Opinionista Colin Bell 5 February 2014

Rhinos: It’s time for Plan B

In public debates about how to save our rhino, those who advocate ending the ban on trading their horns fail to acknowledge (if you'll excuse the metaphor) the elephant in the room.

They also seem to be very jaundiced economists. Not least among them is Ivo Vegter (Daily Maverick, 21 January 2014). Economics is as much an art as a science, and history is full of examples of the planet’s most brilliant economists making some of the world’s most disastrous economic and financial decisions. The tragedy of the horn debate is that, for reasons I will point out, highly respected rhino custodians (park authorities, field rangers, anti-poaching, monitoring teams) and even politicians and scribes like Vegter, have embraced a failed, private-sector-driven, pro-trade economic model as the answer to the rhino crisis.

I think there are two reasons for this. The first is a constant public engagement by a few academics and private rhino farmers who stand to make or lose a fortune if trade in rhino horn is legalised or not. The stock of just one of these rhino farmers is worth billions or zero, depending on the outcome of this debate.

The second reason is a misunderstanding of the difference between successful policies to save rhinos pioneered by environmentalist Dr Ian Player in the past and conditions today in the face of rampant poaching. Vegter raises the standard pro-trade argument that “if the (rhino horn sale) experiment fails, there is no real downside”. In my 35 years in the wildlife industry I have seldom seen a more naive statement. The replacement of rhino in the wild with rhino farmed like cattle is, in my opinion, a definite downside. The idea that selling lopped-off horns from farmed rhinos will curb poaching is untested, unproven, unlikely and something pro-traders avoid like that proverbial elephant in the room.

Unfortunately we do not get a second chance if we get the economics of rhino trading wrong; rhino in the wild will be gone. So we have to get it right and there’s no room for experiments.

Let’s look at the economics. Pro-traders argue that supply of rhino horn can equal demand through free-trade pricing. This may work for large, complex and visible items like Ferraris, but it has not worked for other consumer goods where counterfeiters thrive and expand markets by attracting new buyers to the market by selling goods at discounted prices.

With the real cost of obtaining a rhino horn being merely the cost of a bullet and a hacksaw, there will always be too much of a price difference between the legal selling price of a rhino horn and the cost of poaching that horn. To assume that free-trade pricing economics will stem demand and solve the poaching crisis is nonsense. That sort of theory doesn’t stick when criminal poaching syndicates and the rogue militia have the ability to expand markets by supplying discounted goods and perverting the legal market.

The pro-trade price theory simply has not been proven – it is pure conjecture nor does it take into account the massive potential size of the market. The counter-argument (speaking to my real concern) is: what if the demand for rhino horn is much greater than supply? With close to a billion potential Asian consumers, this could easily become the reality, especially when criminal syndicates can induce increased demand by operating in the grey markets at prices below those set by the central selling organisation. Then what? In my view, the horns of just 25,000 rhinos simply cannot satisfy the demand from just a million, let alone a billion or more potential Asian consumers.

Vegter cites examples of ostriches, crocodiles, vicuñas as successes that rhino policies must copy in order to ensure rhino survival. I’m not convinced that these are comparable examples, as none show the same relative scarcity levels based on values attached to body parts. Tigers and elephants do, and we’ve seen what trade in their parts has done to wild populations. If trading were the simple answer for all wildlife crises, why don’t we try to breed and trade tigers (or maybe even wild dogs) out of their critical status?

Drawing a comparison on the potential of breeding rhinos in the same way as ostrich, vicuña and crocodile is, in my view, a flawed assumption. Ostriches and crocodiles are bred commercially almost in the way that domestic poultry is bred; laying large clutches of eggs with short gestation periods. Rhinos, on the other hand, have an extremely long gestation period and will only breed after long carving intervals.

The pro-traders propose that the way to conduct rhino sales is via a De Beers-type Central Selling Organisation (CSO). There are many economists, traders and merchant bankers out there who’ll tell you how cartels serve only their own narrow interests (rhino farmers?) rather than the majority of stakeholders. The De Beers CSO made money for their vested interests, but in the process certainly didn’t stop ‘blood diamonds’ or illegal parallel markets.

Well-organised criminal syndicates are extremely clever and innovative… they’ll find every loophole to work around and become enriched by a rhino-horn CSO, which will merely provide a legal platform for them to launder horn, as happened with ‘blood diamonds’. And, given the current poor delivery record of the South African bureaucracy and policing services, we have to ask whether our authorities would really be able to run a sophisticated CSO system.

But here’s the crux of the matter. Current international legislation clearly states that there can be no trade in rhino horn. Surely, then, as is the case with all legal and legislative parameters, the onus is on the pro-trade lobby to prove that trading of rhino horn will unequivocally work and that changing the laws will not be detrimental to rhino populations?

The pro-trade lobby also needs to demonstrate that changing the legislation will largely do away with poaching and the illegal trade. This has clearly not yet been proven and current pro-trade modeling glosses over these vital areas by making basic assumptions.

We also need to factor in that South Africa has little chance of getting any application for approved seller status through CITES in the foreseeable future, no matter how hard we lobby. The earliest SA can submit such a proposal for change is 2016, and this merely sets in motion a whole range of bureaucratic procedures and legislative measures that then have to be satisfied before a vote takes places. Any change then requires a 75% majority.

Given South Africa’s current administrative malaise, it’s far from meeting the extensive CITES requirements and would need unprecedented coordination to achieve this.

Approval to trade rhino horn is highly unlikely and even if South Africa succeeds, sales may only be made to CITES-approved Purchaser Nations. The two most likely applicants, China and Vietnam, have little or no chance of getting such approval without massive internal legislative and law enforcement upgrading. Are we going to waste years of haggling for a slim chance of ever getting trade introduced?

With this protracted process in mind, I’m surprised that South Africa has no ‘Plan B’, because it’s going to need one. My suggestion is that all sides get together to create a strategy that’s a wide-ranging, multi-faceted approach covering the entire scope of the crisis to ensure that rhino have a chance of surviving in the wild. Here’s my stab at it:

To avoid the poaching avalanche, we declare all forms of trade in rhino products illegal. This means we have to switch mindsets from creating value from rhinos to taking away all their value in order to save them in the wild. Rapidly increasing rural populations, together with the likes of criminal and terrorist syndicates, have changed conditions on the ground from when Dr Player and his teams were in the trenches saving the rhino. The difference from those days to now is that putting a price on rhinos made them valuable enough to buy, breed and keep, ensuring their survival. Putting a price on rhino horn today will make rhinos valuable enough to kill, ensuring their extinction. It’s a big ask for everyone to change mindset and direction, but the horn must become worthless for rhino to survive in the wild. Of course it’s easier said than done, but we have to start by sending a clear message to the markets by minimising value through a blanket ban on all trade. We can then work on reducing demand through the local and consumer-country media, increasing security, targeting the middlemen, rewarding whistleblowers, enhancing policing and prosecutorial effectiveness and international co-operation.

We have to give General Jooste’s anti-poaching team time to get fully trained-up and place an iron fist over southern Kruger, then expand that to cover all of Kruger. The same no-nonsense attitude needs to prevail in other protected areas. There are reserves in the country that have not had a single rhino poached because of their potent intelligence and effective anti-poaching systems. This needs to be replicated throughout South Africa. And we have as yet not used the full capability of the military.

Very little has been done to target the middleman. They’re the Achilles heel in the poaching chain and could be the syndicate’s weakest link. They pay poachers to kill rhino and export the horns to Asia. Currently, middlemen are operating relatively unhindered from inside Mozambique and even from within South Africa. And there can’t be too many of them. Some are not hard to spot. Many believe they’re untouchable and show off their wealth with expensive new cars, luxury housing and consumer products. Without them the whole poaching chain would start to implode.

Offer rewards for information, do lifestyle audits and get the taxman working on suspects. Communities will give information if the rewards for poaching information are greater than what they earn from poaching. In addition, there are laws and processes in Mozambique that allow assets and possessions to be confiscated immediately without going through lengthy court cases if there is reasonable evidence. There are reputable people with the necessary skills, expertise and contacts who are prepared to tackle this problem if they’re given the go-ahead and budget.

South Africa’s tourism and wildlife policies have often not sufficiently included rural communities living alongside national parks into their business models and it is from these communities that many poachers come. Many wildlife areas are surrounded by rapidly increasing rural populations coupled with increased levels of extreme poverty. Innovative policies and plans must be put into place to integrate these communities into the business models that govern our wildlife and tourism industries. As long as these neighbouring communities remain marginalised, they’ll seek to claim wildlife, either in their cooking pots or through illicit activities.

In order to redress this, I propose the creation of a ‘Natural Capital Fund’ to:

  • bolster conservation and anti-poaching work, remunerate and uplift communities who live alongside parks and reserves uplifting their lives and
  • pay for information leading to the arrest of the middlemen and poachers.

The South African tourism industry generates around R100 billion a year. My proposal is that a 1% levy is charged on all tourism accommodation and related services to support this ‘Natural Capital Fund’. This could generate as much as R1 billion a year. Getting tourism industry buy-in would take some discussion and persuasion, but it would be possible if there were leadership and the will. In my experience, tourists do not mind paying additional money if they know it’s going to a worthy cause.

This ‘Natural Capital Fund’ could be administered on an annuity-type basis and we could get one of South Africa’s large corporate investment houses involved as part of their environmental commitment. We could also approach the corporate world for initial donations to get the ball rolling and top up this fund through fund-raising campaigns aimed at private citizens and profiled by well respected individuals and suitable celebrities. The myriad rhino conservation NGOs that have sprung up should be encouraged to pay their proceeds over to this fund. The combined efforts would be to get the fund to generate more than R1 billion a year. The funds could be distributed through an impartial and respectable NGO so that the money is spent wisely, effectively and accounted for.

We will have to engage with the Mozambican authorities more effectively to address policies that will reduce poaching. The Natural Capital Fund could help speed up negotiations and ease some of the community issues along Kruger’s eastern boundaries (and will help ferret out the poaching middlemen). SA needs to get the Mozambican authorities to close the loopholes in their ports and airports. If we don’t have progress with the Mozambican authorities, the rhino issue should then be elevated to Presidential priority level (and with Vietnam) to speed up agreements and implement effective policies.

International conservation agencies, governments and NGOs must put greater emphasis on demand-reduction strategies and spread awareness that horn has no medicinal properties. These efforts must be significantly increased, using all platforms, especially the social media and celebrities. The current horn consumption patterns in Vietnam are not based on age-old traditional practices. They are very recent behaviours that have followed the economic boom. Global political and economic agencies must also put further pressure on China, Laos and Vietnam to step up measures against users and criminals. China and Vietnam are states heavily controlled by politburos where a very small number of people effectively dominate the country. These influential few can effectively shift public demand, as happened with the recent Chinese ban on serving shark fin soup at official banquets and the resulting drop in overall demand.

Additional effort needs to be put into standardising wildlife legislation and criminal sentences around the continent as well as strengthening policing and prosecutorial capacity. In most cases, current criminal sentences are inappropriate to the point of not sending a clear message that wildlife trade is a crime, let alone providing any deterrent.

We need an Elon Musk/Steve Jobs-type of left-field thinking to ensure that technology is created to help monitor and protect vast wildernesses such as Kruger. Drones that work, Google Earth that assists anti-poachers and counters poachers as well as other high-tech solutions would be a boon and we are capable of making them.

The above list is far from exhaustive and I’m sure that our conservators and rhino experts can add many more, better points to the list.

Ivo Vegter and the pro-trade lobby concede that trading rhino horn would not necessarily reduce poaching in Africa and furthermore, some pro-traders concede that their policies may result in rhinos becoming extinct in the wild and only being found on well-protected farms. Is this what we want?

The bottom line is: which is the safer bet – test the gluttony of market demand, or get together to create an effective and risk-free Plan B with no trade, ensuring that rhinos do survive in the wild? In my view, we cannot let rhinos become extinct in the wild and South Africa become merely a ‘Big 4’ tourism destination through risky economic policies. DM

Colin Bell is a tourism professional with 35 years of experience and co-author of “Africa’s Finest” a new book out on the good, the bad and the ugly of the tourism industry (www.africasfinest.co.za). His operations have successfully re-introduced rhino into the wilds of Botswana and pioneered sustainable partnerships with rural communities in Namibia that ensure that rhino thrive outside of protected areas.