EIMPack – Economic Impact of the Packaging and Packaging Waste

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EIMPack – Economic Impact of the Packaging and Packaging Waste Directive Framework and Evolution of the Packaging Sector in Brazil - Report 0

February 2013

Task 3 – Financial Flows

Legal notice This report was prepared as part of the work programme of EIMPack - Economic Impact of the Packaging and Packaging Waste Directive, financed by European Investment Bank. The European Investment Bank or any person or company acting on behalf of the Bank is not responsible for the use that may be made of the information contained in this report.

Research team Rui Cunha Marques (Principal Investigator)

Marta Cabral Pereira (Research grant)

Nuno Ferreira da Cruz (Researcher)

Ana Raminhos (Research grant)

Pedro Simões (Researcher grant) Sandra Faria Ferreira (Research grant) i

Task 3 – Financial Flows

Table of Contents Page TABLE OF CONTENTS ............................................................................................................ I LIST OF TABLES ................................................................................................................... II LIST OF FIGURES ................................................................................................................. II 1. INTRODUCTION ............................................................................................................... 1 2. WASTE MANAGEMENT IN BRAZIL...................................................................................... 5 2.1 Legal Framework..................................................................................................... 5 2.2 Waste Management Institutions .............................................................................. 8 2.3 Urban Solid Waste Management Models................................................................. 9 2.4 The Case of São Paulo ..........................................................................................12 3. ENTITIES MANAGING THE LOGISTICS CHAIN OF PACKAGING WASTE ..................................16 3.1 Cooperatives ..........................................................................................................16 3.2 Public Consortium ..................................................................................................16 3.3 Customers ..............................................................................................................19 4. ECONOMIC AND FINANCIAL ASPECTS ..............................................................................20 5. CURRENT SITUATION .....................................................................................................23 6. CONCLUSIONS ...............................................................................................................26 REFERENCES ....................................................................................................................28

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Task 3 – Financial Flows

List of Tables Table 1 – Municipalities and population by region in 2010 ................................................ 1 Table 2 – States in each region of Brazil ........................................................................... 2 Table 3 – Quantities of waste sent for disposal ................................................................. 3 Table 4 – Municipalities with selective collection, 2010 ..................................................... 9 Table 5 – Operators of solid waste selective collection in 2010........................................10 Table 6 – Waste management in São Paulo State, 2008 .................................................14 Table 7 – Intermunicipal public consortia for waste services per region in 2010...............17 Table 8 – Bahia characterization ......................................................................................18 Table 9 – Acre characterization .......................................................................................18 Table 10 – Regional arrangements for disposal and the landfills status in Rio de Janeiro 18 Table 11 – The future of MSW up to 2014 in Rio de Janeiro ............................................19 Table 12 – Waste charging systems per region in 2010 ...................................................20 Table 13 – Solid Waste management expenses ..............................................................21 Table 14 – Processing units by type and region in 2010 ..................................................23 Table 15 – Processing units per type of operator in 2010 ................................................24 Table 16 – Participation of formal selective collection estimate, 2008 ..............................25

List of Figures Figure 1 – Regions of Brazil .............................................................................................. 2 Figure 2 – Recycling symbols ..........................................................................................12 Figure 3 – Material collected per type, 2008 ....................................................................24

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Task 3 – Financial Flows

Acronyms ABNT – Brazilian Association for Technical Standards (Associação Brasileira de Normas Técnicas) CEMPRE – Corporate Commitment for Recycling (Compromisso Empresarial para Reciclagem) CONAMA – National Environment Council (Conselho Nacional do Meio Ambiente) IBGE – Brazilian Institute of Geography and Statistic (Instituto Brasileiro de Geografia e Estatística) MMA – Ministry of Environment (Ministério do Meio Ambiente) PBR - Brazilian Recycling Program (Programa Brasileiro de Reciclagem) PERS – Solid Waste Stadual Policy (Política Estadual de Resíduos Sólidos) PEV – Volunteer Delivery Sites (Pontos de Entrega Voluntária) PMSP – Municipal Prefecture of São Paulo (Prefeitura municipal de São Paulo) PNRS – National Policy on Solid Waste (Política Nacional de Resíduos Sólidos) PNSB – National Survey of Basic Sanitation (Pesquisa Nacional de Saneamento Básico) SEA – Secretary of State of Environment (Secretaria de Estado do Ambiente) SES – Municipal Bureau of Services (Secretaria Municipal de Serviços) SINIMA – National Environmental Information System (Sistema Nacional de Informações do Meio Ambiente) SINIR – National Solid Waste Information System (Sistema Nacional de Informações sobre a Gestão de Resíduos Sólidos) SISNAMA – Environmental National System (Sistema Nacional do Meio Ambiente) SNIS – National Sanitation Information System (Sistema Nacional de Informações sobre Saneamento)

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Task 3 – Financial Flows

SNSA – National Department for Environmental Sanitation (Secretaria Nacional de Saneamento Ambiental) SRHU – Department of Water Resources and Urban Environment (Secretaria de Recursos Hídricos e Ambiente Urbano)

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Task 3 – Financial Flows 1. Introduction

1. Introduction

Brazil is the largest country in South America. It is a Federal Republic formed by 26 States and one Federal District with their own governments. According to SNSA (2012), Brazil has 5565 municipalities encompassing a population of 190.755.799, for the year 2010. The geographic distribution of the population is shown in Table 1. Table 1 – Municipalities and population by region in 2010 Region

Municipalities

Total Population

Urban Population

North

449

15.864.454

11.664.509

Northeast

1794

53.081.950

38.821.246

Southeast

1668

80.364.410

74.696.178

South

1188

27.386.891

23.260.896

West Center

466

14.058.094

12.482.963

Total

5565

190.755.799

160.925.792

Source: SNSA (2012)

All 26 States have the autonomy to create State Constitutions and laws. Their legislative power, however, is limited by the Federal Constitution. Since 1970, the States have been grouped in five regions: North, Northeast, West Center, Southeast and South. The States belonging to each region are presented on Table 2. In the West Center region is located Brasília, the capital city. These regions can be seen in Figure 1.

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Task 3 – Financial Flows 1. Introduction

Table 2 – States in each region of Brazil Region

States

North

Acre, Amapá, Amazonas, Pará, Rondônia, Roraima, Tocantins

Northeast

Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe, Bahia.

Southeast

Espírito Santo, Minas Gerais, Rio de Janeiro, São Paulo

South

Paraná, Santa Catarina, Rio Grande do Sul.

West Center

Goiás, Mato Grosso, Mato Grosso do Sul, Distrito Federal Source: IBGE (2013)

Figure 1 – Regions of Brazil

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Task 3 – Financial Flows 1. Introduction

The Brazilian economy grew considerably in the last years. With this growth has been associated a rapid change in consumer habits, inducing a great increase in waste production. In many states, the urban services and infrastructures did not follow this growth and the “rapid” changes (Ministério do Meio Ambiente, 2011). This circumstance created a significant problem and several challenges for states and local governments. Challenges were not only related to the collection of the waste produced but also, and mainly, regarding the model of waste treatment. In Brazil, dumpsites are still abundant as waste disposal solutions (although with a decreasing tendency). Currently, more than 50% of the waste collected is landfilled, as shown in Table 3. Table 3 – Quantities of waste sent for disposal Quantities of waste (tonnes per day) Dumpsites National Survey of Basic Sanitation (PNSB) Brazil

Controlled landfills

Sanitary landfills

2000

2008

2000

2008

2000

2008

45.484,70

37.360,80

33.854,30

36.673,20

49.614,50

110.044,40

Source: Adapted from Ministério do Meio Ambiente (2012)

The Federal Constitution determines that local public services, including urban cleaning and solid waste management should be the responsibility of municipalities. However, reality has shown that without a proper commitment between the different government levels – Local, State and Federal – the sustainability of the waste sector is seriously put into question (Ministério do Meio Ambiente, 2010a). The Ministry of Environment (MMA), through the Department of Water Resources and Urban Environment (SRHU) supports the Brazilian States implementing public waste management consortia particularly responsible for urban waste transportation, treatment and final disposal. The new legal requirements for the waste sector, and, in particular, for the recycling sector, (discussed in detail in this report) represent a great challenge for national waste services. In most cases, public services are unable to deal with these issues adequately. In many cases, only the commingled waste collection and disposal (dumpsites) are provided. Regarding the recycling sector, besides the absence of technological and human resource capacity, there is also a lack of an organized recycling system and of specific laws or

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Task 3 – Financial Flows 1. Introduction

regulations (at least until 2011) allocating the responsibility for collecting, recycling and managing the final disposal of packaging material. In order to minimize inappropriate waste disposal, recycling has been encouraged either through enterprise associations or individual companies (Coelho et al., 2011). After this brief introduction, the present report is organized as follows. In section 2, the framework is presented for the most important waste management policies implemented in Brazil; it also includes an overview of the waste sector in São Paulo, as a case-study. In section 3, the most important entities managing the logistics chain of packaging waste in Brazil are presented. Section 4 presents the economic and financial aspects of solid waste management and section 5 shows the current situation for selective collection and recycling. Finally, section 6 presents the main conclusions.

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Task 3 – Financial Flows 2. Legal Framework

2. Waste Management in Brazil

2.1 Legal Framework According to Galbiati (2005), selective collection services were firstly provided in Belo Horizonte, in 1993, as part of the Differentiated Solid Waste Handling Program. This program aimed at establishing and maintaining Volunteer Delivery Sites (PEV), to promote environmental education and to reduce costs for the municipality. It involves several partnerships for training waste pickers and other employees. The program was a success due to its decentralized activity distribution and integrated structure. In 1998, the Ministry of Industry, Commerce and Tourism created the Brazilian Recycling Program (PBR). The goal of the program was to study the Brazilian waste collection system and to propose guidelines to stimulate selective collection in an integrated solid waste management system (Costa & Valle, 2006). The Brazilian legislation has diverse diplomas focusing on environmental protection (e.g. National Policy for the Environment – Decree 6938/81; the National Policy for Health – Decree 3.080/90; the National Policy for Environmental Education – Decree 9.795/94, the National Policy for Water Resources – Decree 9.433/97; the Law for Environmental Crimes – Decree 9.605/98 and the City Statutes – Decree 10.257/01). However, it was missing sector-specific legislation for the waste sector (which was recently implemented, through the Law No. 12.305/2010), implementing the new National Policy for Solid Waste (PNRS). Among its greatest objectives, this law fosters the principle of shared responsibility between government, industry and population. The new law encourages the return of the products to industries after consumption and forces the governments to create plans for waste management (threatening with the access to Federal Government resources). Among the novelties, the law establishes the social aspects of recycling, with formal participation of waste pickers organized into cooperatives.

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Task 3 – Financial Flows 2. Legal Framework

The PNRS encompasses the set of principles, goals, instruments and actions adopted by the Federal Government, individually or with the cooperation of the States, Federal District, municipalities or third parties for the implementation of an integrated solid waste management system. The PNRS goals include prevention, the implementation of the polluter-pays principle (i.e. the party responsible for polluting is also responsible for paying for the damage caused to the environment) and of the protector-receiver principle (benefits or resources should be delivered to communities or people concerned with environmental protection), cooperation among the different levels of Public Administration and shared responsibility over the products’ life-cycle. According to this plan, until August 2014, all dumpsites should be closed. Local governments are responsible for the integrated solid waste management in their own territories and the Federal Government should support and prioritize initiatives of shared solutions between municipalities. There are several Solid Waste Management Plans with different objectives and implementation levels such as: 

National Plan on Solid Waste



State Plans on Solid Waste



Micro-regional, metropolitan and urban plans on Solid Waste



Inter-municipal plans on Solid Waste



Municipal Plans on Integrated Management of Solid Waste



Solid Waste Management Plans

The National Plan on Solid Waste is formulated by the Federal Government under coordination of the Ministry of Environment for a twenty-year horizon, updated every four years. It includes the current situation, the reduction, reuse, recycling and recovery targets, dumpsites elimination and guidelines for waste management activities. The State Plans on Solid Waste are formulated by States entitled to Federal Government funds. The plans are intended for solid waste management activities with a horizon of twenty years, revised every four years. To access the funds, States considered microregions as a priority, grouping bordering municipalities for integrating the public functions’ planning and execution (in this particular case, the urban waste management) with common interest. These micro-regions are responsible for such activities as selective collection, recovery, recycling and solid waste treatment and disposal. They are also required to meet the State plan requirements. In addition to State Plans on Solid Waste,

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Task 3 – Financial Flows 2. Legal Framework

States should formulate the micro-regional, metropolitan and urban Solid Waste Plans with the cooperation of the municipalities involved. The Municipal Plans on Integrated Management of Solid Waste are formulated by the Federal District and the municipalities entitled to Federal Government funds for activities related to urban cleaning and solid waste management. This fund prioritizes intermunicipality solutions; i.e. municipalities that implement consortium solutions and selective collection with the participation of cooperatives or other associations of waste pickers collecting reusable and recycling material. The Solid Waste Management Plan is mandatory for all producers of solid waste such as industrial waste, health services waste, waste from commercial establishments, hazardous waste, construction wastes, etc. This plan should comply with the provisions of the Municipal Plan on Integrated Management Solid Waste of the respective municipality. It is part of the environmental licensing process which is the responsibility of municipalities. The shared responsibility principle states that all actors involved in the life-cycle of a product are in part responsible for managing the environmental, social and economic impacts of that product. According to Art 30 of Law No. 12.305/2010 of 2 August, this principle should be implemented involving manufacturers, importers, distributors and sellers, consumers and operators of urban cleaning and waste management services. Furthermore according to Art 32 of the same law, packaging should be manufactured with materials that can be reused or recycled. When municipalities are associated can have a separate management body. The Law No. 12.305/2010 of 2 August establishes that municipalities opting for consortium schemes are not required to elaborate the Municipal Plan if the Intermunicipal Plan (which includes other municipalities) fulfils the minimum requirements defined by law (GeRes, 2012). The Federal Government has been supporting the creation of consortia through Law No.11.107/2005. Through the MMA, the Federal Government supports the States and the municipalities in the elaboration of Solid Waste Management Plans, coordinating implementation of the PNRS. The Federal Government has created and currently administrates the National Sanitation Information System (SNIS) belonging to the National Department for Environmental Sanitation (SNSA) by the Ministry of Cities. The SNIS comprises water,

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Task 3 – Financial Flows 2. Legal Framework

sanitation and waste services, including operational, administrative, financial, economic aspects as well as quality of service. One of the tools of the PNRS is the SINIR (the National Solid Waste Information System) launched in the end of 2012. The goal of SINIR is to store, treat and provide information to support the operations or processes of waste management operators.

2.2 Waste Management Institutions In addition to local governments, which have the responsibility of providing waste services, there are other organisms with responsibility in the waste sector, such as the Ministry of Environment (MMA), the National Information System on Sanitation (SNIS, under the Ministry of Cities) and the Corporate Commitment for Recycling (CEMPRE). The mission of the MMA is to foster the adoption of strategies and principles for knowledge and environmental protection, including the sustainable use of natural resources, environmental services improvement and sustainable policy implementation. The Law No. 10.683, of 28 May 2003, establishes that the following issues are competences of the MMA: 

National environmental policy;



Preservation, conservation and sustainable use of biodiversity and ecosystems;



Proposal of strategies, mechanisms and economic tools for better environmental quality and sustainable use of natural resources;



Environmental programs and policies;



Ecological and economic zoning (EEZ)1.

The SNIS is very important for the sanitation and waste sectors. Since 2002, it involves the “Diagnosis of Solid Waste Management”, using information provided by the municipalities, to present the main characteristics of the waste services and describe the method of collecting and processing information, as well as some preliminary analyses of the performance of services.

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Political instrument to propose and establish spatial divisions and classifications based on ecological and

socio-economic factors (NEUR et al., 2008).

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Task 3 – Financial Flows 2. Legal Framework

Specifically for the recycling sector, the Corporate Commitment for Recycling (CEMPRE), a non-profit organization, was created in 1992 to promote recycling in Brazil. In the early years, the main focus of CEMPRE was on the creation of mechanisms for improving the efficiency of waste pickers (for example, an educational kit which helped them to create cooperatives, Brazilian Recycling Commitment, 1996). The aim of this organization is to encourage the integration of solid waste management, recycling and environmental education through technical research, publications and awareness campaigns. Indeed, among the main actors involved in selective collection are the waste pickers. Waste pickers are at the bottom of the pyramid (of the waste sector) and are about 1 million people, in all country, including small groups, which work without health and safety conditions for bigger cooperatives (CEMPRE, 2012).

2.3 Urban Solid Waste Management Models Waste services have been a matter of great concern among Brazilian decision-makers. While refuse collection (mixed waste) is a service provided to practically all the population, the same does not happen with the selective collection (being one of the topics of the PNRS). In this regard, SNSA (2012) developed a detailed characterization of municipal waste management in Brazil for 2010. This study covered 2051 of the 5565 municipalities (about 36,9%) corresponding to a population of 116.596.214 of a total of 190.732.694 (about 61,1%). However, within this sample, only a small percentage (39,1%) of those municipalities provided selective collection services and the majority are located at the South and Southeast regions, as shown in Table 4. Table 4 – Municipalities with selective collection, 2010 Municipalities with selective collection Number %

Region

Respondents

North

75

12

16,0

Northeast

387

48

12,4

Southeast

791

383

48,4

South

662

333

50,3

West Center

136

25

18,4

Total

2051

801

39,1

Source: SNSA (2012)

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Task 3 – Financial Flows 2. Legal Framework

Selective collection can be classified as “formal” or “informal”. Formal selective collection is performed or supported by municipalities or by organizations such as cooperatives. Informal selective collection is provided by autonomous waste pickers. This informal selective collection is not always supported by public entities. In these cases, the quantity of recyclables collected is not taken into account and controlled by the municipalities. Formal selective collection can be carried out through kerbside collection or (volunteer) bring system. The material collected is separated or sorted at sorting facilities, organized and sold to recyclers. Table 5 shows the selective collection models of delivery. In general terms, selective collection is mostly performed by private companies, followed by waste pickers and municipalities. Looking more closely to the regions, we can see that some of the regions do not follow this pattern. Table 5 – Operators of solid waste selective collection in 2010 Selective collection operators Region

Municipalities that answered

Municipality (%)

Outsourcing (%)

Waste pickers with municipality support (%)

North

8

25,1

34,7

40,2

Northeast

26

14,8

6,7

78,5

Southeast

269

18,9

38,3

42,8

South

238

13,9

62,9

23,2

West Center

14

78,9

0,9

20,2

Total

555

19,9

42,8

37,3

Source: SNSA (2012)

Concerning the identification of recyclables, the resolution CONAMA No. 275, of 25 April 2001, establishes the following color code for the different types of materials (to be used in containers and transportation identification): 

Blue: Paper/Cardboard



Orange: Hazardous materials



Red: Plastic



White: Hospital waste



Green: Glass



Purple: Radioactive waste



Yellow: Metal 10

Task 3 – Financial Flows 2. Legal Framework



Brown: Organic waste



Black: Wood



Grey: Non-recyclable waste, mixed or contaminated.

In terms of environmental labelling, according to ISO standards, there are three types: 

Labelling Type I – NBR ISO 14024 for the green label programs.



Labelling Type II – NBR ISO 14021 for specific symbols for products.



Labelling Type III – NBR ISO 14025, including the life cycle assessment (LCA) tool.

The Brazilian Association for Technical Standards (ABNT) is responsible for the standards implementation in Brazil (CEMPRE and ABRE, 2008). Environmental auto-declarations (labelling type II) are developed by manufacturers, importers or distributors to communicate environmental information for their products or services. This type of labelling is recognized by the consumer by the symbols presented in Figure 2.

Auto-declaration for recyclable steel

Auto-declaration for recyclable packaging

Auto-declaration for recyclable glass

Auto-declaration for recyclable aluminum

Auto-declaration for recyclable paper

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Task 3 – Financial Flows 2. Legal Framework

Symbol for recyclable PVC

Source: CEMPRE and ABRE (2008)

Figure 2 – Recycling symbols

These symbols have a great social meaning impact due to the existence of waste pickers which carry out selective collection. The labelling type II is easily recognized by waste pickers, so they can sort the recyclables according to the symbols. On the other hand, the labelling type I had not such success in Brazil, according to CEMPRE and ABRE (2008), since the green label does not inform consumers about the specific environmental aspects of the product. According to the Law 12.305/2010, manufacturers, importers and distributers have the obligation to implement the take-back procedure, regardless of the waste collection system. The objective of the shared responsibility is to promote solid waste recovery, reduce the quantities consumed and produced, stimulate market development and promote sustainable practices. In addition to this shared responsibility, manufacturers and importers have the responsibility to invest on product development to reduce the quantities of waste produced, and use materials that are suitable for recycling. Manufacturers, importers or distributors of pesticide products, batteries, tires, oils, lamps and electronic equipment are required to have their own reverse logistics systems, separately from the public urban waste services.

2.4 The Case of São Paulo The State of São Paulo is located in the Southeast region of Brazil, with a population of 41.262.199 inhabitants (about 21% of the Brazilian population), encompassing 645 municipalities (corresponding to about 11% of the Brazilian municipalities) and an area of 248.197 km2 (covering about 3% of the area of the country) in 2010. According to Mendes et al. (2004), 93% of the households in the State have waste collection. Most waste is sent to landfills and a portion goes to old incinerators with high emissions. The most recent landfills have geosynthetic lining and leachate collection systems.

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Task 3 – Financial Flows 2. Legal Framework

In terms of State legislation, there are three important laws for waste services that should be taken into account: 

the Law No.10.856/2001 that creates a Selective Waste Collection Program for public schools;



the Decree No. 46.584/2002 that defines the Program of Pollution Control, setting a support system for projects and activities developed by municipalities, which handle up to 30 (thirty) tonnes of household waste per day;



the Law No. 12.300/2006 that establishes the Solid Waste Stadual Policy (PERS), setting the principles, goals and instruments for an integrated and shared waste management.

Waste management should be provided by municipalities in an autonomous and integrated way with the cooperation of the State. Among the several tools and principles of PERS, there is the Annual Declaratory System establishing that private initiatives (producers, waste operators and facilities) are required to declare to the environmental body of the State, the quantities of waste produced and the material composition (Cortez, 2007). There are several incentives to promote selective collection in the State of São Paulo. In this regard, municipalities are committed to assure the economic sustainability of sanitation (water and waste) services by implementing charging mechanisms (while taking into account the affordability of the population). In this process, social cohesion must be safeguarded giving special attention to the integration of waste pickers in the (municipal) service of selective collection. In the metropolitan region of São Paulo, any business/service producing to 200 litters of waste per day is considered a small producer. In case of commercial or mixed condos, the limit is 1.000 litters per day (Ministério do Meio Ambiente, 2011). Refuse collection is already a “universal” service in the State of Sao Paulo, as shown in Table 66. However, concerning selective collection, the scenario is very different. In fact, only 84 municipalities provide selective collection services for all citizens. Moreover, this service is more often provided in urban areas.

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Task 3 – Financial Flows 2. Legal Framework

Table 6 – Waste management in São Paulo State, 2008 Waste management

Number

Municipalities with waste collection services

645

Municipalities with waste collection services (with waste pickers on disposal units)

83

Municipalities belonging to a consortium for waste collection services

57

Municipalities with waste collection services (with waste pickers on urban area)

405

Municipalities with selective collection in all municipality (including urban and rural areas)

84

Municipalities with selective collection only in urban areas

106

Municipalities with selective collection only on selected neighbourhoods

25

Source: IBGE (2008)

In the City of São Paulo in particular, waste production is about 15.000 tons per day (of which 9.000 ton is household waste). This situation is causing a serious problem to the local government, not only regarding landfill capacity but also concerning the location chosen by some consumers to dispose their waste illegally, such as public streets (Cortez, 2007). To deal with this issue, the municipality of São Paulo (PMSP) created the Municipal Authority of Urban Sanitation (AMLURB) which is responsible for the Urban Cleaning Department (managing urban cleaning, household and hospital waste collection). Selective collection was mainly instigated by a new program included in the Municipal Decree 42.290/2002, later on revoked by the Decree 48.799/2007. In 2008, this program covered 74 municipalities, adopting kerbside collection. Plastics, glass, paper and metal can be left in separate bags on the street for collection or in colour-bins (but only in some neighbourhoods). Trucks are different for organic or non-recyclable waste and for recyclables. The frequency of collection is different depending on streets and materials. Moreover, the City of São Paulo also has municipal laws that regulate waste disposal for some products such as lamps and batteries. According to Cortez (2007) there are some major operators performing selective collection, for instance: ECOURBIS AMBIENTAL, LOGA (Environmental Logistics of São Paulo) and cooperatives hired by the PMSP to operate sorting facilities in São Paulo (15 sorting facilities in 2007). Currently, there are 5 more sorting facilities operating in this State (Prefeitura SP, 2013). LOGA is responsible for the northeast region (13 sub-prefectures), covering an area of 490 km2 and a population of 4.2 million inhabitants. Each day 20 tonnes of recyclables are 14

Task 3 – Financial Flows 2. Legal Framework

collected through selective collection. ECOURBIS AMBIENTAL S.A. is a private company that carries out the collection, transportation, treatment and final disposal of household and hospital waste in the southeast region of São Paulo City (18 sub-prefectures). There is also a partnership between Wal-Mart and Coca-Cola, under the coordination of the Brazilian Recycling Commitment (CEMPRE), for a recycling facility construction in São Paulo. This partnership also envisages expanding collection containers for metal, plastics, paper, glass and cooking oil in more than 300 Wal-Mart stores all over the country.

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Task 3 – Financial Flows 3. Entities for Managing the Logistics Chain of Packaging Waste

3. Entities Managing the Logistics Chain of Packaging Waste

3.1 Cooperatives According to Law No. 5.764/1971, of 16 December, which established the National Cooperatives Policy, cooperatives are organizations, public or private, with a minimum of twenty members with the same economic and social goals of public interest. In the waste sector, the amount of materials collected as well as the resources available (such as equipment for waste management activities and awareness campaigns for this type of collection) increased significantly since waste picker cooperatives were formed. Initiatives for training waste picker groups have allowed to improve their organization, enhance their work, recover more recyclable materials and to foster employment and income (Machado et al., 2006). An example of this is COOPERVIDA, a cooperative created in 2001 in Campo Grande. Waste pickers use transport donated by the government of the State and collect recyclable materials in several places. The purpose of this cooperative is to collect sorted waste instead of collecting waste at dumpsites or containers. The Decree 7.404/2010 of 23 December states the requirements for executing the PNRS, instituted by Law 12.305/2010 of 2 August, and determines that waste picker cooperatives should be integrated in selective collection activities (since they are considered specialized operators). The Federal Government is, thus, required to create programs for waste pickers’ (social) integration and better working conditions.

3.2 Public Consortium The creation of Public Consortia is being encouraged by the Federal Government and several States, especially the ones that aggregate several municipalities (Ministério do 16

Task 3 – Financial Flows 3. Entities for Managing the Logistics Chain of Packaging Waste

Meio Ambiente, 2011). The Law No.11.445/2007, of 5 January, established the national guidelines for sanitation services and the Law No. 11.107/2005, of 6 April, established the general guidelines for consortium contracts. The SNIS gathered information about intermunicipal public consortia for waste services in 2010, as shown in Table 7. Table 7 – Intermunicipal public consortia for waste services per region in 2010 Municipality with authorizing law for constitution or integration in consortium*

Municipalities declared as members of consortia**

Number of municipalities members of consortia

Urban population

Number of consortia

North

3

15

18

214.365

2

Northeast

29

162

191

483.998

21

Southeast

48

202

250

9.135.490

30

South

46

236

282

7.533.704

20

West Center

8

47

55

541.316

7

134

662

796

17.908.873

80

Region

Total

* Only municipalities with authorizing law for constitution or integration in a consortium after 2005 are included. Municipalities whose consortium was on an implementation process (2010) were not included. ** The statement of the number of municipalities as members of consortia is made by municipalities that have authorizing law. Source: Adapted from SNSA (2012)

Error! Reference source not found.8 and 9 present the number of consortia, population covered and waste produced for the States of Bahia (Northeast region) and Acre (North region). In Bahia, the public consortia were initially created for solid waste management and now this model is generally used to promote sustainable development in all the State. In Acre, the case presented is a multisectorial consortium, performing several services, directly or indirectly, according to the contracts firmed with private operators. In this case, the planning activities are the responsibility of the municipalities in the consortium (although they may also rely on the cooperation of the consortium). The regulation and control activities are carried out by the regulatory entity, which acts on the activities carried out by the consortium (Ministério do Meio Ambiente, 2010b).

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Task 3 – Financial Flows 3. Entities for Managing the Logistics Chain of Packaging Waste

Table 8 – Bahia characterization Characterization

Number

Consortium

2

Consortium municipalities

31

State population

14.080.654

Population covered by the consortium

728.024

Waste produced in the consortium municipalities

220 ton/day

Source: Ministério do Meio Ambiente, 2010b

Table 9 – Acre characterization Characterization

Number

Consortium

1

Consortium municipalities

5

State population

655.385

Population covered by the consortium

60.610

Waste produced in the consortium municipalities

45 ton/day

Source: Ministério do Meio Ambiente, 2010b

The State of Rio de Janeiro has already created several consortia, as presented in Table 10. Bearing in mind the current status of the waste sector and the policies developed so far, is expected that this should be the first Brazilian State to eliminate all dumpsites. Table 11 shows that 93,6% of the waste produced and collected is already sent to sanitary landfills according the Secretary of State for the Environment (SEA, 2013). Table 10 – Regional arrangements for disposal and the landfills status in Rio de Janeiro Regional arrangements for disposal Consortia established

5

Regional agreements

8

Arrangements in definition

4

Individual solution

7 Sanitary landfills

Operating

19

Planned

11

Total

30

Municipal landfill to disable

3

Dumpsites to disable

49 Source: Zveibil (2011)

18

Task 3 – Financial Flows 3. Entities for Managing the Logistics Chain of Packaging Waste

Table 11 – The future of MSW up to 2014 in Rio de Janeiro Municipalities sending waste to sanitary landfills

Waste sent to landfills

Waste sent to landfills

(tonnes per day)

(%)

(n.º) Up to 2010

30

1.995

11,7

Up to 2011

43

6.320

39,1

Up to 2012

70

15.447

95,6

Up to 2014

92

16.163

100

Source: SEA (2013)

3.3 Customers According to the shared responsibility principle, costumers also have the responsibility to give an appropriate ending to reusable and/or recyclable waste, if a selective collection or take-back system is implemented by the municipalities. Consumers are key actors in selective collection and recycling in general. They have the important role of material separation at the source for posterior collection. In this regard, it is very important to assess the reasons why consumers separate their waste, so they can be encouraged in the most effective way.

19

Task 3 – Financial Flows 4. Economic and Financial Aspects

4. Economic and Financial Aspects

In 2008, about 11% of the Brazilian municipalities had some kind of charging system for waste management services, of which 9% are based on a tariff system (Ministério do Meio Ambiente, 2012). Nevertheless, these shares have tendency to increase, in particular, with the new legislation promoting the sustainability of waste services. According to SNSA (2012), in 2010, 50% of the municipalities stated that they charge for their regular services of waste collection, transportation and final disposal, as shown in Table 12. Table 12 – Waste charging systems per region in 2010

Region

Municipalities (n.º)

Municipalities with charging system

Municipalities without charging system

(%)

(%)

North

73

16,4

83,6

Northeast

392

14,0

86,0

South

788

52,7

47,3

Southeast

663

78,6

21,4

West Center

136

16,9

83,1

2.052

50,0

50,0

Total

Source: Adapted from SNSA (2012)

The Law No. 11.445/2007, of 5 January, establishes that the economic and financial sustainability of waste and urban cleaning services must be mainly assured either through taxes or tariffs. This law includes an alteration to Law No. 8.666/1993 avoiding bidding procedures for hiring waste picker associations or cooperatives (Ministério do Meio Ambiente, 2011). Waste pickers collect and sort material at cooperative facilities and sell it directly to the recyclers at lower prices, avoiding other intermediaries. However, illegal 20

Task 3 – Financial Flows 4. Economic and Financial Aspects

dumping areas are still a problem difficult to manage. Collection in dumpsites entails several problems due to material contamination (quality of the materials, health problems from sanitary conditions for the collectors). These collected materials require expensive cleaning, which reduces the value of the materials and the collector receives a lower value (Coelho et al., 2011) The extended producer responsibility (reverse logistics) which includes collection, sorting and delivery to industry, creates a dilemma because who finances the system is neither the packaging companies nor the sellers of packaged products, but society as a whole (Coelho et al., 2011). Economic and financial measures to encourage reverse logistics are being implemented progressively, in order to make the recycling market more attractive for new technologies and private investments (CEMPRE, 2012). According to SNSA (2012), the average cost (per capita) with solid waste management vary between 19,89€/hab./year and 31,72€/hab./year, varying considerable among the Brazilian regions, as shown in Table 13. Table 13 – Solid Waste management expenses

Region

Municipalities

Solid waste management expenses per capita Minimum Maximum Average (€/hab./year)) (€/hab./year) (€/hab./year)

North

38

22,79

158,68

52,03

Northeast

247

20,16

198,40

77,21

Southeast

521

20,09

208,12

73,04

South

462

20,52

206,38

70,50

West Center

84

23,87

200,39

89,33

Total

1.352

20,09

208,12

73,48

Source: SNSA (2012)

Nowadays, most Brazilian municipalities charge for the waste services through local taxes, mainly in the Building and Urban Territorial tax – IPTU – Imposto Predial e Territorial Urbano (Ministério do Meio Ambiente, 2011). According to the legal framework (Law No. 12.305/2010), waste services are required to be charged according to a sectorspecific tariff mechanism, which assures the financial sustainability and full cost recovery. In the Law No. 11.445/2007 that provides guidelines for sanitation services, economic sustainability is also addressed: urban cleaning and waste management shall be charged through tariffs or fees, according to the activities performed. According to Decree 7.217, 21

Task 3 – Financial Flows 4. Economic and Financial Aspects

which regulates the Federal Law on sanitation services, waste management services tariffs should take into account the adequate destination for the collected waste as well as: the population income, building characteristic, average volume or weight collected per inhabitant or household and economic mechanisms for waste reduction.

22

Task 3 – Financial Flows 5. Current Situation

5. Current Situation

In Brazil, despite the recent developments, selective collection remains in its early stages, not only regarding the service and technological aspects but also in terms of people behaviour. Some private companies are trying to support municipalities and recycling companies in making improvements to achieve an efficient collection system and to obtain better quality materials. Cities such as Curitiba, Porto Alegre, Florianópolis, Campinas, Caxias do Sul, Jundiaí, S.J. dos Campos, Lins, Pomerode, Blumenau, Juiz de Fora, Belo Horizonte have selective collection implemented, performed by municipalities or outsourced companies (Neves, 1999). Tables 14 and 15 show the treatment facilities in Brazil per region and per operator. As can be seen, sanitary landfills and dumpsites are the most used processing units and remain, mainly, managed by the municipalities. The Southeast and South are the regions with more sorting facilities, and the majority are handled by waste picker associations. In 2011, among the 5565 Brazilian municipalities, 3263 (58,6%) developed some initiatives regarding the development of selective collection (ABRELPE, 2011). In 2008, the most collected materials were paper/cardboard and plastic, as shown in Figure 3. Table 14 – Processing units by type and region in 2010 Processing Unit

North Northeast

Southeast

South

West Center

Total

Controlled landfill

11

33

242

79

32

397

Sanitary landfill

13

47

265

179

31

535

Dumpsites

51

282

60

35

69

497

Composting facilities

2

9

40

13

4

68

Incineration facilities

3

8

12

5

3

31

Sorting facilities

7

40

196

126

12

381

Source: SNSA (2012)

23

Task 3 – Financial Flows 6. Conclusions

Table 15 – Processing units per type of operator in 2010 Processing Unit

Municipality Company

Consortium

Waste pickers association

Other

Total

Controlled landfill

325

57

4

2

5

393

Sanitary landfill

366

143

14

1

6

530

Dumpsites

457

25

1

5

7

495

Composting facilities

49

11

1

7

0

68

Incineration facilities

7

21

1

0

1

30

Sorting facilities

101

194

30

376

48 3 Source: SNSA (2012)

19% Paper and Paperboard 1%

39%

Plastics Glass

9%

Metal Aluminium

10%

Others 22% Source: CEMPRE

Figure 3 – Material collected per type, 2008 In 2008, bottle-to-bottle recycling was regulated in Brazil and Coca-Cola Brazil implemented it. This bottle-to-bottle system is a recycling process that envisages incorporating used PET bottles in the productive process of new packaging. Bottles are sorted, crushed and cleaned for entering again in the production process (Coelho et al., 2011). According to the Federal Government (Ministério do Meio Ambiente, 2011), in 2008, the total amount of paper and cardboard collected was 4.154 thousand tons. According to the same source, in terms of selective collection, between 2000 and 2008, there was an increase of about 120% in the number of municipalities performing selective collection 24

Task 3 – Financial Flows 6. Conclusions

(reaching 994 municipalities). In urban areas, selective collection service reached 98% and in rural areas only 33% of service coverage (Ministério do Meio Ambiente, 2011). As can be seen in Table 16, metal is the material more commonly recycled. Paper is the material that has the highest amount of recovery arising from selective collection official programs. However, plastic is the material with the greater selective collection rate to total recycling. Table 16 – Participation of formal selective collection estimate, 2008 Waste recycled Waste

(thousand tones/day)

Waste recovery from selective collection official programs (thousand tones/day)

Selective collection on total recycling (%)

Metals

9.817,8

72,3

0,7%

Paper/Paperboard

3.827,9

285,7

7,5%

Plastics

962,0*

170,3

17,7%

Glass

489,0

50,9

10,4%

*Data from 2007

Source: Ministério do Meio Ambiente (2012)

Regarding refuse collection, as expected, the level of service is considerable higher than selective collection, covering 90% of the municipalities in 2009. Following the implementation of Law No.12.305/2010, dumpsites shall be eliminated until 2014. According to the Federal Government (Ministério do Meio Ambiente, 2011), there are still 2.906 dumpsites in Brazil, distributed by 2.810 municipalities. As mentioned, there are also 80 identified consortia for waste management, located in 796 municipalities (see Table 7).

25

Task 3 – Financial Flows 6. Conclusions

6. Conclusions

Brazil experienced great economic growth in the last years, coupled with the very rapid urbanization of the main cities and a significant change in the consuming habits of the population. However, the infrastructures and availability of resources did not follow these changes. This circumstance created serious problems to local governments regarding urban waste management and to the recycling system in particular. Nevertheless, through new legislation, policies and public awareness campaigns significant efforts have been developed to overcome this situation. One of the most relevant steps in the Brazilian waste sector is related to the implementation of the new Solid Waste National Policy, defined by the Law No. 12.305/2010. This law intends to overcome the major problems of the waste sector in Brazil, such as the lack of economic sustainability and the non-existence tariff systems, the presence of dumpsites, and the social integration of waste pickers. The public sector and private entities have being concerned with the urban waste problem, thus public and private investments have been made with a growing tendency. The new legal framework establishes added responsibilities for States and Municipalities but it also creates new opportunities for urban waste management. The change is evident and the organized growth of the last few years allowed for the evolution of this sector. The new infrastructures and the improvement of the existing ones is a step forward to fulfil the need to cope with the growing waste production. Although recycling is being carried out and selective collection systems are being implemented by waste pickers or consortia, a large quantity of packaging waste is still sent to dumpsites. This leads to several problems including environmental impacts and public health issues. There is little doubt that the implementation of a recycling system should be promoted in a suitable way. However, to raise the levels of recycling, certain public services must be available, especially regarding selective collection.

26

Task 3 – Financial Flows 6. Conclusions

An important actor in the recycling system is the customer. Changes in consumer habits concerning material separation at the source should become more prevalent. Raising awareness is therefore an absolute requirement. In order to evolve in terms of recycling, it is necessary to create national policies for urban waste management, establish clear and attainable goals and deploy legislation for municipalities to implement selective collection and create solutions for the industry to adapt to the new political requirements regarding the recycling of packaging materials.

27

Task 3 – Financial Flows References

References

ABRELPE (2011). Panorama dos Resíduos Sólidos no Brasil - 2011. Associação Brasileira de Empresas de Limpeza Pública e Resíduos Especiais, pp. 186. Brazilian Recycling Commitment (1996). Promotion of Recycling in Brazil - A Case Study. Urban Management Programme, Swiss Agency for Development and Cooperation, São Paulo. Câmara dos Deputados (2003). Consituição da República Federativa do Brasil. Brasília. CEMPRE (2012). Política Nacional de Resíduos Sólidos - Agora é lei. São Paulo: CEMPRE. Available on: http://www.cempre.org.br/download/pnrs_002.pdf CEMPRE e ABRE (2008). A Rotulagem Ambiental Aplicada às Embalagens. CEMPRE Compromisso Empresarial para Reciclagem e ABRE - Associação Brasileira de Embalagem. Coelho, T., Castro, R., & Gobbo Jr., J. (2011). PET containers in Brazil: Opportunities and challenges of a logistics model for post-consumer waste recycling. Resources, Conservation and Recycling, 291-299. Cortez, A. T. (2007). Pós-consumo de embalagens: As políticas de gestão em Lisboa (Portugal) e São Paulo (Brasil). Estudos Geográficos, 119-134. Costa, L. G., & Valle, R. (2006). Logística reversa: importância, fatores para a aplicação e contexto brasileiro. III SeGeT - Simpósio de Excelência em Gestão e Tecnologia, 9 p. Galbiati, A. F. (2005). O Gerenciamento Integrado de Resíduos Sólidos e Reciclagem. Educação ambiental para o Pantanal. Disponível em www.redeaguape.org.br/desc_artigo.php?cod=92. GeRes (2012). Apoiando a implementação da política nacional de resíduos sólidos: do nacional ao local. Available on: http://aneam.org.br/attachments/article/603/Manual_de_residuos_solidos_28_03_ 2012.pdf IBGE (2008). Pesquisa Nacional de Saneamento Básico 2008. Instituto Brasileiro de Geografia e Estatística - IBGE, Rio de Janeiro, Brasil. IBGE (2013). [email protected] Available on: http://www.ibge.gov.br/cidadesat/topwindow.htm?1 [accessed on 22/01/2013] 28

Task 3 – Financial Flows References

Machado, B. A., Moraes, G. G., Castro, R., Manfrinato, J. W., & Wiens, I. (2006). A importância social e econômica da implementação de cooperativas de materiais recicláveis. XXVI ENEGEP - Fortaleza: Associação Brasileira de Engenharia de Produção. Mendes, M. R., Aramaki, T., & Hanaki, K. (2004). Comparison of the environmental impact of incineration and landfilling in São Paulo City as determined by LCA. Resources, Conservation and Recycling, 41 (1), 47-63. Ministério do Meio Ambiente (2010a). Manual para implantação de compostagem e de coleta seletiva no âmbito de consórcios públicos. Ministério do Meio Ambiente, Brasília -DF. Ministério do Meio Ambiente (2010b). Estudo dos Custos Relacionados com a Constituição de Consórcios Públicos de Resíduos Sólidos Urbanos. Ministério do Meio Ambiente, Brasília-DF. Ministério do Meio Ambiente (2011). Guia para a elaboração dos Planos de Gestão de Resíduos Sólidos. Ministério do Meio Ambiente, Brasília-DF. Ministério do Meio Ambiente (2012). Plano Nacional de Resíduos Sólidos. Versão pós Audiências e Consulta Pública para Conselhos Nacionais. Ministério do Meio Ambiente, Brasília-DF. NEUR, NEPAMA & CEHS (2008). Ecological-economic zoning in Brazil – an analysis of its application to date and relevance as a strategic land-use planning tool. Centre for Regional and Urban Studies (NEUR) and Centre for Research on Agricultural and Environmental Economics (NEPAMA) in the University of Brasilia; and the Centre for Environment and Human Settlements (CEHS) in the Edinburgh College of Art/Heriot-Watt University, Edinburgh, UK. Neves, F.L. (1999) Reciclagem de Embalagens Cartonadas Tetra Pak, Revista O Papel, pp. 38-45. Prefeitura SP (2013). Notícias. Available on: http://www.prefeitura.sp.gov.br/portal/a_cidade/noticias/ [accessed on 22/01/2013]. SEA

(2013). Lixão Zero avança, mas problemas persistem. Available http://www.rj.gov.br/web/sea/exibeConteudo?article-id=375869 [accessed 23/01/2013].

on: on

SNSA (2012). Sistema Nacional de Informações sobre Saneamento: diagnóstico do Manejo de Resíduos Sólidos Urbanos - 2010. Ministério do Meio Ambiente, Brasilia-DF. Zveibil, V. (2011). PEGIRS – META 1: A evolução dos estudos de regionalização – cenário atual. Ministério do Meio Ambiente, Governo Federal, Governo do Rio de Janeiro, Secretaria de Estado do Ambiente and Instituto Estadual do Ambiente, Brazil.

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