This blog has been prepared by Alya Nurbaiti, a consultant for the Basel Institute’s Green Corruption team. It is also published on the Targeting Natural Resource Corruption (TNRC) website, alongside numerous research papers and practical resources for more effective anti-corruption programming in relation to natural resources.

Financial investigations are essential for identifying and evidencing who pays bribes to whom, enabling investigators to trace, seize and eventually confiscate the proceeds and instrumentalities of environmental crimes. Such investigations also help to identify the high-level actors behind wildlife trafficking, illegal unreported and unregulated (IUU) fishing, illegal logging, illegal mining and other activities – illuminating who finances those crimes and who profits from them.

The use of financial tools emerged as the still-missing element in environmental crime investigations at an online discussion between members of the United Nations Convention against Corruption (UNCAC) Coalition’s Environmental Crime and Corruption working group. In that meeting in June 2022, the Basel Institute on Governance shared high-level learning on good practice from financial investigations and asset recovery research conducted under the TNRC project.

Following the money

Various bodies have reminded law enforcement worldwide about the importance of applying “follow the money” approaches in environmental crime investigations. Even focusing on the issue of illegal wildlife trade (IWT), this includes, among others:

• G20 Leaders addressed combating corruption related to environmental crime in 2017, resolving among other things to ensure that “investigations and prosecutions of all wildlife crimes, particularly those identified as result of seizures, extend, as appropriate, to potential corruption linked to the illegal trade in wildlife and wildlife products, including through the tracking of financial flows.”
• The Royal United Services Institute (RUSI), a British-based think tank, published a 2017 paper calling for the adoption of a systematic strategy to financially stifle the actors behind wildlife crimes, going beyond the low-level perpetrators.
• The UN General Assembly urged member countries “to amend national legislation...so that offences connected to the illegal trade in wildlife are treated as predicate offences [for money laundering],” in its 2019 Resolution 73/343. It reiterated and expanded this statement in its 2021 Resolution 76/185, which states that "crimes that affect the environment falling within the scope of the Organized Crime Convention" should be "treated as predicate offences".
• The Financial Action Task Force (FATF) released a study in 2020 which notes that IWT “is a major transnational organized crime that fuels corruption.” It laments that “countries are still rarely conducting financial investigations” in IWT cases, encouraging them to “conduct parallel financial investigations” and “explore other international mechanisms to aid in IWT-related investigations, such as UNCAC”. A similar study on different environmental crimes (forestry, mining and waste) was issued in 2021.
• The OECD recommended in 2020 that in order to increase the effectiveness of efforts to curb IWT in Southeast Asia, countries should conduct “anti-corruption investigations… on the back of arrests for wildlife crimes to identify and prosecute related criminal networks” and “[r]einforce the engagement of financial intelligence units in follow-the-money investigations related to wildlife crime.”

In contrast to these overwhelming exhortations to incorporate financial investigations in IWT cases, on-the-ground observations indicate that such investigations remain the exception rather than the norm. This dissonance has created numerous missed opportunities to tackle IWT and other environmental crimes and the related corruption and money laundering.

A tried-and-tested tool

The concept itself is nothing radical: that is, tracing funds linked to IWT and other environmental crimes back to the organised criminals and their facilitators – often corrupt politicians and public officials – further up the trade chain. Law enforcement has long used similar tools in combating other organised crimes, such as human or drug trafficking.

According to Juhani Grossmann, Team Leader of the Green Corruption programme at the Basel Institute on Governance, this should be a matter of extending these investigative tools to environmental crimes. Financial investigations should become the norm and not the exception.

Financial investigations are essential to identify and prove who paid bribes to whom, as well as to trace, seize and eventually confiscate the proceeds and instrumentalities of environmental crimes. They also help to identify the high-level actors beyond the poachers, loggers or fishermen caught red-handed – who finances the crimes and who profits from them.

During the discussion, UNODC Senior Anti-Corruption Advisor Tim Steele said criminals sometimes formed business-like structures, with different levels of responsibility to facilitate their activities. Legitimate businesses, Steele said, played an active role in forest crimes. In this area, corruption can influence laws and policy, such as shady deals to ensure legislation on forestry favours specific businesses or sectors. And the way to get to them? Financial investigations.

Boosting capacity

The biggest hindrance to the systematic implementation of financial investigations in environmental crime cases is often a lack of capacity to understand the tools and collect the data.

The panel noted that financial investigations might not need advanced databases and could start with software as general as Excel. But there is still a need for law enforcement officers to understand the variety of information sources available and know the most relevant tool to analyse them. Training for investigators and prosecutors is therefore much needed.

Manuel Medina, Intelligence Analyst at the Basel Institute on Governance, outlined the Basel Institute’s approach to bolstering the capacity for effective financial investigations into environmental crimes. He said the cornerstone of the Institute’s work rests on embedding financial advisors in relevant law enforcement agencies to mentor and assist financial investigations. An essential step in this approach is identifying which agency to engage with for the most impact.

Further, Medina said it was necessary to address the lack of systematic data collection in the field.

“Too often, investigations end at seizures and the information about financial investigations is not gathered, and thus cannot be analysed. It is essential to change mentalities and emphasise collecting data for analytical purposes,”

said Medina, also stressing the need for investigators to follow the value and identify where criminals make a profit.

Expanding intelligence

Also speaking at the discussion, Senior Intelligence Analyst Jenna Robertson of the Wildlife Justice Commission (WJC) explained how financial investigation of transnational organised crime could lead to the collection of key intelligence to conduct financial investigations.

Robertson said that financial investigations could, indeed, be daunting at first. But she insisted that it was essential for financial investigators to start small, saying: 

“Focus on one particular aspect of a case and then broaden the scope as the investigation progresses.” 

Sharing information

Last, there is a need to increase contact and information sharing between financial intelligence units (FIUs) and other public agencies with a law enforcement / wildlife and natural resource remit.

FIUs have the capacity and responsibility to analyse suspicious financial transactions, so this would be an important step in efforts to make financial investigations into environmental crimes the norm.