Eco-friendly Auto Recycling Value Chain and Training Local Businesses to promote and achieve Goal 8,12,17
Description
With approximately 1.3 billion cars running in the world – a number which will only increase in the future – the potential environmental impacts of broken or old vehicles in terms of non-biodegradable waste are significant. End of life vehicles (ELVs) generate millions of tonnes of waste, including hazardous substances which should be recycled in environmentally friendly ways. However, many countries do not have sufficient waste management and recycling policies in place to address this environmental challenge. Rather than going to landfill, ELVs contain many reusable spare parts and recyclable materials, such as steel, copper and aluminum.
Used cars from developed countries have long provided people in developing countries an affordable means of transportation, in turn providing access to more jobs and opportunities. At the same time, end-of-life vehicles (ELVs) pose a threat to the environment, especially in developing countries where no proper car recycling measures are in place and old cars are often simply dumped in the street. What’s worse, insufficient occupational health standards expose employees in the used-car industry to serious health issues, such as injuries and respiratory problems. We recognize that integrating the informal sector with formal businesses could improve waste management while addressing serious health and livelihood issues.<br />
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KAIHO INDUSTRY, a Japanese automobile recycling company, is working to build a thriving vehicle recycling value chain in Sao Paulo and Minas Gerais in Brazil, consisting of micro, small and medium enterprises such as local garages and repair shop (SMEs), recycling engineers, recycling technicians and local collectors of discarded materials and auto parts. Many of the individuals along the value chain are living at the bottom of the economic pyramid, and participating in this initiative will help to lift them out of poverty.<br />
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Operating within developing countries has been an educational but challenging experience. One of the major obstacles we face is a lack of ecological consciousness and a deficiency in waste management laws. As a business, we have to cover the cost of ELV collection, transportation and processing to make a reasonable profit. However, inadequate regulations on waste management create a situation in which improper disposal is more profitable than proper recycling. To address this, we have begun advocating for change on a political level. I believe that unless all businesses are subject to strong environmental regulations, good businesses who do good work for the environment will be outdone by bad businesses who just aim to maximize profit. With that in mind, we urge governments to not only monitor and enforce environmental regulations, but also to implement a support system and market-based incentive mechanism for good businesses to be guided and rewarded.
In 2000s, KAIHO has widened the focus of my company from simply dismantling and selling scrap steel to also creating awareness on effective recycling among local companies and policy makers, not only in Japan but in developing countries as well.
KAIHO founded the Re-Use Motorization Alliance (RUM Alliance) in 2003. The RUM Alliance is a non-profit organization of Japanese auto recycling companies whose goal is to strengthen and support each other through cooperation rather than competition. The mission evolved into bolstering the circular economy and contributing to a “resource circulation society”, which requires well-functioning waste management and proper recycling systems. To address these needs, we developed a solution with the following three components: installation of recycling equipment, installation of business management systems and provision of training on recycling. With this solution, we train on the use of technologies and convey management skills acquired through our 50 years of business experience to trainees through classroom lectures and practical work at IREC, the International Recycling Education Center in 2007.
To date, KAIHO has provided training courses to over 200 people from a wide range of sectors including private and public actors. One participant at the training, a professor from a local university, concluded that Brazil should introduce a Japanese-style ELV recycling system. He published a book on ELVs and searched for a potential project site for an ELV model plant. Together with the professor and the Japanese International Cooperation Agency (JICA), KAIHO agreed with the Federal Center of Education of Mains Gerais to launch a pilot plant – a Brazilian version of the IREC – at the university.
Coincidentally, at that time, the local transportation department was facing the problem of dumped and stolen vehicles. With the help of the newly-founded plant, the transportation department received technical skills training. Consequently, the state government of Minas Gerais enacted legislation on dismantling ELVs with which all traders have to comply. This is one of what we hope will be many examples of how KAIHO fosters knowledge and capacity building and drives innovation for local economies, governments and development organizations alike.
The project has begun since 2014 and this is the first technology center in Latin America for the complete recycling of automobiles, with advanced technology and traceability of all materials and parts recovered from vehicles.
In addition to contributing to sustainable development, the initiative aims to contribute to the training of Cefet-MG students and carry out training for the external community. The idea is to encourage the installation of similar plants in other states and allow the formation of entrepreneurial professionals in this new economic sector, qualified for the expansion of this type of activity in the country.
KAIHO joined Business Call to Action (BCtA) in December 2017 with a pledge to establish an eco-friendly auto recycling value chain in Brazil with the capacity to recycle 100,000 end-of-life vehicles per year by 2022. As part of this commitment, it will develop the skills of 15,000 recycling engineers and expand 20 existing recycling businesses, including local garages and repair shops.
Building a rule of business is key to creating an ecosystem as it allows a lot of SMEs to start their new business and expand their business sustainably. In this case, KAIHO has a partnership with the Japanese government, such as JICA and METI, to share the structure of such a recycling law through a seminar in Japan with other country’s governmental officers.
(1) Installation of automobile recycling equipment and production system
Our standardized Japanese recycling technologies will be adapted to the pilot plant. In this production system, ELVs will be collected from the local market and dismantled into mainly scrap metals (such as iron, aluminum and copper) and used recycle parts (such as engines, body parts and suspensions).
(2) Installation of computerized business management system called KRA
The KRA system is a computerized business management system which allows users to efficiently support the execution of business processes that include automobile appraisals and order / stock / sales management. This system allows the company to manage quality control and inventory control with its extensive use of barcodes attached to individual parts. The barcode system identifies the origin, history, and specs of individual parts and provides vital information to customers.
(3) Provision of training on automobile recycling technologies and management skills
In 2007, we opened a training center (International Recycling Education Center, IREC) to improve the skills of automobile recycling workers for our alliance partners in Japan and overseas. We convey the technologies and management skills acquired through our 48 years of business experience to trainees through classroom lectures and practical work under the training programs at IREC.
The potential for upscale and replication is high as the number of ELVs is rapidly increasing all over the world, and the business model can be taken to any country. KAIHO can transfer its recycling technology to any partner in any country context. A suitable local partner is key to successfully replicating the project.
As the population continues to increase in the world, the number of cars reached 1.3 billion. It must not be selling but someone has to “perfect complete recycling-Atoshimatsu". SDGs have the philosophy of "No one will be left behind". In addition to the goals of SDGs "Responsibility to make" and "Responsibility to use", we KAIHO is adding "responsibility for the efficient recycling" and, with the spirit of altruism that the Japanese have, to solve the global problem.<br />
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Of course we also pursue profits to survive as a company, but we are not doing business only for personal benefits. In our business, we seriously consider “perfect complete recycling". “Arterial industries" manufacture things (products), while “Venous industry" circulates (recycles) the used products “perfect complete recycling". Venous industries are still immature all over the world. It is still not efficient enough and canʼt stop environmental pollution, moreover itʼs usually operated in dangerous working environments. By learning from nature, we think it is necessary to be conscious about resources "circulation" and act accordingly.<br />
As a pioneer in the venous industry, KAIHO cooperates with several government organizations. The Ministry of Economy, Trade and Industry – The Ministry of the Environment – The Japan International Cooperation Agency (JICA) – The Japan External Trade Organization (JETRO). <br />
We also collaborate with other overseas local governments and university institutions. We are proposing environmental-friendly automobile recycling business to the world.<br />
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SDGs (Sustainable Development Goals) was adopted by the United Nations to form a global partnership to promote both "sustainable consumption and production“ as well as "human employment rewarding for everyone“. We will contribute to resources recycling in the world.
UNDP Business Call to Action
https://www.businesscalltoaction.org/news/end-life-car-recycling-brazil…
UNIDO
http://www.unido.or.jp/en/technology_db/3776/
KAIHO INDUSTRY
https://kaihosangyo.jp/english/
<Book>
The Green Leap to an Inclusive Economy
edited by Fernando Casado Caneque, Stuart L. Hart
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Taishi Suzuki, Manager, Business Development Division