THE INFORMAL SECTOR IN WASTE RECYCLING IN EGYPT Report Submitted to GTZ MAY 2008 Submitted to GTZ by Table of Contenets ABBREVIATIONS ............................................................................................................................ 4 GLOSSARY OF EGYPTIAN TERMS .................................................................................................... 5 INTRODUCTION ............................................................................................................................ 6 METHODOLOGY ............................................................................................................................ 6 Chapter 1: Historical Descriptive Narrative of Egypt’s SWM Situation ............................................ 8 1.1 Actors in the Informal Recycling Economy ........................................................................... 8 1.1.1 The Traditional Waste Collectors (Zabbaleen) ........................................................... 8 1.1.2 Roamers (Sarriiha) .................................................................................................. 10 1.1.3 Robabekia and Saxonia Peddlers ............................................................................ 10 1.1.4 Middlemen and Intermediary Buyers/Dealers ......................................................... 10 1.1.5 Wholesale Merchants of Recoverable from Roamers ............................................... 10 1.2 Formal Actors in the Solid Waste System .................................................................... 11 1.2.1 Local Level Government ...................................................................................... 11 1.2.2 Ministries .............................................................................................................. 11 1.2.3 The Formal Private Sector....................................................................................... 13 1.2.4 Donors and Private Supporters ............................................................................... 14 1.2.5 Residents and Commercial Waste Generators ........................................................ 15 1.3 Adaptive Strategies of the Informal Recycling Sector ..................................................... 15 Chapter 2: Overview of the Institutional Framework of Informal Waste Workers .......................... 17 2.1 Informality of Shelter is linked to Informality of Livelihood ................................................ 18 2.2 ..... Business Aspects of Informality: International Contracting Threatens a Dynamic Recycling Sector ..................................................................................................................................... 20 2.2.1 Response to Markets .............................................................................................. 20 2.2.3 Ownership of Land, Sorting Space and other Assets ............................................... 20 2.2.4 Capital ................................................................................................................... 21 2.2.5 Labor and Wages ................................................................................................... 21 2.2.6 Growth in Recycling Enterprises ............................................................................. 21 2.2.7 Trading Networks .................................................................................................. 21 2.2.8 Specialized Trading Towns and Centers ................................................................. 22 2.3 Informal Sector Recyclers: Private Business Partners to Large Industry ........................... 22 2.3.1 Livelihoods, Income and Employment ..................................................................... 23 2.3.2 Exploitation of Household Waste Collectors by Middlemen ..................................... 24 The Informal Sector in Waste Recycling in Egypt 1 2.3.3 Competition for the Waste by Scavengers ............................................................... 24 2.3.4 Residents’ Displeasure ........................................................................................... 24 2.3.5 Resettlement Issues ............................................................................................... 24 2.4 Challenges Faced by Informal Sector Recyclers .............................................................. 25 2.4.1 Poor Ability to Organize ..................................................................................... 25 2.4.2 Lack of Transparency of the System ...................................................................... 25 2.4.3 Financial Constraints ............................................................................................ 26 2.4.4 Legal and Contractual Obstacles .......................................................................... 26 2.4.5 Social Issues Related to Stigma of Trade and Perception of Society at Large ................ 26 2.4.6 Need for Skills Upgrading – Training ..................................................................... 26 2.4.7 Operational Issues ................................................................................................ 26 2.4.8 Informality ............................................................................................................ 27 2.4.9 Difficulty in Acquiring and Asserting Ownership of Property ................................... 27 2.4.10 Inadequate Market Information and Market Intelligence ......................................... 27 2.5 Non-Profit Community Groups ..................................................................................... 27 2.5.1. Association of Garbage Collectors for Community Development (AGCCD) .................. 27 2.5.2. Association for the Protection of the Environment (APE) ............................................. 28 2.5.3 Spirit of Youth for Environmental Services (SoY) .......................................................... 28 2.6 Lessons Learned from the Various Institutional Actors ...................................................... 28 2.6.1 Lesson One: Recycling of Source Segregated Waste Dignifies the Trade and Generates Income ............................................................................................................... 28 2.6.2 Lesson Two: Source Segregation of Household Waste into Two Fractions (Organic and Non Organic) is Feasible ............................................................................................... 29 2.6.3 Lesson Three: The Regularity of Service and Efficiency in Recovery are Based on Inherent Incentives to Collectors Who are Recyclers: ............................................................ 32 2.6.4 Lesson Four: Motivated by Profit and armed with Market Information the Informal Sector Recovers High Levels of Industrial Waste all over Egypt ............................................. 33 2.6.5 Lesson Five: It is Possible to Institutionalize Informal Sector Models of Clean Recovery and Recycling of Institutional Waste .................................................................................... 34 2.6.6 Lesson Six: Informal Sector and Formal Private Sector Interests Converge around Brand Name Fraud, 2000 .................................................................................................... 35 Chapter 3: Integration of Informal Waste Workers in Formal Systems: Legal, Institutional and Technical Aspects ....................................................................................................................... 36 3.1 Solid Waste Management Legal Framework ....................................................................... 36 3.1.1 Other Laws Address Specific Aspects of Waste: ................................................... 36 3.1.2 Solid Waste Management Specifications Related to Recycling in law 38/67 and its Executive Regulations: ........................................................................................................ 38 The Informal Sector in Waste Recycling in Egypt 2 3.1.3 Other Laws and Regulations: .................................................................................. 39 3.1.4 Challenges Related to Law Enforcement ................................................................. 39 3.1.5 Laws Related to the Formalization & Licensing of Businesses .............................. 39 Chapter 4: Assessment of Integration Process of Informal Waste Workers ................................... 44 4.1 Awareness and Information Dissemination ........................................................................ 45 4.2 Actions towards Formalization of Businesses .................................................................. 45 4.2.1 Registration through Local Authority .......................................................................... 45 4.2.2 Recourse to Registering with the SFD ......................................................................... 46 4.2.3 Fear of Taxation ......................................................................................................... 47 4.2.4 Complexities of Formalization of Land Tenure ............................................................ 47 4.2.5 Cooperating with the Industrial Modernization Center (IMC) ....................................... 48 Chapter 5: Lessons Learned, Conclusions and Recommendations ................................................ 51 The Informal Sector in Waste Recycling