'Environmental crime' funds terrorism and is growing faster than global economy

Fire burns part of an estimated 105 tonnes of ivory and a tonne of rhino horn confiscated from smugglers and poachers at the Nairobi National Park near Nairobi, Kenya, April 30, 2016.
Siegfried Modola | Reuters

Here is an illegal industry growing three times as fast as the global economy: environmental crime.

A new report from the United Nations and INTERPOL says activities revolving around exploiting natural resources and pollution are becoming big business, and lining the pockets of international criminal organizations and terrorist groups.

Illicit hunting and trading of wildlife, illegal mining, logging, and even waste disposal, have become the fourth largest criminal business around the world, after drugs, arms, and human trafficking.

Together these illegal industries have risen by 26 percent since a previous estimate was made in 2014, and growth is continuing at an annual rate of 5-7 percent, according to a paper released this week, jointly produced by the United Nations Environmental Program and INTERPOL.

Valuing illegal activity is tough, but the latest estimate places it somewhere between $91 billion and $258 billion, annually.

These are not isolated crimes occurring on a small scale in individual countries, said the study's editor, Christian Nellemann, in an interview with CNBC.

Nellemann, who is the head of UNEP's Rapid Response Unit, said that as commerce has become global, criminal networks have globalized along with it.

Marine policemen inspect papers of migrant workers after a fishing boat arrives at a port in Thailand.
Chaiwat Subprasom | Reuters

They are able to exploit and piggyback on ever more sophisticated international shipping networks and logistics channels, and circumvent both local and international laws.

"We are not talking petty crimes here," Nellemann said. "We are talking large-scale, massive tax fraud, companies issuing falsified paperwork, small fleets of vessels transporting illegal cargo from Papua New Guinea or Indonesia to China."

There is scarcely a continent not somehow affected by the trade. Asia has become a particular hotspot both for demand and production, and Nellemann notes the 5-7 percent annual growth rate for the illegal industry tracks the growth rates of some Asian economies.

There has long been a huge market for wildlife products, where everything from tiger bones to ivory, and live birds have been bought for traditional medicines, food, pets and decorative art.

But somewhat novel in Asia is that parts of it have become dumps for various forms of waste — especially hazardous waste, and electronic waste, which is costly to dispose of in the developed countries of Europe or North America.

Tiger cub carcasses are seen in jars containing liquid as officials continue moving living tigers from the controversial Tiger Temple in the Kanchanaburi province, west of Bangkok, Thailand June 3, 2016.
Chaiwat Subprasom | Reuters

Criminals buy up electronic or hazardous waste from European or American clients, and use different tactics for circumventing laws preventing its transport to less regulated countries.

Old computers and electronics, for example, are sometimes transported as "second-hand goods," when really they are bound for dumps.

Also novel is the nexus of security threats and crime. The ongoing conflict in the Democratic Republic of the Congo, which Nellemann noted has claimed 7 million lives, is increasingly seen as a conflict driven by criminal interests, rather than as a political insurgency. The exploitation of resources there totals $722 million to $862 million annually. Only about two percent of that goes to armed fighters — the rest ends up in the pockets of organized crime.

The East African terror group Al-Shabaab, which has been linked to Al-Qaeda, drew somewhere around $250 million in funding from illegal charcoal in 2013 and 2014. And as is well known, ISIS is funding itself with oil.

Drug cartels in Latin America have entered the illegal logging and gold mining business in Latin America.

There are measures that can be taken. Nellemann expects this will require a single international effort run by a single agency, such as INTERPOL. So far the agency has had some successes. The report tells of one particularly large seizure of illegally logged wood in Venezuela, totaling about 20,000 truckloads.

Some efforts at the national level have also worked, though. The Brazilian government was able to reduce deforestation in its patch of the Amazon by 76 percent in five years, in part by sending SWAT teams into the jungle to raid illegal logging operations.

The report calls for the integration of INTERPOL officers in peacekeeping missions, and for greater information sharing among agencies and governments. Countries also have to agree to take environmental crime seriously, strengthen local laws, commit money to combat the problem, and increase consumer awareness of products that might be illegally obtained.