Submission to the Parliamentary Portfolio Committee on Water and Environmental Affairs
 in response to a request for written comments (see Appendix)

Rhino poaching
A threat to hard-won population increases achieved by conservation authorities
Preamble
	We Wildlife Ranching South Africa (WRSA) Private Rhino Owners Association (PROA)
– are proud of the major conservation achievement of South Africa in rescuing southern white rhino from the brink of extinction at the turn of the last century;
– take note that all of the populations of southern white rhino established in all other countries are derived from South Africa’s white rhino population;
– deplore the current situation where the value of this conservation achievement is in jeopardy; 
– observe that the loss of rhinos to illegal hunting in South Africa is escalating despite the significant expenditure by government and citizens on law enforcement;
– calculate that the present rate of illegal hunting is unsustainable and that the rhino population has begun its decline to extinction;
– estimate that, at the current rate of increase of illegal hunting, rhinos will effectively become extinct before 2020;
– are aware that this is taking South Africa away from the goal of increasing rhino numbers, expanding the rhino range and creating an enabling environment for investment in rhinos; 
– estimate that the budgetary provision required to contain the illegal killing and trade exceeds any reasonable amount that might be expected from government, private sector or donor funds;
– believe that South Africa should adhere to its proven principles of sustainable use by placing financial value on species and enabling its people to realise that value;
– emphasize that legal sales of rhino horn would not only meet protection costs but would ultimately reduce them, ensure the survival of the rhino and provide substantial returns to the primary stakeholders in rhino conservation in South Africa;
– highlight the fact that rhinos do not have to be killed to supply a legal rhino horn trade;
– recognise that the present CITES Appendix I listing of black rhino and annotated downlisting of white rhino to Appendix II precludes a legal trade in rhino horn;
– conclude that, unless there are radical changes in the approach to rhino conservation, the future of black and white rhino populations in South Africa is in jeopardy.

Lessons from international trade regimes
	Clear lessons emerge from an examination of trade regimes which have attempted to prohibit trade in valuable commodities.  Prohibition of alcohol in the USA from 1920-1933 was a failure and current attempts to stop the international drug trade are equally ineffectual.
(1)	Where there is an established demand for a high-valued product, it will reach the end-user regardless of any trade ban established under an international treaty or national legislation;
(2)	There are no deterrent effects in legislation that alter this process;1 
(3)	Invariably governments underestimate the costs of the intensive law enforcement which is required to make such bans effective;2
(4)	Such trade bans lead automatically to organised crime and create black markets that compete with the formal economy;
(5)	Many people believe that if the heads of crime syndicates (‘Mafia bosses’) can be arrested and imprisoned it will solve the problem.3  It won’t because the illegal trade is also a ‘cottage industry’.  Although prohibition regimes tend to be a boon to organized crime, they also increase the number and types of people involved in illicit production and distribution.
(6)	Any successes in reducing the supply of the commodity to the black market makes the problem worse by driving up the price and increasing incentives for illegal activities;
	Ultimately it was recognized with the repeal of prohibition that the means by which the law was to be enforced was not pragmatic and that in the majority of cases the legislature did not match the general public opinion.
	Legalizing alcohol and then regulating it accomplished what most temperance and prohibition  supporters claimed was impossible: alcohol moved from being a scandal, crisis and constant front-page news story to something routine and manageable, a little-noticed thread in the fabric of American  life.  Since 1934, alcohol regulation has quietly and effectively organized and managed the production, distribution and sale of alcohol, as well as public drinking.
	The de facto situation in the illegal drug trade is that many countries are moving away from enforcing the draconian requirements of the UN Single Convention of  1961 which established the current system of global drug prohibition.  The rise of illegal drug use in the 1960s and 1970s and the persistence of use since 1980 have created huge pressures on the drug prohibition systems in many Western countries.  Different countries  have responded to drug use and abuse in a variety of ways.  Global drug prohibition is best understood as a continuum – with a harsher more punitive and criminalized end (as in the US)4 and a more  tolerant, regulated and public health-oriented end (as in the Netherlands, Switzerland and growing numbers of  European countries).
Assessment of the status quo for rhino
	Based on the official statistics, the rate of loss increased from 1 rhino every 4 days in 2008 to 1 rhino every 3 days in 2009, to 1 rhino every day in 2010 and to 1 rhino every 18 hours in 2011.  The true number is likely to be much higher than this because a significant proportion of rhino carcases are not found, especially in the larger populations such as Kruger National Park.
	The price of rhino horn to the illegal trader in South Africa has escalated sharply in the past three years.  In 2009 it was about US$5,000/kg, in 2010 it rose to US$10,000/kg and, at the end of 2011, it was approaching US$20,000/kg (R160,000/kg).     
	The current options available to those who espouse the conventional approach to rhino conservation are to – 
(1)	Increase protection for rhinos in situ;
(2)	Increase penalties for illegal hunting and being ‘caught in possession’;
(3)	Place a major effort on detection of illegal horn along the full pathway from the source of horn to the end-consumer;
(4)	Root out corruption both at the national and international level which facilitates the illegal trade in rhino horn; and
(5)	Promote awareness campaigns aimed at educating the consumers of rhino horn that its medicinal properties are fictitious and their demand for the product is leading to the demise of the species.
	Of these options the only one which bears consideration is the first.  The remainder have been tried for past 30 years and have failed.
	The annual cost needed to secure the survival of the South African rhino population (black and white) at its present level is about US$400million (R3.2 billion).  As the population increases towards carrying capacity the figure will rise to more than US$600 million (R4.8 billion).  Such a level of annual recurrent expenditure is unjustifiable in a country where social considerations and poverty alleviation are paramount.  Moreover, it is unlikely to be forthcoming from Parliament.
	In the Preamble we stated that South Africa is moving further and further away from its stated goal of disseminating rhino widely throughout the country and increasing their numbers.  This process is essential to cope with a situation where rhino are reaching ecological carrying capacity in State Protected Areas and need to be translocated if population growth is to continue.  Rhino are now being seen as a liability by private investors, there are few incentives for landholders to invest in rhino and a process of range shrinkage and disinvestment in rhino has already started.
A legal trade in rhino horn
	The only option which can rectify this undesirable situation is the inception of a legal trade in rhino horn.
	Financial value
	 The capital value of all the horn on some 20,000 living rhinos in South Africa is about US$1.5 billion (R12 billion).  Earlier we stated that the annual cost needed to secure the survival of the South African rhino population (black and white) at its present level is about US$400million (R3.2 billion).  This figure is about  25% of the value of the resource and it reinforces the economic absurdity of investing solely in protection – it is an exorbitant insurance policy.
	The present stock of rhino horn in State custody and private hands can be crudely estimated at about 20 tonnes ... worth about US$400 million at current black market prices.  This would  be able to meet the required protection costs for one year.
	A population of 20,000 rhinos can be expected to produce horn worth about US$20 million from natural mortality alone.  However, this amount (about US$1,000/animal) would not come close to meeting the protection costs for rhinos under the present illegal hunting challenge.
	The annual horn production from a small population of white rhino managed under a dehorning regime averages slightly less than 1kg per rhino per year.  Thus every animal in such a population is capable of earning a sustainable annual income of about US$20,000.  A hundred animals would generate US$2 million annually.  The land use value of rhino managed under dehorning is at least 100 times greater than that of domestic livestock.
	Horn sales
	The sale of rhino horn could be done in a manner similar to that which was successfully used by de Beers’ to run the international trade in diamonds for over a century.  The new entity might be named the Rhino Horn Selling Organisation (RHSO).  It would enjoy a high degree of autonomy but would report annually to government.
	The RHSO would have three objectives – 
(1)	To maximise the returns from sale of horn within the constraints imposed by the other aims;
(2)	To stabilise the market for rhino horn; and 
(3)	To reduce the demand for horn from illegal hunting.
	How would the illegal demand be reduced ?  Very simply by stealing both the buyers and the customers away from the black market.  This is a critical insight.  At the moment, all of the horn in the international trade is illegal and all of the customers for that horn rely on the black marketeers.   Logically, the more buyers and customers there are that obtain their horn from the RHSO, the fewer are the numbers of rhino that will be killed illegally for any given level of demand.  The RHSO will have at its disposal a stock of horn which is probably many times larger than any illegal stockpile.  Its tools are the volumes of horn it can release onto the market and the prices it can set at each sale.  Any horn purchased legally from the RHSO will have the unique characteristic that it has not caused the death of a rhino.
	This implies a radical departure from the type of selling methods which have characterised the sale of ivory under CITES ... which have failed to reduce illegal trade.  The principles on which the RHSO would operate might be – 
(1)	It would be made easy for buyers to become legal – requiring no more than registration with the CITES Management Authority in any country;
(2)	Sales would be frequent – De Beers used to hold ten diamond sales (‘sights’) a year;
(3)	Initially the RHSO might use the same selling technique as De Beers which was to prepare ‘packages’ of diamonds and set the prices for those packages.  However, as the number of accredited buyers (‘sightholders’) increases, sales could be conducted by auction.
	Costs of decisions
(1)	No legal trade: If it were decided not to take the ‘risk’ of engaging in a legal trade in rhino horn, according to our estimates the entire rhino population would be lost over the period 2012-20.  This loss, which takes into account the annual increments to the population through breeding and the annual losses from illegal hunting is US$6 billion (R48 billion).
In any other sphere of commerce, were a bureaucracy to lose 48 billion rands, it would result in a national outcry, parliamentary investigations and court charges.  Somehow state conservation agencies appear exempt from this.
(2)	Legal trade beginning in 2013:  Using a population simulation model, the legal trade reduces the number of rhinos killed illegally from 2013-2020 and ensures that the rhino population not only survives but also survives in substantial numbers, i.e. above 16,000 animals.  The financial saving to the nation from this is some US$2.3 billion (R18 billion).   The expected sale of rhino horn from 2013-2020, which should be added to this, is about US$700 million (R5.6 billion).
(3)	Legal trade beginning in 2016:  Delaying the submission of a proposal to CITES for a legal trade in rhino horn from 2013 to 2016 results in a significant number of unnecessary rhino deaths which we assume would not occur if the legal trade been in place.  The additional cost arising from this is estimated at US$1.5 billion (R12 billion).5

Conclusions
	We recommend to Parliament that as a matter of urgency – 
1.	South Africa should engage the Parties to CITES to initiate a legal trade in rhino horn as the only feasible alternative to the effective demise of South Africa’s white and black rhino populations; and
2.	The proposal for the inception of legal trade should be submitted to CITES at the next meeting of the Conference of the Parties in Thailand in March 2013.

Appendix
Comment & Public Hearings: Rhino Poaching
RHINO POACHING: A THREAT TO HARD-WON POPULATION INCREASES ACHIEVED BY CONSERVATION AUTHORITIES: A CALL FOR RESPONSES AND SOLUTIONS TO ASSIST GOVERNMENT TO STRENGTHEN ENVIRONMENTAL GOVERNANCE AND THE FUTURE SUSTAINABILITY OF OUR RHINO POPULATION

Have your say in highlighting the solutions in South Africa and Africa

Parliament invites you to be a solution in ensuring the future of our rhino population

Rhino poaching across Africa has risen sharply in the past few years. This has threatened to reverse the hard-won population increases achieved by conservation authorities during the 20th century.  Until relatively recently, thanks to law enforcement efforts, poaching of rhino had been kept under control and held at relatively low levels. However, from 2008 onwards, rhino poaching has escalated at an alarming rate. Another factor, which saw an increase in the demand of rhino horn into the illegal markets, is the likely leakage of stored rhino horn from various private and government stockpiles, with no indication of decreasing. There has been a dramatic spike in rhino poaching incidents in South Africa from January 2008 to date. 

The modus operandi being utilised both locally and internationally in the illegal killing of rhino and the smuggling of their horns in recent years clearly indicates the increasing involvement of highly organised and well structured crime syndicates that are operating in a lucrative international enterprise. In addition to the loss of horns through increased poaching, concerns have also been raised regarding ‘leakage’ of South African horns onto the illegal international markets from stocks in the public and private sector. These syndicates are also involved in the ‘legal/unethical’ hunting of rhino in the country.

The concern for conservation authorities is that should poaching continue to escalate at the current rates, unabated, one could reach the situation where numbers start declining to a point when more animals are being poached than are born into the rhino population – as has been experienced in other rhino range states in the recent past. 

A properly structured and concerted effort by government, and other relevant role-players, is therefore urgently needed to address this problem, as it poses a significant threat not just to the rhino population, but also to the reputation, eco-tourism industry and public image of South Africa. 

The Portfolio Committee on Water and Environmental Affairs (the Committee) intends holding public hearings on FINDING SOLUTIONS to the rhino-poaching crisis in South Africa and Africa. 

The Department of Environmental Affairs (the Department), and other relevant government state holders will commence the hearings by explaining the current poaching situation in relation to the achievements and challenges. Thereafter, public commentary by presenters of selected submissions will be given a space to provide insights into:

▪ The strength and weaknesses of the current initiatives to address the problem;
▪ The efficacy of current environmental governance structures to address the problem;
▪ Whether South Africa has the requisite combination of expertise, sufficient and sustained financial capacity, and well-performing institutional and regulatory mechanisms to maintain an effective and balanced intervention to rhino poaching; and
▪ Recommendations to address specific challenges and responses of the present regime pertinent to the practitioner, regulator and policy-maker.

The Portfolio Committee on Water and Environmental Affairs in the Parliament of the Republic of South Africa will be holding public hearings on Rhino poaching: a threat to hard-won population increases achieved by conservation authorities. The Portfolio Committee invites all interested stakeholders to submit written comments on the subject matter not later than 20 January 2012. Public hearings are targeted for Thursday 26 January 2012. Specific dates and times will be provided after the deadline has been met.
Kindly note that the Portfolio Committee Water and Environmental Affairs retains the right to regulate its own proceedings, including the right to decide whether to allow oral representations in respect of any submission, and the format, procedure and duration of any oral representation.

All written comments appropriately referenced as ‘’ Rhino poaching: a threat to hard-won population increases achieved by conservation authorities’’ should be addressed to Ms Tyhileka Madubela, Committee Section, Parliament of RSA, PO Box 15, Cape Town 8000. Electronic submissions can be made at: tmadubela@parliament.gov.za or hand-delivered at Room 0/88, 3rd Floor, 90 Plein Street, Cape Town. For enquiries, contact Ms Madubela on 021 403 3713 or 083 304 9586.

Issued by Adv. Johnny de Lange, M.P.: Chairperson: Portfolio Committee on Water and Environmental Affairs on 11 December 2012.
http://www.stoprhinopoaching.com/