Entrepreneurship

Inclusive Waste Management in Peru: Enabling the Business of Recycling

Over a four-month period, the Global Fairness Initiative (GFI) and Ciudad Saludable conducted an Opportunity Assessment of the Waste Management Sector in Peru.

December 19, 2018 Peru

EXECUTIVE SUMMARY AND OPPORTUNITY OVERVIEW

In 1992, more than 178 countries signed Agenda 21, the Rio Declaration on Environment and Development. Established at the United Nations Conference on Environment and Development (UNCED), Agenda 21 states that “the environmentally sound management of waste should go beyond the simple disposal or use by safe methods of waste produced and seek to solve the root cause of the problem trying to change unsustainable patterns of production and consumption." To this end, one of the principles put forward in Agenda 12 was the adoption of the 3Rs – Reduce, Reuse, and Recycle. OECD countries, in particular, have since evolved the 3Rs into an economic model that envisions that the linear flow of materials (resources-product-waste) be transformed into a circular flow (resource-product-recycled resources) capable of generating both environmental and financial returns.

In the decade following the UNCED, the Latin American country that took some of the most progressive steps toward adopting the principals and practices espoused in the Rio Declaration was Peru. Peruʼs promotion of the 3Rs and adoption of the framework of the circular economy across its national and local government systems has created a vibrant new economy around recyclable solid waste in the Andean nation of 32 million people. The recycling sector in Peru is relatively nascent and largely informal, but the growth and opportunity to be found in the sector is considerable, whether from an economic, societal or environmental perspective.

For the purposes of this report, the opportunity of most interest is the growth to be found in the economy and the associated value chain of Integrated Solid Waste Management in Peru. To understand this economy requires an assessment of the laws and regulations that support and govern the sector, the actors involved and how value is added and extracted throughout the value chain. Additionally, we must look at the constraints each actor faces and the investment they require to maximize enterprise potential, all with the goal of unlocking the inherent economic value found in the sector.

With the support of the Mastercard Center for Inclusive Growth, this report seeks to do this by examining the legal framework that provides the foundation for progress and future growth, the key actors and their roles within the supply chain, and the best opportunities to invest in the growth and formalization of enterprises operating in the recycled waste sector in Peru. The conclusion of this report identifies significant opportunity to transform the waste management sector in Peru by engaging key actors who are well-positioned to strengthen the recycling and waste management sector as a whole while expanding new market and microenterprise opportunities. 

ACKNOWLEDGMENTS

This report was made possible through the generous support of the MasterCard Center for Inclusive Growth. We are grateful for the Centerʼs financial support and guidance. Specifically, GFI would like to thank the MasterCard Centerʼs Senior Director, Sandy Fernandez, and Manager for Global Programs in Latin America and the Caribbean, Luz Gomez.

We are also grateful to our partners at Ciudad Saludable who assisted in the research, development, and execution of the overall report. In particular, we would like to thank Albina Ruiz Rios for her leadership, generosity and support, as well as Paloma Ruiz Rios and the Ciudad Saludable team in Peru for their research and fieldwork.