Category Archives: corruption/Illegal markets

Beauty Secrets: Donkeys Exterminated for their Skin Collagen

Over the past 6 years, Chinese traders have been buying the hides of millions of butchered donkeys from developing countries and shipping them to China, where they’re used to manufacture ejiao, a traditional Chinese medicine… Ejiao, in use for thousands of years, purportedly treats or prevents many problems, including miscarriage, circulatory issues, and premature aging, although no rigorous clinical trials support those claims. The preparation combines mineral-rich water from China’s Shandong province and collagen extracted from donkey hides, traditionally produced by boiling the skins in a 99-step process. Once reserved for China’s elites, ejiao is now marketed to the country’s booming middle class, causing demand to surge

Despite government incentives for new donkey farmers, farms in China can’t keep up with the exploding demand, which the Donkey Sanctuary currently estimates at 4.8 million hides per year. Donkeys’ gestation period is one full year, and they only reach their adult size after 2 years. So the industry has embarked on a frenzied hunt for donkeys elsewhere. This has triggered steep population declines. In Brazil, the population dropped by 28% between 2007 and 2017, according to the new report.

African populations are crashing, too, says Philip Mshelia, an equine veterinarian and researcher at Ahmadu Bello University in Zaria, Nigeria. After buying donkeys at markets, traders often drive large herds to slaughter, sometimes covering hundreds of kilometers with no rest, food, or water. Those transported by truck fare worse: Handlers tie their legs together and sling them onto piles or strap them to the top of the truck, Mshelia says. Animals that survive the journey—many with broken or severed limbs—are unloaded by the ears and tails and tossed in front of a slaughterhouse. Some meet their end in an open field where humans await them with hammers, axes, and knives.

For donkey owners, selling their animal means quick cash—now more than $200 in parts of Africa…

Ironically, the booming ejiao trade, along with a developing donkey dairy industry in Eastern Europe, has stirred scientific interest in donkeys.  Zhen Shenming, a reproductive biologist at the China Agricultural University in Beijing, says Chinese efforts are focused on increasing yields, for instance through artificial insemination…Chinese breeders are also testing new nutrition programs that expedite growth, leading to an adult-size donkey in only 18 months…

“They are very observant and sentient animals, and they create very strong bonds with other donkeys.” That’s one reason the current slaughtering practice, in which the animals often await their turn while watching other donkeys being beaten unconscious, slaughtered, and skinned is abhorrent.  “They’re certainly quite well aware of what’s happening and what’s to come,” McLean says. 

Excerpts from Christa Lesté-Lasserre Donkeys face worldwide existential threat, Science,  Dec. 13, 2019

Left to their Own Bad Devices: the Future of Ogoni Land in Nigeria

The decades-overdue clean-up of Ogoniland, after years of oil spills from the pipelines that criss-cross the region, is finally under way. But the billion-dollar project — funded by Nigeria’s national oil company and Royal Dutch Shell — is mired in allegations of corruption and mismanagement.  “We are not pleased with what is going on,” said Mike Karikpo, an attorney with Friends of the Earth International and a member of the Ogoniland team that negotiated the creation of the Hydrocarbon Pollution Remediation Project (Hyprep), the government body running the clean-up… 

Nigeria is Africa’s biggest oil producer, pumping out about 1.8m barrels per day. It provides roughly 90 per cent of the country’s foreign exchange and more than half of government revenues.  The clean-up began only the summer 2019, about a year after the first of an expected five tranches of $180m in funding was released to Hyprep. Mr Karikpo complains of a lack of transparency, alleging that planning, budgeting and awarding of contracts took place behind closed doors. Work started at the height of the rainy season, washing away much of the progress as contaminated soil collected for treatment was swept back into the environment…

Ogoniland, like the broader Niger Delta, has become more polluted and development has stalled, with little to show for the billions of dollars in crude that has been extracted. Critics have now accused Hyprep of being, like much of Nigeria’s oil sector, a vehicle for political patronage and graft. This year 16 companies were awarded contracts for the first phase of the clean-up, which — to the consternation of critics — focuses on the least contaminated parts of Ogoniland.

An investigation by the news site Premium Times found that almost all the companies were set up for other purposes, including poultry farming, car sales and construction, and had no experience of tackling oil pollution.  Meanwhile, insiders have questioned Hyprep’s capacity to handle such a massive project…

Shell and Hyprep have rejected the criticism.  Shell, which closed its Ogoniland operations in 1993, said it accepted responsibility “for spills arising from its operations”, but that some of the blame for the pollution must go to thieves who illegally tapped into pipelines and makeshift refining operations in the Delta’s creeks

Excerpts from Craft and Mismanagement Taint Nigeria’s Oil CleanUp, Financial Times, Dec. 29, 2019

How Sand Extraction Damages Ecosystems

The world uses nearly 50bn tonnes of sand and gravel a year—almost twice as much as a decade ago. No other natural resource is extracted and traded on such an epic scale, bar water. Demand is greatest in Asia, where cities are growing fast (sand is the biggest ingredient in concrete, asphalt and glass). China got through more cement between 2011 and 2013 than America did in the entire 20th century (the use of cement is highly correlated with that of sand).

Since the 1960s Singapore—the world’s largest importer of sand—has expanded its territory by almost a quarter, mainly by dumping it into the sea. The OECD thinks the construction industry’s demand for sand and gravel will double over the next 40 years. Little wonder then that the price of sand is rocketing. In Vietnam in 2017 it quadrupled in just one year.

In the popular imagination, sand is synonymous with limitlessness. In reality it is a scarce commodity, for which builders are now scrabbling. Not just any old grains will do. The United Arab Emirates is carpeted in dunes, but imports sand nonetheless because the kind buffeted by desert winds is too fine to be made into cement. Sand shaped by water is coarser and so binds better. Extraction from coastlines and rivers is therefore surging. But according to the United Nations Environment Programme (UNEP), Asians are scooping up sand faster than it can naturally replenish itself. In Indonesia some two dozen small islands have vanished since 2005. Vietnam expects to run out of sand this year.

All this has an environmental cost. Removing sand from riverbeds deprives fish of places to live, feed and spawn. It is thought to have contributed to the extinction of the Yangzi river dolphin. Moreover, according to WWF, a conservation group, as much as 90% of the sediment that once flowed through the Mekong, Yangzi and Ganges rivers is trapped behind dams or purloined by miners, thereby robbing their deltas both of the nutrients that make them fecund and of the replenishment that counters coastal erosion. As sea levels rise with climate change, saltwater is surging up rivers in Australia, Cambodia, Sri Lanka and Vietnam, among other places, and crop yields are falling in the areas affected. Vietnam’s agriculture ministry has warned that seawater may travel as far as 110km up the Mekong this winter. The last time that happened, in 2016, 1,600 square kilometres of land were ruined, resulting in losses of $237m. Locals have already reported seeing dead fish floating on the water.

 
Curbing sand-mining is difficult because so much of it is unregulated. Only about two-fifths of the sand extracted worldwide every year is thought to be traded legally, according to the Global Initiative Against Transnational Organised Crime. In Shanghai miners on the Yangzi evade the authorities by hacking transponders, which broadcast the positions of ships, and cloning their co-ordinates. It is preferable, of course, to co-opt officials. Ministers in several state governments in India have been accused of abetting or protecting illegal sand-mining. “Everybody has their finger in the pie,” says Sumaira Abdulali of Awaaz Foundation, a charity in Mumbai. She says she has been attacked twice for her efforts to stop the diggers.

Excerpts from Bring me a nightmare: Sand-Mining, Economist, Jan. 18, 2019

Viva Over-Fishing! Addicted to Over-Consumption of Fish

In 2015 world leaders signed up to a long list of sustainable development goals, among them an agreement to limit government subsidies that contribute to overfishing. Negotiators at the World Trade Organisation (wto) were told to finish the job “by 2020”. They have missed their deadline. Overfishing is a tragedy of the commons, with individuals and countries motivated by short-term self-interest to over-consume a limited resource. By one measure, the share of fish stocks being fished unsustainably has risen from 10% in 1974 to 33% in 2015.

Governments make things worse with an estimated $22bn of annual subsidies that increase capacity, including for gear, ice, fuel and boat-building. One study estimated that half of fishing operations in the high seas (waters outside any national jurisdiction) would be unprofitable without government support.

 Trade ministers were supposed to sort it all out at WTO meeting in December in Kazakhstan. But the meeting was postponed till June 2020. Moreover, the murky nature of subsidies for unregulated and unreported fishing makes their work unusually difficult. Governments do not have lines in their budget that say “subsidies for illegal fishing”, points out Alice Tipping of the International Institute for Sustainable Development, a think-tank.

Negotiators are trying to devise a system that would alert governments to offending boats, which would become ineligible for future subsidies. That is tangling them up in arguments about what to do when a boat is found in disputed territory, how to deal with frivolous accusations and how to treat boats that are not associated with any country offering subsidies.

When it comes to legal fishing of overfished stocks, it is easier to spot the subsidies in government budget lines, but no easier to agree on what to do about them. America and the European Union, for example, have been arguing over whether to allow subsidies up to a cap, or whether to ban some subsidies and take a lenient approach to the rest. The EU favours the second option, arguing that where fisheries are well-managed, subsidies are not harmful. To others this looks like an attempt to ensure any eventual deal has loopholes.

Further complicating matters is a long-running row about how to treat developing countries. All WTO members agree that some need special consideration. But as an American representative pointed out at a recent WTO meeting, 17 of the world’s 26 most prolific fishing countries are developing ones. That means broad carve-outs for them would seriously weaken any deal.

China, both the world’s biggest fisher and biggest subsidiser of fishing, has proposed capping subsidies in proportion to the number of people in each country who work in the industry. But it is the world leader here, too, with 10m at the last count (in 2016). Other countries fear such a rule would constrain China too little.

Excerpts from The World Trade Organization: What’s the Catch, Economist, Jan 4, 2020

Sea Turtle Trapped in Floating Cocaine Bales

Some Things Are Always the Same: Drug Trafficking from Netherlands to East Africa

Having fallen during the global financial crisis, production of hard drugs is now as high as it has ever been… In the rich world, too, drug use is climbing again… And in countries from eastern Europe to Asia, demand for recreational drugs is growing with incomes.  Most of these drugs have to be smuggled from places such as Afghanistan and Colombia to users, mostly in America and Europe.

Police from Britain and the Netherlands have cracked down on shipments through the Caribbean, so traffickers are moving their product through west Africa instead. That means that the violence and corruption that has long afflicted Latin America is spreading….The increase in production of drugs “probably affects Africa more than anywhere else”, says Mark Shaw of the Global Initiative against Transnational Organised Crime, a think-tank, because many African states are fragile. Smugglers easily bypass or co-opt their institutions and officials. Drug markets, like other forms of organised crime, thrive best in places where the governments cannot or will not resist them. Trafficking then makes weak, dirty institutions even weaker and dirtier.

Guinea-Bissau’s appeal is partly geographic. The country is a mere 3,000km from Brazil—about as close as Africa and South America get—and reachable by small aircraft fitted with fuel bladders. With over 80 islands, most uninhabited, it is easy to drop off drugs undetected, or to smuggle them in from boats. In the early days of the trade, when cocaine washed up on beaches, locals did not know what it was and used it as detergent or make-up. Now they know.  Guinea-Bissau’s politics are ideal for drug barons. Politicians need money and violence to gain and hold high office. Cocaine can pay for both.  Electoral campaigns involve hundreds of cars, huge wodges of cash and even helicopters, none of which is readily available in a poor country. 

Guinea-Bissau is not the only place in west Africa to be afflicted by cocaine. In February 2019,  nine tonnes were found in a ship in Cape Verde. In June police in Senegal seized 800kg hidden in cars on a boat from Brazil.  East Africa is plagued by heroin.

What are the consequences of the shift in smuggling routes? Drugs need not cause wars—if they did, the Netherlands, which produces much of the world’s ecstasy, would be a hellhole. But they do give people something to fight over, and bankroll armed groups that were already fighting for other reasons….Being a transit country has other downsides. Smugglers often pay their contacts in drugs to sell locally. The world’s second-biggest market for cocaine is Brazil, a major transit country. Heroin is a scourge in east Africa; crack cocaine bedevils west Africa….Mexico offers a glimpse of how drug-trafficking may further evolve. As demand in the United States has changed, due to the partial legalisation of cannabis and a surge in opioid use, traffickers have diversified. Tighter security on the border also favours heroin and fentanyl, which are less bulky. A truckload of marijuana is worth about $10m, says Everard Meade of the University of San Diego. $10m of cocaine would fill the boots of several cars. But $10m of heroin can be smuggled inside two briefcases.

So long as drugs are illegal, criminals will profit from them. Whatever the police do, cartels will adapt…In Britain some Colombians now run vertically integrated businesses—controlling supply at every level from production in the Amazon down to distribution in British cities… Italian traffickers have hired divers in Brazil to attach magnetic boxes filled with drugs to the bottom of ships, to be removed by a second set of divers when the ships arrive in Europe.

Excerpts from Drug Trafficking: Changing Gear, Economist, Nov. 23, 2019 

Dirty Little Secrets: Farming Tigers for their Meat and Bones

The area around the Golden Triangle Special Economic Zone (SEZ), a swathe of north-western Laos..is famous for its tigers. Not wild ones, which have nearly all been killed in Laos, but captive animals, illegally trafficked and bred for their parts, which sell for thousands of dollars. 

A century ago, around 100,000 tigers roamed the world’s jungles. Because of habitat loss and poaching, there are fewer than 4,000 wild ones today. More than twice as many are being held in at least 200 farms across East and South-East Asia. These range from small backyard operations to enclosures breeding hundreds in “battery-farm style”, says the Environmental Investigation Agency (EIA), an international NGO focusing on wildlife crime.  Breeding tigers and trading them and their parts is banned by the Convention on International Trade in Endangered Species, but this treaty is widely flouted in Asia because of poor law-enforcement and high demand for tigers. Belief in their medicinal properties has deep roots, especially in China. Tiger-bone wine, skins and jewelry featuring claws and teeth are status symbols. In Laos, carcasses can sell for as much as $30,000, officials reckon.

Some criminals choose to operate in Laos because…the government of Laos is allegedly complicit. America’s State Department recently reported that Laos was one of three countries that had recently “actively engaged in or knowingly profited from the trafficking of endangered or threatened species”. In 2016 an investigation by Britain’s Guardian newspaper found the Lao government had licensed two tiger farms and cut lucrative deals with wildlife traffickers smuggling millions of dollars’ worth of endangered animals—including tigers—through Laos.

The government has a 20% stake in Golden Triangle SEZ, a resort complex run by Zhao Wei, a Chinese businessman whom America’s Treasury last year accused of engaging in illegal trade in wildlife, as well as trafficking drugs and people (he denies the allegations). With its flashy casino and hotels, the SEZ is designed to attract Chinese tourists (gambling is illegal in China). In 2014 and 2015, EIA investigators found that restaurants in the SEZ were advertising “sauté tiger meat” and tiger-bone wine; shops were selling tiger skins and ivory tusks. Near the casino, 26 tigers stalked the length of their enclosure, destined for the slaughterhouse. Their bones were to infuse rice wine. Since the EIA’’s report, these establishments have closed.

Excerpt from: Tiger Farms in Laos: Law of the Jungle, Economist, Nov, 30, 2019

The Jihadist Mafia: Controlling the Gold of Sahel

Burkina Faso is struggling to contain a fast-growing jihadist insurgency. Along with Mali and Niger, it has become the main front line against terrorists in the Sahel, a dry strip of land that runs along the edge of the Sahara. This year alone the conflict has killed more than 1,600 people and forced half a million from their homes in Burkina Faso….A worrying new trend is a battle by jihadists and other armed groups to take control of the region’s gold rush.

Although gold has long been mined in the region…it has boomed in recent years with the discovery of shallow deposits that stretch from Sudan to Mauritania. International mining companies have invested as much as $5bn in west African production over the past decade, but the rush has also lured hundreds of thousands of unsophisticated “artisanal” miners. The International Crisis Group (ICG), an NGO, reckons that more than 2m people are involved in small-scale mining in Burkina Faso, Mali and Niger. In total they dig up 40-95 tonnes of gold a year, worth some $1.9bn-4.5bn.

Artisanal Mining’s Claustrophobic Conditions

This rush—in a region where states are already weak and unable to provide security—has sucked in a variety of armed groups and jihadists, including the likes of Ansar Dine and Islamic State in the Greater Sahara…The jihadists probably have direct control of fewer than ten mines…But they have influence over many more. In some areas artisanal miners are forced to pay “taxes” to the jihadists. In others, such as Burkina Faso’s Soum province, the miners hire jihadists to provide security… Other armed groups such as ethnic militias are also in on the bonanza and collect cash to guard mines. International mining firms may also be funding the jihadists by paying ransoms for abducted employees or “protection” money to keep mining, according to a study published by the OECD, a club of mostly rich countries.

For the moment much of Burkina Faso’s artisanal production is sneaked into Togo… Togo does not produce much gold domestically but it sent more than 12 tonnes of gold to Dubai in 2016. Gold is also taken out of the Sahel through major airports in hand luggage. 

The resource curse: How west Africa’s gold rush is funding jihadists, Economist, Nov. 16, 2019