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Etilplast: A cartonero’s adventure

May 5, 2009 | Comments Off | Enterprises

Our first visit to a company takes place in Buenos Aires and starts off with an epic beginning…

We have an appointment on Wednesday morning at 10:00 am near the Tigre suburb, outside Buenos Aires. To get there, we take a rémis (like a taxi, but cheaper) but the driver obviously has no idea of the road he needs to take.

As we are already 45 minutes late, our driver keeps stopping at every street corner to ask the way. After yet another stop, his engine caughs and dies… and will not start up again. We get out and push the car for 50 meters until the engine starts. According to the directions we received, we must now be close to our destination, so we chose to continue on foot…

We finally arrive at the Etilplast Cooperative where we are greeted by Walter, the cooperative’s co-founder. The discussion begins at the entrance of the cooperative, and continues in his small office after he has taken us on a guided tour of the place. Although seemingly shy, Walter is indefatigable when it comes to talking about his cooperative, its objectives, the problems it tackles and his plans for the future.

Problem:

Argentina, like many other emerging markets, does not enjoy a waste sorting system at the national level. Waste and rubbish are not sorted because the population is not conscious of the consequences that poor waste management can have on the environment. Recycling is an activity that has only recently started to take hold. And it’s true that as long as the Argentinean Peso benefited from the trust of investors, the import of raw materials was cheaper than the purchase of recycled products.

Context:

Between 1998 and 2002, Argentina experienced a serious economic crisis which intensified in 2001 when the Ministry of Economy announced that the country was no longer able to reimburse its debt. This crisis deeply damaged the country’s economic, political and social situation and led to a strong increase in poverty, the consequences of which are still visible today.

The entrepreneur: 

In 2001, at the height of the crisis, Walter Lizarazu finishes secondary school. The bankruptcy of his father’s store means he can not pay to continue his studies. He starts looking for work, but the intensity with which the crisis hit the country rapidly makes his job search futile. He then has little choice but to become a cartonero. Walter is quickly confronted with the difficulty of his task: rubbish is scattered from one street to the next, nothing is sorted, few elements can be recuperated, and the money he makes is no match the amount of energy he expends. He is particularly struck by the fact that all he is doing is sorting what others have mixed together beforehand… One day, a shampoo company needs to get rid of 6 tons of plastic: Walter takes care of it, and sees the opportunity to launch a project with a wider scope than anything he had imagined. In 2003, the cooperative Etilplast is born!

The company:

Etilplast is a cooperative that currently employs 38 people. Under Walter’s drive, and that of his father, its members started by focusing on recycling plastic. They gradually extended their activity, and now treat various types of waste. Anything that cannot be recycled is sent directly to the rubbish dump, the rest is taken to the warehouse. There, the waste is sorted; after separation, cardboard and glass are sold as raw materials to other companies. Plastic, on the other hand, is redirected towards the recycling factory where, after treatment, it comes out as a raw material virtually indistinguishable from the original product.

Social impact:

The cooperative has two fundamental objectives. The first is to raise the population’s awareness of the environmental issue of waste management. Etilplast is not content with simply sorting and recycling, it aims at solving the problem at its source. They collaborate with several schools where they educate young students on the issue. Walter is convinced that if young people understand the stakes involved in sorting and recycling, they will have the capacity to influence their parents’ habits. The second objective is to offer destitute people a status-enhancing job. Walter is proud of the fact that Etilplast has improved the living conditions of 38 families. However, his humility is striking and he does not like saying that he is the founder of Etilplast, as he considers that all the people working with him have contributed to its development.

Financial support:

The cooperative is largely self-financed. Most profits are reinvested into the company to improve its working practices and to increase its social impact. In 2008, Etilplast received a 600 000 pesos loan (around €145 000) from the Dutch fund Oikocredit (see profile in the category “Financial Players”). This credit has specificities that make it beneficial to the development of Etilplast; for example, Etilplast enjoys a two-year capital exemption,  which means that during the two first years they need only pay back interest, and they will begin reimbursements only in the third year. This exemption allows Etilplast to enjoy the full benefits of the credit before having to reimburse it. Walter’s account was sufficient for us to measure the impact of Oikocredit’s contribution: “In five years of existence, we had managed to employ 20 workers and we collected the waste of approximately 2300 families. Following Oikocredit’s loan, in six months, we have increased our workforce to 38 employees, and we can now collect the waste of 1800 extra families.”

Walter concludes the interview by telling us that “Etilplast’s vision is that nothing is impossible”. He has begun as a cartonero, and is now planning to replicate his model and extend it, in the hope that this will push political authorities to take appropriate measures. Similar initiatives have emerged in other areas of Buenos Aires. The devaluation of the peso which followed from the Argentine crisis has injected some dynamism into domestic recycling initiatives, as recycled materials have become cheaper than raw material imports. As a new crisis is hitting the world economy, Walter can this time face the future with fresh optimism…

(1) In Argentina, “cartonero” refers to individuals who collect waste in the streets, essentially to recuperate cardboard. They then sell the collected materials and live off the proceeds, earning an average salary of €3 per day. The cartoneros are held in low regard by society because of the degrading nature of their work, and as a consequence, the majority of them suffer from social indifference. They are also exposed to extremely hazardous hygiene conditions, and suffer repression from both the police and organized crime groups. The number of cartonero families increased dramatically as a result of the crisis that hit the country at the turn of the 21st century: according to the World Bank figures, over 100 000 new families began to live off this activity in 2000.

 

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Oikocredit: Investing in people

May 5, 2009 | Comments Off | Financial Agents

Oikocredit is a Netherlands-based financial institution which specializes in ethical investments and whose aim is to finance development projects in the South. The name Oikocredit is a perfect representation of the organization’s philosophy: the word “Oiko” is derived from the ancient Greek oikos (meaning “house”, “community”, “world”), and “credit” refers to the Latin credere, “to believe”.

Working on a cooperative model, Oikocredit offers sustainable financial services to microfinance institutions, social enterprises and SMEs (small and medium-sized enterprises) with the main objective of obtaining financing which is favorable to development. The criteria for attributing capital are based on the feasibility and viability of business projects, but also take into account gender equality and social and environmental impact.

With over 30 years of experience, Oikocredit has succeeded in developing a solid structure, and is currently present in 69 countries. The institution has survived the present financial crisis particularly well, returning positive results in 2008: in that year its investments grew by 32%.

Through financial services such as loans, share placements and credit lines, Oikocredit and its partners have helped 15 million people throughout the world to improve their living standards in 2008.

For further information, visit www.oikocredit.org

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