Recycling is at the heart of an innovative social enterprise in Bendigo that is creating job opportunities and diverting significant amounts of waste from landfill.  The concept of recycling is not new. However, as Peter Cox, Chief Executive Officer of training organisation Future Employment Opportunities points out, “It’s how we’re doing it that makes our business model different.”

At the centre of the business model is the Eaglehawk Recovery and Sales Yard, the social enterprise which is largely driven by the skills and decisions of its 14 employees. The business collects waste from the community and local landfill, and finds recycling markets for the salvaged material.

How did the business start?

“For many years we were a fairly traditional training organisation,” says Cox. “But we realised that we were preparing people for existing jobs. And one of the fundamental problems in this area was that there aren’t enough jobs to go around. So we wanted to be able to help create new jobs, not just fill the existing ones.”

In 1992, an article appeared in the local newspaper about the local landfill – it was due to fill by 2001 and to create a new one would cost the local council A$5 million. “When you work with people who are unemployed, one thing they have is survival skills,” says Cox. “They quickly realised that if we could get access to much of the waste that was being buried, we could potentially generate an income from it. So we did a feasibility study and contacted the regional waste management groups who then gave us a licence to scavenge what went into the Eaglehawk landfill.”

Cox advertised for interested jobseekers. “Twenty four turned up to the information session and we selected 10,” says Cox. “Between the 10 of them, they had been unemployed for 44 years.”

With his experience in adult learning, Cox knew he had to make it a hands-on and practical process. Classroom learning wasn’t going to engage this group. “Our first training session was to walk to the tip and collect 10 items,” he says. “Then we came back and stood around the items in a circle and simply asked: ‘What’s next?’”

With a motley collection of items including an old lawn mower, white goods, bits of furniture and an old wheelbarrow, some of the group suggested selling the material.

“So we started pricing the stuff,” says Cox. “So straight away we began to develop a pricing policy.”

A business plan evolved as the group progressed further with their ideas. “If we were sitting in a classroom developing a business plan, it would never have worked.  Fundamental to this enterprise is that the workers themselves take charge and have input into the operations.  They started to consider who they were going to sell to, so that became the start of a marketing strategy.”

Cox emphasises the success of the program has been because the workers have ownership over their decisions and the future of the business. This ownership – and the resulting commitment – from the workers is evident by the fact they worked as volunteers for the first six months.  “They built the business from the ground up,” says Cox. 

Salvaged material is stripped into separate streams and sold for recycling. “If we have a fridge, it has to be de-gased, completely stripped and then separated into the various metals,” says Cox, who also points out that recycling is maximised under their business model.  “Because we are not for profit – and therefore hungry for every dollar – we recycle everything we can get our hands on. Whereas another business might only bother to recycle the materials that make them the most money.”

In the first month of their venture, they made A$1,800 in sales. It was used to buy a ute for A$1,000 and trailer for A$200.“We had to run before we could walk,” says Cox. “All small businesses start off that way. So it’s the same for a community business with a social goal.”

Creating jobs, landfill reduction and community engagement

There are now 14 workers – four of which are from the original group. “We have a weekly meeting every Wednesday morning at 8.30am and that’s been going on for 13 years,” he says. Employees are paid the award wage, they receive four weeks annual leave with 17.5% holiday loading, get 9% superannuation and are supplied with all safety gear and clothing. This equates to a package of around A$34,000 per year.

When locals heard about the initiative, many began dropping off materials to the business instead of the landfill. “For some people the message of recycling because it was good for the environment wasn’t strong enough,” says Cox. “But when you add to your marketing strategy that recycling will also create jobs, that motivates the local community to do much more.”

Cox says they recycle about 4,000 tonnes of material that would otherwise go to the landfill. As a result, the landfill, which was due to close in 2001, is now expected to continue until 2010.

They have also established eager buyers, from second hand dealers to mechanics, tilers, tradespeople who are prepared to repair washing machines and other items. 

According to Cox, one of the elements of their success is understanding their place in the re-sale business. “A lot of people suggest that we should clean up old furniture and sell it for a lot more money,” he says. “But we are strict about what our core business is –collecting and selling. Our buyers can value-add to the product. If we wanted to value-add to our products, it would take a lot of time and it wouldn’t be cost-efficient.”

Social return on investment

Encouraged by Social Ventures Australia (SVA), Cox realises that Eaglehawk’s business model can be rolled out in other communities. Already, they are operating in three other sites. They opened collection and recovery sites in Huntly and Strathfieldsay in 1998 and Heathcote in 2004 – all near Bendigo. “We would like to expand in our region but also encourage others to do similar projects in their own regions,” says Cox. “But other communities need to discover their particular model and what’s right for them.”

SVA also worked with the business to evaluate its “social return”. Using SVA’s Social Return Toolkit, a financial modelling tool, it helped the business estimate the social and economic value it generated. “They helped us analyse our worth to the community – what the council was saving because the life of the landfill was being extended, what was being saved in not having to pay unemployment benefits, and also what was being contributed by our own employees through the tax they pay.”

While the business has concentrated on domestic waste so far, they are now expanding to industrial waste.  “Now that the citizens have been educated about recycling we need to get more businesses involved,” says Cox.  “So when a building is demolished we need to scavenge every brick, bit of timber, metals and windows so all those materials can be reused.We see a large growth period coming up with recycling industrial waste.”

www.employment-bendigo.com