Improving Sustainability in the PET Supply Chain: A CSR Program for PET Recycling Company

Introduction

As global awareness of environmental issues continues to rise, companies across various industries are seeking ways to enhance sustainability within their operations. For a national bottling company in Indonesia, a leader in PET recycling, developing a comprehensive Corporate Social Responsibility (CSR) program is critical to addressing the social and environmental challenges in its PET supply chain. This article delves into The company’s PET supply chain, the key actors involved, and the social and environmental risks they face. It also provides insights on how a well-designed CSR program can improve sustainability, drawing lessons from other successful recycling initiatives.

Understanding the PET Supply Chain

The company sources PET bottles for recycling from multiple collection centers across Indonesia, with a focus on transforming used PET into recycled materials. The supply chain is composed of four key actors: waste pickers, middlemen, main collectors, and collection centers. Waste pickers play a vital role in this chain, collecting PET bottles from households, businesses, and landfills. The collected bottles pass through middlemen and main collectors before being delivered to collection centers, where they are processed and prepared for recycling at The company's facility.

Social and Environmental Challenges in the Supply Chain

The PET supply chain, though critical for The company’s operations, presents several social and environmental challenges, particularly for waste pickers and collection center workers.

Labor Conditions and Social Issues

Waste Pickers' Vulnerability: Waste pickers, who collect PET bottles, often work in hazardous conditions. They lack formal contracts and social security, which leaves them vulnerable to exploitation. Many earn low wages, without access to health benefits or proper protective equipment. In some areas, child labor persists, adding to the complexity of the issue.

Health and Safety Concerns: Both waste pickers and workers at collection centers face significant health risks. Poor working environments, lack of protective gear, and exposure to hazardous materials contribute to a range of health problems, including respiratory issues, skin infections, and injuries from heavy lifting.

Low Social Status: Waste pickers are often marginalized and live in substandard housing with limited access to clean water and sanitation. Their work, though crucial to the recycling process, is undervalued by society.

Environmental Issues

The company's collection centers face environmental challenges, particularly related to waste disposal and water management. In some cases, wastewater from collection centers is improperly discharged, contaminating local water sources. Moreover, waste disposal practices are inadequate, leading to environmental degradation around these facilities.

Insights from Comparable CSR Programs

To effectively address these challenges, The company can learn from successful CSR programs in other regions. Two notable examples are PETSTAR in Mexico and GERDAU in Latin America, both of which have implemented CSR initiatives that integrate informal workers into formal supply chains while improving working conditions and environmental practices.

PETSTAR’s Model in Mexico

PETSTAR, the world’s largest PET food-grade recycling plant, successfully integrated waste pickers into its formal supply chain by organizing them into cooperatives. Their CSR program also focused on reducing child labor by creating community centers that offered education and healthcare services for children. By improving working conditions and providing formal employment, PETSTAR was able to increase the recovery rates of PET bottles while positively impacting the livelihoods of waste pickers.

GERDAU’s Approach in Latin America

GERDAU, a steel recycler, implemented a program that focused on professionalizing informal scrap collectors, providing training, and organizing them into cooperatives. The program not only improved working conditions but also increased the scrap recovery rates and formalized relationships between collectors and the recycling industry.

Recommendations for a CSR Program for The company

Based on the insights gathered from The company's supply chain analysis and the success of other CSR programs, several recommendations can be made to develop a sustainable and impactful CSR program.

1. Improve Working Conditions

One of the core aspects of The company’s CSR program should be improving working conditions for waste pickers and collection center employees. This could include:

Providing formal contracts and ensuring fair wages for workers.

Offering health and safety training, along with protective gear such as gloves, masks, and appropriate clothing to reduce accidents and health risks.

Creating formal mechanisms for reporting labor issues and ensuring compliance with national labor standards.

2. Support Waste Pickers

Waste pickers are essential to the success of The company's recycling operations. However, their role is often overlooked, and they face the most precarious working conditions. To address this, The company can:

Organize waste pickers into cooperatives to improve their bargaining power and allow for better working conditions and fairer wages.

Provide access to basic healthcare services, either through partnerships with local healthcare providers or by funding healthcare programs.

Equip waste pickers with proper tools and safety gear, and offer training on using them correctly to improve health and safety standards.

3. Enhance Environmental Practices

Sustainability is at the core of The company’s business, but its environmental practices at collection centers require improvement. The company can take the following steps:

Implement better waste management systems at collection centers, ensuring that all waste materials and wastewater are properly disposed of.

Work with local authorities and NGOs to raise awareness about recycling and environmental sustainability, engaging local communities in efforts to reduce waste pollution.

4. Strengthen Stakeholder Engagement

Building strong relationships with local communities and stakeholders is essential for the success of any CSR program. The company can:

Partner with local NGOs and government agencies to address broader community issues, such as housing, education, and sanitation.

Collaborate with other industry leaders to establish standards for sustainable and socially responsible supply chain management.

Conclusion

The challenges facing The company's PET supply chain, particularly in terms of labor conditions and environmental sustainability, present both risks and opportunities. By implementing a CSR program that focuses on improving the livelihoods of waste pickers and workers, enhancing environmental practices, and fostering community engagement, The company can strengthen its position as a leader in sustainable PET recycling. Moreover, these initiatives will not only contribute to the company’s corporate social responsibility but also help build a more resilient, fair, and sustainable supply chain.

The company has the opportunity to make a significant impact by addressing the social and environmental challenges in its PET supply chain. By drawing on successful CSR models from around the world and implementing targeted improvements, the company can ensure a brighter, more sustainable future for its operations and the communities it touches.