In 1813, as the Napoleonic Wars created a yarn shortage in Great Britain, a Yorkshire weaver called Benjamin Law worked out how to add rags to virgin wool to create an inferior yarn called “shoddy”. By 1855, factories were grinding 35 million pounds of rags annually, though a negative public perception, which persists in the definition of “shoddy”, clung to the industry. In 1871 Charles Dickens defended it as an “honest imposture” that employed hundreds of hands, though in Bleak House he condemned his rag-and-bottle merchant, Mr Krook, to the fate of spontaneous combustion.

In a large shed at an industrial estate in Lismore, northern New South Wales, the Matthew Talbot Clothing Recycling Centre carries on this “rag trade”, processing the clothes and textiles from St Vincent de Paul Society’s regional charity bins. Unlike those in cities, regional shops sort their own bins, at least initially, then send to the centre what they can’t sell – more than 80% of the fabric, or “post-consumer textile waste” as it is known in the industry.

Angelo Grande, St Vincent de Paul’s waste management facilitator for the state’s north, has his office here. Apart from managing the centre, it’s his job to deal with the other unwanted items that turn up in the area’s bins, which have included, in recent memory, a dead shark, broken Christmas lights and bags of defrosting meat.

“If you came here in December through March you’d barely be able to move,” Grande says, pointing to about a thousand white bags in blue transport crates – about 10 tonnes, or a day’s worth – waiting to go to the sorting lines. “The industry is very seasonal, and in wintertime things drop right off. Spring cleaning, and off they go.” In summer there can be four times the volume.

On the floor, Kaylene, a small woman in fingerless gloves and a too-large fluoro vest, will sort through 2500-odd kilograms of cloth today. Flip, flick – she dispatches items from a small skip into the wire bins that surround her. “Saleable” (about 1%) will go back to the op shops; “wearable”, “C-grade” and “clean linen” will be baled in the nearby wool presses to be sent overseas; and cotton (“light”, “heavy mix” and “towel”) will go to the cutters at their machines on the other side of the shed.

Sometimes the sorters take the T-shirts with the naughtiest slogans to the op shop in Ballina, “to give the girls there a bit of a laugh”, Kaylene says, but the worst thing is unwashed underpants, “dirty left, right and sideways”. This sort of stuff only slips through in high season, Grande points out, when the shops are overwhelmed.

Ninety-five per cent of what comes here is women’s clothing, mostly from fast fashion outlets like Millers and Kmart. Kaylene works through the jumble in a mesmerising flow: women’s tops – polka-dotted, spaghetti-strapped, lace-trimmed; cut-off denim shorts; two onesies (a quick pause, then into the wearable bin); nylon curtains with olive-coloured fern fronds; T-shirts, worn once for BMX meets and fun runs; and pyjamas, optimistic patterns scorched and flaccid – a whistling Bart Simpson, hearts embracing hearts, cats, Eiffel Towers (Oh là là, Paris!).

Kaylene needs her fingertips bare because an experienced sorter knows cotton by touch. “White T-shirts are the gold in this business,” Grande says. Absorbent cotton is in high demand worldwide, at building sites, mechanics, shipyards and even artists’ studios, in the form of industrial wiper cloths. The bags of industrial rag we see at the local hardware store are likely to be imports or to have been made from our own cotton waste that has been shipped to the Philippines for cutting and then shipped back. Workers at the centre turn all St Vincent de Paul’s usable cotton into cut wipers, which the charity sells by the 5-kilogram bag in selected shops.

Industrial rags are just part of the unglamorous soft cargo travelling the world’s shipping lanes. Textile waste, the global fashion industry’s shadow economy, is immense. From Australia we ship 50,000 tonnes annually, mostly sold by the kilo to rag traders – a mysterious bunch, whose names and offices change often. Our biggest market is the United Arab Emirates, then Malaysia, Pakistan, Papua New Guinea and various African nations. This is the destiny of the other bins Kaylene sorts. Grande thinks most of the quarter-tonne black-and-white bales stacked up out the back – part of the 1200 tonnes the centre ships annually – will probably be “opened up in an African marketplace”. Though it’s not pleasant to think of the Third World wearing our cast-offs, clothes recycling keeps hundreds of thousands of people in work through washing, sorting and sale.

The NSW government used to pick up the tab for all charities’ freight, but stopped recently. “So we fund our own now,” Grande says. “The bill comes to around $40,000 a month, but in fairly remote NSW there’s no other way of recycling the goods. No one benefits from that – society or the environment – so we transport it, process it and absorb the cost.” Of everything that comes here, only 16% will join the textile waste that makes up 3% of Australian landfill. A mix of volunteer and paid labour means St Vincent de Paul can turn the rest into another income stream to fund its many good works. Kaylene – still sorting steadily – began working for the dole ten years ago. “Then I was happily allowed to join the band!”

Charities aren’t necessarily regarded as environmental leaders, but St Vincent de Paul is just one member of the National Association of Charitable Recycling Organisations that is finding new uses for unsaleable donations, from carpet underlay to removalists’ cloths.

It’s a challenge, as unsaleable donations grow 10% annually. As the cost of putting things in landfill rises, the charity bin, “under cover of darkness”, is the tip of choice for some, costing some major charities as much as $5 million a year in disposal fees. St Vincent de Paul’s volunteers, many elderly, don’t know what they’ll find in the morning. “It makes my blood boil,” Grande says. At the same time he recognises that “if we want to continue with this model of having bins out in the street we have to accept a certain amount of rubbish. Our model is, have a high donation flow but manage the waste well.”

Meanwhile, in the nearby Ballina Vinnie’s outlet – recycling ground zero – unflappable order prevails. Mary, the volunteer manager, takes me to the back room of the neat-as-a-pin, airy shop. “The toy lady has been in, and the knick-knack lady.” Clean piles sit on their designated shelves, while a tidy stack of donations down the back awaits its sorters. What’s the worst thing about the job? “The filth, I suppose. Dirty shoes and so forth.” However, since cameras went into the lane outside, dumping has eased a little. And what’s the weirdest thing that has turned up in a bin? I suspect, with my questions, that I’m the oddest object Mary has seen through here for a while, but she thinks. There were two mattresses last week, she says, which looked as if they had come straight from a shop. Oh, and the snake up north in Casino – but that was years ago.