Strasbourg: The business of recycling white goods and creating new jobs

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Country:

a) Western Europe

b) France

Language:
Type:	Project, Concept, 1
Area:	City/Town, 100,000 - 1 mill.
Actors:	Local government, Economic sector, NGO
Funding:	Local government, National government, European Union, Economic Sector, NGO, Publ.-priv. partnership
Topics:	Employment
	Solid waste
Objectives:	Improve environmental efficiency
	Increase use of renewable resources
	Waste recycling
Instruments:	Public participation

Abstract:

The organisational model of the "Entreprise Nouvelle Vers l'Insértation Economique" (ENVIE) is a key element in the French concept of combining environmental activities and job creation measures. ENVIE Strasbourg is an undertaking that specialises in the recycling sector, namely the collection, repair and sale of white goods. The idea was taken up in 25 French cities and a national umbrella organisation was founded. The new-style business was selected as a case of good practice in urban development for the following reasons:

• introduction of a new waste collection system for white goods at local level;
• provision of training and job opportunities for disadvantaged unemployed people;
• professional management of a company with self-generated income and social entrepreneurship;
• close cooperation with industry and distributors;
• development of marketing and product strategies by the national umbrella organisation;
• the social aspect of supplying goods for people on low incomes.

Background and Objectives

The total number of unemployed persons within the larger region of Strasbourg amounts to 650,000. In 1996 the Alsace regional level of unemployment reached only 7.5%, whereas the percentage was significantly higher in the region’s capital, Strasbourg. On average 11.5% were registered as unemployed which is near the national level of 11.2%. The main problem is associated with young uneducated, untrained and unemployed people.

The concept of linking labour and environment-related activities at business level was developed in 1984 as a result of cooperation between Emmaus charity and several non-profit organisations. At the time the French government of Prime Minister Laurent Fabius started an active labour market policy by introducing several measures for the purpose of job creation. In 1984 public job creation schemes for young unemployed people in public welfare institutions and service had been set up (Travaux d`Utilité Public). In 1985 organisational and financial arrangements for the creation of temporary employment enterprises (Entreprises d´Insertion) were put into force which aimed to create a fixed number of temporary jobs at local level by granting funds from the Ministry of Employment and the Ministry of Social Services.

Within this context a new-style business was set up: Entreprise Nouvelle Vers L’Insertion Economique (ENVIE). The idea was to bring into line different fields of activities and know-how. The established Emmaus charity’s key activities consisted of collecting various kinds of household articles, including electrical appliances. However, it lacked the knowledge to recycle the white goods. At the same time a large number of young people had no job as they had no school-leaving qualification, vocational training, or - even - temporary employment which offered an entrance into the working process. In addition, it is well known that there is a demand for basic domestic comforts by families with low incomes. Furthermore, discarded appliances are a real 'blot' on the environment. For these reasons it was decided to set up a company to recycle electrical appliances while making it possible for young people to find their niche in society. It is assumed that participation in a new and developing business will enable them to find a path between the world of exclusion and the world of work.

Implementation

Project date and status

The Strasbourg branch of the ENVIE was founded in 1984.

Strategy

ENVIE started with a pilot project in Strasbourg and has now become a nation-wide network in 25 cities. In 1989 a special body ENVIE Développement was set up in order to coordinate the activities of the different ENVIE businesses according to common principles. The aim of ENVIE Développement is to ‘animate’ the network to expand on the national level and to adopt common logistics in training, marketing and purchase at the local level where the single ENVIE units remain an autonomous organisation (cp. Merseyside European Liaison Unit (ed.) 1996: 36). This body has the following objectives:

• it carries out market feasibility studies and gives advice and support in setting up new businesses;
• it harmonises and coordinates the organisational methods of the units. Each member unit pays a fee to ENVIE Développement and subscribes to a solidarity fund. This money is used to fulfil the tasks of ENVIE Développement and to assist existing and new businesses;
• it assists the various units with management methods, technical documentation, communication and information, and organises training sessions for management employees;
• it is in charge of communication policies and represents the units in political and administrative circles or with business partners;
• it is engaged in the search for new markets, products, processes, partners, services and techniques of rehabilitation and vocational training.

ENVIE Développement has in turn created ENVIE SAGE. Sage is the public limited company of the ENVIE Group that can mobilise financial resources and create and run companies whilst limiting the risks to ENVIE production units. The policy of setting up these new bodies is to pursue stricter management which is more efficiency oriented towards business principles. Due to intensification of cooperation with private and public companies and institutions there has been a necessity to break new ground. Patrick Klein, sales manager of Darty, a leading French distributor of domestic appliances, stresses the importance of such an established partnership:

"A social project must be managed like a regular business. This guarantees that it will be taken seriously. On the other hand, companies must actively participate in the work rehabilitation process. This need not be costly. In Darty's case, it costs management advice and redundant appliances." (ENVIE Développement 1996). In consequence, the philosophy and the practice of ENVIE imply that social and business objectives need not be regarded as conflicting goals.

At the beginning ENVIE was created for young people under 26 years old suffering from exclusion from the labour market. At the time the new enterprise primarily intended to serve socially disadvantaged young people who had problems with drugs, juvenile delinquency, roaming or psychological problems. With the help of organised working routines they were intended to get back on track while also receiving a certain level of vocational training and working practice. Transitional workers are constantly recruited. They are proposed by the municipal social services. After a worker has passed an interview he is given a six-month contract (contrat à durée déterminé). This contract can be extended twice up to two years.

Nowadays the project also has been opened to people from other age groups who have simultaneously social and work-related problems.

Activities

In the first place the goal of ENVIE is to put young adults in a working situation in a company while also offering them specialised training opportunities in the company and at workshops of cooperating private companies (e.g. Darty from the distribution sector or Whirlpool and Thomson-Brandt from the manufacturing sector). Because of the growing numbers of unemployed people, ENVIE has increasingly felt that people of all ages can benefit from the training and skills in the recycling business. The core business of ENVIE Strasbourg is the repair and sale of used cookers, refrigerators washing machines, various small domestic appliances and TV sets.

In 1994 ENVIE Strasbourg founded a subsidiary named 2E (Environnement & Emploi) which takes care of collection, dismantling and depolluting household appliances. As appliances are now recovered more systematically and from a greater catchment area, it has been possible to raise the number of collected items from 9,000 in 1994 to 28,000 in 1996. At present 2E offers 21 jobs and accounts for approximately 60% of all discarded household appliances from Bas-Rhin department. Furthermore, 2E is involved in a new 'conversion' project which is led and sponsored by the French Electricity Board (EDF). With Strasbourg as a test field the purpose of the conversion project is to create approximately one dozen dismantling units throughout France. The dismantling centres are intended to enter new markets of discarded electrical equipment, such as computers, telephone switchboards, photocopiers etc.

Partners

Networking is a basic principle of ENVIE´s organisational structure. Like all others, ENVIE Strasbourg has established a network with distributors of domestic appliances (supermarkets, small craft firms with retail outlets, etc.) and with manufacturers (Whirlpool, Brandt, Electrolux) in order to collect used machines and to create employment opportunities for persons at the end of their contract with ENVIE. Partnerships have also been established with training organisations and organisations in charge of social follow-up.

In 1994 ENVIE Strasbourg created a new structure by setting up the affiliated business 2E which since the beginning of 1997 has been approved as an Entreprise d´Insertion. The wholly-owned subsidiary is responsible for the process of collecting, dismantling and depolluting household appliances throughout Bas-Rhin department. It contributes to more efficient division of labour and is also extending the catchment area for collecting white goods. Later this new organisational structure is expected to be transferred to other ENVIE units.

Furthermore, ENVIE Strasbourg has established a partnership across the border. In the Baden region it is cooperating with a German firm which has branches in Kehl and Offenburg. The ZEUS recycling non-profit company (Zukunft mit Elektro-Umwelt-Service) is following the ENVIE model of collecting and recycling household appliances. Within the framework of the regional non-profit job creation company afög (Arbeits-Förder-Gesellschaft Ortenau gGmbH) it has set up projects with a workforce of 15. The target groups of transitional workers are long-term unemployed and people of German origin who are returning to Germany from Eastern European countries (Spätaussiedler). The project is funded for three years as a model project by the Federal Ministry for Employment's programme "Neue Wege in der Arbeitsmarktpolitik". 70% of the annual budget comes from the special programme (959,765 DM) and the remaining 30% (410,944 DM) is obtained by revenue from sales. Similar to ENVIE's new regionally oriented approach the ZEUS recycling company does not concentrate on the local level but collects white goods from 36 municipalities. In addition, it is working together with seven charities and nine industrial undertakings. In this trans-national partnership ENVIE Strasbourg is using its advisory capacity to support the new ZEUS project which started in 1996.

Financing and resources used

The financial structure of ENVIE Strasbourg makes clear that nearly half the total costs is covered by revenue from sales. European money is distributed to ENVIE by local government as it is participating in the redistribution of funds for the City of Strasbourg's local plan for temporary employment. ENVIE is, therefore, not obliged to apply directly for funds for the ESF. This funding procedure originated from the City of Lille, which introduced PLIE (Plan lillois d´insertion économique) in 1990 as an instrument to fight off the problems caused by the decline in textiles, steel and coal industry. PLIE aims to activate public and private actors in the field of job creation and vocational training. ENVIE can be regarded as a model of how such funding can contribute to the success of a nonprofit company.

Source: Pascal Monard (Manager of ENVIE Strasbourg) 1997

From the funding structure it is clear that nearly 80% of ENVIE Strasbourg's budget is generated by its own revenue. This is partly due to the fact that the affiliated 2E business is responsible for the parts of the business which are not particularly suited to contributing to income (collection and dismantling). Nevertheless, even this branch generates nearly 50% of its budget by income from non- funding sources. In ENVIE's core business (repair and sale) the budget is divided into the following items:

Source: Pascal Monard (Manager of ENVIE Strasbourg ) 1997

On the national level over 30 million francs have been invested in ENVIE units. These investments are financed by the state (15%), loans (25%), regional and city councils (35%) and private resources (25%). In 1995 the exploitation costs were 90 million francs, consisting of purchasing (13%), external services (18%), wages and salaries (60%), amortisation and provisional funds (5%) and other charges (4%). These costs were covered by revenues resulting from training allowances (5%), sales of domestic appliances (57%), subsidies, including ESF (32%) and others (6%).

Results and impacts

As ENVIE offers an insight into the experiences of the local as well as the nation-wide context the following sections present facts and outcomes from both levels of this new-style business. Besides employment effects ENVIE has resulted in an improved environmental situation. Every year a certain amount of CFCs and compressor oils have been collected and illegal rubbish dumps have been decreased. Furthermore energy and raw materials are saved by prolonging a product’s lifespan.

In Strasbourg the eco-balance shows that a significant impact was made in 1996. Around 200 kg CFC were collected, approximately 1,500 litres of compressor oil and 980 kg of condensers were recovered, 1,600 kg of glass was collected as well as 30,000 kg of concrete waste. In total 3,080 second-hand electrical appliances have been repaired for re-use. As far as ecological effects at the national level are concerned, ENVIE has made rapid progress in the last decade.

* figures for 1996 and 1997 are estimates

In 1996 ENVIE Strasbourg employed 20 transitional workers (twelve mechanics, two store-keepers, two salesmen and four people in the transport unit) and it has a permanent staff of eight. In the last six months of 1996 twelve of the transitional workers succeeded in finding a job while they were at ENVIE or on expiration of their contract.

Since 1984 the ENVIE units have provided trainee jobs for more than 1,800 people at the national level. An estimated 40% of those who complete a scheme will move on to a permanent job. In 1996 400 previously unemployed participated in ENVIE nation-wide. Statistics reveal that this job creation initiative is becoming increasingly popular since the French government started its active labour market policy in 1991. In addition, 50 permanent executives are committed to providing vocational training, so that the trainees learn how to produce and sell. Another 50 permanent administrators are employed to provide support and facilities needed for operation, training and development resources. An additional 270 voluntary administrators are committed to promoting ENVIE among local authorities to ensure the on-going support necessary to reach the social goals of local associations.

Barriers and conflicts

Since 1984 ENVIE Strasbourg has improved its business structure and performance step by step. This is mainly due to a broad partnership approach and the growing credibility of the organisation. Some critics say that the number of women in ENVIE training schemes is too low at a modest level of only 7%. The national umbrella organisation has recognised this issue and aims to promote the participation of women.

Lessons learned and transferability

After more than a decade of ENVIE experience, the following lessons have been learned:

• partnerships are extremely important. Social partnerships need to be established for recruitment and follow-up activities. Professional partnerships are necessary for collecting and distributing the products;
• the network as 'mother' organisation for the various ENVIE units has proved to be essential;
• setting up a national research and development organisation is vital in order to promote the concept and to build a common structure which offers a coherent marketing strategy and standardised support;
• investment in human resources allows recruitment of managers who fit into the organisation;
• a social project must be managed like a commercial business in order to meet economic requirements;
• a normal paid job, combined with efficient back-up, is the key to successful rehabilitation and a new start in the 'world of work';
• strategy and management are keystones in rehabilitation.

In addition, ENVIE's financing is particularly interesting as the nonprofit company has taken a great step in the direction of finding sources of sustainable revenue. On the one hand this policy demonstrates a shift in managerial behaviour from thinking 'subsidy' to thinking 'revenue'. On the other hand the vulnerability of the commercial undertaking is reduced as the income derives from sales and service. Financial stability enables ENVIE to extend its business by setting up the 2E subsidiary which strengthens the economic basis.

The creation of a national network and the local diversification of business clearly underline that there is a high level of successful transferability.

Source of Information

Claussen, Wiebke 1997: Ein Bündnis gegen Ausgrenzung in Frankreich. Insertion par l'économique: eine konzertierte Aktion gegen soziale Ausgrenzung, Arbeitslosigkeit und den Verfall der Vorstädte, Dortmund

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

ENVIE développement 1996: machines & men, Paris

Merseyside European Liaison Unit (ed.) 1996: The Promotion of new Employment Initiatives in the Context of a Regional Development Strategy. A Challenge for Industrial and Urban Regions in France, the UK and Germany, Exchange of Experience Project October 1996, Liverpool

OECD / CEC 1995: The environment and job creation at the local level, in: Innovation & Employment, No.18, June

OECD 1997: Environmental Policies & Employment, Paris

Contact:

Cities:

Strasbourg :

The City of Strasbourg is situated in the Alsace region on the Franco-German border. The City of Strasbourg has 252,000 inhabitants and the catchment area is populated by 435,000 people. The City of Strasbourg is part of the regional political community of 27 municipalities, the Communité Urbaine de Strasbourg (CUS). The CUS covers an area of 30.9 square kilometres. As the City of Strasbourg accounts for more than half of the community, the Mayor of Strasbourg is normally also the head of government of the Communaté Urbaine de Strasbourg. The region, Département du Bas-Rhin, covers an area of 8,300 km². The region has 1.6 million inhabitants of which 1.2 million live in urban areas. Services are the major economic source with a share of 76.7%, compared to the industrial sector with 18.1%, construction with 5.2%, and agriculture with 0.2%.

The City of Strasbourg has a high number of public sector jobs (111,000) as it is a trading centre and the second largest finance centre in France. It has approximately 42,000 industrial jobs (especially paper, electronics, and food processing). In addition, there are many services related to the work of the European Parliament which has its seat in the city. Industrial activities also play an important economic role with 7,300 companies. Principal regional sectors are mechanical engineering, cars, chemicals, rubber and plastics, and farm produce. In environmental terms, the region suffers from a high level of air pollution, and a high proportion of activities capable of putting the environment at risk and contributing to the 'greenhouse' effect.

Population:

Project was added at 27.02.1998
Project was changed at 27.02.1998