Informal workers dominate the Southeast Asian labour market, making up more than half of the region's workforce.
They play a vital role in many industries, including waste management and recycling — a sector that is set to be a focus of discussions as the world turns its attention to ambitious sustainability goals. Plastic, in particular, will be at the top of the agenda as negotiations on the details of a landmark legally binding global instrument begin.
While informal workers are the backbone of waste management and recycling efforts in the region, their contributions and needs are often overlooked. As governments, investors and corporations strive to build more circular supply chains, we must not miss the opportunity to also make the sector more inclusive.
Ensuring responsible and ethical sourcing is a complex goal to achieve, particularly in regions as diverse as Southeast Asia. Using recycled plastics as an example, the supply chain involves a large number of participants across two distinct source streams, comprising formal and informal sectors.
The former is not fully developed in the region due to a lack of funding and insufficient know-how on sustainable waste management. As a result, waste collection is generally dominated by informal workers and their participation is a crucial component of ensuring sustainable practices.
A recent study of nine Asian cities revealed that the informal sector contributed to the recovery of more than 95 per cent of polyethylene terephthalate for recycling. Despite playing a critical role, they are the most affected by human rights abuses and at risk for exploitation.
Furthermore, the informal community is made up of some of the most vulnerable members of society, subjected to economic and social marginalisation, low wages and employment standards. In many cases, it is close to impossible for these waste workers to move up the social ladder, due to long-standing systemic barriers.
Similarly, in Malaysia, despite the transformation made to the country's solid waste management policy and strategies, there is no specific policy that formally regulates and recognises the role of the informal sector in recycling.
The working conditions of informal waste workers are starting to receive much-needed attention, especially as companies place pressure on partners to ensure that their supply chains do not involve any discriminatory practices.
Beyond an ethical obligation, the potential of informal waste workers to deliver positive environmental and financial value is tremendous. By developing and uplifting this overlooked sector, companies can create a more sustainable and resilient ecosystem while also capitalising on the invaluable knowledge and contribution that they make.
Supportive government regulations to increase recycling of plastics can be observed globally, such as recycled content mandates and Extended Producer Responsibility frameworks, and they are pushing brands to take action.
The Malaysian Recycling Alliance, founded by the countrys 10 leading fast-moving consumer goods companies, including Coca-Cola Malaysia, Mondelez International and Nestlé Malaysia, pledged to reach a minimum recycling rate of 25 per cent of members' packaging volumes by 2025.
The momentum driven by regulatory frameworks is accelerated by the rise of environmentally conscious consumers. A global study by Deloitte revealed that close to a quarter of consumers will switch to buying products from an organisation that shares their values on environmental issues.
They feel most strongly about the recycling and reuse of materials within the circular economy and expect businesses to contribute to spurring positive change.
As the demand for recycled plastics continues to rise, the role of informal waste workers, who are at the frontline of waste recovery, will similarly grow in importance. The ecosystem needs to address the fundamental issues relating to their welfare and treatment, in order to ensure that supply chains are held to the highest standards.
As a consumption and production powerhouse, Southeast Asia holds significant potential for impact in advancing the circular transformation, from both environmental and social perspectives — and businesses have a critical role to play in this transformation.
It is not only their duty to ensure compliance within supply chains and place human rights at the very centre of business development, but they can also play a role in guiding the wider industry and community towards socially responsible practices.
Working with international regulators, non-governmental and investors, they have the opportunity to leverage this moment in time to make the voices of the informal sector heard.
The writer is research analyst, The Circulate Initiative