Finanzierung der informellen Wirtschaft durch Abfallsammler (EN)

Summary

Poor collection, open dumping, burning and the disposal of organic waste have serious consequences for health, pollution, flooding and the climate. Nevertheless, waste systems have long been treated as a municipal afterthought. COP31 addresses this gap by placing zero waste and methane reduction among its priorities for climate action. These priorities recognise that better waste prevention, collection, source separation and material recovery can reduce pollution, improve resource efficiency and limit emissions from uncontrolled disposal. These are the requirements for a circular economy.

However, for this agenda to be just, it must also strengthen the livelihoods, safety and voice of the workers who already make recovery possible. It also begs the question: Who will be financed in order to build the circular economy? The answer, in many African cities, lies with the people who are involved in making waste recovery possible: informal waste pickers, itinerant buyers, sorters and small aggregators.

Waste pickers collect recyclable and reusable materials wherever waste is generated or dumped, then sort and sell them on, while itinerant buyers and small aggregators link this collection to larger recycling markets. Their work keeps valuable materials out of drains and landfills, often where municipal collection is thin. However, most of them do this work without the basic protections of formal employment, and with little say in the decisions that affect their livelihoods.

In discussing the financing of the waste pickers, it must be stated that this is not an argument that seeks to preserve poorly paid and unsafe work, but rather one against a transition that ends up measuring success in the amount of waste recovered or the facilities that were commissioned, while removing the people who make circular recycling possible. Waste pickers can only become stakeholders in the just circular transition if the financing mechanisms around waste management recognises them as one of the providers of public and climate services. In addition, they must be supported to organise and upgrade the terms they shape, which will also protect their access to materials and income while waste systems become more formal.

The Nigerian example makes this question immediate. The country has a National Policy on Waste Management, and, since 2025, there have been UNIDO-supported guidelines for its implementation. In Lagos, the state government has also pursued actions that seek to reduce plastic leakage and single-use plastics. The policy direction has been clear from the onset: Plastics should be treated as a resource, not just waste. However, the reality is more difficult. Much of the collection and recovery system depends on informal workers who often lack formal contracts, secure sorting spaces, reliable access to recyclable materials and stable buyers. Their incomes can depend on daily sales of materials whose prices fluctuate, while unsafe working conditions and limited protective equipment create further risks.

In Lagos, formalisation has to be designed carefully because a new concession, transfer station or material recovery facility can transfer control of collection routes and recyclable materials to a formal contractor. When this happens without the participation of waste pickers, they can lose access to the materials and buyers on which their livelihoods depend. This dynamic is supported by research on informal waste pickers that has shown how approaches that are more centralised can become a threat to waste access and livelihoods when the waste pickers are not consulted in the design of new systems. Formalisation should not, therefore, constitute a wholesale replacement of informal workers with a formal contractor. Instead, it should mean that waste pickers are recognised, given legal and commercial capacity, provided with support for safer work, represented and given a fair share of the value that is created.

Other examples from cities in the Global South point to what this looks like. In Pune, India, SWaCH (Solid Waste Collection and Handling) emerged from waste pickers organising and working in partnership with the municipal corporation as the designated provider of door-to-door collection. That model did not take waste pickers as beneficiaries of the project, but it positioned a worker-owned cooperative as a partner providing municipal services. Meanwhile, in Bogota, Colombia, organised recyclers were able to employ collective action and litigation to win recognition and payment for recycling as part of public service. These actions emphasised that income should not only rely on the changing price of scrap. Ultimately, the city recognised the service associated with waste collection and transport. In Belo Horizonte, Brazil, ASMARE (the Association of Paper, Cardboard and Recyclable Material Pickers) was formed by waste pickers in 1990 with help from the local NGO Pastoral da Rua. Under an agreement signed in 1993, the municipality engaged the association as a service provider and supported a wider avenue for worker organisations, public institutions and civil society organisations to play a role in shaping inclusive recycling.

However, the above-mentioned examples do not provide a template that can simply be copied into other African cities. Instead, they offer some common lessons. First, workers need to be organised and represented before they can negotiate on equal terms. Second, municipalities must recognise the public service that is being delivered, not only the commodity that is being sold. Third, all formal requirements should follow a gradual and proportionate path, meaning, for example, that waste pickers should not be expected to satisfy every capital and administrative requirement of a large waste facility from the onset. A final lesson is that protection is not secured by registration alone, as even recognised cooperatives can lose ground if a large contractor receives sole access to materials or if payments are delayed.

Bearing all this in mind, COP31-era finance should be more intentional. At present, most financing around the circular economy is still structured for firms that are able to present their audited accounts, a formal contract, collateral and annual revenue history. For a major plant, these requirements may be reasonable, but they would exclude the worker organisations that collect the materials needed by the plant. Therefore, the solution does not lie in lowering standards without setting controls, but in staged eligibility. A reasonable approach would be for a facility to accept cooperative registration, municipal verification, association membership, mobile payment records and some independently verified collection data as part of the early evidence requirements. It could then pair this with timebound support for bookkeeping, health and safety, governance and formal registration.

Capital should match the economics of recovery. Grants and concessional funds can be directed towards protective equipment, sorting spaces, weighing scales, carts, training and any digital tools that may help workers track materials and payments. Working capital and group-based credit can help cooperatives procure and store materials when prices are unstable. In March 2013, Bogotá began paying organised recyclers a fee for every tonne they collected and transported, on top of what they earned from selling the material, so that their income no longer rises and falls with scrap prices alone. Schemes, such as extended producer responsibility and municipal contracts, should pay worker organisations in the same way for verified collection, source separation, sorting and diversion from disposal, while the sales of recyclable materials remain an additional income stream. Insurance and health cover are also important because the costs of injury and illness can devastate a household’s income. Together, these measures will give workers a more stable economic base and reward them for the public value of their work.

A better measure of risk should also be used for climate finance. Before support is provided on new infrastructure or a concession, funders should conduct a baseline study of the workers and enterprises that are already active in the area. The aim of the baseline is to record routes, sites where work is carried out, materials handled, gender, earnings, existing organisations, risks to health, and the relationships with buyers. Financing agreements should include a binding ‘no displacement’ clause, meaning that no project may cut waste pickers off from the sites, routes or materials they currently depend on unless an alternative has first been negotiated with them and their organisations. Existing workers should be allowed the first right of refusal to provide collection and sorting services before new exclusive contracts are awarded. In the event that projects require relocation from a dumpsite or transfer station for safety considerations, alternative work and income arrangements should be agreed upon and functioning before access is removed.

This sequencing matters. When Rio de Janeiro closed the Jardim Gramacho dumpsite in 2012, about 1,700 registered pickers received a one-off payment of around R$14,000, but the planned recycling hub that was meant to absorb them was not yet operating and many households struggled once the money ran out. Workers who had not been registered received nothing. Funders already have a tool to avoid this: the livelihood-restoration requirements in the International Finance Corporation’s Performance Standard 5 and the World Bank’s Environmental and Social Standard 5, which apply to people who lose their income because of a project, even when they hold no formal title. Applied to waste pickers, this would mean registering everyone working at a site well before closure, agreeing the alternative with their organisations and keeping access open until new sorting centres or contracts are up and running.

To determine whether these safeguards are working, funders should use early warning indicators that track workers’ livelihoods alongside recycling and climate results. A transition is failing if the number of waste pickers with access to materials falls significantly, even where a project reports higher recycling volumes, or if average net earnings decline, payments are delayed, injuries rise or women are pushed out of better-paid roles as work becomes more formal. A transition is also failing when a traceability system records materials, but workers cannot access the data used to calculate their payment, or where contractors and intermediaries capture a growing share of the value while collectors and sorters remain indebted. These indicators should sit beside volumes recovered, contamination rates, landfill diversion and estimated avoided emissions on every project dashboard.

Experience from methane policy and climate finance points to a simple lesson: Implementation systems determine whether good intentions have an impact on the ground. Guidelines and targets are important, but they cannot implement themselves. This is also true of the waste sector. A circular transition will be more durable when pre-existing collection and sorting systems are strengthened, standards and earnings are raised, and workers are given a place in governance. Waste pickers should not be treated as an obstacle to modernisation but as essential stakeholders in the waste project.

As COP31 unfolds, it can provide the platform that shifts the question from whether informal waste pickers should be recognised to how finance and safeguards can make inclusion real. The practical test, therefore, is this: Can a waste-picker-cooperative win a contract, receive timely payments, access working capital, work in safer conditions and keep a meaningful share of the value being created? If the answer is yes, circular-economy-finance can help anchor a just transition. If not, the transition may boast attractive investment figures and new machines, but it will have failed the very people who are keeping recycling alive.

About the Author

Jabari Sefu

Jabari Sefu writes on climate change, with a broad interest in climate action and a particular focus on Africa’s challenges and opportunities in building a sustainable, resilient and inclusive future.