Jeff Maguire, Director - Packaging Collection and Recycling - Australia, the Pacific and Indonesia, at Coca-Cola Europacific Partners (CCEP) explains how the company is setting up a directly funded fair and responsible collection model which embraces the work of the informal waste collection sector.
This year marks a milestone for CCEP in the recovery of used plastic beverage packaging and expansion of recycling infrastructure to drive circular economy outcomes in the region, with the planned opening of Amandina Bumi Nusantara, the first recycling facility in Indonesia with a food-grade recycled plastic output.
The facility is a PET plastic recycling joint venture between Coca-Cola Europacific Partners (CCEP) and Dynapack Asia, and also incorporates the work of Mahija Parahita Nusantara, the non-profit social foundation set up by both organisations. The foundation supports the creation of collection infrastructure via the development of collection micro-enterprises – and is centred on social enterprise and community support. It provides feedstock for the facility and, crucially, also supports the informal waste-picker community with stable employment and vital social care. Through Mahija, we ensure that its operations adhere to human rights principles and regulations in the waste collection supply chain, such as eliminating child labour and providing safe work environments.
We’ve taken this step to build the Amandina facility and bring together a network of local waste pickers and collection centres through the Mahija foundation voluntarily, but we are not just acting alone. We also work alongside the voluntary producer responsibility organisation, Indonesia Packaging Recovery Organization (IPRO). IPRO’s focus is on driving collection progress at scale working with the beverage industry, local government, and throughout the plastics value chain. And we are part of Indonesia’s National Plastic Action Partnership (NPAP), a multi-stakeholder effort to make progress on the national targets on plastic waste.
Separate from the rPET facility, we also implement various activities to manage post-consumer waste, focusing on three areas: Collection, Education, and Partnership. We conduct waste collection programmes such as the daily Bali Beach Clean Up (BBCU) programme, in place since 2007. We also work with local communities and schools to educate them on the importance of waste segregation, and develop community waste management organisations and waste banks.
Our goal in Indonesia is two-fold: to establish an effective collection solution that delivers high quality feedstock for recycling, thereby making progress towards circular outcomes for PET bottles, while also stabilising feedstock pricing and ensuring fair and responsible collection practices for waste collectors.
The challenge of plastic pollution in Indonesia
Data from NPAP highlights the scale of the challenge that Indonesia faces. The region generates 6.8 million tonnes of plastic waste every year with a massive 61% remaining uncollected. This plastic waste is derived from a variety of sources, with around 8% comprised of food and non-food bottles. In 2021, our own PET plastic footprint in Indonesia was 37,000 tonnes.
Indonesia is also the second largest ocean plastic polluter - about 620,000 tonnes of generated plastic waste leaks into lakes, rivers and the sea. To tackle the problem, the Indonesian government set out an ambitious roadmap in 2020 to divert waste from landfill and oceans. Its National Waste Management Policy & Strategy seeks to ensure 70% of waste is properly managed and marine plastic litter is reduced by 70%, both by 2025.
But these goals are set against a complex backdrop. Despite overarching targets for Indonesia, responsibility for achieving them largely sits with regional governments. With limited waste management infrastructure in place, private sector partnerships have a critical role to play in delivering these targets. We understand our responsibility to help tackle the plastic packaging waste crisis and are committed to taking voluntary action to recover used beverage packaging.
A voluntary, directly funded approach to collection
To replace the use of virgin fossil-based plastics in packaging, the industry needs to increase its use of recycled content. This requires working with national and local governments, NGOs, and beverage industry stakeholders across all our countries of operation to set up effective systems to collect post-consumer beverage packaging material, which can then be recycled and re-made into new packaging.
Collection solutions for beverage packaging vary depending on the legislative and socio-economic context in each market, as well as learned consumer behaviours. For example, in Europe, Australia and New Zealand, where collection infrastructure is well developed, we support legislation for well-designed, industry-run beverage packaging return schemes, unless a proven alternative exists. However, for markets where collection infrastructure and legislation are less developed, such as Indonesia, we are committed to proactive voluntary action to drive progress towards both our own and the wider industry’s collection goals.
By directly funding and incentivising collection solutions ourselves, we can help recover used beverage packaging and drive circular economy outcomes.
This is why the ground-breaking Amandina facility will make such a positive impact. As the first bottle-to-bottle PET recycling facility in Indonesia, it will convert used plastic bottles into food-grade rPET pellets, which will be resold to Indonesia’s soft drinks bottling industry to produce new bottles. With a starting capacity of 15,000 tonnes of rPET in 2022 and a planned ramp-up to 25,000 tonnes per year starting in 2023, it is expected to reduce the amount of virgin fossil-based plastic resin required to make beverage bottles by the same amount annually. CCEP has already committed to buy at least 50% of the recycling facility’s output and we aim to start using the material in our 390ml carbonated soft drinks bottles in Indonesia this year.
To reach this capacity of 25,000 tonnes of rPET, Amandina must be supplied with around 32,000 tonnes of high quality used plastic bottles (based on an 80% yield). And, with no formal waste management infrastructure in place, it is the informal sector that will provide this valuable resource.
A new, proven model
The existing, traditional value chain for PET feedstock in Indonesia is erratic and transactional, creating unstable pricing for waste collectors and inconsistent supply of PET for recycling.
We want to do more in Indonesia than just buy collected beverage bottles. We want to build sustainable, long-term partnerships across the value chain to drive collection with mutual benefits for all parties. And we know from The Coca-Cola Company’s previous successes in countries such as Mexico, that the ‘pull-incentive’ collection model can deliver real impact.
Through this model, the supply agreement incentivises the recycler and this, in turn, flows through to the waste collectors to drive collection. This not only ‘pulls’ high-quality PET through the system via a direct buy-back model to be turned back into bottles, it also ensures price stability for the collectors.
In 2021, this model has been put to test, and we were able to collect 3,000 tonnes in a period of two months.
Through direct investment, we’re incentivising progress throughout the waste collection value chain and contributing directly to increasing collection and local recycling rates. We believe what we’re doing will stimulate further investment in collection and recycling capabilities, aligning with government policies on waste management.
Driving social progress
Importantly, our model isn’t just about securing a stable supply of good quality rPET. We want to ensure better living standards and futures for the workers and communities driving most of the packaging waste collection.
Thousands of waste pickers – the cornerstone of informal waste collection and sorting in Indonesia – are the often unseen and forgotten labourers, and there has been little focus on their human rights and economic empowerment. The Mahija Parahita Nusantara Foundation ensures safe and ethical practices. We monitor and actively audit the collection micro-enterprises created through the foundation to ensure the enforcement of no child labour and compliance with modern slavery principles.
The foundation also provides healthcare, education and opportunities for social enterprise and employment. Provisions include medical assistance and nutrition for children of waste pickers through frequent health checks, vaccinations, and packages with food staples, as well as structured learning programmes and after-school care. Routine audits by external independent auditors help ensure human rights protections and prevention of forced and child labour. CCEP also provides equipment, vehicles for transport, and training on business skills, technology, and capability building.
Today, 18 collection centres are part of Mahija, supported by more than 600 collectors, and we’re building the network even further to include 25 centres and 1,000+ collectors by the end of the year. To date, we’ve donated more than US$300,000 in equipment and supplies, and shared our knowledge and expertise to ensure that the centres run as efficiently as possible. This helps lower processing costs and drive the best, most stable price for high-quality feedstock, enabling waste collectors to evolve micro-collection centres into more formal small-to-medium enterprises, while providing a certainty to the waste pickers through stable demand for the feedstock.
‘If you want to go quick, go alone. If you want to go far, go together.’
Notably, our ambition goes beyond collecting and recycling the equivalent of our own footprint of plastic packaging. To achieve a World Without Waste, we need to think bigger than our own operations and work together towards an industry-wide vision where we eliminate the plastic we don’t need, innovate new materials and collection models, and create a circular economy for plastic packaging. That’s why we proudly work alongside the IPRO, voluntarily, towards a long-term, system-wide solution for packaging waste collection in Indonesia, without relying on legislation.
Together with the wider industry, we are driving alignment and jointly developing a roadmap for how IPRO can support the foundation and recycling facility to achieve government targets. We’re doing this work alongside The Coca-Cola Company and, as active participants on the government’s NPAP, driving even greater partnership and collective action.
We believe that there’s tremendous potential to make inroads on the collection of what we estimate to be 140,000 tonnes of uncollected post-consumer PET bottles, to increase recycling capacity and drive circularity. We want to help fill the infrastructure gap by developing a scalable and sustainable model that can also make national recycling targets achievable.
This will ensure that our action, individually and collectively, enables true circularity for the beverage industry in Indonesia, while also establishing a more formalised and fair collection structure that’s fit for the future.
Jeff Maguire, Director - Packaging Collection and Recycling - Australia, the Pacific and Indonesia