Challenges of Waste Management Startups in Indonesia

Environmental issues are one of the biggest issues of the 21st century. This issue has various branches of problems, ranging from climate change to illegal forest clearing, each of which has a level of urgency. For some communities and stakeholders, the issue of waste management is one of the most worrying environmental issues.

We immediately take the example of waste management in Jabodetabek. The amount of waste generated by Jabodetabek residents is estimated to be around 14.000 tons per day. There are only 8 final disposal sites (TPA) that accommodate the mountains of garbage. Quotes report Jakarta Post, two of which have exceeded capacity, three others have the same fate this year and next year. Currently, the government is building the Lulut-Nambo TPA which covers 55 hectares or half of the Bantargebang TPA.

This situation indirectly gave birth to a number of startups that focus on waste management. Gringo, Waste4Change, Magalarvaand MallTrash are some of them. This is natural because the waste problem in Indonesia is deeply rooted. Don't be surprised if the Citarum river won the title dirtiest river in the world.

Root of the problem

In fact, there are so many sources of waste management problems in Indonesia, but Bijaksana Junerosano from Waste4Change condenses them into three main causes. The first is law enforcement. Indonesia has a number of regulations regarding waste, but their enforcement is far from sufficient.

Sano, as he is familiarly called, said that weak law enforcement caused a number of residents to choose shortcuts to dispose of their waste, either by burning or throwing it into the river. Don't be surprised when you visit the banks of a large river, such as Ciliwung, you can find items such as mattresses to sofas floating in the current.

The second reason is the cost of waste management which is too cheap compared to the responsibilities that must be carried out. The cost that is too cheap has been enjoyed by residents for years, so it's only a slight increase can get protests.

Waste4Change data shows that there is a fairly large disparity between the average target retribution for waste and the amount received in metropolitan cities. Last year, the average target for metropolitan cities to receive waste retribution was around Rp. 17 billion. But in reality they can collect on average only around Rp12 billion.

"This is a big problem because the government has been asked to fix the waste problem, but those who own the garbage don't want to pay properly," said Sano.

The retribution case raises the third and final challenge, namely the financing of waste management. Sano believes that if the waste management ecosystem is to progress, the financing aspect must be better so that it does not depend solely on the limited government budget.

Role sharing

In this waste management ecosystem, the government has a very big role, including making regulations, enforcing them, and financing. Waste management startups in this ecosystem play a role in offering a variety of new solutions to overcome this problem. We took two sample solutions from MallSampah and Waste4Change.

MallSampah is a startup engaged in waste management based in Makassar. Operating since 2019, MallSampah has two services, namely waste selling and recycling services. The first service emphasizes regular garbage collection. Users of this service can sell their waste by sorting by type of waste. After being sorted, the garbage will be picked up by the Garbage Mall according to the specified place and time.

Meanwhile, MallSampah's second service is B2B with similar principles to the first service. Business owners can subscribe to this recycling service to sell or recycle their waste. With these two services, MallSampah manages to recycle 30 tons of waste every month with 5.000 monthly active users.

In contrast to MallSampah, Waste4Change's services are much more diverse and comprehensive from upstream to downstream and are divided between companies and individuals. They have a house-to-house garbage pick-up service, trash boxes for ready-to-recycle waste, ready-made tools and equipment for self-composting, consulting on company waste management, sorting labeled waste, and educating schools on the principles of reduce, reuse, and recycle. Thanks to their wide range of services, Waste4Change has managed to manage 5.400 tons of waste so far.

Obstacles still being faced

MallSampah CEO Adi Saifullah Putra said the most obvious obstacle from this vertical was regulation and implementation in the field. Adi assesses that there are so many waste management programs that have been made, but few embrace movements and communities that have moved before.

Adi refers to the existence of scavengers and collectors who have a key role in the waste management chain in Indonesia. "How many government programs have initiated mentoring and increased effectiveness of scavengers and collectors, as the key to the recycling chain in Indonesia? Most of them have created their own new programs," added Adi.

Sano on the other hand said that infrastructure and financing are the obstacles they still have to face. This is reflected in the way Waste4Change works, which is now also partnering with local governments.

Sano had said that they would be very overwhelmed if Waste4Change alone served the community in one large area. This is because the existing infrastructure is not adequate and equal in all regions, so Waste4Change requires a large investment of money and time to create it. No wonder if the service personal waste management they are still limited to South Jakarta, South Tangerang, and Bekasi only.

Recently Waste4Change outsmarted it by cooperating with the local government. Their collaboration with the government has been realized in Bekasi City. From this collaboration, they are targeting to be able to process up to 500 tons of municipal waste.

"It's impossible for us to ask people to pay before we provide services. So we build infrastructure first and then fix the retribution," said Sano when he signed a memorandum of understanding with the Bekasi City Government last March.

Need time

It can be said that this waste management business is not as simple as other verticals like you can call it sharing economy for example. In addition to a deeper layer of problems, the regulations that these vertical startups face are also more complicated.

Even so, Indonesia at least has a clear waste management policy direction as stated in Presidential Regulation No. 97 on National Policy and Strategy (Jakstranas).

The Presidential Regulation targets a 30% reduction in waste and 70% waste management by 2025. This means that there is a need for close collaboration between startups and the government in every waste management effort.

This has been practiced by Waste4Change in collaboration with the Ministry of Environment and Environment, the Coordinating Ministry for Maritime Affairs and Investment, and Bappenas. This big collaboration may be needed because Indonesia produces 175.000 tons of waste per day or 64 million tons per year.

"This is a new sector that has just been disrupted by technology and there hasn't been a fairly successful model so far," Adi concluded.