Organization Description

The Ocean Cleanup website demonstrates that it is a foundation that came into being in 2013 under Boyan Slat, its founder. This foundation was established for the purpose of ridding the world’s oceans of pollutants with the use of modern technology. Through the use of modern technology and the study of ocean currents, their efforts are supposed to have a significant impact on the global standpoint by the year 2022.

In this foreseeable future, the organization intends to clean up half of the Great Pacific’s garbage patch. The rubbish from the industries ends up being dumped in the ocean with the most prevalent types of trash being plastics. Due to the tides and ocean currents, the garbage is whirled up by ocean currents to form gyres. These gyres break down the component plastics and other pollutants into tiny particles that the sea life consumes as food. This is the reason why the foundation has incorporated Research and Development (R&D) to assist them in undertaking the project of cleaning the oceans. Given the nature of their work, this has placed them as a contender for future investors who are also keen on their Corporate Social Responsibility (CSR) Projects.

According to the Annual Report 2015, the organization has a number of projects in the pipeline, with some of them being at their prototyping stages. In 2016, they deployed prototypes in the North Sea with a repeat of the same in 2017. These prototype simulations are intended to provide an insight into the nature of the expected volume of work when undertaking large-scale projects such as the one related to the Great Pacific. Consequently, they have highlighted the following focal areas, which are supposed to enable them to achieve this goal. These include the development of technologies of a large-scale proportion intended for passive and competent removal of plastic pollutants from the oceans, the development of spin-off technologies that will curb the entry of said plastics into the oceans and raising the awareness of the magnitude of this problem.

Key Services

The Ocean Cleanup working in the sphere of ocean protection provides the following services:

Project Simulation – The Ocean Cleanup Array

This service enables the foundation to carry out research and simulate the completion of various projects before they are actualized. Through the incorporation of computer software technology, in 2015, the organization embarked on the design of advanced computer models intended to show a simulation of how the plastic waste moves in the ocean. Additionally, the simulation reveals how their cleanup mechanism interacts with the pollutants in regard to capturing and eliminating them (Annual Report). The advantage posed by the simulations is that they enable the organization’s specialists to monitor ocean current variations. This system of operations has enabled them to pinpoint the key locations that their cleanup array should be focused on along with developing their system design.

Research and Development – Deltares and MARIN Research Institutes

These research institutions are an integral part of the foundation’s R&D initiatives. Though they are not owned by Ocean Cleanup, they are part of the R&D strategy of the foundation. In 2015, for instance, they were the benchmarks for the Pacific Array project. As a result, simulations were carried out in these locations and a cost-effective plan was laid out (Annual Report). The findings were effectively incorporated in the 2016 simulation projects in the Dutch North Sea.

Recycling

According to the Annual Report 2016, the foundation has a recycling procedure to be carried out for the recovered plastics. Once the garbage is taken back to the land, it is sorted out depending on the categories of trash that have been laid out by their specialists. For the plastics recycling, there are primarily two categories, low-quality plastics, and high-quality plastics. The ones that fall under the first grouping are supposed to undergo pyrolysis, which is a process that converts them to diesel fuel, which is then used to power the organization’s vessels. The latter category includes the plastics that will be recycled and repurposed. The foundation is able to make money from the process since large multinationals dealing with plastics generally pay a premium for the recyclables.

Competition

According to Macklin, an estimated number of 8.8 million tons of plastic material enters the oceans on a yearly basis. This has provoked campaigns on plastic-free lifestyles and the recyclability of plastic waste material has provided a business opportunity for the other companies.

Surfrider Foundation

According to their website https://www.surfrider.eu/en/about-us/, this is an organization based in Europe that focuses on the problem of safeguarding the oceans and coastlines. They also participate in environmental education for the public as a campaign strategy aimed at raising awareness of the pollution of the ocean and the coastline. Across Europe, the foundation has a network of over 10,000 members and an additional number of almost 2,000 volunteers (Surfrider Foundation). Their focus is, however, mainly centered on the formulation of policies aimed at resolving environmental issues.

Oceana

According to the Environmental Watch, this organization was founded in 2001 and their primary functions are: combating ocean pollution through policy campaigns: promoting accountable fishing and preserving marine life and their habitats. According to Environmental Watch, this organization has a larger coverage than Surfrider and Ocean Cleanup with offices across Europe and the Americas.

Financial Performance

Based on the 2015 Annual Report, (p.11-12) it is apparent that the funding for Ocean Cleanup’s operations is sourced on a project basis. This means that at first, the team identifies a project that they want to embark on, such as the intended 2018 Pacific cleanup. Once the budget is developed, funds are then searched for. Close to the end of the 2015 financial year, the foundation had accrued expenses equal to 3.1 million Euros. 1.5 million Euros of this expenditure were allocated for R&D projects on plastic waste material in the ocean (Annual Report). EUR 150,000 was spent on scale model testing, which refers to the engineering processes that involve the technological applications. 348,000 Euros were directed to the development of spin-off technologies intended for mitigating the problem of the ocean pollution and the Ocean Cleanup Array (Annual Report).

269,000 Euros were directed towards awareness and communication campaigns. The strategy applied in this segment was partially oriented on a campaign to entice sponsors. Finally, 289,000 Euros were spent on the running of the foundation’s daily operations. According to the 2015 Annual Report, (p.12), the R&D budget was projected to amount to EUR 2.2 million, but they fell short of this by EUR 700,000 and this significantly halted their operations.
The 2016 Annual Report, (p.16-17) reveals a new structure in the organization of Ocean Cleanup. A subsidiary named Stitching the Ocean Cleanup was put in place and was meant to account for the project-related outlays such as reimbursement of personnel. The financials for this subsidiary are presented separately from those of the parent entity. Since the subsidiary was formulated in November 2016, the financials will be presented in the 2017 report.

As for the financial report for 2016, it is as follows:

According to the 2016 Annual Report, the total outlays amounted to EUR 3.7 million, and 74% of this spending was allocated for the foundation’s projects. The spending on the projects is as follows:

  • EUR 1.1 million for the North Sea Prototype, and an almost the same amount for recycling processes and Plastic Flow Modeling.
  • The Ocean Cleanup Array and the subsequent spin-off initiatives amounted to 334,000 Euros.
  • Engineering and Communication expenditures were equal to 239,000 and 333,000 Euros respectively.
  • 14% of the total amount was incurred for the daily operations of the organization.

The subsidiary took up an additional EUR 500,000 thereby bringing the total expenditure to EUR 4.2 million.
Given that the past two financial years incurred significant expenses for the research of the most appropriate methods to be used in the reclamation of the oceans, in 2017 and 2018 the company is expected to have more funds directed to the actual projects, especially the Great Pacific Garbage Patch.

Regulatory Framework

According to the United Nations, the oceans of the world cover 72% of the earth’s surface. From the 17th century, the vast oceans have been under the Freedom of Seas Doctrine. This guideline distributes national rights on various matters regarding oceans and a narrow belt of the sea being the proximity for jurisdiction, with the rest proclaimed as international waters.

UNCLOS – United Nations Law of the Sea Convention

This law as detailed on the United Nations website outlines the guidelines that govern the use of the seas and oceans in an agreeable way for the good of the entire humankind. The United Nations Seabed Committee has been expedient in banning the storage of nuclear weapons in the seabed. This was done after the affirmation by the General Assembly, which stipulated that the seabed was governed by the same principles as the Freedom of Seas principle (United Nations). In light of the operations of the Ocean Cleanup in the oceans, this is a primary principle that guides their operations in the international waters. Such projects are protected by the UN law of the sea convention.

Legal Constraints

The cleanup project undertaken by the foundation is limited by 3 legal constructs. Laws of abandonment would be inapplicable if the foundation were to adopt a legal approach in a bid to deter the involved parties. The law of finds stipulates that for Ocean Cleanup to pursue legal action, they would have to provide evidence showing actual possession of the material so as to prove ownership/control and give evidence that the said property was indeed abandoned by the proprietor (Slat 30). In this respect, however, it means that the foundation has a claim for the plastic material they collect in the ocean. The Ocean Cleanup also has to operate under the regulations on the shipping of hazardous materials. In this respect, they are subject to the regulations established by the International Maritime Organization (IMO). This would be ideal for them, but only under the condition that they are not flagged either by the UN or the state government; with a claim to the collected plastics (Slat 30). If this were to happen, they would be subject to the respective jurisdiction laws.

CSR project/sustainability program

According to DSM Dyneema, the project in regard to the North Sea is as follows. A U-shaped blockade is placed in the ocean in the perpendicular orientation to the current; this way it will be able to collect as much plastic refuse as possible. The initial barricade was supposed to cover a total length of 100 kilometers. This length would mean that it would have been able to capture a substantial amount of refuse deposited in the sea in a very short span, but it is also associated with one major challenge; breakage. To ensure that the barricade withstands the tension from the refuse and the ocean currents, it will be made from Dyneema which is a form of fiber that is 15 times the tensile strength of steel. Once the barrier is laid, the ocean currents will channel the plastic to its mesh. This innovation was a sustainability initiative implemented by a partnership of DSM Company and The Ocean

Cleanup

The ocean currents will channel the barrier towards the plastic refuse as it is also treated as such in the presence of the ocean currents. However, the challenges that arise with dragging a barrier of such dimensions through the ocean bed were mainly economic rather than practical. Therefore, the foundation sought to reduce this length and in their May 2017 press release on their website, they announced a new approach according to which the 12 meter long anchors will be used to hold the barrier in place as it moves along the ocean bed.

The purpose of this initiative was to rid the ocean from plastic refuse as much as possible. Rekelhof and Simoskie, (p.1) identify the social and economic aspects of the project. The social phase delves into the effect of pollution on the ecosystem through the food chain. The plastic material further absorbs toxic chemicals in the environment and they enter the food chain once they are consumed by sea life. As consumption progresses over time, the concentration of pollutants in the form of chemicals that make up plastic increases in the food chain and eventually affects the health of the consumers.

Fishing lines occupy the largest share, being followed by plastic bottles and plastic bags, while the paper towels comprise the lowest portion.

Stakeholders and the General Public

The general public has played a significant role in the growth of the foundation. Initial funding was primarily obtained from this quota. Mcclelland documented that the initial investment in the idea for The Ocean Cleanup was $90,000 that was obtained through donations to the foundation. This was then followed by a $2.2 million input that facilitated them to start pilot testing (Caminiti). Crowdfunding was, therefore, the source of the startup capital of the organization. This amount was amassed from about 38,000 donors in over 150 countries (Caminiti). Over the past 2 years, the foundation has made significant strides in its development with $10 million donations from entrepreneurs in Silicon Valley and Europe. In the period between November 2016 and May 2017, the foundation received $21.7 million in the form of donations that allowed them to carry out their trials on a large-scale level (Caminiti). Some of the key backers of the foundation are Peter Thiel and Marc Benioff. The former is a billionaire venture capitalist and the latter is the CEO of Salesforce.com, an internet-based company. As time goes by, the foundation is virtually gaining traction as more people are investing in their projects. This is the best proof of the organization’s viability.

Evaluation of CSR / Sustainability Program

The initiatives taken up by the organization reflect their CSR projects because of having a non-profit agenda as a foundation. According to Hoiland (p.1), plastics have made life easier in the modern age, solely because they demonstrate unique characteristics in diverse fields of application. Some of these characteristics include corrosion resistance, chemical inertness, durability and recyclability. These properties have enabled the manufacturing industry to use this material for numerous purposes such as packaging and as containers for the beverage industry as well as in the form of housings for electrical components, among other fields of application. In America, more than 50 billion plastic bottles are retailed every year. The hazardous issue in this regard is that only an estimated 30% of these bottles are recycled. Even with the recycling component in the cycle, about 34 billion plastic bottles end up loose in the environment.

Sherman and Sebille, assert that a more effective way of cleaning the garbage in the ocean is through the placement of refuse collectors along the shorelines. They find this as being more preservative to the ecosystem rather than dragging a barrier close to the ocean bed. Furthermore, their analysis points to the fact that plastics tend to float on the water and as a result find their way to the seas through urban side rivers that are washed out to the sea waters.

The Ocean Cleanup team has come to an agreement that the plastic fragments in the ocean have a detrimental effect on the ecosystem at large. The Great Pacific Garbage Patch is one such example of the impact of continuous waste disposal into the ocean on the environment. Given the proportions of this patch, the Ocean Cleanup foundation seeks to target it and get rid of it in the next five years. Dr.Sebille is, however, skeptical about the effectiveness of this approach. He performed an experiment in the Imperial’s Grantham Institute, with a model simulating ocean currents and how they channel plastic waste to the central point similar to the situation with the Great Pacific Patch. The findings of the experiment (published in the Environmental Research Letters) showed that the method adopted by the Ocean Cleanup would be 17% effective as compared to their proposed approach of placing collectors within the proximity of shorelines, which would rid the oceans of 31% of the plastic refuse (Sherman & Sebille). Their methodology proposes certain key points that would lead to the best results across the shorelines of China and Indonesian islands. The success rate was projected to be realized in a period of 10 years.

Given that their approach was mainly governed by the need to safeguard the ecosystem through the cleaning process, it is focused on ridding the ocean of refuse at its entry point. The main criticisms of the tactic adopted by the Ocean Cleanup include a suggestion that the barrier would also harm marine life due to its mobile nature and that it lacks a precautionary application. The same model was used in places rich in phytoplankton and the results of its application were as follows: when the collectors were placed in a manner similar to that of the Ocean Cleanup, there was an 86% overlap while their alternative had a 54% overlap (Sherman & Sebille, p.4). In summary, the methodology by the foundation targets a dead zone while the proposed scheme of Dr. Sebille primarily targets the areas with abundant wildlife. Further, research on the Australian Coast found that 90% of the birds studied had consumed plastic elements, which was ascribed to the point that the said birds primarily fed on the shoreline.

Conclusion

The main project that the Ocean Cleanup has undertaken is the clampdown on the Great Pacific Garbage Patch. This undertaking is revealed in a mutual effort of the organization in partnership with the Dutch foundation. This plan is primarily cost effective because the burden of the workload is imposed on the ocean currents. Testing for the project is projected to end in 2017 so that the actual project is supposed to start in 2018. For an investor seeking to finance current and future projects of the Ocean Cleanup, the following factors should be taken into account. First, a large portion of their funding is directed towards R&D. This factor has two possible outcomes. In the event that the research and development efforts are successful, the organization will embark on a feasible project, but in case the opposite happens, the funds spent on the initiative will be lost. Additionally, the Great Pacific Garbage Patch plan that is projected to start in 2018 is subject to a number of criticisms. Researchers such as Sherman and Sebille in their report documented in the Environmental Research Letters have raised questions on the liability of the strategy adopted by the Ocean Cleanup. A side by side comparison of the approach proposed by the researchers and the one that the foundation has embarked on highlights the strengths of the approach proposed by the Ocean Cleanup. This is primarily because the proposed alternative has a preventive outcome as well. Conclusively, an investor is better-suited in financing a project that involves strategies being in line with the findings of the named researchers.