Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices NEPRA Resource Management Private Limited (NEPRA) is a large Indian waste management and recycling company. This case study focuses on NEPRA’s initiatives to support waste pickers in its supply chain, who are predominantly unskilled or low-skilled individuals from historically marginalized social groups, with limited opportunities for alternative or formal employment. The Challenge Inclusive Employment Solutions In India, a large proportion of the 62 million tons of solid waste Rather than procuring waste from intermediaries such as scrap generated annually ends up in landfills. The country’s waste dealers, NEPRA uses inclusive employment practices to partner management sector remains largely unorganized and relies on directly with informal waste pickers wherever possible. informal waste pickers, who collect recyclables and sell these to scrap dealers and other intermediaries. Working conditions are often hazardous, and productivity and incomes are low. Many waste pickers must travel long distances to deposit collections, are prone Participation to exploitation by intermediaries, and frequently do not receive fair or timely payments. NEPRA wanted to increase productivity in the Targeted recruitment. Improvements to safety and waste collection process and recycling rates, while also improving the physical environment. Access to benefits such livelihoods for these informal workers. as childcare. Benefits for Business Advancement Fair pay and capacity-building to support self-employment. The company’s commitment to inclusion attracted over $30 million in investment. Access to Resilience Capital Training improved waste Access to emergency loans and material support pickers efficiency, which during the COVID-19 pandemic. Health training contributed to an increase in processing capacity at with a focus on women and children. Human Capital NEPRA recovery facilities Performance from 100 tons per day in 2017 to 560 tons in 2022. Empowerment Clear and transparent work terms. Enhanced NEPRA’s waste picker network has grown recognition of the value of waste pickers’ work. ten-fold since 2013. Retention rates improved. Access to labor Benefits for Workers NEPRA’s direct engagement and fair and transparent payments have generated 25 percent higher earnings for waste pickers. Overall, the company has improved livelihoods for over 5,000 people at the base of the economic pyramid since its establishment. 1 Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices working.1 Previously these children would have accompanied parents to work and been exposed to the often-hazardous conditions faced by waste pickers. This initiative not only shields waste pickers’ children from these hazards, but also improves their educational outcomes. Industry: Waste management and recycling Capacity: Collects and sorts around 560 tons of dry “Waste pickers are key players in India’s waste waste per day at three recovery facilities and one management sector–our business would not work collection center in the states of Gujarat, Madhya Pradesh, and Maharashtra. if we don’t include them.” Base of the Pyramid Workforce: 178 direct Dhrumin Patel, Co-founder and Chief Operating Officer, NEPRA employees and 618 workers contracted through third parties, along with more than 1,800 waste pickers who collect and sell solid waste material to NEPRA. On average 40 percent of waste pickers are Advancement: Offer Fair Pay women, although this rises to 70 percent in some areas. NEPRA has introduced convenient collection pick- up services that make it considerably easier for waste pickers to deposit waste and sell directly to NEPRA, thereby avoiding How NEPRA Puts Inclusive Employment potentially lengthy journeys to material recovery facilities. In Ahmedabad, the company aims to ensure that waste pickers Solutions into Practice have to travel no more than 400 meters to deposit collections. More convenient collection pick-up services contribute to higher incomes for waste pickers, as they save on travel costs Participation: Target recruitment and gain more time for waste picking and other activities. Over NEPRA has actively pursued direct outreach to 48 percent of Gujarat-based waste pickers surveyed in 2021 waste picker workers and communities, aiming to position itself cite the convenience of NEPRA’s collection pick-up services as a more attractive buyer offering better opportunities than as a key advantage of working with the company.2 Overall, 78 local competitors. It also relies on strong community connections percent of surveyed waste pickers reported that their quality between waste pickers to help ‘spread the word’ about potential of life improved because of NEPRA, of which 45 percent cited income-earning opportunities and grow the number of suppliers a greater ability to afford expenses, 36 percent cited a stable who choose to sell to it. source of income, and 32 percent cited greater ease of working. Participation: Ensure safe working conditions Advancement: Build capacity for self-employment NEPRA’s staff distribute basic equipment such as Waste pickers are invited to attend awareness gloves, masks, and other safety gear to waste pickers through sessions to upgrade their capabilities. These are organized in different supplier clusters. The provision of basic personal protective clusters and run by NEPRA’s staff on dates pre-agreed with waste equipment, combined with safety training, helps limit the number pickers. They offer training on a range of topics, from identifying of occupational injuries waste pickers experience when sorting and sorting different types of waste, to understanding current waste, thus supporting ongoing economic participation. market demand in a particular geography, and the use of safety equipment, as well as wider topics such as health and hygiene, and prevention of child labor. NEPRA’s staff report that training Participation: Reduce entry barriers on sorting has been particularly beneficial for attendees, raising efficiency and earnings, as better sorted waste attracts higher In Ahmedabad, where over 70 percent of NEPRA’s prices than mixed-material waste. suppliers are women, NEPRA provides much needed childcare support for waste pickers. In 2021, the company partnered with SHWAS, a non-profit organization specializing in the education of underprivileged children, to launch a dedicated center to provide more than 95 children with basic education while their parents are 2 Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices Resilience: Improve access to benefits Empowerment: Recognize value of work Waste pickers’ incomes were significantly affected NEPRA’s awareness-raising sessions seek to in the COVID-19 crisis. During lockdowns, many were unable to create pride among waste pickers by highlighting the social and find and sell waste, and the vast majority had no access to social environmental value of their work. According to NEPRA staff, protection or personal savings to withstand the sudden shock. selling waste to a recognized business is perceived as a more ‘dignified’ source of livelihood for marginalized informal workers, To support them, NEPRA provided emergency cash loans totalling whose work remains highly stigmatized. Some of NEPRA’s waste $26,400, to be repaid interest-free as part of future transactions pickers speak of a sense of empowerment as a result of their and when convenient for the individual waste picker. It also partnered with local non-profit organizations to distribute daily association with a formal business. essentials such as food packets and groceries. NEPRA’s operations staff provided waste pickers with information on newly launched government support schemes and helped them to fill out forms and prepare applications. “We get a sense of being associated to a company. Our status in society has risen and we no longer feel inferior about the work we do.” Empowerment: Provide fair and clear terms of work Arunaben, waste picker To ensure payment transparency and fair pricing in its supply chain, NEPRA introduced a mobile app used by staff to record all transactions with waste pickers. NEPRA’s waste pickers receive immediate payment in cash, corresponding to the exact decimal point weight of collected waste, while other buyers tend to ‘round down’. Waste pickers are permitted to stand on the scales used to weigh their collections each day to check that they have not been tampered with. In cases where NEPRA is unable to give a waste picker exact change on the day, the amount owed is recorded in the app and carried forward, so the seller is compensated fully at the next collection. The app relies on facial recognition to ensure that waste pickers are correctly compensated for collected waste. Eliminating intermediaries and ensuring fair pay has raised earnings. Some waste pickers reported a 20 to 25 percent increase in earnings after starting to sell to NEPRA.3 Some 94 percent of NEPRA’s Gujarat-based waste pickers surveyed in 2021 rated the prices offered by NEPRA as either very good, good, or fair, and timely payment was cited among the main benefits of selling to the company. “We used to go to the scrap dealers to give our waste. They would give us very low rates and weren’t regular. With NEPRA, we are assured of regular and fair pay.” Kuvarben, waste picker 3 Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices The Benefits for Business: Nepra’s Experience Access to labor Access to capital For NEPRA, direct outreach to local waste pickers The company’s strong reputation helped it attract ensures a reliable and growing supply of material for sorting and over $30 million in investment which has been crucial to its rapid processing. The company has seen a significant expansion in its growth. Impact investor Aavishkaar Capital provided $9.7 million supplier network, with the number of individuals selling waste to in funding for the streamlining and mechanization of NEPRA’s NEPRA growing more than tenfold since 2013. operations in 2013-2018. It was joined by Asha Impact in 2018, raising $6.5 million, and along with Circulate Capital, the trio Although waste pickers are not obliged to sell exclusively to NEPRA, raised $18 million in 2020 to support the expansion of NEPRA’s management reports supplier retention is high, and attributes this operations beyond Ahmedabad. NEPRA’s socially-conscious to NEPRA’s efforts to ensure payment and process transparency. approach to working with waste pickers also earned the company According to operations staff, the company pays market rates numerous awards, including the Forbes India Leadership Award for which have occasionally driven up the prices offered by scrap Entrepreneurs with Social Impact.4 dealers to waste pickers. However, NEPRA is perceived to be a more consistent and reliable buyer. By offering immediate payment and emphasizing transparency, NEPRA believes it has become a Reputation and risk management partner of choice for individuals vulnerable to exploitation, enabling the company to build a stable—and growing—supplier network. NEPRA minimizes its exposure to risks in the company’s supply chain by raising waste pickers’ awareness of NEPRA’s efforts also mean that the company will be well- children’s rights and the dangers of child labor. It provides regular positioned to take advantage of rising demand for waste products, health and hygiene awareness sessions focusing on women’s and stemming from growing policy and regulatory focus on reducing children’s health. In Ahmedabad, NEPRA’s education center for the environmental impact of post-consumer waste. children of waste pickers also provides a safe space where children can receive basic education while their parents are working. Human capital performance NEPRA’s managers observe that training on sorting has improved waste pickers’ ability to sort collected waste ‘at source’, or prior to pick up. Better initial sorting makes the segregation process at material recovery facilities more efficient and makes output recovery higher, resulting in enhanced quality and value of waste sold on to recyclers. These initiatives, alongside others, have increased NEPRA’s processing capacity significantly from 100 tons per day in 2017 to 560 tons in 2022. 4 Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices Endnotes & Sources In addition to company interviews and focus group discussions conducted in February 2022, and workforce and other company data provided by NEPRA, this case study used the following sources: 1 NEPRA Foundation. 2021. Activities Report 2020-2021. https://www.neprafoundation.org/images/pdf/2020-21-Activity-Report-NF.pdf 2 60 Decibels. 2021. NEPRA: Impact Performance Report 3 Aavishkaar Group. 2021. Impact Report 2020. https://aavishkaargroup.com/wp-content/uploads/Aavishkaar_Impact_Report2020.pdf 4 Sarda, Pranit. 2019. “FILA Entrepreneur with Social Impact 2019: NEPRA CEO Sandeep Patel” (2 December 2019). Forbes India. https://www.forbesindia.com/article/leadership-awards-2019/fila-entrepreneur-with- social-impact-2019-nepra-ceo-sandeep-patel/56393/1 IN PARTNERSHIP WITH 5 Supporting Informal Waste Pickers: NEPRA Lowers Risks and Increases Efficiency through Inclusive Employment Practices