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Ciudad Saludable: The video report!

July 25, 2009 | Comments Off | Enterprises, Videos

Ciudad Saludable (healty City) is a NGO that develops micro-enterprises focusing on waste management in Lima. Founded by Albina Ruiz, Ciudad Saludable encourages and helps “recicladores” to organize themselves and create their micro-organisation. It has created 150 new jobs and Albina Ruiz pays a special attention to the self-estime and the dignity of the workers. Beside the trainings they give to the micro-entrepreneurs, Ciudad Saludable offers a technical and legal support and they developed an innovative microfinance system to finance the creation of micro-enterprises. After a successful experience in Peru, Albina is currently thinking how she could replicate her model in other countries such as India.

For more info, read Ciudad Saludable’s profile


Fair Street - Ciudad Saludable from Angalio Productions on Vimeo.

Our Peruvian report takes place in Lima where we met Albina Ruiz, founder and manager of Ciudad Saludable. Throughout our interview with Albina, we were really impressed by her enthusiasm and by her optimistic vision of the future. After this meeting, we have headed towards “El Pino”, one of Lima’s poorest neighbourhoods. There, we observed the work of the microentrepreneurs who drive all over the area with their tricycles to collect waste. The impact of Ciudad Saludable’s work is striking: despite the obvious poverty and the improvised buildings, we visited a clean neighbourhood dotted with green areas where it feels nice to move around.

Problematic and context:

Waste management is a major issue in Peru. The funding that the different governments allocate to this matter are insufficient and are mostly concentrated on the richest neighbourhoods. The demographic explosion in the main cities has also worsened the situation. The Peruvian households alone produce 20.000 tons waste daily. Among this waste, only 60% are collected and 35% treated appropriately. In the poorest areas where private associations do not intervene, some streets look like open sky dumps, the air is unbreathable, and the waste negatively impacts the hygiene and the health of the communities.

The inefficiency of the public services in the destitute areas is mainly caused by the lack of integration of the poorest populations within the legal system and the lack of political will to tackle the problem head on. Often without declared address and valid ID documents, the state does not have the opportunity to control the destitute citizens. Also, many politicians believe that the poor are not able to pay for a collection service. Once in a situation of free rider, the municipalities do not have enough means to cover all the areas and the waste excess start accumulating quickly in different places of the area.

The materials accumulated in these dumps represent a source of revenue for the poorest people. Improvising themselves “recicladores” go around these open sky dumps looking for plastic or paper that they can resell for a small amount of money (+/- $2 per day) to an intermediary who sells these materials to a recycling centre. These “recicladores” work in really bad conditions, without gloves, protection masks and working pants. Moreover, the “recicladores” are regularly persecuted by the local police who do not accept their activity. Finally, as they work alone during the night, the “recicladores” are often victim of the violence of the local gangs.

The initiative:

Ciudad Saludable (Healthy City) is an NGO which favours the development of microenteprises that collect and recycle waste in Peru. Ciudad Saludable regroups “recicladores” formally by organising them within microenterprises. Practically, Ciudad Saludable helps them in the legal work needed in the creation of a company, provides them a logistic support and enables them to finance the tools needed for their activity by giving them access to microcredit at very attractive conditions. This relatively simple model has revolutionised waste management in Peru and has improved the living conditions of millions of destitute people.

The organisation of the “recicladores” has several advantages: firstly, by regrouping the output of their daily labour, the “recicladores” together a larger amount of waste that they can directly sell to a recycling centre at a much better price, not using any intermediary. This quantity effect is enhanced by the Ciudad Saludable’s financial support that enables them to acquire tools increasing their productivity such as trucks, motorised tricycles.

Secondly, by providing appropriate equipment (helmet, gloves, working pants…) to its “recicladores”, Ciudad Saludable allows them to collect waste in better hygiene and safety conditions and in greater dignity. Ciudad Saludable gives a great importance to the self-esteem and the dignity of its workers. Therefore, they have to buy their own equipment through a system of microcredit developed in collaboration with Scotia Bank. In this context, they are not assisted but buy themselves the tools that will improve their condition.

On the field, the microenterprises collect the waste of the households that have accepted to subscribe to the services of Ciudad Saludable. The cost of the subscription is $1 per month. To encourage the people of the neighbourhood to contribute, Ciudad Saludale does a lot of sensibilisation stressing the interest of waste collection and the positive impact of a clean neighbourhood on children’s health. Ciudad Saludable also rewards the “good contributors” by creating green areas close to their houses. Today, the payment rate in the areas where Ciudad Saludable is working is over 60% and that rate is constantly increasing.

The creation and the assistance of micro-entreprises is Ciudad Saludable’s main program. However, Ciudad Saludable has other fields of activity: they offer consultancy services to different cities in Peru to help them improving their waste management. They have also created an innovative program enabling the production of gas using the excrements of pigs that feed themselves of organic waste.

Finally, Ciudad Saludable has developed a master in environmental management in collaboration with “l’Universidad Católica del Peru” in Lima. The goal of this master where Albina Ruiz and some of her collaborators teach different classes, is to generalise waste management solutions in Peru.

In the mid-term, Albina Ruiz’s objective is to replicate her model of micro-entreprises to all cities of Peru and to other countries in South-America. Deeply affected by a recent trip in India, Albina Ruiz also made a priority of adapting her model to that country.

The entrepreneur:

Albina Ruiz, the founder of Ciudad Saludable, grew in the Peruvian Jungle. Aged 18, she leaves to Lima where she is shocked by the amount of waste in the streets and by the air contamination. She quickly decides to fight this plague and launches several cleaning campaigns within her university.

Then, she will do her thesis on the management of micro-enterprises and the environmental management in the poor areas of Lima. This thesis will trigger a lot of interest among her teachers. This enthusiasm will encourage her to put her theories into practice and she decides shortly after to create Ciudad Saludable. Her model and her innovations have been awarded numerous times ; among others, Albina has been elected “Schwab Social Entrepreneur of the World Economic Forum”, she has received the “Skoll Award for Social Entrepreneurship” and she is an Ashoka fellow.

Social Impact:

The 13 micro-enterprises launched by Ciudad Saludable employ 150 people. Ciudad Saludable operates in 60 Peruvian municipalities, enabling the collection of 100% of the waste in the areas where it is active. By collecting waste and favouring the adoption of respectful behaviours, Ciudad Saludable’s different micro-enterprises have improved the living conditions of 4 million people.

Ciudad Saludable’s work has also had a huge influence on the Peruvian government. Recently, the company has been an important actor in the creation of the first General Law on solid waste in Peru.

Finally, through its master in environmental management, Ciudad Saludable has enabled more than 5,000 students to master in the field. Today, all these students have the skills to be the actors of the environmental change initiated by Albina Ruiz.

Financial impact:

The micro-enterprises are managed by destitute people living in the neighbourhoods where they operate. These people generally do not have access to the loans of “classic” banks and find it therefore very difficult to finance the purchase of additional material. To tackle this problem, Ciudad Saludable has developed a microcredit program with the Canadian Bank Scotia Bank. As Albina found the normal interest rates proposed by the microcredit institutions way to high, (between 30 and 40% annually) Albina created a special fund that Ciudad Saludable guarantees with a deposit of $30,000 at the Scotia Bank. With the guarantee to be reimbursed and not having to deal with the follow up of the loans, Scotia Bank offers credit at a much lower annual interest rate (12%).

In 2006, Ciudad Saludable has obtained a $615,000 grant from the Skoll Foundation after having received the “Skoll Award For Social Entrepreneurship” awarding the quality of the innovations. This grant enabled Ciudad Saludable to gain scale, to improve the quality of its support to the micro-enterprises and to accelerate the expansion process to other countries of South America.

Ciudad Saludable, by developing innovative solutions, has met the challenge to create “healthy cities”. Now surrounded by a skilled and optimist management team, Albina Ruiz wishes to extend her model to all the Peruvian cities and to export it abroad.

Etilplast: Watch the video…

May 6, 2009 | Comments Off | Enterprises, Videos

Etilplast, a cartonero’s adventure, now the movie:

 

Fair Street - Etilplast from Angalio Productions on Vimeo.

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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