-:HSTCQE=V\YWWV:

isbn 978-92-64-17422-1 97 2012 05 1 P

OECD Trade Policy studies

illegal Trade in Environmentally sensitive GoodsContents

Executive summary

Chapter 1. Defining illegal trade in environmentally sensitive goods• Wildlife• Timber• Fish• Hazardous waste• Chemicals

Chapter 2. Key drivers and main impacts of illegal trade• What drives illegal trade? • Enabling environments for illegal trade• The impacts of illegal tradeAnnex: The role of China

Chapter 3. Assessing illegal trade flows based on customs and licensing scheme data

Chapter 4. Licensing and trade controls for environmentally sensitive goods• Licensing systems for wildlife – CITES• Licensing system for timber – FLEGT• Licensing system for fish – CCAMLR Catch Documentation Scheme• Licensing system for chemicals – the Rotterdam Convention• ODS and the Montreal Protocol• Licensing system for waste – Basel Convention

Chapter 5. The effect of domestic environmental policies on illegal trade• The establishment of property rights over environmental resources• Taxes, charges and payments for environmental resources

Chapter 6. Illegal trade in environmentally sensitive goods: Conclusions

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OECD Trade Policy studies

illegal Trade in Environmentally sensitive Goods

Please cite this publication as:

OECD (2012), Illegal Trade in Environmentally Sensitive Goods, OECD Trade Policy Studies, OECD Publishing. http://dx.doi.org/10.1787/9789264174238-en

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OECD Trade Policy Studies

Illegal Trade in Environmentally

Sensitive Goods

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ISBN 978-92-64-17422-1 (print) ISBN 978-92-64-17423-8 (PDF) Series: OECD Trade Policy Studies ISSN 1990-1542 (print) ISSN 1990-1534 (online)

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Please cite this publication as:OECD (2012), Illegal Trade in Environmentally Sensitive Goods, OECD Trade Policy Studies, OECD Publishing.http://dx.doi.org/10.1787/9789264174238-en

FOREWORD

OECD TRADE POLICY STUDIES: ILLEGAL TRADE IN ENVIRONMENTALLY SENSITIVE GOODS © OECD 2012 3

Foreword

The objective of this report is to provide an overview of the economic and policy issues involved in illegal trade in environmentally sensitive goods and to highlight a set of key policy messages for OECD and non-OECD governments. The work has been

overseen by the OECD Joint Working Party on Trade and the Environment (JWPTE).

When taking forward the planned activity, the JWPTE agreed that the most added value from the work would be realised by focussing on selected cross-cutting issues,

illustrated by examples belonging to different types of illegal trade flows in environmentally sensitive goods such as wildlife, timber, fish and fish products, chemicals and hazardous waste.

Examining the impacts of trade in environmentally sensitive goods, including its economic significance and environmental consequences, was the core objective of this

work. The extent to which customs and licensing-scheme data analysis can be used to assess illegal trade was also examined by the group. In addition, the activity carried outunder the guidance of the JWPTE aimed at better understanding the role of different

broad types of policy instruments in addressing illegal trade in environmentally sensitive goods.

The publication is based upon a set of papers prepared by experts from Chatham

House (U.K.) The main contributors were Duncan Brack, Jon Buckrell, Alison Hoare and Sam Lawson. The assistance of Šárka Svobodová (OECD Secretariat) in the preparation of the final manuscript is gratefully acknowledged.

TABLE OF CONTENTS

OECD TRADE POLICY STUDIES: ILLEGAL TRADE IN ENVIRONMENTALLY SENSITIVE GOODS © OECD 2012 5

Table of contents

Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter 1. Defining illegal trade in environmentally sensitive goods . . . 13Wildlife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Timber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Fish . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Hazardous waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Structure of the publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Chapter 2. Key drivers and main impacts of illegal trade . . . . . . . . . . . . 25Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26What drives illegal trade? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Enabling environments for illegal trade . . . . . . . . . . . . . . . . . . . . . . . . 32The impacts of illegal trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Annex 2.A1. The role of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Chapter 3. Assessing illegal trade flows based on customs and licensing scheme data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Data from customs and licensing records . . . . . . . . . . . . . . . . . . . . . . . 61Customs data from importing and exporting countries . . . . . . . . . . . 65Comparing data from within licensing schemes and MEA reports . . 71Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Chapter 4. Licensing and trade controls for environmentally sensitive goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80Overview of licensing systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

TABLE OF CONTENTS

OECD TRADE POLICY STUDIES: ILLEGAL TRADE IN ENVIRONMENTALLY SENSITIVE GOODS © OECD 20126

Licensing systems for wildlife – CITES . . . . . . . . . . . . . . . . . . . . . . . . . . 86Licensing system for timber – FLEGT . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Licensing system for fish – CCAMLR Catch Documentation Scheme 97Licensing system for chemicals – the Rotterdam Convention . . . . . . 100ODS and the Montreal Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Licensing system for waste – Basel Convention . . . . . . . . . . . . . . . . . . 107Main lessons from licensing and concluding remarks . . . . . . . . . . . . 109Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Chapter 5. The effect of domestic environmental policies on illegal trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122The establishment of property rights over environmental resources 123Taxes, charges and payments for environmental resources . . . . . . . 129Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Chapter 6. Illegal trade in environmentally sensitive goods: Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Tables

2.1. Types of impacts examined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.2. Estimates of illegal production and trade . . . . . . . . . . . . . . . . . . . . 373.1. Trade in ramin sawn timber from Indonesia to

Chinese Taipei, 1998-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633.2. Exports of ramin sawn timber to Chinese Taipei, 2005-07 . . . . . 643.3. Possible causes of discrepancies in import-export data . . . . . . . 663.4. Import-export data discrepancies: Selected cases

(tonnes of CFCs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673.5. Trade statistics for exports of logs (HS4403) from Tanzania

in 2007 (cubic metres) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703.6. Avoiding discrepancies in legal trade data . . . . . . . . . . . . . . . . . . 713.7. Total imports and exports reported between 1997 and 2002 . . . 733.8. Total imports and exports reported between 1997

and 2002 (MT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Figures

3.1. Timber exports from Tanzania to China and Hong Kong, 2003-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

3.2. Comparison of trade statistics for trade in timber from Tanzania to China and Hong Kong, 2003-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69