The Role of Waste Banks in Enhancing Connectivity in Plastics Recycling Value Chains: A Case Study of Surabaya

Introduction

Prior to 2004, Surabaya disposed of waste in its two landfills, Benowo and Keputih. After Keputih was closed in 2001 due to opposition from residents and trash piled up in the streets¹, the city recognised waste management as a major challenge. In response, the city of Surabaya identified a need for facilities to encourage waste separation and recycling by establishing community-run Bank Sampah, or waste banks, program and a government-run central waste bank. The first 15 waste banks were introduced in 2010 and they were so well received that by 2013, there over 180 waste banks were then developed in the greater Surabaya region².

This case study describes the Ocean Plastic Prevention Accelerator’s (OPPA) experiences working with waste banks in Surabaya. OPPA is building a social innovation ecosystem to address ocean plastic leakage within Indonesia. Surabaya is the first OPPA pilot project location. It presents the observations of OPPA staff of the ways in which waste banks have contributed to the local waste management system. This case study will also explore whether the practices and benefits of waste banks can be replicated in other countries and cities across South and Southeast Asia facing similar decentralised, disconnected, and inefficient plastic waste management systems.

Currently, about 60% of land-based plastic waste leakage originates from five countries in Asia, of which 40% of the leakage is the result of waste being ineffectively managed (Jambeck, 2015)³. In the fast-growing emerging economies of South and Southeast Asia, despite the growth of comprehensive action plans and existence of national legislation governing the collection and management of waste, existing solid waste management systems and infrastructure struggle to keep up with the rapidly increasing volume of waste generated, resulting in mismanaged plastic waste that enters the ocean and environment. Due to weak governance, lack of transparency, overstretched budgets, and poor infrastructure for waste management and recycling on a local-level, where responsibility for these activities resides, an increasing number of people are not able to receive adequate waste collection services⁴. This has led to the development and growth of informal waste management sectors to fill that demand⁵, giving rise to complex, fragmented and stunted waste management systems that many of these countries rely on today.

Within these informal systems, the lack of cooperation and coordination between the different stakeholders in the plastics recycling value chain, especially between informal and formal actors in waste management systems, pose a great barrier to progress in recycling plastics and other waste. In some contexts, research has shown that when informal sector actors are supported by formal institutions or corporations, they become an attractive complement to formal waste management services, greatly increasing the volume of waste recycled⁶. An example of this joint approach and synergistic partnership between informal actors and formal stakeholders is the SWaCH initiative in Pune, India⁷. Furthermore, the informal waste management sector is responsible for providing waste management services to many households⁸ that are overlooked by the formal sector while operating at a comparatively lower cost.

Informal waste collectors in many municipalities across the South and Southeast Asia lack support offered by formal institutions and face many daunting challenges such as low income, lack of acknowledgement, as well as limited access to equipment and infrastructure⁹.

Based on OPPA’s work with waste banks in Surabaya, OPPA has observed that waste banks have in many cases bridged informal and formal actors, and helped enhance the connectivity between these diverse stakeholders. In some cases, OPPA found that there was increased trust and collaboration between informal and formal actors, which also helped contribute to more efficient waste management practices.

What Are Waste Banks?

Like a regular commercial bank, people in the community open up an account at the local waste bank and at dedicated schedules, they make deposits with non-organic solid waste which are weighed and given a monetary value based on fixed rates set by the central waste bank. The determined value is then saved in the customers’ account from which customers can withdraw money¹⁰. Local waste banks then ship the collected waste to the central waste bank to be sold to larger aggregators or recycling plants. In 2012, the Government of Indonesia released best practice guidelines for the operations of Waste Banks across the city including guidance on employee wages, savings, facilities construction, and pricing, among other topics.

In 2016, Surabaya generated approximately 1,512 tonnes of waste a day with 1,281 being sent to landfills and the remaining 231 tonnes being recycled, the waste diversion rate being 15.3% of which waste banks diverted approximately 1 tonne per day¹¹. While there is much opportunity for waste banks to increase their role in the diversion of waste from landfills and advance recycling value chains, this case study sets out to outline the additional value of waste banks. Specifically, this study will highlight waste banks’ role as a bridge that links not only the formal and informal waste sectors but also other key stakeholders to enhance connectivity in the plastics recycling value chain.

How do Waste Banks Enhance Connectivity in the Plastics Recycling Value Chain?

Cross-Sector Connectivity

Through its work, OPPA observed that the fixed pricing rates of solid waste set by the central waste bank as opposed to the fluctuating prices offered by aggregators in many cases served to attract business from informal waste collectors and be a key partner for both waste-producing companies and waste-repurposing companies.

In that unique central position, waste banks can and have worked with different actors to strengthen parts of the plastics recycling value chain. For example, The Ocean Plastic Prevention Accelerator (OPPA¹²) had collaborated with Asosiasi Pengusaha Sampah Indonesia (APSI¹³) to connect four hospitals in Surabaya with local waste banks to manage their waste, bringing new actors into this plastics recycling value chain.

OPPA has also worked with local repurposing companies such as the sustainable furniture company, Robries, to shorten the plastics recycling value chain by directly connecting companies with a demand for post-consumer plastic materials with waste banks to procure raw materials for furniture production. Shorter value chains provide significant potential to reduce leakage of waste that is often created by the involvement of multiple actors. The strengthened connectivity in the plastics recycling value chain may even act as a foundation for cross-sector collaboration through waste banks in the future.

Community Engagement

OPPA observed that waste banks were in some cases able to develop strong ties with their communities, and build on those connections to more effectively engage their communities to educate them on environmental values and recycling practices. Consumers are responsible for producing a large majority of plastic waste¹⁴, and therefore it is critical to effectively reach out to the community to teach them not just to reduce purchasing non-biodegradable plastic products, but also the proper procedures to dispose of their plastic waste through recycling.

OPPA has worked with representatives from Institut Teknologi Sepuluh Nopember¹⁵(ITS) to host a Waste Data Hackathon to create a public waste bank map. The waste bank map aims to engage households to increase awareness about recycling and encourage them to bring their waste to waste banks.

Improving Access to Reliable Data

Reliable data is vital for improving waste management systems. As in many places worldwide, in Surabaya’s waste sector, high quality and reliable data is scarce¹⁶, and data that is available is difficult to access. It was observed by OPPA that many waste sector stakeholders in Surabaya either do not recognise the importance of waste data or are unable to gather data from their operations due to lack of manpower, technical knowledge, or resources to capture that data while also keeping up with the increasing volume of waste generated every year.

Individual waste banks already keep detailed ledgers about the waste that they process with basic data such as volume and types of plastics. These are recorded by hand in the books of each waste bank, but there is potential to set up a centralized and streamlined system to collate data from the hundreds of waste banks across the city and digitize them to create a data bank of plastic waste flows in Surabaya that can be leveraged by local municipalities to build more efficient systems. The opportunities to use this digital data to arrive at targeted and scalable solutions are many. Consequently, it will allow several vantage points from which to view solutions. In parallel, increasing the diversity of partners will provide richer data to work with in the future. For instance, there is an opportunity for researchers to gather qualitative data and insights from waste banks, such as the number of households taking part in recycling over time, which can be used to gauge the effectiveness of education efforts. Eventually, both the digitisation and diversity of data will contribute to a robust ecosystem of solution-finders working seamlessly across market sectors.

Conclusion

Waste banks are valuable as an institution that can better bridge different actors and enhance connectivity in the plastic recycling value chain. A more interconnected plastics recycling value chain increases the efficiency of the waste management system as a whole by fostering collaboration and reducing barriers to doing business in the waste management industry. This would ultimately have the effect of increasing the total volume of plastic waste recycled and decreasing the amount of plastic waste leaked into oceans and the environment.

Apart from enhancing connectivity between formal and informal waste management sectors, waste banks present a valuable opportunity for community outreach by connecting governments with local communities. As waste banks have strong ties with and are firmly rooted in their respective communities, governments and formal institutions can effectively engage those communities through waste banks. Effective community outreach is crucial for reducing plastic waste at the source by introducing better waste management practices in households and fostering an attitude of waste reduction in the communities.

Finally, waste banks also enhance connectivity in the overall waste management sector by increasing transparency and understanding of waste flows for all stakeholders. Waste banks are a good avenue to collect reliable qualitative and quantitative waste data as they directly receive waste from one of the main sources, from households, as opposed to other actors who are only able to collect waste from other actors upstream of their position in the waste flow. As a result, more accurate data on the volume and types of waste generated at the source can be obtained as other factors such as waste leakage would not need to be taken into account. Such data would be invaluable for policy makers and waste management actors to better evaluate the amount of resources to allocate to better manage waste, where to allocate those resources and to better gauge the effectiveness of policies or actions taken.

The ideas and practices of waste banks as well as the benefits that they bring are not exclusive to the context of Surabaya. It may be useful for countries in South and Southeast Asia with complex and fragmented waste management systems to adopt some of the practices employed by waste banks to build a more connected community with viable solutions to end ocean plastic pollution.

The Ocean Plastic Prevention Accelerator (OPPA) is a social innovation ecosystem builder powered by The Incubation Network that’s supported by SecondMuse, The Circulate Initiative (TCI), Global Affairs Canada (GAC), Alliance to End Plastic Waste (AEPW) and more.

References

1. https://ccet.jp/sites/default/files/2017-10/CCET%20Surabaya%20Case%20Study_PrintingVer0718_2.reduced.pdf
2. Waste Bank as Community-based Environmental Governance: A Lesson Learned from Surabaya
3. https://science.sciencemag.org/content/347/6223/768.full
4. https://scihub.bban.top/10.1016/j.wasman.2012.05.026
5. The informal waste sector consists of the waste recycling activities of scavengers and waste pickers who extract recyclable and re-useable materials from mixed waste (https://scihub.bban.top/10.1016/j.habitatint.2005.09.005) before selling them to aggregators or directly to recycling plants. Informal sector entrepreneurs or enterprises do not pay taxes, have no trading license and are not included in social welfare or government insurance schemes (Haan, Coad, & Lardinois, 1998).
6. https://www.unescap.org/sites/default/files/Closing%20The%20Loop_Pune%2C%20India%20Case%20Study.pdf has found that “The (government contracted) informal waste pickers save an estimated 900 million rupees (US$12.5 million) each year in labour, transportation and processing costs” and “achieves considerable plastic waste segregation and high recycling levels, with an estimated 30,000 tonnes of plastic material annually collected and sent for recycling by the SWaCH waste pickers, diverting 52 per cent of the plastic waste in Pune from landfills.”
7. https://swachcoop.com/about/history/
8. https://scihub.wikicn.top/https://link.springer.com/article/10.1007/s12649-016-9648-4
9. https://scihub.bban.top/10.1016/j.wasman.2012.05.026
10. https://blogs.worldbank.org/eastasiapacific/waste-not-want-not-waste-banks-indonesia In Gunung Samarinda, a household can make around 50,000 Rupiah a month through depositing waste at waste banks (2013).
11. https://ccet.jp/sites/default/files/2017-10/CCET%20Surabaya%20Case%20Study_PrintingVer0718_2.reduced.pdf
12. The Ocean Plastic Prevention Accelerator (OPPA) in Surabaya, Indonesia under Secondmuse & The Incubation Network seeks to create a collaborative network for innovative solutions to address challenges in the local waste management system and recycling sector.
13. APSI is an association of small and medium-sized entrepreneurs in waste management including aggregators, recycling companies and organic waste processing companies.
14. The global plastic production in 2015 was approximately 407 million tonnes and 146 million tonnes of plastic was used for packaging alone, with 42 million tonnes used for consumer products. Retrieved from https://ourworldindata.org/plastic-pollution
15. The leading technical university of Surabaya
16. https://sci-hub.si/https://link.springer.com/article/10.1007/s10163-004-0117-y