Graz: Combining innovative recycling initiatives and job creation

Abstract:

Waste management at local level is often characterised by the introduction of innovative organisational models which fit the urban framework conditions. In Garz the Öko-Service company started a variety of specialised services in the recycling and gardening sector. The nonprofit organisation offers new services as well as cooperation with private waste management companies which test new areas of waste management. This type of business can be regarded as an example of good practice in urban development for the following reasons:

• pioneering role in specialised fields of recycling;
• introduction of innovative technology in the recycling sector;
• partnership approach with the public, the private and the nonprofit sector;
• international cooperation in training and exchange of know-how;
• participation in the city's environmental programme.

Background and Objectives

Within Graz's environmental programme, which is named Ökostadt 2000 - On the way to sustainable city development in Graz - Local Agenda 21, innovative and sustainable management in enterprises has an outstanding place. The funding programme under the name of ÖKOPROFIT (Ökologisches Projekt für Integrierte Umwelt-Technik - ecological project for integrated environmental technology) has been designed as a support programme for implementing cleaner production technology and process changes, as well as setting up new innovative eco-services that on the one hand minimise the ecological burden and on the other hand transfer external know-how to the business which ensures a 'help-to-self-help' policy at company level (cp. case study on ÖKOPROFIT in the database).

In the course of the last decade the recycling sector has been established as a key area for testing new forms of environment-related services in Graz. As this environmental field is currently undergoing rapid technological change and organisation of the working process there is a growing number of activities from which new jobs and innovative training arise. This new type of waste service also fits the type of a non-profit limited liability company (Gemeinnützige GmbH) which incorporates company goals of re-integrating unemployed people and offering an environment-related service. Although compared with other European cities Graz has a relatively modest rate of unemployment of 6.9%, there are certain groups of job-seeking persons who normally have little chance of finding a job on the regular labour market. Special problem groups, such as persons with drinking habits, drug use or people without a permanent dwelling, as well as people in the under 25 and over 45 years age groups, are affected by long-term unemployment and by lack of training and further education opportunities in particular.

Within this context the Öko-Service non-profit company was set up as an independent business. Step by step it developed a business policy that focuses exclusively on unexploited potential in the recycling sector. Previously, the core activities of Öko-Service included the business of garden maintenance, garden waste shredding and composting, and it was integrated in BAN (Beratungsstelle für Arbeitslose und Nichtseßhafte, Advice Centre for the Unemployed and People without Permanent Dwelling), a socio-ecological charity project, which offers employment opportunities for disadvantaged unemployed people. However, growing economic activities in the gardening branch made it necessary to establish a new business which is better suited to act according to business lines and which enables its transitional workforce to take part in sector-related training. In this sector Öko- Service is the only company that provides a garden maintenance service (including garden waste shredding and composting) and there is, therefore, no competition with private companies.

Implementation

Project date and status

Öko Service was founded in 1994.

Strategy

The importance of the creation of a new business as an independent company has already been stressed as a pre-requisite for greater scope of action. A well defined task structure enables the person in charge to undertake greater responsibilities in his area. In contrast to project management in a job creation project, which is conducted on an annual basis or for the duration of the project, the management of an independent company can act freely in a medium and long-term perspective. This arrangement has been an important factor of Öko-Service's success in finding partners in the private business sector and is therefore an outstanding feature of the company's history and in the continuous improvement of the company's set-up.

This organisational characteristic has also affected Öko-Service's transitional workforce as joint activities with private companies in the recycling business can be used as a springboard for workers to the regular labour market. Currently, Öko-Service has about 20 transitional workers who are employed for up to 16 months (under 45 year olds) or up to 28 months for over 45 year olds. They are nominated by the local labour office and selected by Öko-Service after passing an interview with the social-pedagogic staff. The majority of employment contracts are for 16 months, of which 12 months are practical work in the different units and four months are vocational and educational training.

The two months of educational training comprises subject matters ranging from introduction in the fields of botany and soil, green area maintenance, composting, machinery and equipment, waste management, waste reduction, recyclable materials, hazardous materials, techniques of recycling, health and safety regulations, accident prevention, and environmental protection. In addition, the transitional workers are given the chance to learn to drive and to obtain a stacker driving licence. Theoretical education normally takes place during the winter when the gardening services are out of action. Furthermore, all trainees are given educational support in their efforts to enter the regular labour market or if confronted with special problems (e.g. debts, difficulties in dealing with authorities etc.). During the two months of vocational training transitional workers learn various work routines in the environmental and recycling sector. This includes hedge cutting, lawn mowing, shredding of garden waste, handling of compost facilities, gardening, tree-cutting, wood-cutting, collection, sorting and re-use of recyclable materials such as window units, electronic equipment, introduction to warehousing, repair and maintenance of machinery and tools, customer advising, snow clearing, and traineeship at other firms.

Activities

At the outset Öko-Service was established as a socio-economic company mainly engaged in its original field of garden maintenance, garden waste shredding and composting service. There were several good reasons for the creation of a new company:

• an established service for approximately 1,000 customers;
• the new business 'inherited' technical equipment for gardening work;
• both managers had been working in this environmental field for a long time;
• most of the personnel had previously worked in this service;
• the garden-related services continued to be subsidised by the municipality as, in return, it saves waste disposal costs.

The creation of an independent company is for two further reasons an important step in the direction of a prosperous economic undertaking. On the one hand the company status is vital for this type of new socio-economic business in order to establish a financing mix by which it can break into new fields of recycling activities. On the other hand the company status makes it necessary to build a solid and diversified organisational structure from which the stimulation of new fields of activities can take place.

Within the last three years Öko-Service has greatly benefited from its emergence as an innovative partner in the recycling business. Although the garden-related activities are still the heart of the company with approximately 70% of the turnover, it succeeded in breaking into some niches in waste management. Due to fostering internal ideas and incorporation of external know-how and experience from abroad a variety of areas of operation have been put into practice.

The following activities have been started in cooperation with partners from private recycling companies:

New activities have been initiated on behalf of Öko-Service which can thereby strengthen its economic basis and also offer new employment opportunities for its transitional workforce due to the exchange of know-how and the inclusion of transitional workers into the regular working process within private waste companies. The policy of successful implementation of such joint activities contributed to Öko- Service´s image as a competent and credible cooperation partner. Recently, a private recycling company asked Öko-Service's management to participate in a new recycling initiative to dismantle scrap cars. The acceptance of the non-profit limited liability company as a adequate company within the business community can, therefore, be regarded as an important turning point on the socio- economic company's road towards becoming a sustainable undertaking.

Partners

The Öko-Service company is a socio-economic company in the form of a non-profit limited liability company (gGmbH) that has succeeded in establishing a clientele network in various fields of activities. Although the gardening services are central to the business, the incorporation of other areas of waste management and recycling is essential to build up a basis for insertion of transitional workers into the regular labour market. The partnership approach is a basic principle in implementing a combination of labour market and environmental policies. The following organisations are directly involved in Öko-Service's activities:

The BAN organisation is the job creation project which was the cradle of Öko-Service. It was founded in 1983 as an advice centre and charity project for unemployed people who needed the support of teachers in the field of vocational training as well as social guidance. In 1991 it turned into a socio- economic job creation project mainly funded by public money from job creation schemes (55% of total costs). It set up its own collection service, a joiner's shop, a lye shop and sale of second hand goods (mostly furniture, ranging from simple items to antiques). Until 1994 Öko-Service was a branch of BAN, and thereafter BAN and ARGE Müllvermeidung are members of a partnership on Öko- Service's board.

ARGE Müllvermeidung is a private non-profit association that aims to identify and elaborate waste avoidance strategies. It is engaged in the areas of training, counselling and information for municipalities and for individual job qualification.

It publishes a waste management magazine with a circulation of 6,000. Since 1986 more than 200 environment and waste counsellors have been trained. It is also involved in several ÖKOPROFIT projects as consultant. In addition, more than 400 environmental officers at company level have been qualified for new challenges in waste management. Currently, the activities have been extended to other European partners as ARGE Müllvermeidung is coordinator of an EU ADAPT project which is directed towards up-grading environmental know-how in companies. The Environmental Management Assistant Pool project offers 16 companies the chance to qualify their staff as 'internal environmental auditors'. The project is financed by the ESF and Styria labour office, and it has partners in Germany, Italy and Spain. ARGE Müllvermeidung assists Öko-Service with know-how support (e.g. transitional workers are trained in courses) and the manager of ARGE Müllvermeidung also acts as the financial business manager of Öko-Service. In addition, it offers educational training for Öko-Service's transitional workers.

Wirtschaftshof Graz is a municipal waste management organisation in the City of Graz which cooperates with Öko-Service in several fields of waste activities. All other Öko-Service partners are private companies which operate in specialised fields of waste management. Nevertheless, they are open-minded towards integrating recycling niches into their capability profile. Saubermacher AG is Austria's largest private waste management and recycling company with a staff of more than 500. It has more than 400 branches. The other recycling companies (A.S.A. Abfallservice AG and Rumpold AG) are engaged in different fields of specialisation in Styria as well as Austria. SEEG is a private agricultural cooperative which has specialised in the field of producing diesel oil from used cooking oil.

Financing and resources used

In Öko-Service most of the labour costs are covered by the local labour office, the Arbeitsmarktservice (AMS). Permanent staff is entirely paid by AMS whereas transitional workers receive 75% of their payment from AMS (100% of the costs are covered during the training period and two-thirds during their work in different company units). 43% of the labour costs are paid from ESF funds.

The regular wage of the transitional worker is oriented towards the level of customary wages in the recycling business which is 13,000 ÖS per month for a transitional worker and 14,000 ÖS per month for a foreman.

Results and impacts

As Öko-Service is combining goals of ecological waste management and job creation the diversification of areas of operation has an impact not only on the labour market but also on the eco- balance in the city. As it tackles some specialised fields of waste management it has to look not only at recycling aspects but also at collection systems. The following arrangements and environmental benefits can be summarised:

With regard to impacts on the labour market the Öko-Service company employs a staff of 10 and has 20 transitional workers. All of the permanent staff work part-time, ranging from between 50% of standard hours up to 35 hours per week. Even the two managers work part-time: one of them is directly involved in daily management of work on the basis of a 35 hours per week contract, and the other does the financial business management which is approximately 10% of the total management. The professional backgrounds of permanent staff include technician, recycling adviser, gardener, farmer, agricultural machinist, social education worker and clerical worker. Due to the opportunity of outplacement at a private company transitional workers have a good chance of obtaining a permanent job. On average approximately 70% of the transitional workforce succeeded in their efforts to find a job.

Öko-Service is also responsible for the organisation of joint work at the companies. From its point of view this has two major strong points: on the one hand it can organise the work schedule according to the practical skills of the transitional workers; on the other hand, it has the chance to 'present' transitional workers to the private company. Normally, each transitional worker gets the chance to test his capability in the area of responsibility.

Cooperation with private companies has the extra bonus that most marketing for the new recycling services can be transferred to the marketing branches of the company concerned. In return joint marketing has a strategic advantage for the socio-economic company as it becomes well-known and respected by the public and the business community.

In addition, the Öko-Service company is continuously trying to strengthen the educational side of its work and is currently cooperating with Spanish and Swedish partners in a EU Horizont project which is aiming to work out a common curriculum for vocational training of 'environmental worker'. The partners, from the Spanish island of Menorca and the Swedish town of Örnsköldsvik, are engaged in the areas of waste management and recycling and recycling of electronic waste. The results of the cooperation project will be available at the end of 1997.

Barriers and conflicts

The most obvious barrier in Öko-Service's activities is the dependency on public labour market funds which are granted on an annual basis. Therefore financial planning is often restricted to a short-term perspective.

Lessons learned and transferability

Although the Öko-Service project has only been in existence for three years there have been some remarkable successes. Some characteristic features can be identified as key elements of management of a socio-economic type of non-profit limited liability company. The lessons learned might also appeal to other types of businesses:

• building a core activity has to be developed as a basis for economic viability. Sticking to business lines is more promising than the 'charity' approach. In addition, business policy is better suited to link current fields of activities to medium-term corporate planning. Thinking in different time horizons distinguishes the project from the business, as does conducting business policy that is oriented towards the professional marketing strategy of a typical private company;
• networking abilities are a key element in successful management. On the one hand this requires highly motivated management and staff with a solid professional background who can be put in the situation where they need to react to new challenges. On the other hand elaboration of new ideas is crucial in order to win new partners in the public and private sectors;
• it proves to be a valuable experience to look 'beyond one's own nose', as local recycling initiatives throughout Europe can serve as models. Often certain arrangements can be transferred to the local situation or they can be modified according to specific peculiarities of the local or national context (e.g. introduction of selection systems; cooperation with institutions in the field of vocational training; cooperation with private companies etc.);
• quality of work is essential in order to have respected entry to the business community. A socio-economic company is often regarded as a subsidised competitor. It has, therefore, to exploit niches that are innovative and economically promising at the same time. In the case of Öko-Service it has to 'sell' its ideas to a partner from the private sector, as a potential future market has to be tested beyond the local level;
• diversification in recycling activities increases opportunities for the transitional workforce to find the right job. Cooperation with private companies offers not only a test field for products but also for skills and abilities.

Source of Information

EA.UE (ed.) 1997: Job creation in the environmental sector. Local employment initiatives in Europe, Berlin

Contact:

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Graz :

Population:

Project was added at 27.02.1998
Project was changed at 27.02.1998

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