Illegal Logging, Fishing, and Wildlife Trade: the Costs and How to Combat It
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ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE: THE COSTS AND HOW TO COMBAT IT i WORLD BANK GROUP REPORT OCTOBER 2019 OCTOBER BANK GROUP REPORT WORLD ii ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE LOGGING, ILLEGAL PHOTO BY DAVID CLODE ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE: THE COSTS AND HOW TO COMBAT IT OCTOBER 2019 SUPPORTED BY LED BY DEDICATION This paper is dedicated to the memory of Claudia Sobrevila — mentor, friend, and a leading voice for biodiversity, indigenous peoples, local communities, and women in conservation. We are forever grateful for her outstanding leadership of the Global Wildlife Program and Amazon Sustainable Landscapes Program. Acknowledgements This paper was prepared under the guidance of Benoit Blarel, Practice Manager. Julia Bucknall and Garo Batmanian provid- ed invaluable advice during the preparation and consultation phase of the paper. Various development partners provided case studies, references, and insights to help inform key findings and recommendations. The paper greatly benefited from input from the OECD, the USAID-funded Targeting Natural Resource Corrup- tion (TNRC) consortium, and International Consortium on Com- bating Wildlife Crime (ICCWC) partners. The Global Environment Facility (GEF)-funded Global Wildlife Program (GWP) funded the research and development of this paper. The GWP/World Bank Group (WBG) team that authored the paper consisted of Juan Jose Miranda Montero, Elisson Wright, and Muhammad Najeeb Khan. This paper could not have been completed without the input of numerous individuals who provided sector-specific insights and feedback on the draft analysis. We thank the following for their ef- forts and valuable input: Ivonne Higuero, Ben Janse Van Rensburg, Edward Van-Asch (CITES Secretariat); Phil Franks (IIED); Michael Morantz and Piotr Stryszowski (OECD); Dr. Timothy Wittig (Unit- ed for Wildlife); Dr. Louise Shelley and Judith Deane, Terrorism, Transnational Crime and Corruption Center (TraCCC) at George Mason University; Angela Me, Julie Viollaz, Theodore Leggett, and Irmgard Zeiler (UNODC); Mary Rowen (USAID); Roux Raath (WCO); Elizabeth Hart, Rachel Kramer, and Richard Nash (WWF). The paper benefited from feedback provided during various side events and discussions, including at the London IWT Conference 6 2018, CBD CoP 13, CITES CoP 18, and a GWP virtual event held in March 2019. Susan Pleming, Laura Ivers, Sunny Kaplan, and Hasita Bhammar provided communications expertise and worked with various WBG colleagues to publish the paper. Finally, we would like to thank the peer reviewers and other colleagues who supported the paper analysis, editing and dis- semination, in particular, Urvashi Narain, Nigel Bartlett, Marilyne Goncalves, Nagaraja Rao Harshadeep, Csaba Boros, Hrishikesh Patel, Robert Livernash and Thomas Cohen. Disclaimer: This work is a product of the staff of the World Bank with external contributions. All omissions and inaccuracies in this document are the responsibility of the authors. The findings, inter- ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE LOGGING, ILLEGAL pretations, and views expressed in this guide do not necessarily represent those of the institutions involved, nor do they necessarily Acknowledgements reflect the views of Global Wildlife Program, The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. © 2019 International Bank for Reconstruction and Development / The World Bank Rights & Permissions The material in this work is subject to copyright. Because the World Bank Group encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for non-com- mercial purposes, but only with full attribution. Authors Note Systematic data collection and additional research is needed to better understand all implications of illegal fishing, logging and wildlife trade. These activities are examples of renewable natural resource crimes. These are large-scale, involve organized crime, and should be treated as a serious crime and not small-scale lo- calized activity not linked to transnational networks. International human rights, agreements, and national laws guide enforcement action, which should be proportionate and well-targeted. Design and implementation of national solutions should be guided by detailed assessments that incorporate environmental and social impacts, including direct and indirect impacts on communities, and opportunities to promote legal alternative livelihoods. Main Messages » Illegal logging, fishing and wildlife trade deplete the world’s nat- ural resources, deprive nations of needed revenues, and under- mine key ecosystem services such as carbon storage, biodiversity conservation, and water filtration. » This illegal trade undermines international and local commit- ments to sustainable development, biodiversity conservation and climate change mitigation and adaptation. » Illegal logging, fishing and wildlife trade have an estimated value of $1 trillion¹ or more per year. Most of the economic losses (more than 90 percent) comes from estimated ecosystem services that are not currently priced by the market. » The inability of current markets to value crucial ecosystem ser- vices is a major policy dilemma facing global biodiversity con- servation efforts including initiatives to combat illegal logging, fishing and wildlife trade. viii08 » Governments in source countries forego an estimated $7-12 billion each year in potential fiscal revenues that aren’t collected due to illegal logging, fishing, and, in some instances, wildlife trade. This shortfall in revenues hinders economic growth in source coun- tries and increases development risks and vulnerabilities beyond national borders. » Systematic corruption and weak governance across the public and private sectors enable illegal logging, fishing and wildlife trade. » Without greater investments and coordinated action at the local, national, and global levels, the plundering of natural re- sources will undermine economic growth and social stability in ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE LOGGING, ILLEGAL ILLEGAL LOGGING, FISHING, AND WILDLIFE TRADE LOGGING, ILLEGAL poorer countries. » International criminal organizations exploit low-risk, high-reward opportunities to conduct the multibillion-dollar illegal trade that is comparable in economic value and global scope to human and drug trafficking. » Despite important targeted efforts already underway, initiatives to combat the illegal activities pale in comparison to efforts against other transnational crimes. » Strong political commitment at the highest levels of government in source, transit, and demand countries is required to combat criminal activities, scale back corruption, take on powerful spe- cial interests, and change the incentives and behaviors that drive demand and supply for illegally traded wildlife, forest products, and fisheries. 09ix » Effectively addressing illegal logging, fishing and wildlife trade requires policies and actions to strengthen governance, leverage WORLD BANK GROUP REPORT OCTOBER 2019 OCTOBER BANK GROUP REPORT WORLD risk-based financial and customs tools, and establish a legal 2019 OCTOBER BANK GROUP REPORT WORLD and fiscal environment that bolsters private-sector investments and the use of certifiable trade mechanisms to promote sustain- able livelihoods. » Governments in source countries need to capture financial ben- efits from global ecosystem services such as carbon storage and biodiversity conservation, and promote legal and sustainable logging, fishing and wildlife trade to improve local livelihoods and increase their fiscal revenues. Definitions For the purposes of this paper, Ecosystem services and natural capital losses are difficult to the following definitions are used: estimate due to insufficient data and established methodol- ogies. Data and detailed analysis on illegal logging, fishing, and wildlife activities have not been systematically tracked and reported on at a global level. Existing estimates of illegal markets mostly focus on income and lost revenues, rather than estimating its full economic value. The estimates presented in this paper have a broader scope (larger than other estimates previously produced on the value of global illegal markets). To better understand the full impact illegal logging, fishing, and wildlife activities have on sustainable development, concepts and methodologies applied in natural capital accounting and used to estimate a nation’s wealth rather than simply their GDP was used (see World Bank – The Changing Wealth of Nations 2018). Estimation of ecosystem services losses allows for a more complete understanding of the rough order of magni- tude of illegal logging, fishing, and wildlife activities. Illegal Logging (EU Forest Law Enforcement, Governance and Trade (FLEGT) Facility 2019): The harvesting, processing, trans- porting, buying or selling of timber in contravention of national and international laws. For example, illegal logging in a protected area and trade of that timber product is an example of an activity considered in the calculation of economic losses estimated in this paper. Evaded taxes and royalties on logging done illegally (with- out the