Living income in the informal waste sector

Our key takeaway: The informal waste sector is critical to companies in terms of their exposure to, and management of, severe human rights risks and impacts. Why? Because workers in this sector - the majority of which are informal workers - work in hazardous conditions, are paid low incomes, and have limited access to social protection and labour rights. Women and children are disproportionately impacted too. This is despite the fact that the work that they do - collecting and recycling waste - yields many economic and environmental benefits such as job creation, reduced greenhouse gas emissions, reduced landfill waste, decreased reliance on fossil feedstock and mitigation of environmental leakage. To enable a just transition, waste pickers must be provided with a living income to ensure that: 1) they can break the cycle of poverty and afford the essential goods and services needed for themselves and their families; 2) they can contribute to better waste management practices; 3) women waste workers are empowered and gender equality is advanced; 4) they can improve their ability to participate more fully in society; 5) they are provided with a safety net to withstand economic shocks and invest in skills and equipment; and 6) the stage is set for the regulation of the informal waste sector. What can companies do? Implement the UN Guiding Principles on Business and Human Rights by applying the Fair Circularity Principles. The first step would be to recognise that the waste sector is part of companies’ value chains and the human rights risks and impacts that waste pickers face are particularly severe and, therefore, should be prioritised for action.

Fair Circularity Initiative and Systemiq published A Living Income for the Informal Waste Sector: A methodology to assess the living income of waste workers in the context of the Global Plastics Treaty (March 2024):

• The nature of the informal waste sector: The report highlights that there are an estimated 19-24 million people globally - that is, 0.5-1% of the global workforce - who earn their livelihoods collecting and recycling waste. The majority of these people - 80% - are informal waste pickers and they collect 60% of the plastic recovered for recycling. An assessment of three distinct sites in three countries (Brazil, Ghana and India) demonstrates that waste pickers derived more than half of their income from plastic waste. Due to the fact that waste pickers play a pivotal role in the plastic waste sector, the report states that the Global Plastics Treaty - an agreement between 175 nations to develop a legally binding agreement on plastic pollution by 2024 - should explicitly include definitions of “waste pickers,” “informal waste and recycling sector,” and “workers in informal and cooperative settings”, as well as operationalise a just transition within its framework.
  

• Living income is key to a just transition: While existing living income concepts and methodologies have not yet been applied to waste workers, the report outlines reasons why living income is highly relevant to the informal waste sector. These reasons are grouped into six broad categories: 1) Dignity and wellbeing. The majority of waste workers are informal workers and are typically impoverished, which means they are unable to afford essential goods and services to maintain the wellbeing of themselves and their families, such as food, housing, healthcare and education. Therefore, ensuring a living income for waste workers can break this cycle of poverty; 2) Environmental sustainability. A living income “reduces the pressure on informal waste workers, which in turn contributes to better waste management practices.” This can lead to “more efficient recycling, lower pollution levels and a healthier environment”; 3) Gender equality. A large number of informal waste workers are women and, therefore, a living income “empowers women economically, promotes gender equality and reduces gender disparities”; 4) Social inclusion. A living income “empowers waste workers to participate more fully in society, improving their social status and reducing the stigma and discrimination associated with their occupation”; 5) Economic resilience. A living income “provides a safety net for informal waste workers, enabling them to withstand economic shocks and invest in their skills and equipment”; and 6) Recognition and regulation. Implementing a living income baseline “sets the stage for recognition of the role of waste workers in the economy and more broadly in society, and for regulation of the informal waste sector to ensure fair incomes, safer working conditions and access to social benefits."
  

• Recommendations for companies: The report recommends that businesses address the human rights risks and impacts in the informal waste sector by implementing to the UN Guiding Principles through the application of the Fair Circularity Principles. More specifically, Principle 2 of the Fair Circularity Principles states that companies “across all tiers and sectors of plastics value chains must recognize the informal waste sector as part of their own value chain.” This applies to two sets of companies: 1) those who "produce or utilize plastic waste eventually reclaimed by waste pickers” and; 2) those who “use recycled content that has been reclaimed by waste pickers.” In addition, the report states that the human rights risks and impacts - including those related to income - that informal waste pickers experience fall within companies’ responsibility to respect human rights under the UN Guiding Principles. Furthermore, these impacts are particularly severe and should be identified as salient human rights issues by companies; therefore, prioritising corporate action in this area. Moreover, the report spotlights the work that the Fair Circularity Initiative and the Circulate Initiative (TCI) are doing in this area, such as TCI’s Responsible Sourcing Initiative, which is “developing a harmonised framework for the responsible sourcing of plastics through multi-stakeholder participation.” The first iteration will be released in 2024.