9. WOULD WIDESPREAD CORRUPTION MAKE A WELL-REGULATED, LEGAL MARKET VERY DIFFICULT?

Currently, corruption is endemic along the entire chain of rhino horn supply, from the crime scene in the country of origin through the whole transit route and into the consumer countries. It embraces wildlife professionals, law enforcement agencies, customs officials, and many more, from low-level functionaries to people in positions of great power. In such an environment would the operation of a legal, transparent and well-regulated market be possible?

NO TRADE

Proponents of a legal trade often downplay corruption, but it is a major concern. 

In a legal trade environment, the spotlight would be keenly focussed on South Africa as the home of most of the world’s surviving rhinos. South Africa’s poor record of governance and corruption at the highest level under the country’s previous president has weakened virtually every aspect of society. Although there is promise of a turnaround, this remains an uncertainty and at best it is likely to take years to resolve to any significant degree. With the focus on re-establishing the functioning of the big parastatals, there is unlikely to be major time and effort invested in wildlife issues. 

The government and pro-trade lobby’s concept of a “transparent” central selling organisation (CSO) regulating rhino horn trade is little more than a pipe dream. Using the CSO of the global diamond industry as an example of how this might work is naïve and misleading as illicit diamond trading continues throughout the world, with conflict or “blood” diamonds still entering the market. If the comparatively well-resourced diamond industry can’t curb this, it is unlikely that a horn CSO would fare any better. 

The Rhinoceros DNA index system (RhODIS) is an excellent development in identifying the DNA of rhinos that have been poached. Since its inception, RhODIS has been able to link evidence in more than 120 court cases to rhino poaching crime scenes. The fact remains, however, that for as long as endemic corruption persists in Africa and Asia, people will forge documents and bribe and coerce officials to pass illegal horn through legal channels. In consumer countries, this would mean illegally procured horn being fraudulently sold as a legal commodity. An example would be Japan’s ivory market – through highly regulated, illegal imports remain a reality.

In a legal trade environment, a swift reaction to market conditions could theoretically help to match supply and demand, but only if illegal trading proved to be insignificant. This is unlikely to be the case. Also, too little is presently known about possible market dynamics to predict and/or enable such nimble maneuvering.

Furthermore, instead of suppressing stockpiling, a legal trade could equally cause a spike in poaching and stockpiling by cash-rich crime syndicates, who are playing a long game.

If increasingly effective protection of rhinos becomes a reality, it is reasonable to expect that rhino numbers would grow. The unintended consequence might be that it becomes more and more difficult to protect the increased population and that, perversely, poaching would become easier and therefore more attractive to criminals.

PRO TRADE

A legal trade would bring the sale of horn into the open. Unlike the black market, a legal trade would be transparent and tightly monitored at every step of the process.

It is accepted that corruption is an impediment to the smooth functioning of a legal trade. However, one way of regulating trade successfully could be via a central selling organization (CSO). All sales would be conducted through the CSO where volumes would be controlled and the legal provenance of horn would be assured. In effect the CSO would act as a broker funded through a commission structure. The CSO could be owned prorata by the owners of rhinos in the various range states. It would be important for all to participate to avoid independent selling against the interests of the CSO and its members.

Monthly sales could be held where horn would then be offered to a selected range of registered buyers at a particular price per parcel on a “take it or leave it” basis. It would not be an auction. All horn would be properly marked and have a DNA signature. Payment would be made to the certified suppliers and the horn immediately loaded on to an aircraft for export. There would be no room for laundering of illegal horn or corruption.

Given a legal trade, the trading partner countries would need to agree to close down their illegal trade. There would, of course, be some illegal trade, but in the face of a powerful CSO this would be negligible compared to the current situation as the risks to illegal traders would be that much higher. Although the CSO’s initial strategy might be to lower the price of horn to flush out speculators, the longer term objective would be to sell as much horn as is sustainably possible at as high a price as possible. 

With the correct permit systems in place and using technology like the RhoDis DNA database to track and identify the movement of horn, any laundering activities would be minimal.

A well-regulated buying and selling system for horn would mean that the balance of supply and demand could also be closely monitored to allow horn producers to react swiftly to changing market conditions. 

A regular, uninterrupted supply of horn that matched demand would reduce incentives to stockpile on the part of criminals.

Revenues from legal sales would pay for increasingly effective protection of rhinos, whether state or privately owned. This would serve to reduce poaching by driving up the cost to criminals of accessing horn. It has been suggested that if southern Africa were to sell 1,200 horns a year, this would inject as much as US$96 million into the regional economy.