Plastic with Purpose: Transforming Vietnam's Waste Management

The Social Challenge

Plastic waste pollution

Plastic waste is considered one of the most urgent threats to marine ecosystems and coastal economies worldwide. Vietnam, being one of the countries with high levels of pollution globally, faces significant environmental challenges and plays a key role in addressing waste management and reducing plastic debris entering the world's oceans. Domestically, Vietnam struggles with managing plastic waste, as a significant portion is mismanaged, not collected, or improperly disposed of, often ending up in overburdened landfills. In coastal cities such as Da Nang, this leads to pollution reaching the ocean front and impacting local marine ecosystems.

Currently, there are few commercially viable private sector models for solid waste management in Vietnam, especially in areas like Da Nang. Recycling of plastic waste remains shockingly low, with fewer than 15% being recycled due to low-value plastic. To address this influx of waste pollution, informal waste workers (IWWs) in Vietnam serve as the first link in the informal waste recycling value chain. Often part-time or seasonal, IWWs pick and sort tradable waste from household and business trash bins prior to city waste management pickup. These workers are frequently women whose income falls below the minimum living standard and who lack social benefits.

The Partnership

Plastic with Purpose (PwP) Project

The Partners

• International Development Enterprises (iDE)
• Oceanworks
• ReForm Plastic
• Ministry of Foreign Affairs of Denmark, Danish International Development Agency (Danida) Market Development Partnerships Program (DMDP).

The Idea and the Action

The Plastic with Purpose project is a public-private initiative managed by iDE through catalytic funds from the Danish Ministry of Foreign Affairs under the Danida Market Development Partnerships (DMDP) program. This initiative brings together iDE and innovative private sector partners such as Oceanworks and ReForm Plastic to leverage the power of blue economy instruments like the global plastic credits framework. This is achieved by strengthening and incentivizing local waste collection supply chains while integrating them into transparent and traceable digital platforms, improving the collection, recycling, and repurposing of ocean-bound plastics in Vietnam.

The partnership focuses on three impact pathways: improving incomes for informal waste workers, attracting investments in profitable and scalable waste management models, and promoting the circular economy by connecting last-mile market actors in emerging markets to the global plastic credit supply chain. At the waste collection points, iDE and Reform Plastics work with households, institutions, women's cooperatives, and waste aggregators to improve social and economic outcomes for informal waste workers through skills development, entrepreneurship support, a social platform to boost confidence, and a market network initiative to increase incomes.

At the aggregator level, iDE, Oceanworks, and ReForm Plastics collaborate with both public and private sector actors to expand the Oceanworks IMPAC+ program, which provides traceability and transparency of plastic waste through a digital platform. This supports small and medium enterprises in expanding their supply chains and improving processing capabilities.

At the public sector level, the partners sought to influence agencies such as the Department of Natural Resources and Environment (DoNRE) in Da Nang to improve business opportunities for waste workers, aggregators, and the efficiency of collection points. The partnership also tested and developed business models using plastic credit instruments to attract additional investments for scalability and sustainability.

The Impact

The PwP partnership has created lasting impacts in the Da Nang plastic recycling market and supported the development of the two commercial partners' businesses in Vietnam. The Collector Network, a platform for informal waste workers to receive benefits, and the Master Aggregator model, which connects the informal value chain to established commercial partners, were crucial catalysts for this success.

Key results include increased livelihood opportunities in plastic waste management, with a 40.1% change in profit earned by the end of April 2024 across all market actors connected to the project, surpassing the original target of 25%. The project improved the livelihoods of 430 total staff from plastic actors, enhancing working conditions while contributing to the establishment of a sustainable circular waste economy in Vietnam.

Also, plastic waste is ethically collected, recycled, and reused. By the project's end in April 2024, plastic waste actors recovered 2,400 MT of plastics throughout intervention areas, with an additional two hundred tons collected the following month. Moreover, less waste was found in the natural environment. The project contributed to increasing the plastic waste recovery rate in Da Nang from 15% to 41.7% in the project intervention area, compared to the 35% target. Additionally, more investment flowed into the circular economy. The partnership attracted 3,051,432 DKK (approximately 440,000 USD) of investment from the consortium and external organizations to support The Collector Network and the Master Aggregator.

The project created a keystone opportunity for Oceanworks and ReForm Plastics to collaborate under Oceanworks' newly developed Plastic Credits framework, which supports the reclamation of low-value plastic from the environment, inspired by the global carbon credit market.

Although the partnership ended in April 2024, the commercial partners continued to participate in the market framework resulting from the project, ensuring its sustainability. The partners are now exploring ways to expand the reach of The Collector Network in Da Nang, with ongoing market feasibility studies aimed at replicating the model across coastal cities in Vietnam with high amounts of plastic waste.

The Faculty Insight

In March 2022, the US and many other nations adopted a resolution to address the global issue of plastic waste. This agreement set in motion a series of negotiations to craft a legally enforceable accord to stem plastic production. The final round of these negotiations is scheduled for November in South Korea. Also, in July of that year, the UN General Assembly declared “access to a clean, healthy and sustainable environment, a universal human right.” Together, these steps underscore the urgent need for comprehensive action to tackle plastic waste pollution across the entire value chain.

The evolution in plastic production and consumption has parallelled industrial development over the last century. Today, plastics are ubiquitous in major consumption categories, from packaging, and construction to electronics to take-out containers.

To “end plastic pollution,” every part of the value chain, from fossil fuel production to post-consumption plastic waste post management, needs restructuring. Much of the global effort focuses on effective plastic waste recycling.

According to the UN Environment Programme (UNEP), global plastic production has risen exponentially, now amounting to about 400 million tonnes per year. However, only an estimated 12% of the plastics produced have been incinerated and 9% recycled. The remainder has been disposed of in landfills or released into the environment, including oceans.

Without meaningful action, plastic waste flows into aquatic ecosystems are expected to nearly triple from around 11 million tonnes in 2016 to around 29 million tonnes in 2040. This leakage has harmful spillover effects beyond the immediate effect on the landfill and surrounding atmosphere, often making its way into irrigation streams for crops and marine waterways.

Two main challenges exist in recycling plastic waste: “What” can be recycled, and “Where” it can be recycled.

“What” relates to the type and grade of plastic that can be effectively recycled. Not all plastics are the same, and recycling bins often display the grades of plastic the recycling facility can handle.

On the supply side, this is driven by the available technology to collect, separate and process the different types of waste from consumers. On the demand side, it’s driven by options to integrate recycled plastic into the production process. The underlying cost dynamics dictate that a recycling process is only viable when large economies of scale exist.

“Where” is determined by the labor and processing costs that support these economies of scale.

Vietnam, an emerging manufacturing and services hub in Southeast Asia, needs an effective way to tackle the increasing environmental pollution from plastics, a consequence of economic activity from increasing integration with the global supply chain.

Unlike developed economies such as the US or EU, developing countries like Vietnam rely on a mix of formal and informal economies. Waste collection, processing and disposal are among the most informal activities within the country, largely carried out by daily workers from the low-income segments of society. We cannot simply transplant a formalized waste management system from the US into Vietnam. It will not work. A formal system expects upfront investment in processes and technology to ensure quality and consistency of supply, which informal workers cannot provide.

The PwP partnership allows for investments in the system by bringing together development funds and private sector partners with expertise in waste management systems. This approach aims to develop a holistic solution to reduce plastic waste pollution while improving social and economic conditions for informal waste workers. Such integration is necessary to ensure progress in reducing plastic pollution without harming the workers who deal with it daily.

The Darden School of Business’ Institute for Business in Society partners with Concordia and the U.S. Department of State Secretary’s Office of Global Partnerships to present the annual P3 Impact Award, which recognizes leading public-private partnerships that improve communities around the world. This year’s award will be presented at the Concordia Annual Summit the week of 23 September 2024. The five finalists will be highlighted on Darden Ideas to Action on Fridays leading up to the event.

This article was developed with the support of Darden’s Institute for Business in Society where Maggie Morse is director of programs.