The Plastics Solutions Alliance: A Recycling Value Chain in Timor-Leste

The Social Challenge

Environmental Sustainability

Like many countries around the world, Timor-Leste faces the urgent challenge of finding solutions to manage a growing stream of plastic. Currently, plastic waste is burned in trash piles, clogs critical drainage infrastructure and washes up on once pristine shores. With an estimated 81 percent of plastic waste eventually entering the ocean due to direct littering or mismanagement nationally, the improper disposal of plastic not only harms the environment, but threatens the health of communities, undermines the potential of the tourism industry, and exacerbates the risk of natural disasters and climate change for which the country is not adequately prepared.

The Partnership

The Plastics Solutions Alliance

The Partners

• Mercy Corps
• The Korea International Cooperation Agency (KOICA)
• The United States Agency for International Development (USAID)
• The European Union
• Caltech General Contracting
• Heineken Timor

The Idea and the Action

The Plastics Solutions Alliance (PSA) is a cross-sector partnership leveraging private sector and development funding to advance “plastic neutrality” in Timor-Leste. Its objectives are to minimize the use and improper disposal of plastic, and to establish an inclusive recycling value chain, which will expand Timor-Leste’s small manufacturing base, bring a measure of diversification to an oil-dependent economy, and provide sustainable employment and entrepreneurship opportunities.

To create a market system adapted to the country’s resources, the partnership addresses the entire lifecycle of plastic and engages all actors in the waste management cycle. It combines upstream strategies designed to prevent plastic pollution before it happens and resource recovery solutions to mitigate downstream impacts. Through three strategic collaborations with the Secretary of State for the Environment; the Ministry of Tourism, Commerce and Industry; and the Ministry of Education, Youth and Sports, it aligns with the government “zero-plastic” policy push and national climate and disaster risk-mitigation efforts.

Following a de-risk-pilot-certify-scale approach, PSA simultaneously engages businesses in the value chain, government to inspire policy reform, development agencies to bridge the infrastructure financing gap, and civil society to raise awareness and drive behavior change. The action of PSA is shaped by five defining characteristics converging to communicate a powerful “why” for change, explain how to change, make it structurally easier to change and align incentives to reinforce the change.

1. Circular: Helping accelerate the transition to a circular economy
2. Innovative: Providing unique value and exploring untapped potential
3. Viable: Demonstrating marketability and financial sustainability
4. Scalable: Moving from local to global impact
5. Systemic: Accounting for the way in which parts of a system both influence each other and work as a whole

The Impact

PSA is on a journey to recycle 100,000 kilograms of plastic by 2024. Despite the emergence of the COVID-19 pandemic one month after its creation, it persisted to:

• Develop the first Timor-specific, extracurricular syllabus dedicated to plastic issues, with a pilot involving more than 150 students from six public schools to test its potential integration in national school curricula.
• Conduct formative research to study social norms and behaviors around plastic, the findings of which will inform the launch of the first civil-society supported, government-endorsed awareness campaign on plastic in Timor-Leste.
• Install 140+ recycling bins to collect plastic waste from 70+ anchor institutions across the capital city — early adopters include universities, schools, clinics, churches, embassies, restaurants, hotels, shopping malls and residential compounds.
• Establish the first commercial-scale plastic recycler and bring the first locally recycled plastic products to market.
• Support 15 micro-, small- and medium-enterprises to enter the post-consumer plastic value chain and expand product lines.
• Collect more than 111,000 kg of plastic, with more than 31,000 kg already recycled into eco-construction pavers made from 100 percent locally recovered materials — including over 1.3 million plastic bottles.
• Produce 14,000+ recycled pavers, with 13,000+ already sold domestically and 640 exported to be tested according to international standards and marketed to foreign distributors.

The Insight

On 2 March 2022, at the United Nations Environment Assembly in Kenya, representatives from 175 countries endorsed a historic resolution to forge a legally binding agreement by 2024 to “end plastic pollution.” On 28 July 2022, the U.N. General Assembly declared “access to a clean, healthy and sustainable environment a universal human right.” Together, these two announcements highlight the urgent need for action on tackling plastic waste pollution across the entire value chain. The evolution in the production and consumption of plastic has run parallel to the industrial development of the past century. Today we find plastics to be present in all major consumption categories, from packaging, construction and electronics to take-out containers. To “end plastic pollution,” every part of the value chain — starting with production from fossil fuels to managing plastic waste post-consumption — needs to be reworked. Much of the effort across the globe focuses on the last part, i.e., effective recycling of plastic waste. Current outlook estimates from the Organization for Economic Cooperation and Development (OECD) find that more than 20 percent of collected plastic waste is mismanaged (not disposed of adequately), ending up in uncontrolled dumpsites or burned in the open, thus leading to leakage in the environment. This leakage has harmful spillover effects beyond the immediate effect on the landfill and surrounding atmosphere, when it makes its way into irrigation streams for crops and marine waterways.

There are two main challenges 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 plastic is the same, and very often recycling bins will display the grades of plastic that can handled by the recycler. On the supply side, this is driven by the available technology to collect, separate and process the different types of waste produced by consumers. On the demand side, this is driven by available options to integrate recycled plastic into the production process. The underlying cost dynamics dictate that a recycling process is only viable when there are large economies of scale. “Where” is determined by the labor and processing cost that will support these economies of scale.

In the above context, the work undertaken by the Plastics Solutions Alliance in Timor-Leste is laudable. A developing economy like Timor-Leste has the opportunity to build its supply chain infrastructure with an eye on environmental sustainability. Like any other developing country, it has limited government resources to build this infrastructure on its own. With help of a public-private partnership, it can achieve the necessary scale and funding to do so. By building a commercial-scale plastic-recycler and a value chain that integrates micro-, small- and medium enterprises, it ensures that this effort is not dominated by a few major global players alone. In addition to the immediate impact of reducing the amount of plastic that goes to the landfill, PSA is making inroads on the supply side through awareness campaigns and collection efforts, as well as creating additional value on the demand side through development of the eco-construction market. Taken together, it has the potential to achieve a sustainable, circular value chain for plastics in the region and provide a blueprint for action for rest of the world in its quest to “end plastic pollution.”

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 19 September 2022. 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, at which Maggie Morse is director of programs.