499.1 per day. The value is almost equal with cost of waste management. It may indicate that the value of recyclable can cover the cost. Table 4. The estimated value of recyclables

6. CONCLUSION AND RECOMMENDATION The findings of this research have basically described profile of informal sector recycling especially waste pickers, and their role to the waste management in Bandung.