Impacts of illegal wildlife trade on business – risks, but also opportunities
Illegal wildlife trade (IWT) is in the global spotlight thanks to its alleged role in triggering the coronavirus pandemic. It is sparking vivid debate among communities of experts not just in conservation, but in business, finance, technology, anti-corruption forces and law.
One such debate is taking place in the ranks of litigation service providers and economic crime experts of the International Academy of Financial Crime Litigators and IWT specialists at the Basel Institute on Governance. We have decided to publish a short series highlighting different expert perspectives on topics crucial to combating IWT.
In the article below, Dr. Timothy Wittig, Senior IWT Specialist at the Basel Institute on Governance, explores the impacts of IWT on business.
Risks – but also opportunities
Five years ago, illegal wildlife trade (IWT) was not on the radar of most companies. Wildlife protection was viewed as just a conservation issue, something for charities to take care of. Now it’s on everyone’s lips.
The covid-19 pandemic, likely triggered by illegally traded wildlife, has helped to propel the issue into the global spotlight. Fortunately, companies in the transportation and financial sectors had already started to recognise their exposure to the risks of being abused by wildlife traffickers.
IWT exposes companies to a host of risks, not only those directly associated with wildlife and its protection. Why? Because it significantly converges with money laundering, financial crime, drug trafficking, human trafficking and threat finance, as well as climate change and humanitarian welfare issues.
For example, heroin trafficking networks in East Africa are known to also be heavily involved in the ivory and rhino horn trades. Illegal logging virtually always overlaps with high-level corruption and kleptocracy, and is itself an important driver of climate change.
So as IWT converges with all of these issues, corporate risk managers are now realising that they need to include IWT in their risk analysis and mitigation processes. Until now, frankly, IWT has been a big blind spot.
These vulnerabilities are now being recognised in international policy and regulatory circles. The Financial Action Task Force (FATF), for example, has released guidance on tackling financial flows linked to IWT. The regulatory net is tightening.
On the business side of things, companies are under increasing pressure from investors and asset managers to mitigate risks related to environmental, social, and governance (ESG) issues. The pressure has increased with covid-19. Crucially, it includes ensuring integrity and sustainability throughout the company’s entire supply chain. Demonstrating that your company is not fuelling organised crime or contributing to habitat destruction – even down to raw material suppliers - is a big part of that.
Personally, I find IWT an incredibly rewarding field to work in because there are real opportunities to make a meaningful positive difference in the world.
One of the best specific examples is the United for Wildlife Transport and Financial Taskforces, a global initiative of the Royal Foundation of the Duke and Duchess of Cambridge. The Taskforces aim to mobilise the private sector against wildlife trafficking using high-level formal commitments backed up by the sharing of actionable intelligence.
The Taskforces were founded four years ago with12 companies, but now have expanded to include over 150 global companies from the banking, money and financial services, maritime shipping, airline, express delivery, and port operations industries. Just formally convening such a group around an issue like IWT is a major accomplishment.
More importantly together these companies have made huge tangible impact against IWT. Starting from near zero, they are now able to identify and mitigate IWT-related risks internally, share and action intelligence on IWT, and more broadly make active contributions to law enforcement and government efforts to stop global wildlife trafficking.
I have had the honour of working with the Taskforces since their inception as their head of intelligence and analysis. I can say from long experience that the secret to their success are all the unsung working-level heroes within these companies who have recognised the importance of IWT to their companies and to the world. Quietly and without fanfare, they have literally moved entire industries in a more sustainable direction.
Now supported by the Basel Institute’s IWT intelligence team, our job is to help these companies expand on this success.
Next up: tech firms and lawyers
Despite impressive progress against IWT in the financial and transportation sectors, the clear outliers in private-sector action against illegal wildlife trade are the big tech monopolies. Social media platforms act as a huge and largely unregulated online marketplace for illegal wildlife trade – even more so now that physical movement is restricted by pandemic lockdowns. Who will tighten the net here?
Perhaps lawyers can. General counsel offices of our partner companies in the Financial and Transport Taskforces are leading the way in using IWT intelligence as an opportunity to strengthen corporate risk management systems as well as to communicate overall sustainability principles.
Looking forward, private law firms can help their clients understand and manage the risks to their business posed by environmental crime.
And law professors can include illegal wildlife trade on academic curriculums – safe in the knowledge that this is an issue that, for companies at least, is only going to get more important.
To view the alternative perspective on this topic by Antenor Madruga, Partner at FeldensMadruga and Fellow of the International Academy of Financial Crime Litigators, see The Academy's website or download the PDF.
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