PRESS REVIEW — 23 JANUARY 2019

[WHAT IS THIS PRESS REVIEW ABOUT?]

1. Wishing You A Happy New Year

 

2. Blockchain for Social Impact? Careful What You Wish For

 

3. A Japanese Village Going Waste-Free

 


1 – OUR BEST WISHES FOR 2019

As this is our first 2019 Press Review, Monaco Impact wishes you

a Happy New Year.

We are looking forward to share, collaborate and work with you on our ongoing and our new projects!

 


If you wish to learn more about Monaco Impact and/or are interested to

become a member, please send an e-mail to info@monaco-impact.org


 

2- OUR MEMBERS TALKED TO US ABOUT ARTICLES…

“Blockchain For Social Impact? Be Careful What You Wish For”

Full article: Forbes

[Following the Blockchain Conference held by Monaco Impact last October, this article raises further questions on the benefits and effects that this new technology will have on social impact.]

 


Blockchain technology’s potential for social good has
become a hot topic for many philanthropists, social entrepreneurs and related non-profits.

The Blockchain for Social Impact Coalition (BSIC) with over 50 member organizations, held a conference in June, and Ethereal will be sponsoring another major conference in New York in May 2019.

The participants share a view that blockchain is inherently democratic because of the absence of centralized control, and with its time stamps, verification systems, audit trail and protections against tampering, blockchain seems a perfect fit for an arena that prides itself on transparency and trust.


For those organizations involved in doing good in developing countries the applications of blockchain seem especially enticing.


Smart contracts to execute poverty alleviation projects
between heretofore “untrusted” parties like NGOs and local governments, or between NGOs and aid agencies can be transacted faster, at lower cost and eliminate mutual suspicions.

 

Corruption, a major obstacles to development in many Third World countries, would be reduced through “consensus governance.”

In the humanitarian aid field blockchain technology would be useful in cash-based aid to refugees and would eliminate the rip-offs that often plague the materials supply chain. The clearinghouse and settlement functions of blockchain technology could be applied to remittance transfers, now in the hundreds of billions of dollars annually, thus eliminating the middlemen, reducing costs and increasing transaction speed.

 

But in some cases, particularly transactions between and among the growing number of non-profits, aid contractors, VC firms, and others who present themselves as working for social and environmental impacts in the Third World, it might be worth asking the counter-intuitive question: is full transparency what they really want?

Is it desirable to have a system that can generate a chain of custody for each item in the supply chain, where each moment in a contractual relationship is visible?

 

There are sometimes good reasons to keep some of the details involved in complex programs hidden, from standard aid delivery to the fostering of local social impact businesses. Unalloyed transparency can also pose risks to an organization’s reputation.

 

Let’s be honest, the world of social good is highly competitive. The hundreds of NGOs and firms that work in international development for example compete with each other for public recognition, quality personnel and most important, for public monies (government contracts or grants) and private venture capital as well as donations from individuals, religious institutions, corporations or foundations.

The people in those organizations want to be seen and known, their CEOs want to speak at forums and all want their organizations to be seen as trustworthy. Making and selling widgets is one thing, but saving lives or helping to reduce poverty puts you on a higher moral plane.

 

In the social impact world image is everything and fund-raising (selling that image) is based on it. Blockchain applications could conceivably harm that image.

Imagine an NGO called Let’s Eradicate Poverty Together (LEPT), a $400 million dollar organization with thousands of employees and projects in 48 developing countries.

It has won a USAID (United States Agency for International Development) grant to develop and run a project in Malawi that will train and equip unemployed youth to form cooperatives to produce and market dairy products.

 

One of USAID’s requirements is that the winning firm agrees to participate in blockchain technology. There will be several data streams for reporting, all in a permissioned environment. LEPT’s financial reports, staffing patterns, salaries, budgets etc. will be entered in the various reporting blockchains.

Every transaction added to each chain will be time stamped and cryptographically validated, including for example all the steps in the hiring of new staff for the project, as well as expenditures and progress reports along the agreed timeline.

 

There are a few obvious advantages in a blockchain approach for organization like LEPT. A typical USAID grant or contract has to go through multiple verifications before monies are released.

There are Agreement Officer Representatives (called AORs), legal staff and accounting office staff who must check and sign off on the contract or grant agreement. This process often results in delays in implementation and frustrates many contractors and grantees. Since the blockchain creates a “smart contract” in which trust is no longer an issue, there is no need for these multiple verifiers and things can be speeded up.

 

But the cons seem likely to be more important than the pros here.

Take the target population in the LEPT grant, youth, defined as age 16 to 25. In the region of Malawi where the work is to take place unemployed youth periodically move between their villages and the city and some move to the cities permanently. Because they are in a sense moving targets, recruiting youth to the project proves harder than expected, but still each person recruited is entered into a block in the chain with their details and a time stamp.

 

Within the first 3 months, 60% of these youth are no longer involved in the project and this is immediately visible. The on-the-ground staff, in order to meet recruitment targets, have begun taking on a considerable number of people who are well over 30 years old and even a few 40 year olds.

Because of blockchain’s transparency it is now clear that 58% of the project participants are not in the agreed upon age range, nor are they “youth” by any stretch of the imagination.

 

Or consider the budget line item “Capacity building.” In the pre-blockchain past bookkeeping at the ground level would have been somewhat flexibly managed; day to day changes in local circumstances would demand adjustments that could not be anticipated when the project agreement was signed.

Now, for example, two locally hired staff suddenly need housing, and three motorbikes that had initially been acquired under the line item “equipment for outreach activity” are beyond repair and there is no money left in that budget. The project has no choice but to provide housing for the two local staff and buy three new motorbikes under the capacity building line item.

 

Such reality based adjustments used to be informally negotiated and forgotten about, but now with blockchain, they stick out as red flags and USAID officers have no discretion about how to handle them.

In the interest of transparency the blockchain has, as intended, created a single unassailable truth, a good thing in theory.

But in fact informal and often sensible flexibility has been replaced by unalterable rigidity.

 

In reality most NGOs and firms working in projects like these (and the scores of them that work with USAID spend between $4 and $5 billion in U.S. government monies annually) have to do a lot of compromising, both practical adjustments like those noted above and some “white-lie” moral compromising as well.

 

For example, the annual report of LEPT used to make it a point of pride that $0.90 cents of every dollar donated goes directly to its projects’ beneficiaries.

If LEPT were to create a public blockchain it would be impossible to fudge the fact that this $0.90 cents includes things that are necessary to carry out a project but which do not look that way, such as the housing for expatriate staff, travel to conferences where LEPT staff talk to funders about possible proposals, the costs of hiring consultants to write proposals, the travel costs of LEPT’s CEO to each of its regions two to three times a year to inspire the staff and so on. It is now begins to look like far less than $0.90 gets to the beneficiary community.

 

Another image enhancement item in LEPT’s pre-blockchain days used to be claim that LEPT’s work in scores of projects around the world impacted millions of poor people. But with blockchain it is now easier to see that LEPT is actually a subcontractor along with anywhere from two to six other firms in those same projects, and these other organizations make the same impact claims, often with the same exact numbers.

This fairly common double counting, in some sense an innocent part of impression management, is now fully visible.

 

Given the general public’s long-standing skepticism about much of foreign aid, some of it based on misunderstandings of its scope and purpose, perhaps there is something constructive to be said for the way things used to be, in effect a kind of selective transparency.

Both non-profits and for-profit firms claiming to be in the social impact arena have a stake in their reputation and public image.

Blockchain, for all its enticing possibilities, might just pull back the curtain a little further than some organizations want.

 


ABOUT ARTICLES…

“The inspiring thing that happened when a Japanese village went almost waste-free”

Full article: World Economic Forum

 

The village of Kamikatsu sits among verdant rice fields and mountainous forest on the Western Japanese island of Shikoku. With less than 1,700 residents, it’s the smallest village on the island, but for the last few years, has been garnering headlines around the world.

 

For decades, the village had given little thought to processing its waste, either burning it in an open incinerator or burying it in the ground.

 

A failed new incinerator project, however, forced the village to rethink its strategy and a lofty ambition was born – to become a zero-waste town by 2020.

Today, more than 80% of the village’s waste is kept out of incinerators and landfill, but the transformation wasn’t easy or quick.

 

Lifestyle shift

Kamikatsu’s journey towards zero waste started more than two decades ago. The town had recently built, at great expense, a new incinerator to take care of its waste. But it was rendered a health and safety risk by the central government, because of the number of harmful dioxins it released into the air.

 

So the village had to think again. The most obvious solution was to shift the waste to other municipalities, but this was an expensive move, and it wasn’t a sustainable solution for the small economy.

 

Instead, the village decided to plough its efforts into reducing as much waste as possible, and the Zero Waste Academy, led by Akira Sakano, was born.

In practice, the idea is quite simple: waste gets separated into categories and wherever possible is reused, recycled, or reduced.

But while not necessarily revolutionary – after all, millions of streets around the globe offer up colour-coded bins to the local governments for collection on at least a weekly basis – Sakano’s scheme goes well beyond that.

 

For one, the rubbish is separated into at least 45 categories. At the top level, food waste, metals, paper, plastics, glass bottles, food trays, furniture, and machines all get separated.

Within that, there are often subcategories, so metal will get separated into aluminum and steel, or paper gets separated into newspaper, cardboard, paper carton, paper carton with aluminum (coated), hard paper tubes, paper cups, and shredded paper.

By doing this level of segregation, we can actually turn it over to the recycler knowing that they will treat it as a high-quality resource,” explains Sakano, who is one of the Co-Chairs at the World Economic Forum’s Annual Meeting at Davos this year.

 

She says it took some time to persuade the local population at first. Not only did they have to wash and sort their waste at home, but they were also expected to bring it to the waste-collection centre.

It was a real shift in lifestyle,” she explains. “Lots of people were against the new collection system, asking why they had to bring their own rubbish to our waste-management site. They thought that the municipal government wasn’t doing its job properly.”

So the municipal office set about organizing gatherings in the local community where conversations could take place.

They were dialogue and explanation sessions, says Sakano. “And while there was still a bit of conflict, part of the community started to understand the context and cooperate, so the municipal office decided to start the segregated collection system. Once the residents saw that it had started, they realized that it wasn’t that difficult.”

 

Word got around and residential groups got behind the scheme, becoming both supporters and advocates. What started with a few, turned into the majority, and soon, pretty much everyone.

You’ll now see people segregating around five to 10 categories in their house and then doing the final segregation at the station,” says Sakano.

Having wasted so much money on a defunct incinerator, the town had to think of a cost-effective setup.

The Zero Waste Academy operates under four Ls – local, low cost, low impact, and low tech. There is no big machinery here since residents put their own waste in the correct bin, while some ground staff has been hired to support the segregation and get the full bins ready to turn over to recyclers.

The scheme took off and, by the end of 2018, only 19% of the town’s rubbish had to be sent to an incinerator or landfill. But that wasn’t the only reason for its success.

 

Community matters

It’s that trip down to the waste-management station – the one that so many residents were initially so skeptical of – that sets this recycling strategy apart.

Japan has a rapidly ageing population. Some feel so isolated and alone that they resort to committing crimes because they know that, in prison, they’ll have company. Because Kamikatsu is a small, close-knit community, the problem of isolation is not so great. But over half of the population is elderly, and the community gathering aspect of the waste center is critical to their wellbeing. It encourages them to engage with others, stay connected and feel part of the community.

 

With this in mind, the waste-management centre has deliberately morphed into a hub of the local community.

For instance, the onsite “kuru-kuru (circular) shop takes clothing, tableware and sundries that are still useable, but no longer wanted by their owners, and gives them to others. People can also borrow more than 8,000 items of tableware every year, eliminating the need for residents to buy single-use plates and cups for special events.

There’s also an upcycling craft centre. Residents bring in old kimonos they don’t need, then the elderly, mostly local, women make products out of the discarded materials.

 

Everyone in the town comes through the waste collection point anyway, so they come not only to discard their waste, but to see some of our stuff and talk with our staff. It’s not just waste collection but a gathering place for communities,” says Sakano.

Those that don’t have the means of transport to reach the centre can register at the local town hall and have their waste picked up.

They see this not as a waste-collection service, but an opportunity to socialize with the younger generation and to chat. When we visit them, they prepare lots of food and we stay with them for a while, we ask how they are,” explains Sakano.

On occasion, they alert local services if the resident doesn’t answer the door as expected. In one case, the elderly inhabitant was lying prostrate and unmoving, so they called an ambulance for help.

It’s almost like social welfare,” says Sakano. “It’s an opportunity for Japan to see waste collection services as something that connects with other functions of society, whether that’s good community engagement or policy targets.”

 

Global potential

Sakano believes it would be simple to replicate the idea globally – and says through seeing exactly what happens to their waste, residents understand the circular economy better and want to change their consumer habits.

The specific elements of what we have is very much dedicated to our location and geography. But how the community is built and the basic idea of how you can move towards zero waste can be copied anywhere,” she says.

 

 

“The main issue with waste is that residents rarely have to think about what happens to it or where it goes; it’s invisible and out of sight, out of mind. But at the waste-collection centre, we report back on the exact amount that has been recycled, where it has gone and what’s happened to it.

“Here they see where it goes, what it will turn into, how much it costs to do that but also, how we can also sell some of the resources and make money for the town. It makes people consider, once they see the price or once they see this is recycled or this is not, that their actions make a contribution towards the town community as well as to future generations.”

 

The year 2020

As 2020 looms into view, Sakano ruefully admits that their target of 100% zero waste will not be possible without the contribution of the bigger system and wider stakeholders. She believes it’s now time to start pressuring others to contribute.

Our target of 100% cannot be achieved while manufacturers continue to use non-recyclable products,” she says.


Products need to be designed for the circular economy, where everything is reused or recycled.
These actions really need to be taken to businesses and incorporate producers, who need to consider how to deal with the product once its useful life has ended.”

With that in mind, in 2016, Sakano started the Zero Waste Accreditation scheme, where local shops and businesses are given approval according to their effort to reduce waste and avoid as much unnecessary packaging and single-use items as possible.


Local shops can make a big difference,” she says. “They are also consumers, they also purchase products and pass them down to their customers. If they change their purchasing and even stop using certain products, that feeds back to producers.”


Sakano’s ultimate dream is to see the programme replicated on a global scale. She says that that 80-90% progress towards zero waste is achievable – if towns and villages are creative.

It’s important,” she urges, “no matter the obstacles, to keep striving to achieve the 100% goal. It’s important that world leaders now take their turn to make circular economy happen.”

 


 

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