Tuesday, February 14, 2006

Creating an ecological, workers co-op - a case study of 'Reverse Garbage'

In case anyone hadn’t noticed, our economy is killing the planet. It also commits millions of people to live in poverty and is creating an ever-widening gap between rich and poor. Some of us think that we should do something about it.

The failures are systemic and the solutions also need to be systemic. We need fundamental changes in the way that we think about our relationship with each other and with the earth, and changes in the fundamental power relations in society. Not only do we need to challenge the existing power structures (stop inappropriate development, pollution etc), but we also need to build alternatives – alternative economic systems, alternative political systems, and alternative cultural and social norms.

We already have plenty of technological fixes. The thing that we need to get a whole lot better at is the political and economic fixes. We need to learn how to work co-operatively, we need to learn how to do real democracy at a local community level, we need to learn how to create an ecological economy – now! We can’t wait for experts to teach us what to do. We need to learn by doing. The change that is required for sustainability is going to be led by local communities. It is going to be messy, we’re going to experiment, get things wrong, get things right and move on.

This essay is a history of one attempt at starting an ecologically based, worker managed co-operative in Brisbane, Australia. It is one of many experiments happening all over the world aimed at creating viable models for ecologically sustainable economic and community development. This is written 6 years after we started Reverse Garbage so we have the benefit of at least a little hindsight – to learn what worked and what didn’t – what to replicate and what to avoid.

There tends to be a lot of woolly thinking about ‘alternative models’ – which are often promoted well beyond their capacity to deliver worthwhile results. Part of this problem is excessive self promotion driven by the need to obtain funding. However, another part is the pervasive sense of hopefulness whereby people switch off their critical faculties when they encounter nice people trying to do good things. It is useful to remember that Nice is most usefully thought of as an acronym for “Not Insightful or Critical Enough” and, if we are going to succeed in replacing the current model of doomsday economics with something more life affirming and sustainable, we are going to have to subject alternatives to critical scrutiny.

In that vein, this essay provides a brief (and personal) history of the creation of Reverse Garbage Co-op in Brisbane. It is partly a history of people, places and goings on, and partly an analysis of ideas and their practical application.
If Reverse Garbage is the answer, what was the question?

Working with Friends of the Earth Brisbane at the end of 1997, a few of us were asking the following questions:

q How can we earn a living doing something that makes a positive contribution to the environment and to our community?
q How can Friends of the Earth develop a secure source of ongoing funding that fits with their vision and the values and that doesn’t compromise the integrity of the organisation?
q How can we start creating an alternative, sustainable and equitable local economy as a way to help encourage and inspire broader change?

The idea

We were inspired by the Wombles. It seemed that there had to be opportunities to live off the discards of our wasteful, industrial society. Whenever you walk past an industrial skip you see valuable materials destined to be buried in the ground. Our economy systematically destroys ecosystems in order to create ‘products’, which we then fail to use efficiently and turn into another environmental problem through landfill. Because this is common practice, it is easy to think of it as normal – which it isn’t. It is actually insane and grossly inefficient, not to mention morally reprehensible in light of the flow-on ecological and social consequences.

After travelling around the east coast of Australia looking for interesting models of recycling businesses that work, there were two obvious options:
- re-use of industrial discards (Reverse Garbage in Sydney and Melbourne)
- tip shops (Hobart, Canberra)

Initial evaluation

It became evident that a tip shop, while possible, was going to take quite a long time to establish in Brisbane due to the constraints of the waste management infrastructure that was in place. Brisbane has a system of ‘transfer stations’ where ‘wasted resources’ are delivered and dropped into a pit, crushed by a bulldozer and loaded into trucks to be transferred to landfill sites outside of town. This is far from ideal in terms of salvaging useful items for re-use or recycling.

After visiting the Reverse Garbage operations in Sydney and Melbourne, it seemed that there was a similar opportunity for creative re-use of industrial discards in Brisbane.

Reverse Garbage in Sydney had been started by teachers as a way of providing low cost art materials to schools. While it had developed a strong environmental ethic, the initial impetus for the organisation seemed to be more artistic/educational than directly environmental. The business had been running for over 20 years and had managed to achieve a reasonable level of financial viability despite being subsidized by local government through the provision of low cost rent for their warehouse and grounds.

A quick analysis of the industrial base of Brisbane compared to Sydney and Melbourne revealed that Brisbane had a smaller number of large manufacturing organisations but that there was still a sufficiently large waste stream for us to proceed with some basic market research.

Creating an initial project team

I spoke with a number of other people who I thought may be interested in being part of setting up a Reverse Garbage operation in Brisbane. Lots of people liked the idea but none who seemed serious about committing to the project. I asked an old friend from University who had recently quit working as an engineer and was looking at ways of earning a living in an ethical way. Mitch Semple and I agreed to start working together on the project.

Shortly after that, and only a few weeks after visiting Reverse Garbage in Sydney, I was contacted by Lena Tisdall, a Brisbane artist who was keen to start some kind of Reverse Garbage creative re-use center after being inspired by RG Sydney.

I had an initial meeting with Lena and outlined the plans to date. She had lots of great ideas, a useful range of skills and networks and was super keen. Lena, Mitch and I started to build a 3 way working relationship – to clearly articulate our vision and to agree on some principles and processes by which to work together.

We agreed to conduct some basic market research and then evaluate the viability of the project based on the results of the research.

Initial funding sources

We opened a bank account and Mitch, Lena and I each put in $50 to cover the initial cost of postage and phone calls. Mitch and I started investigating the “New Enterprise Incentive Scheme’ (NEIS) which was designed to provide 12 months income support for unemployed people starting their own business. We both managed to enroll in some kind of vague pre-NEIS scheme which at least meant that we could stay on the dole without having to look for work.
Market Research

The viability of Reverse Garbage was going to depend on two factors:
1. a consistent and accessible supply of a wide variety of high quality (valuable) discards;
2. customers who would be willing to buy the materials.

From the visits to Reverse Garbage in Sydney and Melbourne, we had a basic list of the industries from which they sourced their materials. This coupled with Mitch’s and my background as manufacturing engineers and our knowledge of the local manufacturing sector gave us a long list of potential ‘suppliers’.

Lena had worked in schools as an artist and provided the outline of a potential customer base - including schools, kindergartens, the Rock Eistedford, artists and a number of other potential customer groups.

We designed a survey to collect key information from potential customers about their interest in a Reverse Garbage resource center and potential spending. We mailed these surveys to several hundred schools and managed to get a sufficient number of surveys back to see that there was some real interest. We did some basic figures on the size of the market (number of schools multiplied by their average art materials budget multiplied by an estimated % market share) and figured out that it looked reasonably viable.

On the supply side, we phoned over a hundred companies and asked them if they had anything potentially useful that they throw out as part of their usual operations. From this we built a list of potential products and potential suppliers.

Growing the team – stage 1

We reaslised that, due to the relatively low value of the products we were going to be selling, if Reverse Garbage was going to be financially viable, it was going to have to be a high turnover business. This meant that it was going to have to be a reasonably large operation – certainly employing more than 3 people. So we started to think about growing the team.

Peter Maclean (who I had been working with on various different green business proposals) started to become more involved with Reverse Garbage as Mitch and I began writing the business plan.

Around this time I met John Gower, a professional fundraiser with a long history in retail. I spoke with him about fundraising for FoE Brisbane and the vision of Reverse Garbage - and to ask for advice. He somehow became inspired by the RG vision and offered to help with the development of the project.

Dealing with the NEIS scheme

Under normal circumstances, the NEIS scheme involves full time business training for several months, followed by 12 months of ‘hassle free’ dole money, as well as some mentoring from a business advisor. From the outset, our attitude towards NEIS was that we didn’t want training but just wanted access to a hassle free living wage for 12 months so we could get on with setting up the business.

Our initial operations plan told us that we were going to need a total of 8 people to run the organisation on the scale that we thought was required to be profitable. NEIS had only ever dealt with small business start ups with a maximum of 3 people – so 8 was just plain weird. They had also never dealt with a non-profit business before – this was weirder still. And they were insisting that we had to do 3 months business training.

We eventually wore them down. Mitch and I both had business degrees, and John Gower had run multi million dollar businesses for years – so we convinced them that we knew what we were doing. NEIS agreed that for every person who had business experience, we could have one other person on the NEIS programme who didn’t need to do the training. So we managed to get spaces for 6 people on NEIS and managed to avoid having to sit through months of training.

Growing the team – stage 2

We were meeting weekly in the room above the West End library on Boundary Street. Our office consisted of a couple of cramped desks with phones in the FoE office out the back of Justice Products, also on Boundary Street.

We placed a two line ad in the Courier Mail for 3 people to work in a non-profit recycling co-op and we also put up ads in some of the local greenie hang outs. An initial phone call screened out most people when they realized that they would have to work full time and only get paid the equivalent of the dole – and they would have to become a director of a co-operative. We interviewed 5 or 6 people and ended up inviting three women to become part of the project, including Lisa Owen who at the time of writing is the longest standing member of Reverse Garbage (6 years and still going strong).

After a few weeks, one of the new recruits was coming to meetings late and it became obvious that some of the tasks weren’t being done. We didn’t have the time or energy to carry any unproductive members of the team and she was asked to leave only a month after joining.

Developing the organisational model

By this time, we had a basic business plan down on paper and had written a draft constitution for a co-operative. In developing a structure for the organisation we wanted to achieve a number of things:
1. An organizational model that would reflect our vision for a socially just and environmentally sustainable world – so that we would practice what we preach.
2. Non-profit status to gain good will with industry to enable us to collect discard materials easily;
3. Constitutional requirement that any surplus (profits) be used to support Friends of the Earth;
4. A legal model that would enable us to enter into the kind of contracts that we would need to enter (ie long term lease on property);
5. A model whereby decision making rights and responsibilities are balanced (where the people who are doing the work are the ones that make the decisions about the work);
6. A flat structure where everyone would be paid the same and where there would be a sharing of conceptual and rote work;
7. A non-hierarchical decision making model that would both require and lead to full creative participation of everyone involved;

After also looking at the legal frameworks allowed under the Corporations Act and the Incorporated Associations Act, we decided to register as a Co-operative under the recently revised QLD Co-operatives Act.

The organizational decision making model was roughly based on the consensus model used by Friends of Earth – although the details of this model were cause for some considerable conflict.

I was proposing a consensus model whereby if consensus is not reached, a majority of 75% could approve the decision at a subsequent meeting. However, Peter was insisting that we should have a consensus decision making model without any democratic fallback. I argued that this would allow a minority (in fact a single individual) to effectively veto any decision and to bring the organisation to a standstill.

After several weeks of arguing, neither of us was budging an inch. It ended with Peter deciding that he could no longer be part of the project. Sarah, one of the other new recruits from the Courier Mail ad left with him. Mitch also left around this point – for personal health reasons.

We finalized the constitution and submitted a draft to the Co-operatives unit at the Office of Fair Trading. They hated it. We went backwards and forwards arguing over interpretations of the Co-ops Act. The main difficulties were our lack of Managing Director, and the consensus model. The final differences were negotiated (with quite a few compromises on our side – which turned out to be inconsequential) with the help of Anthony Esposito (long term co-op advocate) who effectively mediated between myself and the co-op unit.

Reverse Garbage Co-op Ltd. was officially registered in November 1998, almost a year after the idea was first developed.

Growing the team – stage 3

After Peter and Sarah left, we started to look for a couple of replacements. Lisa had met a local artist who worked with recycled materials and who was interested in getting involved with Reverse Garbage. Her and Lena had a meeting with him to check out his work and to talk to him about his ideas. Timo Mehlem was invited to meet the rest of the team and shortly afterwards was asked if he wanted to be part of the soon to be formed Reverse Garbage Co-operative.

Around this time, I had been starting to do some theoretical work on sustainability and resource efficiency and through this had begun working with Brenton Fletcher who was soon to finish his PHD in Chemical Engineering, researching conceptual models of sustainability in plastics recycling. Brenton was keen to get involved in something practical and we still needed one more person. After another informal interview in our meeting room above the West End library, Brenton was invited to join the team.

We still needed one more person – preferably someone very practical to help with maintenance and building projects, and running the truck. Robbie Lea, a friend who I had known from forest blockades, was in town and at a loose end. After coming along to an informal interview at one of our weekly meetings we invited him to be part of the team.


From the outset we took a very broad view of fundraising. We were very clear about defining our requirements. Do we need money or do we need a particular thing? In some cases (insurance, licences, fees) we were very clearly going to need money. In other cases we reaslised that it would probably be easier to find somebody to donate the particular thing that we needed than to raise the money.

The budget in the business plan made the assumption that no wages would be paid for the first 12 months of operation. The only wages would be from the NEIS payments – a living wage.

The other start up costs were estimated at around $33,000. This was a very very tight budget that assumed that many of our core operational tools would be donated (desks, computers etc.). We started looking for our core infrastructure and for sources of funds.

The infrastructure side was relatively easy. We soon had a phone system, computers, all the office furniture we could dream of, a pallet jack (freshly refurbished by the firm that donated it) and a donation of 150 wheelie bins from the plastics company that made them. We worked all of our personal networks very hard – and we made brilliant and inspired sales pitches.

The money side was more difficult. We approached ethical investment organisations for grants or no-interest loans. We approached the Brisbane City Council and the State Government. We spoke with private philanthropists. We got nothing. Without a track record, nobody was willing to invest.

After lengthy deliberation we applied for a $15,000 grant from the Gaming Machine Community Benefit Fund with which to purchase a truck and lifting equipment. The Grant came through and we were able to purchase our core operating asset. (Note: We refused to apply to the Jupiters Casino Fund as this was seen as a PR fund for the gambling industry. The prevailing argument about the The Gaming Machine Community Benefit Fund was that it is really a form of tax on gambling that effectively goes into consolidated revenue of the State Government.)

So we had $15,000 but still needed another $18,000. The remaining funds were cobbled together with loans from the members of the co-op. We had no other option and decided that a personal commitment of $2000 each would help us to sharpen our focus and our commitment. Some of us had to borrow money from friends or relatives, but in the end we had loans from six of the members, plus an extra loan of $6000 from me. We had a total of $33,000 in the bank.

Finding a property

Finding a property proved to be a much more difficult task. John Gower and I spent countless hours driving around the suburbs of Brisbane. In many ways this is where a lot of the real planning for the business took place – arguing and debating different ideas, solving problems and brainstorming while we drove around looking at properties. We decided to aim high and asked the local council to give us a large inner city property for a peppercorn rent. They refused. We kept looking for months all over Brisbane – from the inner city to the outer lying industrial areas.

One day Timo called and said he had been to a clearance sale at a local West End commercial property that he thought would be ideal. We went and checked it out – it was perfect. We contacted the owners and John Gower started the negotiations. We wanted a 3+3+3 lease to give us the security we needed. They were insisting on directors guarantees for the loan. Only Lena and John owned their houses – the combined assets of the rest of us amounted to a few bicycles, musical instruments and a few tools – so directors guarantees were not going to work because it would mean some directors would bear far more responsibility (and risk) than others. John did a brilliant job. If it wasn’t for his steadfast confidence and brilliant negotiation skills we probably would never have got the lease. We ended up with a 3+3+3 lease, with no directors guarantees, and three months rent free from the date we opened the doors.

Meanwhile I started talking to some local town planners to make sure that we could get the necessary council approval for the project. John Panaretos from Urban Strategies donated considerable time to help us negotiate the maze of council regulations. To be prudent we decided that it would be best to invite Tim Quinn (who was then a local Councilor and head of the Council Planning Committee) down to the warehouse to explain the project.

An operational plan

So we had the concept, the legal structure, the money and the property. The next thing we needed was an operational plan and an organisational process to make it all happen.

We adoped an organisation model developed by Stafford Beer – a British management theorist and systems thinker. He had developed the ‘Viable Systems Model’ (VSM) based on observations about how the human body (and in fact any living system) functions. He identified the key requirements of viability in any system and had put this into concepts for organisations.

The organizational functioning of Reverse Garbage was developed to reflect this model. We had board meetings and we had operational meetings. We identified the key operational areas (resource acquisition, warehouse operations, sales, PR, admin and finance, legal) and allocated responsibility for each area to different people. We each wrote our own job descriptions (both for the start up phase and then ongoing) as well as individual work plans which were then agreed by the group.

We made sure that there was a reasonably sharing of jobs. Everyone was on the roster to clean the toilet at least once each week, and everyone had to do some stints in sales and sorting. By the same token, everyone had some sort of conceptual work as part of their job description. (Michael Albert in his work on Participatory Economics calls this concept “balanced job complexes” - see www.parecon.org ).

We moved into the property in mid January and we set a launch date for the end of March. We had two and half months to deck out the warehouse and collect enough stock for it to be worthwhile opening. The work plan was written into a gannt chart that was kept on the wall in the office so that we could all track our progress in the lead up to the opening.

We bought the truck the same week that we moved into the warehouse. The first thing we had to do was clean the warehouse out. There were piles of junk from the previous occupants – some of which was useful to us as future products, some of which was sent to landfill. We had to remove dust extraction equipment, scrub floors, design and build a material handling system, move walls, build shop counters…

I was living in a share house at the time. Every day I would leave for work before anyone else had woken up, and I would get home after they were all in bed. I think I must have worked about 16 hours a day every day for six months. So did everybody else.

Friends of the Earth decided to move into the house next door. We negotiated a deal with the owners whereby we would have 18 months rent free in return for refurbishing the inside of the building. So while Reverse Garbage was getting ready to start business, a wonderful team of activists were turning their hand to renovating what was soon to become the new FoE Brisbane office.

The birth of a new economy – our first income

The previous occupant of 296 Montague Road was an electric lighting company. They had left behind mountains of partially cut and folded sheet metal. Some of this was useful to us, but most of it was destined for recycling. Timo, Robbie, Brenton and I spent two days sorting through the piles and loading the truck with scrap steel in preparation for what was going to be our first trip to the recycling depot - and our first ever income.

Brenton and I tied down the load and headed off to the SimsMetal yard in Rocklea. We drove through the weighbridge and out into the scrap yard. It took about half an hour to throw the steel off the truck. It was a stinking hot January day – we were dripping sweat, filthy and feeling proud. We had all been working our arses off and today would be the start of a new economy – redefining waste as a valuable resource! We drove through the weighbridge on the way out and Brenton went in to collect our fee. We’d been guessing how much it might be - $50? $200?

Brenton came back looking puzzled. “How much did we get?” I asked. “Three forty” he said. “Three hundred and forty bucks!” I thought to myself, “Whoopiee!”

Brenton clarified, “Ummmm…well actually it was three dollars and forty cents.” I couldn’t belive it. “No way – you’ve got to be kidding – they must have got it wrong. Go back and check.” So Brenton went back in – only to confirm that our two days work had earned us a massive $3.40. It is hard to convey the sense of outrage that we felt. It was starting to dawn on us why there were so few recycling businesses.

We stopped at the drive through bottleshop on the way back to the warehouse and asked for two light beers. “That’ll be $3.40” said the attendant. “Of course,” I said, somehow managing to enjoy the irony. When we got back to the warehouse we had to tell the others. “Sorry guys but we pissed our first income up against the wall”.

Opening the doors and winning awards

After three months of work we opened our doors with a singing, dancing performance that managed to get state wide TV coverage and launched Reverse Garbage successfully into the world. It was incredible to see the amount of support that we received from the local community. Materials poured in, artists offered their services, volunteers were knocking at our door, newspapers and radio stations agreed to cover our story.

During the opening months, Judy Gower joined the Reverse Garbage team, as did Sandy McBride who started to develop our environmental education programmes. Before our first year was out, we were awarded the “New Small Business of the Year” award by Quest Newspapers. It was a wonderful validation from the ‘mainstream’ after months of tireless work. John Gower summed it up well when he said, “We didn’t know that it would be impossible, so we just got on and did it.”

After 12 months the NEIS programme ended and the business was earning enough to replace this living wage – and actually increase it slightly. We developed a budgeting model whereby our annual budget was divided by 52 to give a weekly budget. Any weekly income that was over this budget level was divided up and paid out as wages. This meant that our wages fluctuated anywhere from $6 per hour up to $15 per hour. It was direct and immediate feedback on our performance and ensured that we were all focused on the business of becoming financially viable. Other cash flow fluctuations were managed with a buffer of about $5,000 left over from the start up. Gradually our wages increased over time – edging ever closer to the holy grail of a consistent $15 per hour wage.

A lingering question of equity

When planning the business we realized that, during the start up phase we would not be able to afford to pay people a wage that reflected either the value of their work or the sacrifice they would make. However, we believed that the business would be successful and that, after several years, employees/members of Reverse Garbage would be earning a reasonable living. This created an obvious disequity. The people who had the initiative and drive to start the business would not be financially compensated/rewarded, while people who walked into the business after several years would be paid well from day one.

In order to solve this problem, we devised a model of deferred payment, whereby a portion of unpaid wages were accrued as a debt that could be claimed against Reverse Garbage at some future date. We realised that this debt could not be instantly recallable, otherwise Reverse Garbage would technically be insolvent and the directors would have a fiduciary duty to close the business. The deferred wages system that we arrived at basically involves the formal acknowledgement of the unpaid wages, along with contracts with each of the involved people that outline the terms of repayment. Put simply, if Reverse Garbage does not have the money to repay these wages then it will not be forced to jeopardise it’s ongoing viability to do so. However, if the surplus is there, the back wages debts must be repaid. Alternatively, the back-wages may be able to be claimed in materials instead of cash although this raises practical difficulties in relation to income tax.

This system created an enormous headache with our auditors – and was at least in part responsible for a less than amicable end to our relationship with them. On the otherhand, putting these debts on the public record means that Reverse Garbage is publicly and legally committed to honoring them and ensuring that the principles of equity, which are so clearly written in it’s constitution, are upheld.

In order for equity to prevail, the sacrifice and benefits accrued by the founding members need to be placed in the context of the sacrifice and benefits being accrued by the current generation of co-op members – according to the general guide of ensuring no undue privilege and no undue penalty.
Key lessons learnt

Don’t undercapitalise

The real cost of starting up Reverse Garbage wasn’t $33,000. It was $33,000 plus $110,000 in unpaid wages, plus countless hours of volunteer effort, plus the goodwill of the local community. Even $143,000 is ridiculously cheap for a business that employs 6 people in a self-managed work environment doing something that is benefiting the environment and the local community. It works out to be somewhere around $25,000 per job – for good quality jobs that people feel proud to do. It would be cheap at ten times the price.

Compare this to all of the talk of ‘sustainable job creation’ by the big end of town. When government agencies talk about job creation, they talk about schemes involving millions of dollars – where the cost per job is in the realm of hundreds of thousands of dollars.

Reverse Garbage in Brisbane has proved that, if done properly, resource recovery can be a very cost effective way of creating employment. The challenge is to attract sufficient start up funding so that the founders don’t all burn out from over work/under pay and thereby jeopardise the viability of the business.
In retrospect, we needed at least $200,000 to start Reverse Garbage. If we had access to this kind of capital, the organisation would still be paying it off, but would probably have had a much smoother start up – with less staff turnover.

High staff turnover has been debilitating for the organisation and made the start up process much more stressful than it would otherwise have been. The lack of start up capital and the corresponding low, unpredictable wages also meant that people with kids and mortgages were selected against – in preference for younger people with no dependents/commitments (and perhaps less useful experience).

A recurring theme in environmentally focused organisations and co-ops is that staff tend to be overqualified (ie. University graduates or activists with a philosophical commitment to the ideals of the organisation). However, hiring overqualified workers can be just as big a problem as hiring underqualified workers. Small organisations simply cannot afford the high costs of continually having to recruit and train new people so it is important to find people that are well suited to the work (as well as having a commitment to the values/ideals of the organisation) and that will stick around for the long term.

Adequate capitalisation would also have meant that a lot of time and headaches would have been saved in terms of setting up the backwages system – which has turned out to be quite a problem, not only for the tax office and the auditors but also for subsequent generations of directors who are faced with a balance sheet in which liabilities (although not current) far outweigh assets.

Skills deficit and external directors

Reverse Garbage was an experiment in quite a radical model of worker self-management. In order to be on the board of RG you need to work in the organisation. And if you work there you are required to become a director and to accept legal responsibility for the whole organisation. This is a significant departure from the standard model of having external boards – which might usually have one staff representative at most. It has the advantage that the people who are actually doing the work have control over their work. However it has the disadvantage that without outside input it can become very self referential.

Reverse Garbage faces the reality of all small businesses – too much work and not enough time or money. Organisations of that size generally cannot afford to pay people to sit around pondering the future. It also faces the reality of all progressive organisations that are struggling to survive in a capitalist economy – with relentless pressure to compromise values and principles in the face of perceived economic necessity.

With a pretty lean operation, it can be difficult to bring people into the organisation that have the skills that are required to run a $300,000 a year business and that also are keen to do hands on work, clean the toilets, and serve customers, and who share the values of co-operation and environmental sustainability. The common solution to this problem is to put all of the conceptual work into one job description and to employ a manager (usually on a higher pay scale than everyone else) that monopolises all of the interesting work while everybody else does the slightly less challenging but no less important work of running the actual business. However, this undermines real workplace democracy.


In order to maintain a system of balanced job complexes and to bring necessary skills and experience into the organisation, there are a couple of other mechanisms that can be used. One is to invest seriously in training – so that all staff are given a real opportunity to develop the skills required to manage and to govern the organisation. This is expensive, but it needs to be done for a worker-managed model to survive. In order for people to participate meaningfully and constructively in the governance of any business (or any organisation with significant financial turnover), they need to understand financial management, and they need a basic understanding of their legal responsibilities.

In order to participate effectively in an egalitarian, worker managed co-operative, people also need to have a good understanding of decision making processes, group dynamics and must have a good understanding of the ideas, values and principles that underpin the organisation and it’s mission. This doesn’t happen by accident – it requires clear training and rigorous induction processes if it is to be done well.

External directors

Another mechanism, which can complement good training is to introduce a limited number of external directors on the board. These directors could rotate from year to year depending on what skills are required – and can provide a much needed external perspective. The presence of external directors does not necessarily threaten the integrity of the worker management model so long as their number is not sufficient to veto decisions.

Prioritise and focus

Looking back, I realise that we were insane. At one point, a little more than 12 months after starting the business, I was investigating setting up an environmental printing business, a second hand clothes shop, a bicycle recycling business, a printer cartridge recycling business, doing a feasibility study into solvent recycling, setting up an eco-efficiency consulting branch of Reverse Garbage, and doing a paper recycling research project for the Brisbane City Council. And the rest of the members of Reverse Garbage let me get away with it.

The lesson is simple - you need to keep your main thing your main thing. Decide on the priorities and then focus on them. Set SMART objectives (Strategic, Measureable, Achievable, Realistic, Time bound) and stick to them. Prioritise and focus.


There can often be a clash of cultures between grassroots environmental activists and business people. In part it is due to different values, but also different cultures. Many business people appreciate the need to radically reduce our environmental impact, just as many activists appreciate the need for economic activity in order to generate livelihoods for people.

This clash of cultures and values has played out repeatedly within Reverse Garbage and at times led to debilitating interpersonal conflicts that were not dealt with constructively. I’ll discuss only one aspect of this clash – around the issue of accountability.

If an organisation is going to be effective and efficient, there needs to be a high degree of accountability of the people involved. Roles need to be clearly defined and people need to be accountable for their performance. Organisations have rules/procedures for good reasons and for these to work effectively there needs to be some level of accountability against these rules/procedures.

In Reverse Garbage, we wanted to walk the line between clear accountability and having a nurturing, respectful working environment. We were trying to operate with a non-hierarchical organisational model while also acknowledging vastly different levels of experience, skills and probably most importantly, confidence.

A recurring discussion that we had during the first year was around the old saying “No socialism without discipline”. Putting it another way - you need to have discipline before you can have freedom. The contrasting view is most eloquently articulated by Mikhail Bakunin: “Freedom is the precondition for acquiring the maturity for freedom, not a gift to be granted when such maturity is achieved.”

By getting bogged down in philosophical discussions, and by focusing on differences in cultures/workstyles, we failed to develop an effective model of accountability that was clear and timely. This isn’t to say that we didn’t have any accountability mechanisms at all, far from it, but problems/issues often became politicised rather than being dealt with as operational issues, which they often were. There were real political issues too, but these were generally resolved easily and amicably.

A dynamic that often exists in community organisations (as well as many other organisations) is what is sometimes called a ‘culture of applause’, whereby everyone is always wanting to be nice to each other and to pat each other on the back even if the thing in question is of dubious standard. Sure, it is great to be nice to each other, but this doesn’t need to come at the expense of having real accountability mechanisms – otherwise ‘nice’ become an acronym for “Not Insightful or Critical Enough’.

There have been a number of major interpersonal conflicts since the start of Reverse Garbage. These conflicts have generally not been managed in a clear, direct and timely way – leading to significant acrimony. A more robust culture of accountability would probably have helped us to deal with these conflicts better and would have forced issues to be resolved rather than being swept under the rug and allowed to grow.

So is it a viable model?

Today, Reverse Garbage is a reasonably healthy organisation that employs 5-6 people full time and turns over around $300,000 per year. It diverts around 2 tonnes of re-useable materials away from Brisbane landfills each year and it makes these available at low cost to the local community. It also exposes thousands of people each year to the idea that ‘Waste is something we DO, not something that IS’.

Reverse Garbage has achieved a lot but is still far from reaching it’s full potential as a catalyst for change towards a more sustainable society.

It has shown that you don’t need government funding to set up viable re-use businesses. It has also shown that you don’t need a manager to operate viable co-operative businesses. There are some processes that Reverse Garbage have developed that could well be used by other organisations to good effect. There are other processes and practices that should probably never be replicated.

Hopefully this case study has allowed readers to understand how Reverse Garbage was established, what worked and what didn’t. Ideally it will catalyse discussion and debate, and provide some useful food for thought for others who are considering establishing environmentally focused organisations that also wish to embody workplace democracy and worker self-management.

Since 1998, Reverse Garbage Co-op has been diverting re-useable materials away from landfills and making them available at low cost to the local community. It has an annual turnover of around $300,000 per annum, employs 5-6 people, and is financially self- sustaining. It operates as a not-for-profit worker managed co-operative with a flat organisational structure. It was started with total capital input of just $33,000.

John Hepburn was the initiator and co-founder of Reverse Garbage Co-op Ltd. He was involved from the initial concept development in January 1998 until he resigned as a member in March 2002. This is a personal reflection which may not represent the views of others involved in Reverse Garbage either now or during it’s start up phase.

For more information about Reverse Garbage, visit www.reversegarbage.com.au


SassiGirl said...

Hi John
Just wanted to say thanks for sharing the early journey of reverse garbage with me. I love that you have given such a clear and accessible description of the process which included the personal and the informative.
Lisa Raith

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Respondents according to the Vertical Response survey appear to need some differentiation with the use of SE marketing and Social media Marketing


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