Role of informal and formal actors in e-waste management
This is the second of a series of four articles on the e-waste value chain in Bangladesh, shedding light on how the e-waste value chain is structured, who the actors are, and what functions are performed by whom
In both informal and formal channels, all actors of e-waste management in Bangladesh play multiple roles in creating different types of utilities (eg form, time, place and possession) in the e-waste value chain management. This article discusses how the formal and informal channels can create the mentioned forms of utilities or value additions.
Households or consumers of electronic goods are the significant e-waste generators who play an important role in segregating e-waste at source and indirectly facilitating the recycling functions further. Some households move the e-waste to the next channel of distribution but not with the intention of recycling, instead to gain some financial benefit. In contrast, for others, the intention is to help the disadvantaged and/or get rid of the junk.
Households that intend to get some monetary value through e-waste trade segregate only the type of e-waste they perceive to have good trade value. In that process, other small e-waste, like tube lights, lamps, bulbs, chargers and electronic toys, perceived to have very low or no trade value, are discarded with solid waste. This has led to a significant portion of e-waste being left out beyond the recycling scope.
Informal sector players, particularly tokai, ferriwala/gariwala, perform the role of collector and partial pre-processor. The e-waste collected by tokai and gariwala are mostly broken parts of different electronic products. This group of collectors add value by segregating e-waste from the mixed waste, cleaning the collections and trading those in the downstream e-waste channel.
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Feriwalas, by performing the role of e-waste collector and partial dismantler, add the form, place and possession utility in the e-waste value chain. Feriwalas collect mostly non-functioning e-waste directly from households, which has more value to extract than broken parts. They are readily available to collect household e-waste anytime, without hassle and offer money against those collectables.
This consequently generates place utility-based value addition even without a formal take-back system. Sometimes, feriwalas manually break the electronic products to sort out valuable parts and components because accumulating volume and sorted products give them higher bargaining power and better price.
Consequently, a flow of clean, separated and sorted e-waste is ensured with transferrable possession to the next layer, essential for further recycling functions. However, this sorting, partial dismantling and other pre-processing are neither done with any protective gear, not even a mask, nor with the knowledge of hazardous/non-hazardous e-waste categorisation.
Ignorance of hazardous e-waste and adoption of the traditional dismantling processes prevail among the vangaris. Vangari shops buy recyclable items from the previously mentioned e-waste collectors and perform activities like storing, repairing, reselling the repaired items, partial dismantling and selling the bulk of e-waste to prominent recyclers and traders. Formal repair shops, eg, mobile, computer and small household appliance parts, demand many of their collectables. Thus, some collected e-waste enters the finished product stream for further use.
Vangaris can also transform discarded electronic products into tradeable units to a certain extent by repairing them to make them affordable to the lower-income community. Other than the above items, vangaris sell e-waste to two types of buyers. First, the informal recyclers who buy e-waste to extract valuable items from it by sorting, dismantling and recycling. Second, the traders who perform the sorting and partial dismantling functions only and who are involved in exporting e-waste to overseas markets.
The traders of informal e-waste channel trade the lion's share of the total household discarded e-waste collected from the vangaris. They use both transaction and contractual approaches to perform such trade. The big traders have established a high level of control in e-waste collection and trading over small players. Such control of traders is contingent on the tenure of their business, financial capability, strength of their information network and mutual dependence between traders and collectors.
The traders of informal e-waste channels trade their collected products in local and international markets in the same form as collected or after segregation and partial separation. E-waste, such as CRT monitors, TVs, PCBs and other parts/components where manual dismantling is impossible, are directly traded with local and foreign buyers in the same collected form. In other products where manual separation is possible, eg, blenders, IPS, UPS, power cables, ovens and ceiling fans, the separation tasks are performed using hand-held tools and air pressure by traders or their peddlers before selling to them.
Categorised management of e-waste as hazardous and non-hazardous is made at this stage. However, such categorisation is not driven by scientific e-waste management intention. Instead, the demand of different buyers for different categories of products in local and foreign second-hand markets encourages categorisation and separation of parts/components at this stage.
The e-waste categorisation-led value addition by the traders of informal channels ensures the resell market of higher value e-waste such as CRT, PCB and motherboard, where the buyers are primarily foreigners who buy these materials for producing refurbished products and further recycling. Foreign trade is based on the network/business relationships the e-waste traders built over the years. However, the trading price is subject to the quality and grade of the collected e-waste.
The traders of formal channels manage only industry-discarded e-waste collected from different local and multinational corporations, international NGOs, high commissions and embassies. This channel complies with the legal requirements set by the government authorities.
They perform all-inclusive e-waste management functions except for making new products using recycled raw materials. The value addition through sorting, disassembly and separation processes is performed mainly through manual labour. In contrast, producing recycled materials, such as size reduction, is the only machine-dependent task this channel performs.
Two groups of recyclers in Bangladesh belong to the formal channel. One is the third-party recycler, and the other is the electrical and electronic equipment manufacturer. Both groups can convert e-waste into a tradeable raw material and finished product made from recycled raw materials and trade those in the market.
Third-party recyclers can extract maximum value from complex e-waste such as PCB and CRT. The adoption of a scientific method of recycling (eg electrostatic separation and electrolysis method) with automation (eg magnetic separator machine melting furnace) makes it possible for the recycler to extract the precious materials (eg copper from PCB, cables), which is otherwise not possible by the informal channel.
Bangladesh's only full-fledged third-party recycler has a multi-metal manufacturing system under which they can utilise their treated recycled e-waste to produce metal sheets and finished goods like cutlery items. However, the value addition of this all-inclusive e-waste recycling can be compared to the tip of the total e-waste iceberg in Bangladesh.
The electrical and electronic equipment manufacturers play similar roles. But it is confined to their customers' discarded products, collected under warranty and promotional campaigns such as new for old exchange programmes. Depending on capacity, resources and infrastructure, companies vary in their breadth of recycling activities, ranging from size reduction only to complete shredding, resizing, separation, compounding, melting and moulding.
Manufacturers who adopt an all-inclusive recycling process are doing so to generate secondary raw materials for further production. However, the manufacturers of electronic products who collect their customers' discarded products only usually undertake such activities because they want to serve their promised warranty. They mostly channel back the discarded e-waste as a whole or parts/components in the informal channel, such as vangari and informal channel traders.
Electronic companies play a role in adding possession utility through such a formal take-back system. However, the benefits are not optimised due to its backward movement in the informal channel and the related redundant functions performed in multiple layers of the e-waste value chain.
The value addition processes followed by informal and formal channel actors seem highly interdependent. Undoubtedly, interdependency can bring opportunities by materialising system efficiency in many cases, but to what extent the interdependent roles of e-waste management actors in Bangladesh contribute toward maximising e-waste recycling is not explored yet. Whether such interdependent roles are needed or not, and if needed, to what extent it is needed, exploration of such queries thus sets the context of the next article of this e-waste management articles series.
Nasrin Akter is a professor at the Department of Marketing, Faculty of Business Studies, University of Dhaka.
Muhammad Ismail Hossain is on leave from DU and currently working as Dean of Academic Affairs, Monash and UoL LSE Program at UCB.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.
