Southland disAbility Enterprises (SdE) says it has lost its bid to continue to sort and process the region's recycling.

In a memo sent to staff and stakeholders today, chairman Stephen O'Connor and general manager Hamish McMurdo said they were breaking the confidentiality requirements of the tender terms to inform staff and stakeholders that they had been formally notified "that we have not been selected as the preferred proposer".

"WasteNet has also advised that negotiations have begun with the preferred proposer, with the intention of presenting a report to the Waste Advisory Group on 30 May, with ratification by the WasteNet Councils (Invercargill City, Southland District & Gore District) at meetings on the 4th & 5th of June," the memo says.

Southland disAbility Enterprises employs a team of about 100 and has a stated mission "to enrich the lives of people with disabilities by providing meaningful employment & personal development opportunities through operating a successful business".

Established in 1974 as an Industrial Work Training Unit for People with Disabilities, it was determined that SdE would be a commercial business with a social purpose. All work would be costed out at full commercial rates, and wage payments were to be made to staff based on their individual abilities and work output (productivity).

It has morphed many times over the years but in 2003 it was offered the opportunity to tender for the establishment and operation of the Invercargill Kerbside Collection “processing depot.” Its quote was accepted.

In 2009 the Invercargill City Council elected to change its Kerbside Recycling System to Wheelie bins and both the Southland District Council and Gore District Council joined the scheme as well. That same year SdE won the Sustainable Business Award and were presented with the Trophy by the Prime Minister at a black Tie Dinner held in Auckland.

The following year SdE submitted a proposal to WasteNet regarding the setting up and operation of a Mechanical Recycling Facility (MRF) for the processing of all recycling, collected through a new system of 240 Litre Wheelie Bins from all properties throughout Southland. The contract was accepted at SdE became the “preferred supplier”.

In 2017 SdE was presented with the Environmental Leadership in Business award at the Southland Community Environment Awards.

Now no longer WasteNet's "preferred supplier", the memo says the organisation must now face the substantial likelihood that it will not be carrying out the the WasteNet recyclables sorting beyond June 30.

"The Board will meet again next week to discuss the future options for SdE and the structure of the organisation going forward," it says.

"We understand that this news will be upsetting and that the psychological and financial impact on our staff, their families and the community will be huge."

"Our focus will remain on enriching the lives of people with disabilities, by providing meaningful employment, while ensuring the economic value and ongoing viability of the organisation," it says.