The Illegal Wildlife Trade, Dollars & Sense by John Cusack

According to the best available sources the illegal Wildlife Trade is valued at approx US$7 – 23 billion a year, and is regularly described as the 4th most lucrative crime after any of drugs, counterfeit goods, humans and arms, with Africa the main area of concern, in particular due to the killing of Rhinos, Elephants and Pangolins, by criminal gangs that move horns, tusks and scales shipping these clandestinely onto markets in Asia.

That the illegal wildlife trade is in the billions of dollars a year and includes iconic African mammals such as Rhino’s, Elephants and Pangolin’s is not in question, and neither are the claims that criminal actors are involved and that Asia is a main destination.

Whilst this picture is a popular one, in which the illegal wildlife trade is most often portrayed, by digging a little deeper the picture becomes a little less about Africa and Asia, and involves all regions, including North America and Western Europe, and a little less about iconic African Mammals and includes reptiles, birds, fish, plants and shells. It also becomes clear that whilst the monies generated by the illegal wildlife trade are not on the same scale as the largest crimes like drugs, that doesn’t diminish the importance of tackling it.

Question 1 – Is the Illegal Wildlife Trade worth US$7 – 23 billion a year to criminals?

With the usual caveats, around the challenges and the lack of information, the answer really is we just don’t know, though it’s safe to say it’s in the billions of US dollars a year, for reasons that will become clear. That said the figure that is widely quoted of US$7 – 23 billion has a very interesting creation story, and for the last 10 years has been oft repeated, without any primary research being undertaken and a reliance on earlier sources, with ranges created when sources differ. The US$7-23 billion figures come from more than 10 different sources, including Interpol, United Nations Agencies, US Government Agencies, Global Financial Integrity, NGO’s and numerous other credible and reputable sources, however in almost all of the sources that make up this estimate, the figures are repeats of earlier sources and in some cases ranges, based on a number of earlier sources.

Once you strip away all the noise and the cross referencing, you get back to a couple of sources 15 – 20 years old, some of which are no longer available in their original form, but have made it through time through references by others that have. The oldest sources found are

from the year 2000 from the US, published by the US Government’s interagency working group in support of and pursuant to the President’s International Crime Control Strategy in a Threat Assessment that covers more than wildlife crime. It reported, that,”criminal groups earn, “US$6-10 billion for illegal wildlife (described as “the illegal trade in exotic birds, ivory and rhino horn, reptiles and insects, rare tigers, and wild game)“ and

from 2005 from the US State Department which reported that “Wildlife trafficking–the illegal trade in wildlife and wildlife parts-is a soaring black market worth $10 billion a year, second only to arms and drug smuggling.”

In both cases there is unfortunately no source, nor any explanation given as to how these figures were arrived at.

It was only in a 2008 Report to the US Congress that sources began to reveal themselves, and at last a hint at the basis for these figures. The Paper in question, “International Illegal Trade in Wildlife: Threats and US Policy” from the US Government stated that, “some estimate that it is worth at least $5 billion, and may potentially total in excess of $20 billion annually. This would rank the illegal wildlife trade as among the most lucrative illicit economies in the world, behind illegal drugs and possibly human trafficking and arms trafficking.” References included the previously published US figures from 2000 & 2005 but also included an Interpol reference and a UK Police online reference, but without further information. As the previous US figures from 2005 and 2000 provide no sources or basis for the figures, the link to Interpol and the UK Police could potentially explain things. The links though provided no information as the web pages have long since gone, or have been taken down!

Whilst this could have been the end of the search, the good news is it wasn’t. There is still no primary evidence of exactly what was said by Interpol or the UK Police, perhaps 20 years or more ago, but other sources have revealed at least enough to help determine the matter. For example:

In 2003, an Environmental Journalist, reported that “Although legal trade in wildlife is regulated by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an estimated one-third of the global sales of 25 billion dollars a year is illegal – an illicit business surpassed only by arms and drugs trafficking.” There is no source for this statement, but on this basis it would estimate the illegal wildlife market at around $8 billion a year.

In 2008 Paper “Reducing the Illicit Trade in Endangered Wildlife” by Jacqueline Schneider, it revealed something crucial, stating that, “Calculating the costs of the illegal trade is fraught with difficulty, but as a way to illustrate both the scale of the problem and the frailty of the data, existing figures are reported here. Cook et al. (2002) estimate US$159 billion annual trade based on declared import values of commodities. However, the Metropolitan Police (United Kingdom) estimate that 350 million animals and plants are traded every year, with a market value of US$25 billion, of which one quarter is from illegal trading.” The link to the UK Met’s website no longer identifies this information, but it is clear as to amounts and rationale.

In 2011, Global Financial Integrity, published a Report “Transnational Crime in the Developing World“, which stated that “In 2005, TRAFFIC Europe estimated that the total legal trade in wildlife (not including fish and timber which are discussed in separate sections of this report) was worth €17.2 billion, equal to $22.8 billion. Other estimates list the legal trade at $25 billion. Illegal trade is estimated to be around one-third of the legal trade, which would set it at a range between $7.6 and $8.3 billion.” GFI reviewed the available sources and concluded, “on a range of $7.8 to $10 billion for the value of the global illicit wildlife trade.”

In 2016 “The Illegal Wildlife Trade Inside the World of Poachers, Smugglers and Traders“, was published by an academic from Holland – Daan P. van Uhm, who sought to explain the genesis of the estimates on the Illegal Wildlife Trade, and claimed that “the figure of 20 million that is often quoted to indicate the amounts of the illegal wildlife trade was initially the estimated value of the legal trade in wildlife by Traffic in the 1990s and Interpol has been incorrectly quoted” in some sources. Van Uhm goes on to explain that “the illegal wildlife trade is estimated at approximately one fourth of the legal trade.”

In 2019, the World Bank in their Report, “The Illegal Logging Fishing and Wildlife Trade“, stated that, “Van Uhm’s (2016) approach was used, which suggests that worldwide illegal trade in wildlife accounts for nearly 25 percent of the legal market, representing nearly $8.5 billion per year. The value of the legal global international wildlife trade, including non-CITES species, is based on the data for declared import values in 2012 (UN Comtrade and FAOSTAT database).”

On this basis the figure that seems most credible is around US$8.5 billion, within the range of US$7 – US$23 billion but based on an estimate of 25% of 2012 figures on the legal wildlife trade. Whilst at least we have a clearer basis for a figure, I haven^t found a reasonable basis for the 25% figure, nor reliable information on the current size of the legal wildlife trade AND what we mean by “wildlife trade”.

Question 2 – What do we mean by the “Wildlife Trade?”

This may sounds like a simple question to answer but it is not. At different times, sources use “the wildlife trade” to include many different things. A narrow definition used for example in the US 2000 publication on the illegal trade, covers “exotic birds, ivory and rhino horn, reptiles and insects, rare tigers, and wild game“, whereas in 2011, US Homeland Security, combined a number of elements into an “Environmental Crime” category “ (illegal wildlife trade, logging, trade in CFCs, and toxic waste dumping) – $20 to $40 billion.” In 2007, TRAFFIC Europe in “Opportunity or Threats: The role of the EU in Global Wildlife Trade“, described 2005 figures for the “Legal Wildlife Trade” both globally and in the EU. The Report included a table whose contents are reproduced below, in terms of the Global Wildlife Trade in Euros.

TRAFFIC EUROPE “Opportunity or Threats; The Role of the EU in Global Wildlife Trade: 2007. Figures for 2005

On the figures in the chart, the value for the legal wildlife trade, not only depends on whether you include and or exclude Fish For Food and Timber, which seems appropriate, at least they are separately categorised, but also whether all the other items are included. When thinking about the illegal wildlife trade and its size, now that we understand it has been estimated as at 25% of the legal trade, what does the legal trade tell us about the illegal trade. Some may be surprised to see the largest values in Euro terms, excluding Fish for Food and Timber as being, Ornamental Plants, and Medicinal Plants, as well as ornamental fish as the largest segment of live animals, though again these sound appropriate, they are not what many would have expected.

The figure of €17.2 billion represents US$21.5 billion based on average 2007 €-$ exchange rates. An interesting observation is that both for timber and illegal fishing similar % estimates of illegality have been applied in various other source materials for these criminal markets and segments, and it may be that this is no coincidence, as for long periods of time, many have combined these as well as looked at them separately, including a number of important agencies.

As the trade in elephants, rhinos and pangolins are strictly controlled and restricted much of the illegal wildlife trade that generates significant illicit profits and column inches, have little relevance to the legal wildlife trade, or to its size. We do have better estimates however on these individual markets. For example, in 2013 the UNODC published a Report, Transnational Organised Crime in East Asia and the Pacific, which stated that, “In 2008, the combined global value of legally traded commodities derived from wild plants and animals was approximately US$24.5 billion.” and referenced to “These estimates have been developed by TRAFFIC on the basis of an analysis of data contained in the 2009 UN COMTRADE (UN Comtrade 2009) and in the 2008 FAOSTAT (FAO 2008).” It also stated that for the East Asia Pacific Region, “a conservative estimate values the regional illegal wildlife trade at US$2.5 billion a year, excluding illegal timber and off-shore fishing,” and according to estimates in a chart, “developed by UNODC on that basis of limited information collected through existing publications, media and consultations with NGO’s,” the proceeds for various illegal wildlife products were: Ivory US$200 million, Pangolin US$135 million Rhino US$35 million Bear Bile US$10 million & Tigers, US$5 million, and that 70% of illegal Ivory goes to China.

Based on these figures and the TRAFFIC information in the chart above, we can see that the illegal wildlife trade for Ivory, Rhino Horn and Pangolin Scales remain some of the largest illicit markets and therefore a target for criminal actors. The estimate that the Asian market is about US$2.5 billion in value, also evidences that other Regions will be just as large, particularly North America and Western Europe for other types of wildlife illegally traded, for example illegal caviar, birds and reptiles, furs and skins, and that these markets will have different characteristics and criminal actors and require a different understanding to ensure an effective response.

Question 3 – Should the Illegal Wildlife Trade be in the same conversation as for drugs, humans and arms trafficking?

In pure financial terms, as far as proceeds of crime are concerned the illegal wildlife trade (excluding fish and timber) are not as large as either drugs, counterfeit goods or human trafficking, but it is bigger than arms trafficking which in financial terms is not a significant generator of criminal sums, though causes great harms. If you take the broader category of “Environmental or Green Crimes” however then the illegal trade is still smaller than drugs and counterfeit goods, but could be bigger than human trafficking. Of more interest, at least to the author is the reason for the oft positioning of the illegal wildlife trade with these other crimes. It seems from the various sources that the main reason to combine these crimes was possibly initially to indicate that there were synergies and connections between those perpetrating these crimes, and that transit routes and logistics networks already established for these other crimes were being shared and that even these products could be interchanged also as currency and used in exchanges. More often than not, the positioning of the illegal wildlife trade with these other crimes more recently appears to be an attempt to amplify the importance of the illegal wildlife trade, which it doesn’t need as it is sufficiently serious to stand out without the extra help.

It would be helpful if these connections could be accentuated, where they exist, for example in the African to Asia elephant, ivory and pangolin markets, and differentiated when this is not the case, instead of the positioning of the trade in aggregate in pure financial terms.

That said, the economic costs of losing for example Africa’s iconic mammals has been considered by Chatham House, on 7 Countries, Angola, Namibia, Zambia, Zimbabwe, Botswana, Mozambique and South Africa which found that:

illicit financial flows generated by IWT of 7 species in 8 Southern African Countries of US$1.6 billion in 2006-2014
estimated minimum law enforcement costs to protect rhino’s is estimated at US$20,000 per rhino, and
the natural capital loss from elephant poaching is estimated to be US$12 -18 billion in 2010 – 20012.

According to another study, the economic loss in the event of the extinction in direct and indirect tourism income for Rhino’s could be as high as US$36 billion for South Africa, Kenya, Namibia and Zimbabwe, & US$74 billion for Elephants across Africa, and that the value of a single live elephant for tourism purposes is over US$1.6 million throughout the course of its life

Conclusion

The Illegal Wildlife Trade is having a devastating impact on the natural world, on iconic mammals, and on many species on land, in rivers and in the sea, with many species under threat and endangered, organised criminality is involved and it generates US$ billions a year. The main destination markets are North America, Western Europe and Asia. The main source Countries include the Southern Hemisphere, in Africa and South America and in the tropics and in the Black Sea area, and yes even in North America and Western Europe too. Still the exploitation of the natural world, includes iconic mammals, birds, reptiles, plants and shells, and is taking place generally speaking in low income countries to satisfy demand in higher income ones. Evidence connecting the illegal wildlife trade to terrorism and financing of terrorist groups is extremely limited and episodic. Linkages to organised crime are real and networks and logistics are shared to carry out illicit trade, at least in the Africa to Asia corridor. Corruption plays a significant role, in facilitating the trade, unsurprisingly in those parts of the world where corruption is endemic, which also serves to protect those involved from successful prosecution. International co operation is essential across source transit and destination countries, with both public and private sectors playing a role, recognising that following the money can help take the profit out of this crime, and increase the risks to those involved.

As we target this illicit trade, it’s important we understand it. In order to go forward, sometimes it’s important to look back and test the basis of our current understanding. When we stand on firmer ground we can expect our next steps to be ever more sure footed.

BY John Cusack. Editor Financial Crime News; 8 March 2020

Note For Financial Institutions that want to play a role in combatting the Illegal Wildlife Trade. The UNITED FOR WILDLIFE FINANCIAL TASKFORCE, has been established and welcomes new members willing to sign the Mansion House Declaration and participate in the fight back on combatting the illegal wildlife trade that is underway.