How financial firms can help stop the next pandemic in its tracks
Evaluating suspicious financial flows can help curb the illegal wildlife trade
The illegal wildlife trade has long been viewed as just another conservation issue, but the onset of a global pandemic has shifted expert focus from merely preserving species for future generations to assessing the effect of the trade on human health.
According to a recent report by the Financial Action Task Force (an intergovernmental body that develops policies to combat money laundering), annual proceeds from the illegal wildlife trade range between $7bn and $23bn. This figure is compounded by the economic and social devastation brought on by animal-to-human viral transmissions, such as the coronavirus.
While many associate the illegal trade with rhinos, elephants and pangolins, activity is certainly not limited to these animals. Exotic bird trafficking is prevalent in South America, owls are extremely popular in India, and there is a growing demand for endangered glass eels from Europe. Essentially an opportunistic crime, markets or “little economies” tend to develop around specific and emerging products.
Key operating tactics have been noted by investigators and the sad reality is that poachers are usually from vulnerable communities, living below the poverty line. Local syndicates are ideally positioned to exploit these individuals to obtain what they need. Following this, illicit goods are moved to a transit or destination country, often stored alongside legitimate products. Criminals have been known to hollow out timber and place ivory inside, disguising cargo as perfectly “normal” shipments.
In most instances corruption features prominently throughout the illegal wildlife trade value chain. For example, officials altering origin countries in transportation documentation, lowering suspicions and ensuring that end products enter relevant markets as quickly as possible.
The abalone (perlemoen) trade involves layers of complex syndicates, all contained within a larger structure. SA loses billions of rand per year as a result of illegal harvesting and related activities, one of which is the manufacture of drugs, as this highly desired invertebrate is used as a barter for precursors to methaqualone and methamphetamine.
However, the industry is gaining more insight into the illegal wildlife trade and the individuals behind it. Traffic, a leading non-governmental organisation (NGO), recently interviewed more than 100 criminals convicted of wildlife crimes hoping to learn more about motives and common modi operandi. Those brought to book are usually the ones who ''pull the trigger”, so to speak, and catching the kingpins of operations is therefore a far more difficult challenge. Those higher up are usually reluctant to speak out for fear of the negative repercussions.
While protecting natural resources and environmental governance is central to any organisation’s sustainability strategy, financial institutions are especially equipped to take it one step further, by playing a role in pinpointing suspicious transactions. Financial investigators can also assist in gathering the evidence required for successful prosecution.
There are various obstacles to cracking down on wildlife criminals, namely a lack of resourcing and the fact that priority is given to other transnational crimes. It is important to note that all of these crimes do converge to an extent, and that targeting wildlife crimes frequently exposes other illicit activities.
The question remains: how can financial institutions (particularly those operating across Africa) take effective action against the illegal wildlife trade? What is the best approach to helping protect biodiversity, economies and livelihoods, and prevent the spread of disease and subsequent collapse of health systems and other government structures?
First and foremost, banks and other such institutions must fully understand the risks they face and potential exposure to the trade. United for Wildlife, a forum with more than 170 members comprising financial institutions, transport companies and NGOs led by the duke of Cambridge and the Royal Foundation, has developed a bespoke “tool” member institutions can use to assess their risk. Once this is established, risk mitigation must be prioritised — assessing, identifying and addressing exposures.
Lastly, actively participating in public-private partnerships and forums — such as the SA Anti-Money Laundering Integrated Taskforce, United for Wildlife, Focused Conservation and the Basel Institute on Governance — ensures intelligence, typologies and trends can be shared and used as crucial indicators when evaluating suspicious financial flows and enhancing existing controls.
The key word here is “shared”; innovative measures and a willingness to co-operate with other organisations in the financial sector is one of the best ways for the illegal wildlife trade to be successfully controlled. It is time to stop beating about the bush and combine all available resources, technological and otherwise, for the sake of both humans and animals.
• Venter is a specialist spokesperson with Absa.
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