edited by Inge Lardinois (Project manager UWEP 03)
This research paper describes the state of the art of the research on
`Solid Waste Micro and Small Enterprises and Cooperatives in
Latin-America', carried out between January and May 1996. The countries
involved were: Bolivia, Brazil, Colombia, Costa Rica, El Salvador,
Guatemala and Peru (an inventory study was carried out in Paraguay). The
research was coordinated by ACEPESA (Asociación Centro Ejecutor de
Proyectos Economicos y de Salud) of Costa Rica, IPES (Instituto de
Promoción de la Economia Social (IPES) of Peru and WASTE. This research
project was made possible with funding from the Urban Waste Expertise
Programme (UWEP) of WASTE itself and from the Urban Management Programme
(UMP-LAC and UMP-WB). The present paper is a summary of earlier papers
presented at international conferences in Cairo and Istanbul (see
Literature). The Spanish edition of a book describing all experiences is
available; the English edition will be available in the beginning of 1998.
1 Justification and Objectives
The research had two prime objectives: firstly, to contribute to the
improvement of solid waste management services and secondly, to promote
adjustments to national, regional, local and sectorial policies to allow
for the improvement and setting up of micro enterprises and cooperatives
(PYME/COOP) working in this area in Latin America. To meet these
objectives, the research study proposed documenting and analysing the
experiences of small and micro-enterprises and cooperatives in
Latin-America, which have become important mechanisms in presenting
alternatives to the grave environmental problems generated by inadequate
solid waste management.
Since little is known of projects in Latin-America in English and French
speaking countries, it was assumed that the Latin American examples would
provide interesting experiences and lessons for Africa and Asia.
2 Scope and Limitations
The different entrepreneurial forms studied are found in every part of the
waste cycle: some of them promote recovery at the point of origin, others
play an important role in the sweeping and cleaning of public streets, in
garbage collection and in the management of small-scale final disposal
sites. Recycling enterprises were not included in the study. The number of
enterprises from each country and their year of origin are listed in the
following table according to their type of activity.
Special attention was paid to financial-economic aspects of the enterprises
and we have attempted to elaborate performance indicators for each
enterprise. However, in some cases it was difficult to obtain financial
information because no accounts were kept, nor was there a register of the
waste collected, separated or disposed of. This situation restricted the
possibility of drawing detailed comparisons.
Table 1 PYME/COOP investigated by country and activity
||NO. OF ENTERPRISES
||sweeping and cleaning
collection and transportation
collection + transport
recovery and segragation
3 Methodology and State of the Art
Methodological guidelines were elaborated and were discussed and explained
during a workshop in Costa Rica in February 1996. In May 1996, a second
workshop was held in Peru to present the studies and to draw conclusions.
Field studies were carried out by local consultants. The results were
presented at HABITAT-II in Istanbul (June 1996), at the UMP-conference on
small and micro enterprises in waste management in Cairo (October 1996) and
at a World Bank seminar (November 1996). Final reports are available from
all countries and a book is currently in production.
4 Results of Field Studies
4.1 Types of Initiators
By examining the origin and principal characteristics of their activities,
four "types" of initiators were identified: small entrepreneurs, informal
recovery workers, Community Based Organizations, and NGOs.
- Small entrepreneurs
This type is represented by examples taken from the City of Guatemala, El
Salvador and Costa Rica. They are projects initiated by small
entrepreneurs, and offer waste collection services directly to the
population with municipal approval.
- Informal recovery workers
In this type, the entrepreneurial organization was set up on the initiative
of the recovery workers (waste pickers and itinerant waste buyers). These
projects were established to assure the permanence of their jobs and to
improve their working conditions. Cooperatives in Brazil and Colombia are
examples of this type of initiative. They often received support from the
- Community Based Organizations
These are organizations formed by the community to respond to its own
needs. Examples can be found in Costa Rica, El Salvador and Guatemala. The
PYME/COOPs that basically respond to community interests usually have very
limited relationships with the municipalities.
- Non-Governmental Organizations
This type of initiative comprises small and micro enterprises formed with
the support of NGOs that have close links with the communities and which
generally work in waste collection in low-income areas. Examples can be
found in Bolivia, Peru and Colombia.
All of these entrepreneurial forms are characterized by the intensive use
of manual labour (a large number of workers in proportion to the capital
invested), a factor which has permitted many PYME/COOPs to emerge and
profit in the real world of free competition without depending on donations
or international loans for financing.
4.2 Employment Generation
The survey researched 89 PYME/COOPs which together account for more than
800 jobs. It must be stated that the PYME/COOPs studied represent only a
small number of the total of PYME/COOPs that exist in the countries
investigated. Some of the examples studied:
- in Guatemala, five out of more than 300 waste collection enterprises were
- in Colombia, four cooperatives were included in the research, while more
than 100 cooperatives exist in the country, most of them being organized in
the National Association of Recyclers (ANR)
- in Peru, 19 enterprises were studied out of a total of more than 100
From the survey, it was evident that the actual number of jobs created in
waste management activities is much higher, totalling around 10.000 jobs
(excluding individual waste pickers and recyclers).
Alternative employment opportunities have also been set up, such as the
cooperative `Recuperar' in Medellin (Colombia), which has found jobs for
its members in other sectors (e.g. the manufacturing industries).
4.2.1 Income Generation
In general, the wages of PYME/COOP workers are higher than the statutory
minimum wage (see Table 2). An analysis of wages per activity in the
countries investigated, with the exception of recovery and separation in
Costa Rica, showed that all of the PYME/COOP workers earn higher than the
Table 2 Average wages received per activity and statutory minimum wages
If the salaries are analysed by activity, the garbage collection and
transport workers of Guatemala are the most well paid, since they receive
3.03 times the minimum wage. With respect to the recovery and separation
workers, in relative terms (average salary/minimum wage) as well as
absolute terms, those in Brazil are the best paid because they receive 2.46
times the minimum wage. Sweeping activities were only compared in Guatemala
and Peru; PYME/COOP workers receive the highest salaries in Peru.
The functions carried out by women in waste management are closely related
to the way men and women divide their labour both inside and outside the
home. However, the research shows that traditional divisions of labour can
- Street Sweeping and Cleaning
In Peru, the micro enterprises studied are made up exclusively of women who
live in the marginal urban areas of Lima. Here it is evident that the
street sweeping PYME/COOPs prefer to contract women because they consider
them to be more efficient at this work than men. This decision is based on
the gender stereotype that because women clean the home, they feel
comfortable with this type of work, transferring their domestic cleaning
experience to the public arena.
- Primary and Secondary Waste Collection
The following table shows the participation percentages of men and women in
the study sample of solid waste collection enterprises. It is especially
interesting to note the differences in women’s participation in this type
of activity in the PYME/COOP in the Central American countries with those
of women in Peru and Bolivia.
Table 3 The participation of men and women in the waste collection
||Total no. of Workers
||No. of women
||No. of men
The participation of women in this type of activity in Central America is
minimal. In Peru and Bolivia, the participation of women is much higher.
One of the reasons for this difference is the influence of the majority of
the NGOs, who guided the formation processes of the enterprises, including
the selection of poor, unemployed women from the marginal urban areas.
One of the results of the investigation in Peru indicates that women remain
in the enterprises longer whereas most of the men consider it to be a
temporary job. Many men prefer to leave the PYME/COOP immediately on
finding a job or occupation considered more prestigious than garbage
collection. Women, however, see this job as their only source of income and
therefore perform their work with more responsibility and continuity.
The above-mentioned situation provides a degree of insight into why the
enterprises are predominantly owned and managed by women. The majority of
the active associates are women and almost 70% are informal or formal
leaders (managers). It should be pointed out that some of these women had
previously acted as leaders in community organizations, a circumstance
which in some cases allowed them to become leaders in the enterprises.
The following table shows the participation of men and women in the solid
waste recovery activities of the PYME/COOPs studied.
Table 4 The participation of men and women in the recovery enterprises
||Total no. of Workers
||No. of women
||No. of men
In the cases of the cooperatives in Colombia and Brazil, it is difficult to
determine the percentages of participation due to the permanent fluctuation
of the number of workers in the cooperatives. By way of example, in the
PROSPERAR cooperative, in Manizales, Colombia, men occupy 69% of the jobs,
women 23% and children 8%. These numbers give an idea of the situation.
The participation of female manual labour is greater in recovery activities
than it is in garbage collection, probably because the classification work
requires visual-motor abilities and
prolonged periods of concentration. Both abilities are traditionally
associated with women. Another condition which facilitates the
incorporation of women in this type of labour is the fact that the
installations of the enterprise where they carry out the classification is
generally located in a room in their own home. Thus they can attend both to
their domestic work and to the work of the micro-enterprise.
4.3 Financial Aspects
4.3.1 Costs of collection and street cleansing
Even when the income levels and the costs of all the PYME/COOP have not
been precisely determined, there are relevant factors which indicate that
these have a "basic" income which permits them to continue operating and
guarantees their future growth to some degree. In general the enterprises
make enormous efforts to attain the best possible income. Because of this,
all of them continuously seek to reduce their costs and maximize their income.
In some cases, we have been able to calculate performance indicators:
costs per ton collected. As shown in Table 5 the average collection costs of the PYME/COOP in Peru and Guatemala are lower than the average for Latin-America.
Table 5 Average collection costs per ton per month in US $
||Costs/ton/month (in US $)
Costs per kilometre street cleaned
As can be seen in Table 6 the average cleaning costs of the micro
enterprises in Lima are also lower than the average street cleaning costs
Table 6 Average cleaning costs per ton per month in US $
||Costs/km/month (in US $)
||7 - 9.5
Both indicators provide strong evidence for the cost-effectiveness of the
4.3.2 Payment of services
It is important to point out that there is a basic difference in the income
obtained by those PYME/COOPs which charge the population directly for their
services and those which are paid by the municipalities. With regard to the
first type of enterprise, the results in the two countries researched are
In Guatemala, there is a competitive market for waste collection and
transportation services, and the method of direct payment by the residents
is very effective. In several cases, this has enabled the growth of the
PYME/COOP. However, in Peru, where the municipality has granted the
PYME/COOP the right to charge the people directly for this service in some
areas, this method has had little success and non-payment or delayed
payment is a frequent result. This situation in Peru is basically due to
(a) There is a non-payment culture or tradition for these services because
people consider that these services should be provided by the government
free of charge.
(b) The lack of concern of people for the solid waste problem.
(c) In Peru, services are primarily provided to low income areas, while in
Guatemala services are generally provided to middle and high income areas.
The customers are not the only bad payers. In some cases where the
PYME/COOPs have a contract with the municipality, payment may be delayed by
several months. This is particularly the case in Peru.
4.3.3 Hidden Costs
In order to be present in the market and to be able to compete, the
PYME/COOPs have had to implement "defence" mechanisms. One of these
mechanisms is that of hidden costs. This refers to those costs which,
although they should be paid by the PYME/COOP, are not. Consequently, the
enterprises do not consider these costs as part of their real costs.
This concept was introduced in the investigation with the object of
evaluating and understanding the logic of the micro-enterprises and
cooperatives and of understanding how they remain in the market and, above
all, how the participation of external agents in this type of enterprise
contributes to their existence in one way or another.
The survey showed that there are common hidden costs in all of the
PYME/COOPs. One of the most representative examples is the cost of labour
or personnel. The hidden cost of personnel includes the unpaid labour of
the family members of the owners of the PYME/COOP, and unpaid legal social
benefits for many staff such as medical insurance and old age pensions.
4.3.4 Hidden benefits
The fact that not all the inhabitants are disposed to pay for the service
has also prompted many enterprises to interact with the community through
educational campaigns. This situation can be seen in several countries
(e.g. El Salvador, Peru, Bolivia).
The disrespect of the population for waste collectors has stimulated
cooperatives to engage in environmental education. The cooperatives in
Brazil and Colombia pay great attention to organising educational campaigns
aimed at encouraging awareness of the importance of recycling among the
population and stimulating the community to cooperate in recovery
activities. Since environmental education campaigns are carried out cost
free, they were identified as one of the most important hidden benefits of
the work of the PYME/COOP.
4.3.5 Financing of the PYME/COOP
The enterprises that arose `spontaneously', received loans from friends,
families and banks. In some cases, particularly those in which NGOs played
a crucial role in establishing the PYME/COOP, special credit schemes were
established to serve the needs of the enterprise.
We have not identified a single case that makes use of the micro credit
programmes of international agencies such as the World Bank or the IDB. In
Peru it was discovered that the existing micro credit schemes do not extend
loans to waste collection enterprises - firstly because a service providing
enterprise is not considered a viable enterprise and secondly, because
enterprises must operate for at least one year before they are eligible for
credit. In general, micro credit programmes have insufficient knowledge of
the operational logistics of waste management enterprises.
4.4.1 Types and Ownership
The enterprises investigated use completely different technologies. These
vary from carts made from waste to trucks (see Appendix 1). In the majority
of the cases investigated the technology used is owned by the PYME/COOPs
themselves. They have acquired the equipment they use in their work in
different ways: by making it, through credits, or through donations.
4.4.2 Technological adaptations
Distinct examples of technological adaptations exist. For example, in Costa
Rica, one enterprise (garbage collection) uses a truck with a partition and
chain for emptying the solid waste. ECOASEO (Colombia) has a three-ton
garbage truck, in which the compacting system has been removed in order to
facilitate the recovery of recyclable materials. This vehicle has been
designed, at the suggestion of the recycling workers, by an engineer (a
Social Foundation functionary) and assembled by a national firm using local
In the majority of garbage collection micro-enterprises investigated in
Peru, the equipment used was made with certain ergonomic considerations in
mind. This has been the case in the design of the garbage collection
tricycles and capachos (a fifty-gallon drum on wheels with a handle for
pushing). In some cases the micro-enterprise workers have detected defects
in the equipment and have introduced improvements in order to make their
work easier and quicker.
In spite of the adaptations made, there are still technological aspects
which need improvement. For example, the principal technical problem with
the carts in El Salvador is the bicycle wheels, which are easily damaged by
the weight of the refuse and the conditions of the terrain. In most cases,
these are small problems which increase the operational costs of the
4.4.3 Effectiveness versus efficiency
The techniques and technology used for the collection and transportation of
waste have been adapted to the situations within in each locality and have
largely been improvised. The collection method is effective, but can at the
same time be inefficient. This does not reflect on the technology used, but
rather on the enterprise’s poor logistics.
Taking the garbage collection micro-enterprises of Guatemala as an example,
garbage collection can be said to be effective because, using appropriate
technology, 90 to 95% of the waste produced by the population is collected
and 60 to 70% of residents is willing to pay for the service. However, the
system established to collect this 90% is not efficient. The clients are
not concentrated in the same work area (a collector works in at least three
different zones), and the distance between the work area and the workers’
homes is great (the worker must travel at least half an hour to get to his
work area). Moreover, in some cases the unloading of waste at the final
disposal sites is slow, thus prolonging operation time.
4.5 Linkages with municipalities
4.5.1 The responsibility of municipalities
In all cases, municipal responsibility for solid waste encompasses all of
the corresponding services. However, solid waste management occupies a
position of prime importance on the municipal agenda only in some cases.
Only in Costa Rica, Colombia, Bolivia and Brazil does the subject of solid
waste receive political attention, although this does not always guarantee
adequate solid waste management. Recovery and recycling are usually not
seen as the responsibility of the municipality.
4.5.2 Types of relationships
The relationships between the municipalities and the PYME/COOP are very
different in the countries investigated. On the one hand, in Guatemala the
relationship is distant because the municipality does not intervene in any
way in the functioning of the garbage collection system. There the
micro-enterprises decide for themselves who they will provide their
services to, how much they will charge their clients, when they will attend
them, and so forth. While in Peru, on the other hand, the relationship is
very close. The municipality determines in great detail how the PYME/COOP
4.5.3 Contractual relations
In the majority of the cities investigated the micro-enterprises operate
under contract or concession from the municipality. This contract varies
from a period of four to six months as in Cucuta, Colombia, to a period of
several years. For example, in Costa Rica and in Villa Nueva, Guatemala,
some PYME/COOPs have managed to acquire contracts for up to ten years.
However, the majority of the contracts with the enterprises are for an
average of one year.
Despite this, there are examples where the PYME/COOPs operate without
written or verbal contracts, but have been granted authority to operate by
the municipality. In the City of Guatemala, more than 300 micro-enterprises
have collected solid waste without any form of contract for the last forty
years. Likewise, there are examples such as the city of El Alto, Bolivia,
the district of Villa El Salvador in Lima, Peru and the majority of the
cities in Costa Rica where micro-enterprises are in operation.
4.5.4 Dependency relationships
Even when there is no contract between the PYME/COOP and the
municipalities, a dependency relationship is sustained, especially with
regard to the authorization necessary for access to the final disposal
sites. These sites are almost always managed by the municipality, which is
the reason why the PYME/COOPs require municipal permission to dispose of
the solid waste collected. Another dependency relationship is the
coordination required of the garbage collection enterprises, which do not
directly transport the waste to the final point of disposal, and the
municipal vehicles which should carry out this task.
4.6 Community Participation
The PYME/COOPs that are dedicated to garbage collection and transportation
are those which establish closer relationships with the communities as a
result of the characteristics of their activity. In this case the
PYME/COOPs were created to meet the needs of the community. They offer
personalized service and form part of the community. From the analysis it
was concluded that the client's satisfaction with the service offered is
vital to the permanence of the PYME/COOPs in the communities and is a
necessary condition for their success.
From the start of the activities, and especially during operation, the
communities participate in distinct ways:
- They put the waste out in time for collection and store it as required by
- They participate in community cleaning tasks.
- They pay for the service.
- They control and supervise the work. For example, they control the
quality of the work, the running of the route according to the schedule,
the demeanor of the worker, the correct use of the uniform and equipment,
etc. They also comment on the service rendered, discuss the operative
problems, and make suggestions concerning how the service can be improved.
- They participate in the management of the enterprise. For example, a few
enterprises in El Salvador, Costa Rica and Brazil are the property of a
- They pressurise the municipal authorities into allowing the PYME/COOP to
offer the service. For example, one community pressurised the municipality
to retract its decision not to extend the enterprise’s contract.
- They participate in the design of solid waste collection projects to be
presented to the municipality, in the convocation and selection of workers,
in the establishing of tariffs, etc.
4.7 Roles of Stakeholders
The research identified a large variety of stakeholders’ roles, a few
examples of which will be given here (see also Appendix 2). The simplest
system encountered is the system whereby the enterprise delivers the
services to the beneficiaries and the beneficiaries pay the enterprises
directly. The role of the municipality is very limited and often implies no
more than a certain type of authorization or tolerance. These systems are
often spontaneous initiatives, which emerged without external support, and
exist, for example, in Guatemala, Bolivia and Costa Rica. The case of
Guatemala City is interesting (see Figure 2). The role of the municipality
is almost absent, which makes this example one of total privatization. 300
to 400 yellow trucks, as they are called locally, provide waste collection
services. The ‘technical support’ of the municipality means no more than a
quick inspection of the vehicle, after which it receives a stamp. The
non-profit sector (NGOs and CBOs) is completely absent.
The system in Peru and Bolivia is quite different (see Figure 3). It is
important to note that most of the enterprises did not emerge
spontaneously, but were initiated by NGOs at the request of either the
community or the municipality. In this system the enterprise provides the
service, the beneficiaries pay taxes to the municipality and the
municipality contracts and pays the enterprise. The role of NGOs is very
strong: they provide financial, technical and institutional advice and
manage to obtain small loans from the banks. The system in La Paz, Bolivia,
is basically the same as the Peruvian system. The differences are that the
municipality of La Paz provides the loans and that a law was recently
established to facilitate the participation of citizens through locally
established Committees of Vigilance, which have a role in the monitoring
and control of the enterprise. If the enterprise does not deliver an
adequate service, these committees can complain, which may result in
terminating the contract.
In Costa Rica, the situation is again quite different (see Figure 4). The
enterprises studied operate in semi-urban areas, where the role of the
municipality is often limited. Most of them also emerged spontaneously, in
tourist areas in particular. In Costa Rica, CBOs are established by law and
receive state financing, which they can spend according to their own needs
and priorities. One system encountered is the ‘communal enterprise’,
whereby the beneficiaries pay fees to the CBO and whereby the CBO employs
workers to provide the service. Waste collection is only one of the
activities of the CBO. Another system consists of beneficiaries paying the
fees directly to the enterprises. These enterprises often receive payment
from both the beneficiaries (the households) and the state.
5 Conclusions and Recommendations
It is difficult to draw specific conclusions from such a diversity of
activities and experiences encountered in seven countries. However, the two
most important general conclusions are presented below:
- The PYME/COOPs studied and described, can contribute to solving the
problems of urban waste management, directly tackling the main causes which
- by introducing efficiency in waste management through the transfer of
services to the PYME/COOP;
- by reducing investment costs and operating costs involved in waste
management by using unconventional systems characterized by the use of
simple technologies and the intensive use of labour; and
- by achieving the active participation of the population in the solution
to environmental problems by seeking to raise their level of awareness of
- One of the major constraints the investigated enterprises face is the
limited institutional framework in which they operate. In particular, the
municipalities face serious problems with, for example, staff
incompetence, inadequate legislative and regulatory infrastructure and
inadequate administrative and financial systems. In this context, they can
hardly comply with their normative, regulatory and fiscal functions, which
are indispensable if enterprises are to provide the services in an adequate
and integrated way.
Intervention programmes need to be directed at the three principle actors
involved in waste management:
- municipalities and other government agencies: training in principles of
integrated sustainable waste management, regulation and control of
privatized services, taxation;
- small and micro enterprises and cooperatives: training in negotiating
capacities, bookkeeping, working conditions, business management and
- the population: environmental education, strengthening of Community Based
6 Proposed Follow-Up Activities
The following activities have been proposed:
- Execution of the project: `Urban Environmental Management of Solid Waste’
in La Ceiba
- Development of training manual
- Development of performance indicators
- Formulation of `Programme of Technical Assistance for microenterprises
and municipalities in Latin-America
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Appendix 1 Examples of Used Technology
- Tricycle (e.g. Peru, Bolivia, Colombia)
- Minitruck (e.g. Bolivia, Peru)
- Open truck (e.g. Guatemala)
- (Mini) tractor (e.g. Costa Rica, Brazil)
- Handcart: separate waste collection (e.g. Colombia, Brazil)
- Handcart: street sweeping and cleaning (e.g. Peru)
- Handcart: waste collection (e.g. Bolivia)
- Handcart: waste collection (e.g. El Salvador)