Assessment of Informal Supply Chains Case study on e-waste handling in

Pakistan

Presentation at International Seminar on Social LCA Montréal, 7 May 2013

Elisabeth Ekener Petersen

KTH - Royal Institute of Technology Stockholm, Sweden

The case study

•  Case study on e-waste handling through field trip in Pakistan in 2012, visiting eight different locations

•  Interviews with various stakeholders including officials, import officers, importers, sellers, waste collectors, manual dismantlers (scrappers), refurbisher, gold extractors, etc

The case study •  Example of findings:

•  Assessment conducted on the collected data using S-LCA approach based on UNEP/SETAC Guidelines

•  Conference paper presented at ICT4S conference at ETH, Zurich in February 2013 and published in conference proceedings: Umair et al. 2013, Social Life Cycle Inventory and Impact Assessment of Informal recycling of Electronic ICT Waste in Pakistan

–  The supply chain was not organized, the waste collectors collected waste during the day and then tried to sell it to someone

–  ‘Cottage industries’ was performing manual dismantling of equipment, open air burning of wires, melting of motherboards and dipping of boards in acid baths to extract precious metals

Evaluation of problems related to informal processes

•  The case study showed it is complicated to apply the Guidelines on informal processes

•  Informal processes is more likely in the beginning and the end of value chains (Dreyer et al. 2006)

•  Informal supply chains is found also in raw material extraction (e.g. artisanal mining)

•  Evaluation conducted to try to identify the problems and possibly propose ways to address them

Selected stakeholders and subcategories in the case study

Stakeholder category Subcategories

Workers Forced labour

Child labour

Social security

Wage/benefits

Freedom of association and collective bargaining

Work hours

Equal opportunity/discrimination

Health and safety

Local community Health and safety

Community engagement

Local employment

Society Contribution to economic development

Public commitments to sustainability issues

Value chain actors Promoting social responsibility

Fair competition

Specific features identified for informal processes

•  Processes not registered and not publicly known, thus not covered by the enforcement of law and other related actions by the authorities

•  Processes being illegal and/or influenced by mafia or other criminal actors

•  Relations between employers and employees are not formally regulated through contracts; workers not recognized as employees and thus not benefiting from workers rights

•  Relations between suppliers are not formally regulated through contracts, causing a breakage of the contractual chain between suppliers. Thus, informal processes are not covered by the CSR programs of main firm in the supply chain (Chi X, et al 2011)

Criteria for identifying a problem

1.  Are the subcategories possible to apply on informal processes? I.e., does the specific feature of an informal process result in that evaluating the magnitude and significance of the impact would be impeded, impossible or meaningless?

2.  Is there any specific feature of informal processes that is not addressed by the subcategories (or even stakeholder categories)? I.e. is all negative social impacts from the informal processes captured in the present set of stakeholders and subcategories?

•  The first question was evaluated for all stakeholder categories as well as all subcategories, based on the experience from the case study.

•  The second question was evaluated for the negative social impacts identified in the case study.

Outcome of the evaluation Problematic

stakeholder and/or

subcategory  

Specific features of informal

processes  

Problem description  

Workers, all subcategories  

Workers are either self-employed or employees without proper contracts  

Not meaningful to assess the subcategories for stakeholder Worker, as they all assumes an employer, having and taking the responsibility for decent working conditions  

Local community, subcategories Health and safety and Community engagement  

Businesses are not under scrutiny of the authorities or any other actor with leverage. Businesses being illegal and/or influenced by mafia or other criminal actors.  

There is no commitment to health and safety issues in relation to the local citizens. Community engagement is not relevant as the businesses are unknown and unregistered, and sometimes even illegal.  

Society, subcategory Public commitments to sustainability issues

Businesses being illegal and/or influenced by mafia or other criminal actors, not under scrutiny of the authorities or any other actor with leverage  

Not relevant as, the businesses are unknown and unregistered, and sometimes even illegal.

Value chain actors, subcategories Promoting social responsibility and

Fair competition

Breakage of the contractual chain between suppliers, processes are not covered by the CSR programs of main firm in the supply chain

As there is a breakage of the contractual chain, commitment to social responsibility cannot be sent along the chain by the main firm. Suppliers in the informal sector is probably not even known. Fair competition has no meaning when the actors are illegal and/or influenced by mafia or other criminal actors.

Discussion (work in progress) •  We found several subcategories, distributed under all

assessed stakeholders, that were difficult to assess due to the specific features of informal processes

•  We did not find any negative social impacts outside of the proposed set of stakeholders/subcategories (should they have been possible to assess)

•  We suggest inserting a new issue considering the prevalence of informal processes in the value chain - an obvious source of risk.

•  The assessment of informal processes could be a combination of their existence and the efforts from the main firm to handle them (which may lessen the risk)

•  The original set of subcategories should still be applied for informal process, automatically set at their worst position and not ‘no data’, as there is reason to believe that they constitute large risk. Moreover, as the main firm hopefully starts to handle the informal processes, there may come more data on them and improvements then can be monitored.  

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Thank You!

Elisabeth Ekener Petersen KTH/Centre for Sustainable Communications Stockholm, Sweden www.kth.se/abe www.cesc.kth.se