In a world of economic uncertainty, elephant ivory has become a new investment vehicle in China, sparking an extraordinary surge in the number of elephants being killed for their ivory.
A new ivory market investigation report by the International Fund for Animal Welfare (IFAW) shows that the legal sale of ivory stockpiles in 2008 has spurred the demand for ivory, particularly in China where ivory is increasingly coveted by wealthy Chinese as “white gold”.
“Elephant ivory has, in a manner of speaking, become a new currency in China,” said Grace Gabriel, Asia Regional Director for IFAW. “The escalating demand has sent the price of ivory soaring. Couple that with the strengthening of the Chinese Yuan (RMB) against an ailing US$ dollar and suddenly, buying illegal ivory in Africa and selling it at a huge profit in China becomes an extremely lucrative business.”
IFAW says the blame lies firmly at the door of the Convention on the International Trade in Endangered Species (CITES) which, in 2008, gave the go ahead for the legal sale of ivory stockpiles by four southern African countries to China and Japan.
Since 2009 when China took delivery of its purchase, the market for ivory in that country – legally traded or not – has spiralled. Worldwide seizures of illegal ivory have matched the trend with the media reporting that 5,259 ivory tusks (a whopping 23 tons) were confiscated in 2011 alone.
The Chinese regulatory system, introduced in 2004, and intended to strictly control the domestic ivory market in line with CITES required conditions, has been rendered virtually impotent against the demand for ivory.
“Of the 158 ivory trade facilities visited in five cities by Chinese experts, 101 did not have government issued licenses and were operating illegally. Among licensed facilities the majority abused the ivory control system in some way,” said Gabriel, “The illicit ivory trading activities in both unlicensed and licensed but non-compliant facilities, outnumbered properly legal ones nearly six to one (135/23)”.
IFAW’s 2011 survey (the fifth in Asia in 10 years) shows clearly how illegal ivory, once smuggled into China, is easily laundered through the legal market. The report also sheds light on the strong economic incentive for Chinese engaging in ivory trafficking.
While the wholesale price per kilogramme of ivory in RMB has tripled (¥4,500-¥15,000) from 2006 to 2011, the RMB is increasing in value against the USD. In the overseas market where ivory is sourced, the strengthened Chinese currency provides more purchasing power to Chinese buyers who convert RMB to USD for ivory purchases.
This, coupled with the ease with which smuggled ivory can be easily laundered in the legal market, means huge profits for criminals involved in illegal ivory trade.
“The CITES stockpile sales were supposed to reduce the illegal trade and the slaughter of elephants by saturating the market with legal ivory; in fact, the exact opposite has occurred,” said Gabriel.
“Legal ivory imports have provided opportunities for illegal ivory to be whitewashed in China; the insatiable demand for ivory as an investment has tripled the wholesale price of ivory; and currencies in flux have mixed to create a lethal combination that is decimating wild elephant populations,” she said.
Founded in 1969, IFAW saves animals in crisis around the world. With projects in more than 40 countries, IFAW rescues individual animals, works to prevent cruelty to animals and advocates for the protection of wildlife and habitats.