TNRC Introductory Overview Corrupting trade: An overview of corruption issues in illicit wildlife trade
Corrupting trade: An overview of corruption issues
in illicit wildlife trade
- Corruption is one of the most important facilitators of illegal wildlife trade. Every stage in the illegal trade chain is affected, from poaching and illegal harvesting through transportation, processing and export, to sale and laundering of proceeds.
- Corruption threatens to undermine progress disrupting criminal networks whose activities deplete wildlife and weaken good governance, the rule of law and the well-being of local communities.
- In addition to measures called for in international and regional resolutions and treaties, efforts to address corruption should focus on areas such as streamlining and auditing permitting processes and controls; engaging the transport sector; strengthening stockpile management systems; improving traceability systems; addressing vulnerabilities in special economic zones; and employing behavior change approaches.
Wildlife crime is perceived as a low-risk, high-profit enterprise by organized crime groups that target specific species because of their high monetary value. This can make officials responsible for regulating trade in these species vulnerable to corruption. Corruption facilitates all aspects of the illegal wildlife trade. For example, the activities of both specialist and opportunistic poachers and wildlife traffickers are made easier when authorities provide information to help them find specimens or evade law enforcement. This corrupt action, committed by anyone from low-level field personnel to heads of departments and ministers, facilitates grassroots, opportunistic criminals as well as powerful networks by corrupt officials (Ondoua Ondoua et al., 2017).
The United Nations Office on Drugs and Crime (UNODC) and the United Nations Environment Programme (UNEP) report corruption as the most important enabling factor behind the illegal wildlife and timber trades (UNODC 2012). A recent UNODC World Wildlife Crime Report noted that international illicit trade in live great apes using fraudulent export permits, for example, would not be possible without corruption (UNODC 2016).
The COVID-19 pandemic has also brought into sharp focus the particular risk that wildlife trade can pose in the transmission of zoonotic diseases and the urgent need for measures to address these risks. Such measures can be undermined by corruption, exacerbating the persistence of potentially high-risk trade through illicit markets that are hard to control (Broad, 2020).
Wildlife trade: The commerce in wild animals, plants and fungi, inclusive of parts and products derived from them. This includes timber and fisheries trade and is inclusive of both local/domestic and international commerce.
Wildlife crime: Acts committed contrary to national laws and regulations intended to protect wildlife and to administer their management and use.
Special Economic Zone: An area in a country that is subject to unique economic regulations that differ from other regions of the same country.
Corruption along the illegal wildlife trade chain
Practitioners involved in developing and implementing wildlife trade-related policies and projects can strengthen outcomes by building a stronger understanding of the forms of corruption that are most significant in facilitating illicit trade in wildlife and the modes of operation and actors involved (see Figure 1), and by implementing strategies to target these forms of corruption. The evidence presented in this overview is drawn from analysis of select studies and reports, as well as documents produced for meetings of the Standing Committee and Conference of the Parties of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), where corruption issues have been highlighted.
One of the most prominent examples of the use of documents to facilitate illegal international trade in wildlife involved the export of apes from Guinea between 2009 and 2011, using fraudulent CITES export permits. The head of the CITES Management Authority of Guinea at the time of these exports was removed from office in 2013 and, two years later, was arrested for his suspected role in corrupt and fraudulent actions in the issuance of CITES export permits (UNODC 2016). In November 2017 the Directorate of Wildlife and Hunting Resources in Côte d’Ivoire, reported an incident where two offenders attempted to bribe officials to issue CITES export permits for the export of three live Appendix I-listed West African Manatees (Trichechus senegalensis). This was done after efforts to export two of the animals illegally with a fraudulent permit from the Democratic Republic of the Congo failed (CITES 2019).
The corrupt use of paperwork to facilitate illegal hunting and trade was clearly illustrated when a surge in hunting permit applications from Vietnam prompted South Africa to suspend the issuance of those documents. Some corrupt wildlife industry individuals also began illegally dehorning live rhinos on game ranches without the required permits and selling the horns to Asian buyers (Milliken and Shaw 2014). Paperwork is also the foundation for the laundering of smuggled animals from the wild into the legal trade in captive-bred animals, with traffickers exporting wild-caught specimens of species that are prohibited in international trade by using false certificates claiming them to be captive-bred. Document fraud is not limited to the harvesting of and trade in animals – it is also rife in the forestry sector in many countries. In Madagascar, some officials were allegedly bribed by timber operators in order to get export permits, even though the required stockpile verifications were not carried out. It was also alleged that political influence was used to allow operators to bypass the formal permitting system required for the transportation of precious timbers (Ratsimbazafy et al., 2016).
Transport sector complicity
A recent wildlife protection and trafficking assessment conducted in Kenya by TRAFFIC (Weru 2016) noted that corruption among government officials and the private sector, especially in the transportation industry, were among the key drivers and enablers of the poaching and illegal trade in rhinos and elephants in the country. The report cites the case of a transporter and a Kenya Revenue Authority official who were jointly charged in a Kenyan court in connection with 511 pieces of ivory seized in Thailand on April 27, 2015, exported from Mombasa. TRAFFIC’s analyses of the Elephant Trade Information System (ETIS) mandated under CITES has consistently shown increasing numbers of large-scale ivory seizures (seizures involving 500 kg or more) over the past decade. The ability to transport such large volumes of ivory at a single time is indicative of greater sophistication and collusion that typically involves the use of organized covert channels for the illicit procurement and movement of ivory, greater levels of finance, and higher levels of collusion and corruption between private sector operators to exploit trading links and networks between source countries and end-use markets (CITES 2019).
Organized crime is often affected through means of collusion, corruption and protection that covertly link private sector operatives with public sector regulators and law enforcers at important trade bottlenecks such as border crossings, airports or seaports. In the Philippines, some wildlife traders routinely ship contraband through airports without needing to conceal illicit wildlife or provide appropriate permits (Sy 2018). In Madagascar, officials at one checkpoint did not confiscate banned ebony and rosewood but allegedly systematically extorted a toll for each log from the transporters (Ratsimbazafy et al., 2016).
Illicit financial flows
Wildlife trafficking is a transnational organized crime with a significant financial dimension. Worldwide, for every wildlife product sourced illegally, money changes hands – whether in domestic pet stores, on online marketplaces or under the eyes of corrupt officials. These illicit financial flows associated with wildlife crime exacerbate poverty and economic disparities, and undermine resource management plans and legal trade regimes, threatening food security and the economic, environmental and social pillars of sustainable development. Wildlife criminals often use legitimate financial institutions to launder the proceeds of their businesses and conduct the corrupt practices that facilitate their illicit activities.
For example, authorities in Malaysia conducted an investigation in 2019 under the country’s Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (ALAMFTA) on four locals believed to be behind the hunting and selling of animal parts. In the raid on four premises, enforcers seized animal parts including elephant tusks, deer antlers and various animal skins, as well as five cars owned by the four suspects. Thirteen bank accounts belonging to the suspects and their family members, reportedly containing about MYR1.58 million (USD395,000), were frozen (TRAFFIC, 2019).
TRAFFIC has previously documented missing ivory stock in Cameroon, Ethiopia, Gabon, Côte d’Ivoire, Nigeria, Rwanda and the United Republic of Tanzania, and it has been reported that official stocks of ivory in the Democratic Republic of the Congo and the Congo (Brazzaville) were also lost during periods of civil unrest and war (CITES 2007). Ivory stock theft cases often represent “inside jobs” and the collusion of local government officials. One of the largest ivory seizures ever made in the Philippines, approximately 3.7 tons of raw ivory in 2006, subsequently disappeared from the custody of Manila Customs under corrupt circumstances; while the entire ivory stock of Pemba, Mozambique, possibly as much as 1.5 tons, “disappeared” in early 2006 (CITES 2007).
The situation is similar for other commodities, such as timber. Surveys conducted by TRAFFIC of timber operators in some regions of Madagascar highlight corrupt practices occurring during stockpile inventories. According to the operators consulted, allegedly a few days before stockpile verification, some government officials with high-level connections requested large sums of money from operators. In return, officials refrained from carrying out any physical inventory of their stocks. Because they did not have any documentation to prove the legality of their stockpiles, these operators claimed to have no choice but to “cooperate” by paying the requested amount. This sum was reported to range from MGA 20 million to 100 million (USD 8,000 to USD 40,000, at 2015 rates). Of the 10 operators interviewed, eight had already allegedly been subjected to this and paid an average of MGA 30 million (USD 12,000, at 2015 rates). This practice started during the first stock inventory in 2011, and allegedly remained common practice until at least 2016 (Ratsimbazafy et al., 2016).
Free economic and trade zones
The Golden Triangle Special Economic Zone, situated in Lao PDR close to the borders of Thailand, Myanmar and China, is a global hub for trade in many wildlife goods, including tigers, elephants, bears, pangolins and illegally-sourced timber (Krishnasamy et al., 2018). In 2016, a mission conducted by the CITES Secretariat expressed concern that existing laws regarding Lao PDR’s Special Economic Zones contain significant loopholes (including with regard to possession of wildlife specimens, creation of wildlife farms and harvesting of timber), resulting in these Zones operating under opaque regimes and becoming particularly prone to corrupt practices that facilitate a wide range of criminal activities (CITES 2016b). The U.S. Department of the Treasury identified a crime network active in the Zone engaging in “an array of horrendous illicit activities, including human trafficking and child prostitution, drug trafficking and wildlife trafficking. US officials are also monitoring the Zone for money laundering” (Serlet 2019).
More regulated free trade zones may also be prone to corrupt activities due to the lax Customs regimes that characterize these regions. Undeclared cargoes of Ramin timber, for example, frequently enter Malaysia via Free Commercial Zones and Barter Trade Zones. Trade through these zones is not subject to the same Customs controls as other routes, allowing traders to ship cargoes into Malaysia (or Singapore) without Customs clearance documents from Indonesia. The loopholes created by the Free Commercial Zones and the Barter Trade Zones were seen as weakening Customs’ control on the trade in legal Ramin timber and increasing opportunities for “laundering” illegal Ramin (Chen et al., 2004).
One element of wildlife trade-related corruption that has not been widely studied is the role of corporate gifting. Rhino horns, for example, are apparently purchased and offered as high-value, status-conferring gifts to important political officials and other socio-economic elites in Vietnam (Milliken 2014). For example, on August 6, 2010, the Chairman of the Hoc Mon District’s People’s Committee was sentenced to 26 years imprisonment for accepting a monetary bribe and part of a rhino horn valued at USD 10,000. CITES Parties have certainly recognized the role that corporate gifting plays by adopting Resolution 17.6 on Prohibiting, preventing, detecting and countering corruption, which facilitates activities conducted in violation of the Convention, which urges “Parties to pay particular attention to corruption associated with corporate gifting or accepting of CITES-listed species or products made from them and adopt efficient policies against such practices” (CITES 2016a).
China’s national anti-corruption campaign has in recent years targeted the use of banquets and luxury goods in the bribing of officials (Szto 2016). It has shown the potential that national anti-corruption measures have in reducing demand for luxury products made from endangered species. The impact of the anti-corruption drive on luxury goods derived from wildlife is already evident, with a Yale University study indicating that China’s national anti-corruption campaign had reduced the imports of conspicuously consumed luxury goods by approximately 55% (Qian and Wen 2015).
Recent high-level commitments
It bodes well for future action that governments have recently recognized the importance of and are committing to tackling corruption related to wildlife trafficking at the highest levels. Resolutions and strategies adopted since 2015 by the United Nations General Assembly (UNGA), African Union, Group of Twenty (G20), and CITES reflect a heightened level of political concern over the trafficking of wildlife and associated corruption, and reinforce the need for collective action (see Figure 2).
In addition to the measures called for in the resolutions and commitments described in Figure 2, governments, working in partnership with civil society, the private sector and other stakeholders, can take a variety of practical actions to address the problems and challenges highlighted in this paper:
Streamline and automate CITES permitting processes and controls
Many customs and CITES Management Authorities in exporting countries do not have automated processes and cannot apply modern, electronic approaches for risk identification and targeted inspections. To address this, the CITES Secretariat, in collaboration with the CITES Working Group on Electronic Systems and Information Technology and the UNCTAD Automated System for Customs Data (ASYCUDA), has launched the eCITES initiative, a global effort rapidly to streamline and automate CITES permit processes and controls. By eliminating the use of paper permits, this greatly reduces opportunities for criminals to use fraudulent or falsified permits and therefore the adoption of such a system is to be encouraged. While this technology can potentially reduce the role of corruption in CITES permitting processes, it must be recognized that it cannot eliminate it completely. Monitoring will still be required, and where irregularities are detected these should be investigated. Other benefits, such as increases in revenue collection, productivity and efficiency, as well as eventual cost-savings, must also be identified to justify investments needed.
Further engage the transport sector
Whether partnering with airlines and other transport companies to identify international smuggling methods (such as in the USAID ROUTES Partnership – Reducing Opportunities for Unlawful Transport of Endangered Species) or working with financial institutions to uncover corrupt money flows (as in initiatives such as the United for Wildlife Financial Taskforce), engaging the business world in efforts against corruption and wildlife crime is already proving a crucial way to fight back for wildlife. Governments and civil society need to work with a wide variety of businesses, companies, and financial industries to tackle poaching and illegal wildlife trade from a variety of angles—including implementing zero-tolerance policies and practices that deter corruption and collusion.
Engagement with the finance sector
Financial investigation or “following the money” of individuals and criminal syndicates is critical in order to disrupt international money flows linked to wildlife trafficking and firm action in this critical area will help prevent money laundering and the corruption associated with wildlife trafficking. With wildlife criminals exploiting global financial systems to move the proceeds of their crimes and facilitate corruption, financial institutions can play a crucial role in disrupting such criminal activities. Anti-corruption, financial and conservation communities must join forces to deepen understanding of the links between wildlife crime, corruption, illicit financial flows and associated financial crime. Initiatives such as the United for Wildlife Financial Task Force can allow the conservation community to contribute to efforts in the private sector, including financial institutions, to address wildlife crime through development of due diligence procedures ensuring supply chain integrity, and in development of guidelines for the financial sector to link financial crime to wildlife crime, including prioritizing financial analysis associated with wildlife crime. Such collaboration can include training to identify and investigate suspicious activity linked with wildlife crime and provision of intelligence with regulatory bodies and law enforcement agencies for the appropriate actions.
Strengthen stockpile management systems
Robust stockpile management systems are essential to reduce the risk of corruption and contraband leakage back into illegal trade, to safeguard evidence in wildlife crime cases and preserve products for forensic analysis, and to foster a culture of custodial accountability and transparency. Various forms of guidance on the establishment of systems and procedures needed for adequate management of stockpiles have been developed, and governments will need to ensure resources are available for effective implementation of such guidance. This includes designating the appropriate agencies to manage all aspects of stockpile management and their roles and responsibilities, the development and operational roll-out of stockpile management systems.
Improve traceability systems
Many of the conditions that create opportunities for corruption outlined in this document, such as abuse of documentation and corruption along transport routes and hubs, may be reduced by the introduction of effective traceability systems. Traceability is the ability to access information on specimens and events in a species’ or commodity’s supply chain, from harvest to subsequent transactions needed for authorities, producers and traders to substantiate both legal acquisition and non-detrimental findings. While recognizing that effective operation of traceability systems can also be undermined by corruption, they can provide buyers throughout supply chains with the basis for reliable, transparent, and accessible information on the origin of what they buy, whilst simultaneously providing governments, producers, processors, and retailers with assurances as to the product’s compliance with national and international legislation.
Various traceability mechanisms now being implemented or considered for wildlife, timber and fisheries products in trade would help combat illegal supply, and help the relevant international and national governmental agencies to identify the origin and legality of the relevant product, minimizing the opportunities for collusion and corrupt practices. For example, in 2017, TRAFFIC, WWF and Hewlett Packard enterprises launched an online tool to help global customs and enforcement agencies better detect illegal trade in fish. Within the forestry sector, timber tracking systems using various forms of technology for data capturing processes are well-developed and have reached the operational stage in forestry and many other sectors.
Establish clear guidelines for free economic zones
The focus on the economic gains from lighter regulation and reduced customs presence in such zones has meant that guidance on countering illicit and corrupt practices has often been overlooked in their operations. Governments must adopt clear guidelines regarding the operation of Special Free Economic Zones in relation to wildlife trade, farming and consumption, as well as clear guidance on how to proceed in cases of alleged trafficking occurring in these zones. With no standard procedure in place for law enforcement authorities to act upon when receiving information on illegality in many such zones, they have become particularly prone to corrupt practices that facilitate a wide range of criminal activities, including wildlife trafficking. Recognizing the need for international cooperation and partnerships to fight international corruption and illicit trade in such zones, the OECD Task Force on Countering Illicit Trade (TF-CIT) has recommended that governments implement the Code of Conduct for Clean Free Trade Zones. National anti-corruption awareness campaigns and training programs should target these zones.
Consider social norms and integrate behavior change approaches
To address how gifting of luxury products made from endangered species can promote corrupt business practices, demand-reduction efforts should include raising awareness and changing behavior. Initiatives should be government-led and include a range of other stakeholders including government, civil society, sectoral experts and key influencers, including business. Actions should be scientific and clearly evidence-based, building on research into users’ values and behavior, and form part of coherent demand- and supply-side reduction strategies. A behavior change approach to tackling natural resource corruption is one that uses cognitive, psychological and social science research, insight, evidence and approaches to influence the motivations, attitudes, values and actions of those engaged in corrupt practices. Such an approach can use a structured framework for changing corrupt behaviors to ensure that conservation and natural resource management practitioners consider a behavior change component when designing their projects.
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Image attribution: © naturepl.com / Jen Guyton / WWF; © Brian J. Skerry / National Geographic Stock / WWF; © Georgina Goodwin / Shoot The Earth / WWF-UK; © Hkun Lat / WWF-Aus