Interview: Lucy Walker, director

Lucy Walker's Waste Land has been dubbed the Slumdog Millionaire of documentaries. It has already won more than 30 awards, including the top audience prizes at the Berlin and Sundance festivals, plus the Amnesty International Human Rights Film Award.

The film follows the Brazilian-born artist Vik Muniz as he creates art out of garbage at the world's largest landfill on the outskirts of Rio de Janeiro, collaborating with the trash pickers (catadores) who work there.

Often too poor to live in the favelas, the catadores make a living by recycling and selling plastics, glass and food from the landfill. Sometimes they uncover banknotes, guns, headless bodies. After Carnival, they pick out the discarded costumes and wear them as they work. In the film, as Muniz creates huge photographic portraits of the catadores surrounded by rubbish from the site, Walker begins to tease out the back-stories of these handsome, charismatic people. They come across as anything but passive victims.

One man who finds a copy of Machiavelli's The Prince in the landfill is inspired to learn to read. Another woman, Irma, tells the heartbreaking story of how she came to the landfill when she lost everything after the death of her baby son. They explain that they chose recycling garbage because (unlike prostitution or drug dealing) it harms no-one else. The conditions are squalid, the smell disgusting, but even on a bad day they make twice Brazil's minimum wage. Many have been living here since childhood, but recently the handsome, dreadlocked Tiao has been organising the workers into the equivalent of a union.

On paper, a film about pollution, waste-management failures and the gap between rich and poor in Brazil sounds painfully worthy. But in Walker's hands, it's a thrilling and uplifting journey. She even persuaded her friend Moby to let her use his music for the soundtrack.

"We've had amazing screenings all over the world, and it can be really fun looking at the audience fidgeting at first, and then getting pulled in. You see their faces reflected with tears, as they howl and sob and chew their knuckles," she tells me.

In the flesh, Walker, in her late thirties, is extremely striking, with high cheekbones and compelling, cat-like eyes. Very charming, she has the ability to make you feel you are the only person in the room. And yet people in the film world can find her slightly aloof – many simply don't realise she cannot see out of one eye. "I was blind from birth so I never had any trauma," she says. "I'm sure this is partly why I'm such a cinephile and visual artist fanatic, because everything visual became so precious and intriguing to me that I saw things with different eyes."

It certainly hasn't stopped her taking risks. For Waste Land, she had to film for nearly three years at the Jardim Gramacho landfill site – 300 acres full of trash, rats, dogs and discarded syringes. There was the risk of leprosy and dengue fever, as well as kidnapping by Brazilian drug gangs. Despite the heat, she spent most of the shoot in a plastic "astronaut" suit.

She first met Muniz – who lives in New York but regularly goes back to Rio – at a British film festival. For some time they had been talking about collaborating on a social project that would also make a good film. Both are fascinated by the role of "garbage" in consumer society. As an artist, he is known for recreating images recognisable from art history using unlikely materials such as dirt, diamonds, chocolate syrup and plastic toys, while Walker has researched landfill sites since visting one in New York as a student.

Although she insists she is a film-maker rather than an activist, many of her documentaries deal with marginalised subjects. For 2006's Blindsight, which also won the audience award at Berlin, she followed six blind Tibetan teenagers as they climbed up the north side of Everest with their hero, the blind American mountaineer Erik Weihenmayer. Clearly it was a topic close to her heart, as had she been born in Tibet, she would have been kept in a back room, like the children in the film. "Many of them merely just had awful vision that was never corrected. And that awful vision was not nearly as bad as mine. They just didn't get spectacles."

Walker grew up in London, one of four high-achieving sisters.. Cinema was her passion. One half-term holiday she went to see The Aristocats four days in a row. "After that, I'd run out of people to take me to the movies and I was inconsolable. For the rest of my childhood it was all about trying to persuade adults to take me to the cinema."

A contemporary at school was Tom Hooper, who recently directed The King's Speech. but she says it never occurred to her that she could make films. At New College, Oxford, she studied English literature and began directing plays (which she soon started filming on video, too). After graduating in 1992 with a first, she won a Fulbright scholarship to the New York University film school, by convincing them that they needed more female directors.

Her first feature documentary, Devil's Playground (2002), followed a small group of Amish teenagers in the period of "rumspringa", when they are allowed to run wild and free, before deciding whether to stay cut off forever from modern society. The film was nominated for three Emmys.

Her aim is to give the ordinary person on the street a clearer grasp of the issues. She has a second film coming out later this year – Countdown to Zero, an expos of the threat of nuclear proliferation and terrorism, or "a non-fiction horror movie", as she calls it. She managed to bag interviews with nuclear experts and politicians – including Mikhail Gorbachev, Jimmy Carter and Tony Blair. She eventually tracked Pervez Musharraf, the former president of Pakistan, to a safe house in a London suburb. The film has won praise in high places. Hillary Clinton recommended it to her team at the State Department; Ban Ki-moon, the secretary-general of the UN, has also seen it.

Today the catadores appear on chat shows in Brazil and open exhibitions – they are no longer ashamed of their profession. For Walker the film is about the transformative power of art. "I just thought that question was a good one: can you take treasures out of trash?" she says. "I think ultimately the answer is yes. The film in the broadest possible sense serves as an advertisement for the benefits of creative education and positive intervention."

• Waste Land is out now on DVD and limited cinema release.